From One Book, to Three: Making Every Transition Count

Matthieu Bouchard, Group MCB Private Wealth Management, PEAK Investment Services Inc., has written a strategic growth story for himself, buying one book after another over the short span of three years. In this article, he shares the details about every transition process, offering practical tips and tricks that have facilitated a near perfect retention rate.

Successful transitioning

After falling in love with the business almost immediately out of university, I acquired my grandfather’s book in 2017, at age 22. That led to a significant growth trajectory for my firm – Group MCB – propelled by the strategic purchase of successive books over the next 2.5 years. We’re currently in the midst of transitioning, and it’s been a meaningful journey thus far, growing to 300 clients and $60 million AUM – with plans to augment these numbers further once our latest acquisition is 100% complete.

While COVID-19 was unexpected, there hasn’t been a detrimental impact to the process. In fact, it has only accelerated change that we wanted to implement previously – from electronic signatures to the adoption of virtual platforms that save us time and effort that could be spent on other growth – and service-oriented – initiatives. For example, I’m now working on a social media marketing campaign to generate awareness of our brand through Facebook and Instagram ads, slowly but surely bringing in a greater number of younger professionals into my practice. The changes have improved efficiency and productivity, and we see these tools as a complement to our existing offering, even beyond the pandemic. It’s particularly helpful for clients too, with so many families now pressed for time and juggling multiple responsibilities.

Though every transition has been different, they’re all driven by my ambition to build a practice that exceeds expectations, and creates lasting partnerships.

Book one: listen and learn

The first book I bought was my grandfather’s, who ran his practice for more than 35 years, so that has been a unique transition because the business stayed in the family. I started my career at his firm in an entry level position while I obtained my licensing, so I used that time to learn the details about every client and then shadowed him closely before taking the reins. As a result, there’s already an element of trust built since the same values have been passed down, and client feedback so far has been extremely positive. We’ve seen a 97% retention rate, and the relationships have all flourished from when I began working with them almost four years ago.

Having been through it, what I would recommend is that when Advisors meet clients for the first time, don’t talk about yourself and what you can do for them – simply listen intently. Your goal is to understand their wants and needs first, and only then can you build toward helping them achieve their objectives. As an example, if they don’t want a financial analysis, it’s not necessary to push one on them; instead, speak in simple terms, and bring them numbers they can easily comprehend. In general, the number one complaint I hear is that “my previous Advisor is very intelligent, but he uses financial jargon, and I don’t understand what he’s saying.” I always try to speak to my clients as if I’m speaking to someone with zero investment knowledge.

Constant, effective communication is at the core of our offering at Group MCB. At the onset of the global pandemic in March, we took the initiative to send a weekly email update, keeping clients informed of current market events – from PM perspectives to Goldman Sachs’ viewpoints on the economy – which really helped assuage concerns and panicked calls. It also landed us six referrals from people who appreciated that responsive service and transparency, which inevitably was missing from their current Advisor relationship.

Book two: chemistry pays off

With my second purchase, most people would have expected the transition to be more challenging, since the seller was a fellow PEAK Advisor, whose clients I had never met before. My extensive experience working with retirees (from my grandfather’s business) has been instrumental to this successful integration – in large part due to the chemistry between myself, and a similar clientele. I use youth to my advantage; it means they will likely never have to change Advisors again, which has helped them grow increasingly comfortable with the situation.

Even more extraordinary has been the 20% growth rate at which I have developed this book over the last year, which is far beyond my most optimistic projection. How did it happen? Well, I’ve personally met with all the clients, and delved deep into their portfolios, developing detailed financial plans so we could objectively assess their progress from a more holistic perspective. I realized there were assets held at banks or retirement pension funds that could have been invested more strategically. For instance, we’ve had a few clients recently whose assets we allocated toward environmental funds, an area that resonates with us and is becoming more prevalent in our conversations.

Book three: building from a solid foundation

My grandfather had two longstanding associates, one of which is still active, but at a place where he wants to solidify his succession. Last year, we signed a legal agreement to buy 100% of his book within a five-year period. Currently, I own a 10% stake, with plans to acquire another significant portion in 2021. This last transition process has been interesting because most of the clients knew my grandfather, and while they don’t know me personally, they know my story. It’s similar to a warm lead in the sense that there’s inherent trust; they understand how I work and the values on which my business was built, so I’m optimistic about retention. I’ve already met 10% of his clients personally, and if all goes according to plan, I’ll manage approximately 200 more people, which brings my firm to 500 households under management.

I’m confident in our approach, which prioritizes personalized financial analysis. We don’t use “cookie cutter”, model portfolios, but instead cater to our clients’ unique needs, time horizon and risk tolerance level – whether they’re interested in impact investing or robotics or artificial intelligence. What’s most important to us is that we understand 100% of our clients’ objectives, and what they’ve accomplished with their previous Advisor. If everything is working, we’re not looking to rock the boat, and change things unnecessarily. We work to earn their trust first and foremost, and if down the line, there are modifications to be made to optimize the portfolio, then clients will rest easier at night knowing we’re truly looking out for their best interest.

Expanding…into a new niche, and more

To expand further, a year ago I brought on an associate and long-time friend, Maxime Bourque, to learn the business from the ground up, like I did. He finished his business degree last May, and the plan is to mentor him for a few more years. When the timing is appropriate, we already have the roadmap in place to acquire another book for him to manage on his own.

I also plan to continue to develop our current practice, with both existing and prospective clients. Specifically, the median client age of the books we bought was 69, so we’re looking to attract younger professionals and entrepreneurs – a niche I can relate to as I build my own business and undertake a similar process. I connect with these clients on a deeper level through conversations about their future vision, comparing ideas, objectives and obstacles that we’ve shared on our respective paths.

We also make an effort to nurture relationships with the next generation – making it known to them that we’re available anytime if they have questions, and always inquiring about the family at every client meeting. That detailed knowledge – from birthdays and pet names to family dynamics and planned legacies – is irreplaceable, and it’s how we ensure our relationships extend across generations.

Practical advice as door opens to more buyers

For potential buyers right now, several factors are contributing toward a changing environment – from the older average age of an Advisor to market uncertainty and greater compliance and technology demands that require significant time and effort. Especially with COVID-19 hanging over us, I believe more Advisors will be interested in selling their book. There’s been a recession and we have barely seen any evidence of it in terms of portfolio performance, and the virtual burden may eventually take its toll on those unable to adapt.

If you’re considering buying a practice, come prepared with a written transition plan before meeting with a prospective seller, and be open – listen to what they want their clients to feel, and their goals for succession and business growth. What are the key lessons they’ve learned over the years? If you appreciate the advice they’re giving, and actually implement their plans, it will positively impact client retention in the long run.

Ultimately, the key to a smooth transition is chemistry between the buyer and seller. A selling Advisor will typically stay on board for a 2-3-year-period after the acquisition, so you don’t want to work with someone who clashes with you on different issues, especially since clients can sense this type of negative energy. A strong bond based on mutual respect will facilitate an easier changeover process.

At the end of the day, we’re in a relationship industry – it’s not just about performance. You can manage the best portfolios generating robust returns, but if clients don’t trust you or feel at ease with your decisions, they’ll quickly make a switch. And that’s what motivates me the most – knowing that people feel secure with their investments, and that I can provide that peace of mind to allow them to enjoy their success – and accumulate wealth in the process.

To gain more valuable practice management insights, and tools for a balanced portfolio, contact your BMO Global Asset Management Regional Sales Representative.