Attract clients from the oil and gas sector

Whenever there’s a conference on oil and gas in Canada, you’re likely to see Penny Walker. Most recently, she took in the inaugural Liquid Natural Gas (LNG) conference in Vancouver, a day-long event that took place last September.

“I choose which conferences I go to based on what I need to learn about the companies that are presenting,” says Walker, a director of wealth management and investment advisor at Richardson GMP in Calgary.

She looks for sessions featuring companies that haven’t yet caught on with investors.

At LNG, she discovered three firms, including Enterprise Group and Entrec, that fit the bill. The firms had made conference presentations, and her post-conference research showed they’d be viable investments, so she’s added them to her clients’ portfolios.

Read: Learn from your own referrals

She also got a client as a result of her attendance. But, Walker says, that’s a bonus because her primary goal is gaining industry knowledge.

PROFILE

Years in the business:

22 (12 years as a licensed advisor)

Percentage of book that’s niche: About 60%

Niche: Oil and gas

Minimum: None

Book size:

$90 million in AUM

Compensation style:

Commission and fee-based

In fact, the client from the LNG conference chose her because she wasn’t trying to sell. They met in a session where a CEO was presenting about his resources company. As she was taking notes on her iPad, she mumbled to herself that the CEO was being extremely promotional.

An attendee nearby noticed and, at the end of the session, asked what she thought. She gave him an honest, but diplomatic, account of the CEO’s track record. “I’m not afraid to give my opinion. I’m licensed to give it, but I’m not as blunt as I would be with a client,” Walker says of encounters like these. She doesn’t want to alienate companies or prospects in her niche.

Later that afternoon, the attendee called and confessed to owning stock in the CEO’s company. He asked Walker if he should sell. She told him to stay the course: in her experience with similar companies, the stock would rise. On her advice, he held, and the stock’s value has increased 39% since the conference.

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The man opened an account with her the next week, thanking her for giving him advice without asking for his business.

So far, his account with her is more than $100,000 but, in total, her new client has more than $10 million in investable assets.

Make the most of your time

The LNG conference was organized by one of Walker’s clients, Keith Schaefer, editor and publisher of Oil and Gas Investments Bulletin.

She attended the conference last fall as Schaefer’s guest, but paid for her flight and hotel. It was worth it, she says, because of the insights gained. One highlight was a session in which two experts faced off about whether investors in natural gas projects will prefer large wells or niche operations.

At any conference, she favours panels that include company leaders talking about their firms over those with other brokers talking about investment prospects. “I’ve grown up in the investment business and I’ve heard enough people’s strategies,” she says.

Read: How to differentiate yourself

She’s constantly looking for information that will help her clients’ portfolios (see “Client challenges,” below).

Client challenges

The biggest obstacle Walker’s clients face is lack of diversification.

When the industry has a rough year, clients may lose their jobs, see their home prices tumble as colleagues move in search of other employment, or watch their resource-heavy portfolios drop. Employees with company pensions, RRSP matching plans or stock options are further tied to the fates of their businesses.

Still, her clients know their sector and prefer to invest in it. So instead of warning them off, she helps minimize risk. If they’re long on several energy stocks, she’ll purchase them a resources hedge fund that counterbalances their stakes in resource companies.

And she keeps their portfolios balanced by selling when an energy stock has gone up and re-investing in other avenues, like REITs.

“Every aspect of our lives in Calgary is in some way, shape or form associated with energy.”

If she leaves a conference with three ideas, whether it’s to buy or sell a stock, or get into a particular market, she deems it a success.

Another company she learned about at LNG is Petrowest, which services oil field infrastructure. Last fall, she bought it for her clients at a per-share price of around 90 cents, and sold when it hit $1.15.

Walker also attends the Global Petroleum Show, which gathers 2,000 companies and 60,000 people in Calgary for three days every June. It’s a prime opportunity to spend time with clients, prospect their colleagues and glean the industry’s latest news.

Walker likes the direct access to industry executives that conferences provide. “I’ll go to their booths and talk to them about whether they have employee share purchase plans,” she says. Then she’ll ask, “Do you need help exercising your stock options?” She adds, “I haven’t landed anybody yet, but I’m working on it.”

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While she visits booths, she doesn’t have one herself—it’s not her style. “I’ve always been more of a mingler.”

That approach lets her choose whom she speaks to, as well as follow up with people she’s seen in conference sessions. And she doesn’t have to worry about staffing the booth, which pulls her team away from more productive tasks back at the office.

Walker suggests attending conference events with someone you know inside the business, be it a well-connected client or a friend who works in the industry association. They’ll introduce you to their own extensive networks, bypassing the group’s natural insularity.

TIP!

If you want to work with oil and gas clients, don’t let the lack of an engineering degree discourage you, says Walker, who holds a law and society degree from the University of Calgary, as well as CIM and FCSI designations.

“You definitely should have some basic oil and gas knowledge,” she says, “but I don’t think you need to know how to frack an oil well.”

Build new relationships

When a conference hits town, Calgary is abuzz with related social gatherings. Along with official events, Walker attends get-togethers arranged by clients, many of whom are well drillers, work camp suppliers and engineers—some are even accountants who advise oil and gas workers.

Read: 5 tips to prospect wealthy clients

“It’s a great time to network and branch out,” says Walker. During the petroleum conference, her longtime clients will invite her to the Black Cat restaurant, which they frequent, in downtown Calgary. She’ll meet their friends and colleagues, who are fellow executives, suppliers and oil and gas investors, and talk to them about their businesses and investments.

Walker finds this a more effective way to prospect. (Last year, she got more than double the number of prospects at associated social events than she did at conferences.)

There’s a lot of competition for wealthy oil and gas investors, and Walker says the in-person social referrals help her stand out from advisors who go the traditional route by giving formal presentations at company offices.

“Calgary is very social,” she says, “and that’s how you do business.”

Jessica Bruno is a Toronto-based financial writer.