Open Agenda: Stay organized as your business grows

This column gives you an inside look at an advisor’s scheduling process, and provides tips on how to better manage your practice.

Andrew M. Suthern, CIM, CFP, CFA, FCSI Senior investment advisor at IPC Securities Corporation. He works out of offices in Calgary and Winnipeg.

Number of households: 300

Client type: In Manitoba, professionals between the ages of 50 and 65 who earn upwards of $100,000 per year. Their average portfolio size is $500,000. In Calgary, people who work in the oil and gas sector. They’re between the ages of 50 and 65, they earn upwards of $200,000 annually, and their average portfolio size is $1 million.

Client communication: Suthern primarily emails and phones clients, though he also mails statements if people prefer.

Secrets to success: Advisors should recognize they can’t be everything to everyone, he says. As he’s grown his book, he’s segmented clients, delegated tasks and incorporated automation. He’s also open to hiring extra staff.

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Clients

Suthern divided his book into five categories. The two upper tiers are AA—longtime clients with full financial plans who’ve offered referrals, and AB—people with complete plans who’ve transferred most of their assets.

He connects with these clients by calling or sending newsletters monthly, and reviews portfolios with them quarterly. At that time, he sends investment updates with personal notes. For other clients, he usually connects annually for reviews.

These meetings, which run an hour, are always booked on Tuesdays, Wednesdays and Thursdays between 10am and 3pm. This gives him Mondays, Fridays, as well as the end of each day to complete additional tasks. If meetings run long, follow ups can be scheduled to make sure all questions and concerns are addressed.

Many clients prefer to meet at the same time each year, says Suthern. People with no preference are “slotted into months were we have fewer client meetings.”

Compliance

Determining and keeping track of a client’s risk tolerance is challenging. With a new client, he first figures out how much she needs to earn and save to achieve her goals through detailed discussions rather than just through questionnaires.

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Throughout this process, Suthern determines her true risk tolerance by detailing how volatility can help produce her desired returns. He also talks about the possible downsides of taking on portfolio risk using specific examples. This way, she’s knows what range of returns to expect over time, and will be prepared for short-term losses.

If clients can’t handle volatility and are uncomfortable with risk, he helps them rethink their goals. Communication is key, says Suthern, so he works closely with people to determine their true risk tolerances.

While doing this, he also goes over asset allocation questionnaires—only when clients are comfortable with their financial plans and return projections does he complete account and KYC paperwork.

What if: A client’s email is hacked?

This year, Suthern received an email from his client. The message included a request to withdraw $20,000 from the client’s RRSP.

He started the withdrawal process since the client then provided confidential account information. He became concerned, however, when she claimed she couldn’t call to confirm the transfer since she was travelling. Suthern knew something was amiss so he called his client. She was at home, and knew nothing of the withdrawal request.

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That’s when Suthern found out her email had been hacked.

Luckily he hadn’t transferred funds. Still, he says clearing up the situation took a week of his time. He sent all email communication to his branch manager and compliance department. As well, he had to transfer her money into new accounts.

As a result, his partner had to take over some of his responsibilities and his assistant had to reschedule some appointments.

The scary part, he adds, is the imposter had studied his client’s writing style. The person also knew Suthern was her advisor and he often handled withdrawal requests from the client. Since then, he’s taken extra precautionary steps when handling even small client requests.