Why one advisor chooses lawyer clients

Christian With-Seidelin is a portfolio manager at HollisWealth in Oakville, Ont. About 50% of his clients are lawyers; the rest are business owners and retirees.

Thirty years ago, Christian With-Seidelin decided to change careers. He left his job in the technology industry, and became an advisor at Fortune Financial (now HollisWealth) in Oakville, Ont., where he’s worked ever since.

He decided to prospect for lawyers, since his previous job involved automating systems for law firms. Plus, he wanted to focus on high-income earners.

At that time, he says, privacy laws weren’t as strict. So, he acquired staff lists from the seven major law firms in Toronto, and sent letters to lawyers describing his holistic approach.

It worked. Today, 50% of his clients are lawyers. The rest are business owners and retirees.

What makes With-Seidelin stand out, he says, is that he understands the legal profession’s key concerns. “I have a good idea of how the partnership agreement for each law firm is structured, how their benefits are set up and [the terms of] their long-term disability plans,” he says. “So when I go into a law firm, there are a lot of questions I don’t have to ask. I can just say, ‘Here’s the latest information I have because I deal with colleagues of yours. Can you confirm it for me?’ ”

For instance, most law firms don’t have pension plans, notes With-Seidelin. “So what’s really important is for clients to build up an asset base for when they retire.”

There are more than 47,000 lawyers in Ontario.

Source: Law Society of Upper Canada

He notes most clients are disciplined when it comes to saving and spending. “They say they work hard and should enjoy their money, but they’re still very responsible in terms of saving X amount of dollars per year.”

To create a plan, he spends time understanding a client’s risk tolerance and investment objectives. For instance, he’ll ask, “Which of the following statements best describes your objectives for the money you’re spending: perseveration of capital; growth through a balance of capital gains and income; growth through capital gains and some income; or growth primarily through capital gains?”

When it comes time to build a portfolio, With-Seidelin says he’s been able to offer more choices since 2010, when he got his discretionary license and became a portfolio manager. He and his team (consisting of two administrative assistants and a research assistant) often use blue-chip securities with a dividend yield. “They provide an ongoing income stream. On top of that, we use options. When we see securities go up a lot, we’ll put in place what’s called a collar.”

For instance, say a client acquires a stock for $20. It increases to $40. But if With-Seidelin’s research shows it could go up to $60, he’ll do a call option, promising to sell those shares if they hit that amount by a certain time. He also uses put options, so if the stock drops to $35, he has the right to sell.

“That way, we’ve protected their gains against downside risk because we can sell at $35, not at $30. But sometimes you also just buy the put, because we want to make sure that we can get out at a certain point.”

Permanent life insurance, he says, is another tool to build assets; and in his case, to build business. For about three years, he was managing the insurance portfolio for a partner at a major law firm. Recently, that client and her husband turned their entire investment portfolio over to With-Seidelin, as well.

Why? The couple, both in their late 40s, got burned during the tech crash and again in 2008. They were looking for an active approach, and he told them he could help.

“I said, ‘We take the time to build individual portfolios for our clients. We then monitor things very carefully—we don’t put things on autopilot. If we think markets are not going to work, we will have no compunction going 100% to cash.’ ”

With-Seidelin notes he’s never had to take their portfolio to cash, and today it consists of Canadian and U.S. securities, and pools of ETFs and mutual funds.

Also, since he’s a portfolio manager, “the fees a client pays in non-registered accounts are deductible,” he says. “So that aligns the client’s interest with ours and becomes a tax-planning tool.”

And he’ll suggest investment vehicles, like corporate-class mutual funds, to help clients defer tax and shelter their incomes.

A changing profession

The legal industry is going through a period of transition, notes With-Seidelin. More lawyers are opting to work as in-house counsel for corporations, instead of at law firms, because it offers better work-life balance.

“It’s a trend right now,” he explains. “They trade being an independent business person [for being] an employee. And they typically take a pay cut.”

Two separate clients have approached him in the past, saying they were switching jobs. So, he worked with them to adjust plans. He asked each: “How will this affect your goals” and “Can you manage this transition?” Then, he went through the figures, detailing assets, savings and how their new salaries would change their plans.

One of the clients originally came to him five years ago, saying she wanted to leave Bay Street.

“We did a number of analyses,” says With-Seidelin. “Let’s say she wanted to have $200,000 worth of income. We needed to come up with $100,000 from her portfolios with me so she could make $100,000 in a new job.”

Her portfolio needed to generate income. So, instead of being more growth-oriented, he suggested a conservative approach. And while he didn’t fundamentally change the portfolio (it still includes fixed income and equities), he shifted some of the weighting to income-producing assets.

For instance, she owned securities that didn’t pay dividends, so he replaced them with dividend stocks to add stability and cash flow. The updated plan could work, but it would take time. “We need to establish what new securities we want, and at what price, and which ones to sell. Also, the market might not be good to buy, but to sell. We use a patient, systematic approach to make sure the client is protected.”

It wasn’t until this year that she could give up her high-paying job and still reach her retirement goals. At time of print, With-Seidelin was waiting to hear if she’d made the transition.

As a result of his experience, With-Seidelin no longer has to prospect. Lawyers are a tight-knit profession, he says, so once one partner becomes his client, that lawyer may recommend him to other partners at the same firm.

Suzanne Yar Khan is a Toronto-based financial writer.