A giver, not a taker

Lockhart, who holds the certified financial planner (CFP), chartered life underwriter and chartered financial consultant designations, says his clients trust him to put them first.

“The biggest benefit I offer them is an ability to understand what’s important to them,” he says, “combined with a grasp of the tools of the trade. Then we work together to find solutions to their financial concerns.”

Lockhart, 67, began his financial services career with Bank of Nova Scotia in his native Annapolis Valley in Nova Scotia in the 1970s. A branch administrator, he transferred to Scotiabank in Calgary in 1979 before leaving the advisory business to sell real estate. Unfortunately, his timing was poor.

“I got my real estate licence in February 1981 and the market died in June because of the National Energy Program,” he says. “I stuck with it until 1983 and made a living, but didn’t really enjoy it.”

While in Calgary, Lockhart met and married his wife, Dale. When they learned Dale was expecting twins, the couple decided to move to Vancouver.

“I left real estate because I wasn’t good at limiting my time on the job and I wanted to be available to spend time with my kids,” Lockhart says. “Dale and I had family in Vancouver, so we moved to the Lower Mainland.”

Over the next two and a half years, the couple welcomed three sons and a daughter. Meanwhile, Lockhart ran a Robin’s Donuts franchise in Maple Ridge, B.C., before joining a major insurance company in 1985.

Initially, Lockhart found selling life insurance quite stressful. One problem was the disconnect between the company’s rhetoric and its sales tactics.

“They said, ‘Don’t pressure people’ but taught me pressure tactics,” he recalls. “I sold more than 100 policies in the first year and had to resell them all in Year 2 because my clients weren’t happy.”

Lockhart was troubled by the concept of sales as a competitive exercise, so he reworked his sales vocabulary and took a more collaborative approach. That made it easier to work with his clients to resolve their concerns. “We were on the same side,” he says. “So, everyone won.”

As the Lockharts’ young children grew, the parents began looking for a new community in which to raise them. The Lockharts chose Kelowna, in the heart of British Columbia’s Okanagan Valley. Lockhart joined Canada Life Assurance Co. and began rebuilding his practice.

“It was the best move we could have made,” Lockhart says. “Kelowna is a great town for kids to grow up in. My children are all athletic and they excelled in this environment.”

Lockhart stayed with Canada Life until 1999, when the company disbanded its career agency. He then became an independent insurance advisor. Something of a “lone wolf,” Lockhart tried working with other agents over the years, but none panned out.

Today, Quail Ridge Financial consists of Lockhart; his wife, Dale, the firm’s administrator; and their youngest son, Jake, 27, who came on board as an advisor a year ago. Jake, a graduate of Calgary’s Mount Royal College with a degree in applied finance and a CFP, previously spent five years with a major bank.

Quail Ridge Financial has slightly less than $20 million in assets under management and about 60 clients – “Ordinary, middle-class Canadians,” as Lockhart calls them. “Some are just starting out, several are in their 90s and there’s a wide range in between.”

Almost half of the firm’s income comes from segregated funds, which Lockhart began selling seven years ago after relinquishing his mutual fund licence due to the costs related to rising regulation. “The cost of compliance,” he says, “reached the point at which it was becoming unprofitable to keep some of my clients. I had to choose between them and the licence.”

Most of his clients moved to seg funds, which Lockhart sells primarily with a zero front-end load: “My income comes from the trailers. I don’t see that as a conflict of interest – if the value of the funds rises, so does my income.”

Other income sources include insurance products, servicing fees and new sales.

Lockhart is thrilled to be working with his son. But while the senior Lockhart has no intention of retiring “until I’m at least 93,” he is working on transferring the business to Jake in the future.

“We sit in on one another’s interviews,” Lockhart says, “so Jake can get acquainted with my clients, and they with him.”

The challenge Lockhart faces is to be fair to all his children. “We’re working on structuring an agreement,” he says, “that allows Jake the maximum opportunity to develop the business while sharing my estate fairly with his siblings.”

A longtime member of Advocis, Lockhart served as its chairman from December 2012 until June 2014. In that role, he was forced to address the ever-increasing bur-den of financial regulation.

“Advisors face too many regulations,” he says flatly. “It seems like regulators want to impose the same template on us as banks have for their employees, and that’s not in the clients’ best interests.”

Rather than being burdened with more regulations, Advocis would like every advisor to belong to an accredited professional association with a strong code of conduct and a disciplinary process to back it up. A code of conduct makes more sense than a bunch of rules, Lockhart says, because it’s based on principles.

Lockhart stepped down as Advocis’s chairman in mid-June, leaving the association, he says, healthier and more responsive to its members’ needs than when he started. “We’re becoming more bottom-up than top-down,” he says, “which means there’s greater opportunity for input from our members. And we have credibility with regulators.”

There’s room for improvement, however, and Lockhart is pleased that his successor, David Juvet, is committed to developing a “culture of delight,” in which any interaction with Advocis is a pleasure for its members.

Lockhart, looking back on his 29 years in the financial services field, believes that the majority of successful advisors have the interests of their clients at heart: “This industry attracts givers and takers. But in my experience, the takers don’t last long. Sure, some of them make a lot of money but few clients want to have a long-term relationship with one.”

Lockhart’s advice to other advisors: get to know yourself and figure out what makes you tick.

“Find out whether you’re a giver or a taker,” he says. “If you’re a giver, develop that. And if you’re a taker, either change yourself or move to another field – because you won’t serve your clients well.”

© 2014 Investment Executive. All rights reserved.