By specializing in a narrowly defined client niche, you can gain a competitive advantage as a financial advisor. And as you gain superior knowledge of your niche’s common needs, you are able to serve the group better.

“If you have a niche and are serving it well, referrals tend to travel faster because it’s a tight group,” says Sandra Foster, president of Headspring Consulting Inc. in Toronto.

The strategy has worked well for the following six advisors, who found that once they developed expertise with one client, they could apply it to others of the same ilk. Whether it is serving ethnic communities or professional communities, each group has its own issues.

But whatever the niche you choose, you need to be qualified to serve it. And you must have visibility. Foster recommends conducting seminars, attending the group confer-ences, writing articles for the niche’s publications and defining your expertise on your Web page.

“It’s about knowing what people need and getting the message out,” she says. “Remind people that you specialize.”

Here is how these six advisors built their niche businesses.



As a member of the Norway House Cree Nation, Andrew Clarke, certified financial planner and founder of Winnipeg-based Clarke Financial Planning and Insurance Services, has focused his 13-year-old business almost exclusively on Canada’s aboriginal community. While traditionally there has been little individual wealth in the First Nations community, the situation is improving as a growing group of professionals becomes successful.

“When I ask myself who I know best, the answer is: my own people,” says Clarke, who serves First Nations people in a number of provinces across Canada. While he has about 400 individual, government and corporate clients, the size of the status Indian population in Canada is an estimated 650,000 people. It’s a market that is not well served by the financial services community, Clarke says, which is an advantage to someone like him, being familiar with the community’s cultural and taxation issues.

“The First Nations market is so varied, with so many nuances and idiosyncrasies, that it’s hard for the big players to break in without the essential relationships and the cultural knowledge,” he says.

The bulk of Clarke’s business revolves around putting together group insurance and pension benefits for employers. He works with a variety of First Nations employers, including regional and community band offices and health centres, to develop group plans that fit with the benefits already being received by First Nations people. He also works with groups that provide services to the reserves, such as bus drivers and teachers; and with the employees of private businesses — such as trucking firms, gas bars and casinos — operated by First Nations groups.

“We are able to get our foot in the door with the employer group plans,” Clarke says. “But once we gain the employees’ trust, there are opportunities to cross-sell on an individual basis.”

The government benefits received by First Nations people present unusual challenges in designing group plans, particularly when status and non-status employees are working side by side, Clarke says. For example, for status Indians, who are tax-exempt, it makes no sense to set up an RRSP, in which contributions are based on taxable income and payouts are fully taxable. Instead, there’s a need for non-taxable pension plans, he says. If status Indians invest in stocks, bonds or mutual funds, however, any income they generate is deemed to be earned off the reserve and is, therefore, taxable.

First Nations people also receive additional health benefits beyond provincial insurance plans, including eyeglasses, prescription drugs and dental work. Therefore, group insurance plans, including life, disability and medical insurance, must be designed to wrap around but not overlap with these benefits.

Clarke spends a lot of time educating people on how they can make things better for themselves and their families. A lot of it is “freebie work,” he says, that generates goodwill. First Nations people seldom make wills or appoint powers of attorney, for example, and he always brings these matters to clients’ attention. To promote business, he conducts a variety of educational seminars and hands out flyers. Aboriginal communities are close-knit and one person will pass along a recommendation to another.



Rick Claydon, a financial advisor and partner with Stonegate Private Counsel LP in Toronto, considers himself an entrepreneur and business owner, and that’s why in his practice, he zeros in on successful entrepreneurs.

@page_break@Before he became a financial planner 20 years ago, Claydon was a practising chartered accountant who did tax returns and audits for owner-managers of businesses.

“It was natural for me to target the same group when I started out as a financial advisor,” says Claydon. “It’s an extremely focused approach. With most entrepreneurs, business is their second love affair after their families, and I understand that.”

Claydon manages the affairs of 62 families. Clients who come to him must have $3 million-$5 million in investible wealth, which doesn’t include the assets tied up in their businesses. When their businesses are accounted for, his clients typically are worth $6 million-$40 million.

“For most entrepreneurs, the biggest concern is the passing on of an estate and a succession plan for their businesses,” Claydon says. “Many can’t let go of the reins, and they hold on to their business too long. The smart ones sell out and bring someone in to take it to the next level.”

A large part of Claydon’s work revolves around helping entrepreneurs consider the options for extricating themselves from their businesses as they get older. And whether it’s the business or the wealth that comes from selling it, entrepreneurs are concerned about passing assets to the next generation without demotivating their heirs.

Claydon usually sets up a multi-stage plan for his clients, to be implemented over a period of a few years. He starts with a plan for financial independence, which involves assessing income, the value of the business, RRSPs and other sources of wealth. Investments are placed in conservative, balanced global portfolios consisting of privately managed pools and individual securities. Asset allocation is based on each individual client’s risk tolerance, but all portfolios lean toward the conservative side, he says.

The next stage is risk management, which involves putting in place various types of insurance, including life, disability and, possibly, critical illness and long-term care. He also looks at the business to make sure key person insurance and property and casualty insurance coverage are adequate.

The final stages are wealth transfer and tax and estate planning. Wealth transfer revolves around the will, Claydon says. Most entrepreneurs are best served by having two wills, he says — one for the private business and one for everything else. A will for a private business does not have to go through the probate procedure, which saves fees. With probate fees at 1.5% of the asset value in Ontario, a client can save $150,000 on a $10-million business.

Stonegate offers recommendations on wills and estate planning issues, and will work in co-operation with a client’s existing lawyers and accountants.

Claydon has low client turnover, and doesn’t take more than three new clients a year. Most are referrals from existing clients or from his network of connections among accountants. When he started out, he drew clients by holding seminars entitled “How to sell a small or medium-sized business.” The seminars offered information of value to his targeted clients and led to introductions.

Claydon stays in close contact with clients, and prefers to hold quarterly meetings in their homes or offices so he can get a better feel for their lives and keep up to date with any changes in business or family life. In the summer, Claydon spends a few days travelling by boat around the Muskoka cottage area north of Toronto, meeting with clients at their cottages.

“The business is high-touch, and I like to build social contact into it,” says Claydon.



The gay and lesbian community possesses an attractive set of attributes for any advisor who works within this circle. And as a gay man, Colm Foley, an advisor with Investors Group Inc. in Toronto, has the inside track.

The majority of people in the gay and lesbian community are well paid, according to the Web site www.gaiety.ca, and there’s a high proportion of couples with two incomes and no kids. Gays and lesbians represent a powerful consumer market in Canada, with a population estimated at 1.6 million. Almost half the members of the gay and lesbian community have some college or university education, and 17% have a degree. Personal incomes are typically above average, with 44% of gays and lesbians earning between $39,000 and $79,000 a year, and 10% earning more than $85,000 annually.

Foley has targeted this community since he started with Investors Group 10 years ago, and it makes up about 20% of his client base.

“It’s an advantage that I’m gay and I’ve come out,” says Foley. “I’m familiar with the issues that are faced by this group, and if people are going to be open about their lives — financial or otherwise — they need an empathetic person. But like any community, it’s how you interact with people that matters.”

Foley says gays and lesbians are no different from straight duel-income childless couples, in that “there tends to be a fair amount of money around.

“People who don’t have kids are not worrying about feeding and clothing them, or paying for their university education,” he says. “Making sure they have enough for retirement is their main financial priority.”

Much of Foley’s business comes from referrals. He is a member of the Ontario Gay and Lesbian Chamber of Commerce, which hosts various business networking events, as well a social organization called the Fraternity.

Foley is conversant in issues pertaining to common-law marriage, as well as wills and power of attorney. Although he is not a lawyer and does not work on wills himself, he advises his unmarried clients — many of whom are childless and have relationships that are not supported by their relatives — to leave nothing to chance when it comes to their assets after death.

“A well-drawn-up will can save a lot of trouble down the road,” he says, citing the case of a gay man who willed his house to his longtime live-in partner, but failed to leave the contents to him as well. Shortly after the first man’s death, his relatives drove up in a van and removed every stick of art and furniture.

“Appropriate executors and people to act as powers of attorney for financial and personal-care matters are also particularly important,” Foley says.

While a legal marriage ensures that certain assets — the most important being the matrimonial home — pass automatically to the surviving spouse, many gay people live in common-law relationships, in which these rules do not apply.

The problem can be solved by placing some assets in “joint tenancy with right of survivorship,” so they automatically pass to the co-owner on the death of one partner, or by leaving specific directions in a will.

Issues of insurance for long-term care and critical illness may also be more important to gays and lesbians, particularly if they are single or childless.



For Lily Khosla and Dawn Carey, investment advisors who work as a team at Richardson Partners Financial Ltd. in Toronto, the South Asian community is a fast-growing niche. And they have a significant communication advantage. Khosla, who is of Indian heritage but was born in Uganda, is fluent in Hindi and Punjabi.

“Speaking these languages breaks down barriers,” says Khosla, “as I am ethnically and culturally sensitive to the needs of our clients.”

While Khosla is a Sikh, her husband is a Hindu, and she understands the teachings and customs of both religions. Carey was born in Toronto, and the pair say clients like the mix of having one partner with an Indian background and the other Caucasian.

“Lily has the cultural background, but clients know I understand their values, and like the fact that I am family-oriented,” says Carey.

The South Asian clientele whom the pair serve are successful entrepreneurs and professionals such as doctors, dentists and lawyers who have $250,000 or more to invest. While some were born in South Asia, others are second-generation, a savvy group who have benefited from the priority their parents placed on education.

“Many people who have come to Canada have worked hard and become wealthy,” says Khosla. “But investing has traditionally not been part of their everyday lives, and they don’t know where to start when it comes to wealth planning.”

Traditionally, Indians with wealth have directed it toward real estate and jewellery. Any excess cash was put into the bank or in GICs. Indians in business in Canada have established relationships with banks from which they have borrowed money and, because of a lack of investment knowledge, have typically stuck with the banks when looking for a place to put their profits. But on an after-tax basis, Khosla says, they have not been well served by sticking to interest-bearing investments.

“There’s been a lot of bank influence. We get our clients to think outside the bank mentality,” Khosla says. “Many have not had experience with stocks, bonds or mutual funds.”

In some cases, the pair’s clients have no idea what these various securities are, and the advisors spend a lot of time patiently educating them.

Although families in the community are traditionally male-dominated, the pair has found it works well to reach the women first. Often, parents leave money to their children, or a young family is caring for aging parents, and there are intergenerational issues to discuss. Sometimes, insurance needs are part of the picture, including long-term care and disability insurance.

“The women can influence their male partners, many of whom don’t know what a stock, bond or mutual fund is, either, but are afraid to ask,” Khosla says. “Statistics show that many women outlive men, and we want them to understand the risks of divorce and illness, and the possibility they may end up alone.”

Weddings are often a huge expense in the South Asian community and it’s important to include them in the financial plan. It’s not uncommon for the bride’s parents to spend $100,000 or more on a wedding, and the marrying couple will often chip in, as well. The dowry is still part of the tradition, and an Indian bride requires valuable saris and jewellery. Parents also frequently contribute up to $100,000 to help a young couple buy their first home.

“Parents will save and sacrifice for the children, and it’s a challenge to move them beyond the GIC mentality,” Khosla says. “It’s a gradual process and takes a lot of hand-holding.”

Khosla and her husband are socially involved in both the Sikh and Hindu communities in Toronto, and often business comes from social connections and word of mouth. Khosla is a golfer who attends regular golf events sponsored by the Indian community and is also a member of the Indo-Canada Chamber of Commerce.

Simply letting people know what she does when she attends business, religious and cultural events often leads to a phone call, Khosla says. Recently, she invited clients and interested prospects to a concert by a famous spiritual musician, Dya Singh.



Consumer buying habits have played a big part in the practice of Richard Plamondon, an investment advisor with Richardson Partners in Montreal.

About 20% of the assets under his management are owned by a group of 25 Quebec-based clients who have made their wealth from being franchisees of a major Canadian retail operation. Of the group, 15 are still actively managing stores, while 10 have sold out and retired.

“The franchisees are a highly successful group,” says Plamondon. “Like other successful business people, they have money but not time — and that’s the kind of client we like to have.”

The franchisees share some common characteristics, says Plamondon. They are self-starters, highly motivated and well organized. They form a close-knit community, and word travels fast among members of the group.

It all started about 11 years ago, when Plamondon had one franchisee and decided he wanted more of the same. He held a social event at a casino in Montreal and asked his client to invite fellow franchisees.

“You must give before you receive,” says Plamondon. “Within six months, I had one more franchisee as a client.”

As Plamondon learned more about the retail organization, he became aware of a charitable foundation associated with the group and got involved in organizing a fundraising golf tournament. Golf led to meetings with more franchisees of the same retailer, and Plamondon ultimately joined the board of directors of the charitable foundation.

A chartered accountant as well as a financial planner, Plamondon has been able to offer useful financial guidance to the foundation. Gradually, he acquired other foundation board members as clients and has slowly branched out to include more store owners. He has also attracted relatives and friends of the franchisees.

“News gets around quickly, and people in this retail community know who is doing business with whom,” he says. “If you do right by them, they do right by you.”

The needs of franchisees are similar to other successful business people, he says. They want to pay fewer taxes, they want a successful retirement and they want an estate plan for their family. Most have RRSPs and spousal RRSPs and, for many, it makes sense to have an individual pension plan.

Over the years, Plamondon has acquired an intimate knowledge of the specialty retail business, and enjoys discussions about such details as what kind of inventory moves best in particular neighbourhoods.

Franchisees ultimately sell their businesses and retire, and Plamondon helps with planning related to minimizing taxable capital gains from the sale of inventory and equipment.

He also assists with the investment of profits when businesses are sold. He typically recommends a balanced asset allocation, with cash, bonds, preferred shares, common shares and mutual funds, as well as some private-equity investments available through Richardson Partners. IE