The advisor’s advisor

For the wholesaler, then, the primary goal today is retention of clients and assets. The key tool to attain that goal, says the senior vice president of sales and sales manager for Western Canada with CI Mutual Funds Inc., is a network of solid relationships, backed by good products and a steady flow of “value-added.”

Green, 42, is big on relationship-building. It’s a theme he returns to repeatedly during an hour-long interview in his office very early on the morning of Calgary’s famous Stampede Parade.

But then CI, too, is big on relationship-building — and with good reason. Other fund companies also have good products, Green acknowledges. “In 1993, all it took to be a successful wholesaler was hot funds,” he says. “Nowadays, what it takes is good funds and great relationships. The industry is consolidating. There are fewer fund companies, there are consolidators doing nothing but buying up agencies, and over time, there will be fewer advisors with bigger books. And it has been an abysmal 12 months. Only 1973-1974 rivals it within the past 40 years. Right now, we need to keep investors focused on their long-term goals.”

CI is banking on the importance of wholesalers to its business plan. Green is a Vancouver native who spent his early career years first as a telephone clerk, then as a trader on the Vancouver Stock Exchange floor and finally as a derivatives trader with RBC Dominion Securities Inc. He moved into wholesaling in 1993, after being contacted by a headhunter recruiting for a competing firm. He didn’t get that job, but was intrigued by the field, so he approached CI and joined its Vancouver operation.

At the time, CI had a grand total of two wholesalers and one assistant covering the area from Victoria, B.C., to the Ontario border. Today, there are 24 covering the same territory, split equally between wholesalers and support staff and also equally between Vancouver and the Calgary office that Green opened three years ago and still heads. The western region (British Columbia is now counted as its own region, the “Pacific”) has a potential market of 10,000 brokers and planners.

Green’s operation builds new business mainly through one-on-one presentations. The lead often comes from a referral by a satisfied client. So, to Green, happy clients are key. Clients “are looking for insight, direction and business-building ideas,” he says.

“The advisor is the lifeblood of my business, and you get the business of the advisor by adding value to his or her business,” Green adds. “You have to be a knowledgeable consultant to a client’s own business — like a jailhouse lawyer or a streetwise social worker. It’s something you can’t quantify. It’s intangible. But without it, you might as well close the door.”

Green says he wields two essential tools to operate in today’s market conditions. First is relationships. “It’s when the markets misbehave that you most need to be out there with the advisors,” he says. “People notice when you don’t come around in times of trouble. One of the first things I ask when I do a presentation is, ‘Who’s been around to see you lately?'” Green thereby learns a lot about the competition. His inquiry also often prompts clients to recall that other companies’ wholesalers may not have been seen in a year or two.

CI tells its wholesalers to see every client at least once every 90 days. In any case, some of Green’s relationships have become personal. One client recently lost his wife to cancer. Green, who lost his brother to cancer last year, has been spending quite a bit of time with that advisor.

Even the best salesman would ultimately run out of breath without something of substance to offer — the “value-added” part Green keeps referring to. In past years, that consisted of a steady diet of new products, such as CI’s aggressive “boomernomics” campaign. It advocated directing investments into companies and sectors that, CI believed, would be driven by a combination of the aging, spendthrift boomer demographic plus trade globalization and the information technology revolution.

“Boomernomics gave advisors a great story they could take to their clients,” he says. It provided both an interesting product and a compelling reason to invest.

Today’s environment is more defensive, he says. The primary goal is to “keep assets in the company.”

The second essential tool in building value is a steady stream of research and analysis from CI that Green and other wholesalers provide advisors. This allows advisors to bolster communication with today’s skittish and confused investors. “In times like today, advisors often don’t want to talk to clients, because they don’t know what to say,” says Green. “My job is to make sense of the nonsense.”

CI’s most recent handout contains tables that analyse current economic conditions and place today’s market conditions in perspective. The economic table asserts energy prices, interest rates and stock market valuations are today more favourable for an economic rebound than a year ago, while admitting market sentiment remains in terrible shape. Those factors, Green argues, point to better economic times ahead and suggest that now is a good time to invest in discounted markets.

Another sheet, labelled “Sharp corrections are normal,” shows 318 market corrections during the 20th century. Of those, 29 turned into bear markets, with an average one-year duration. Rallies, Green notes, invariably followed.

To Green, this kind of analysis is pure gold. It reassures the advisors, and arms them with background to reassure investors.

CI must be doing something right. In the eight years Green has been with the company, it has grown from an aggressive but small player into the senior ranks. CI was No. 1 in net sales in Canada last year, racking up $6 billion. So far, says Green, the firm has not had a month of net redemptions. That alone is worth a lot to advisors and wholesalers. What’s selling are lower-risk, broad-based products such as global balanced funds. Small-cap and specialized funds are out.

As regional wholesale manager, Green divides his time between acting as a “resource” for his team of wholesalers and servicing his own remaining base of 200 clients. “There’s no way that, during a market downturn, I can know what’s going on in people’s minds unless I feel the heat myself,” he says. “So I need to keep some clients.”

Asked about his management responsibilities, Green laughs and says, “Do you know many salespeople? They’re unique individuals. With creativity comes a cost. I try to do well in sales so I lead by example. But I obviously can’t be tops, so my other role is to be a resource to other wholesalers and keep them focused on key points. We’re not just moving product, we’re adding value and building relationships.” IE