Lower margins, higher volumes

Johns is the creator and head of the Andrew Johns Financial Advisory Team, a 10-member group that’s recognized as the top-producing team for Raymond James in Canada.

Since joining Raymond James 14 years ago, Johns became the firm’s first advisor to surpass $1 billion in assets under management (AUM). Today, Johns and his team have more than $2 billion in AUM from private-wealth and institutional clients, and Johns now ranks third in revenue among all the firm’s advisors in North America.

So, what makes this Vancouver-born, small town-raised wunderkind tick?

Johns’ inherent love of commerce was first nurtured by his grandfather, a realtor in Port Alberni on Vancouver Island.

“I started my own lawn-cutting business as a 10-year-old,” Johns says, “and got new customers by distributing my own flyers.”

He also made and sold yarn-weaving crafts called “God’s eyes,” which his grandfather helped to sell in his real estate office.

“My grandfather took a small commission for each unit sold,” Johns says, “to teach me that making less per unit but with higher sales volumes meant more profit overall.

“That lesson has stuck with me all these years,” Johns adds. “And our focus here today at Raymond James is still all about lower margins and higher volumes.”

While attending high school and subsequently completing his undergraduate commerce degree in international business at the University of Victoria, Johns honed his business skills on the side. His student awning-cleaning business, for example, quickly developed into an enterprise with two full-time employees. “There were lots of commercial window cleaners,” he says. “But nobody specialized in cleaning awnings, so that was my niche.”

As a youth, Johns was an active athlete. He still plays hockey and is an avid surfer who first chased big waves on the west coast of Vancouver Island. Since then, he has surfed all over the world, including Hawaii, California, Australia, Indonesia, Portugal and even Wales.

But while Johns once dreamed about becoming a pro hockey player and did reach the Junior B level, he always knew financial services would be his calling. It helped to have an uncle who was a director with Vancouver-based Global Securities Corp., where Johns got his start.

“I actually first applied at Raymond James,” Johns says, “but they turned me down as being too young and inexperienced.”

But, eventually, he found himself under the Raymond James wing after the company acquired another firm at which Johns was working. “I joke,” he says, “that I was picked up like a bag of used pucks.”

Zero to $100 million

During Johns’ first six years at Raymond James, he and his small team built a private-client wealth-management book from nothing to $100 million in AUM.

But from those early days until now, Johns says, the key to his success remains sticking to his basic rule: spend time and energy only on tasks that translate directly into revenue.

“I’m not doing anything differently today than 14 years ago,” he says.

Another key to the team’s success is its website (www. andrewjohns.ca), says Johns: “It’s very content-rich and user-friendly, so we get a lot of active investors [as potential clients] who want useful information. Most of our private clients don’t have time to do their own research.”

However, while Johns’ team first built its book based on private clients (minimum account size is $1 million), business skyrocketed after it entered the institutional side five years ago. Today, 88% of the team’s revenue is produced by institutional clients, with the rest coming from private clients. For this, Johns gives thanks to the big banks.

“About 85% of institutional cash management in Canada is done by the big banks,” he says. “But in my opinion, many of these clients are underserved. We saw a major opportunity here.”

Today, Johns’ team has more than 100 institutional clients, including private companies, public companies and governments such as municipalities.

“In some ways, this is almost recession-proof for us,” Johns says of the government sector. “Today, we manage cash for more than half of all municipalities on Vancouver Island, and we also have municipal clients in the rest of B.C., Alberta and Ontario.”

The Johns team also is creating an institutional market niche in foreign exchange (FX). “We launched our FX program about two years ago,” Johns says, “after realizing that many clients have to deal in various currencies.”

Johns has a significant number of clients in the mining sector, which prompted him to launch yet another new side business: a social media project called Find My Mine (www.findmymine.com).

Modelled on the LinkedIn/Facebook concept, the site can be used by investors to access a growing database of mining maps and data as an investment research tool.

Johns credits his team for the success of all of his business activities. All of the team members are young, highly qualified – and meticulously selected.

Rigorous hiring process

“The average person on my team has undergone nine interviews and has taken probably three months to get through the hiring process,” Johns says. “Most are from outside Canada and, in total, we speak nine languages.”

Like individual players on a hockey squad, Johns has “special teams” to manage specific tasks.

And as the team’s business-process chart shows, it uses a “pipeline” approach: some team members concentrate on making initial contact with prospective clients; others follow up with the more promising clients; then a third group concentrates on providing the best possible service for clients under contract.

Even little things are never ignored. Initial client contact, for example, is always by phone call, not email, says Johns “We have an ‘always call first’ policy.”

Mentoring is equally important. Johns benefited greatly from mentoring in his early days, and he’s happy now to take up the torch. “I tend to hire younger people because they’re usually more open to new ideas,” Johns says. “After all, mentoring is a form of coaching, and I’ve enjoyed coaching hockey, too.”

Johns, in defining his success further, continues with the hockey analogy: “Wayne Gretzky was an unbelievable hockey player because he leveraged the strength of all his teammates, not just one. Our individual team members here have different talents, too, and together they make a stronger team.”

As for Johns’ personal career development, he has turned down several offers to assume a senior vice president’s role with Raymond James. Johns wants to continue developing his team.

Johns is happily married with two young children – and that, understandably, has added a new dimension to his life.

Johns’ main message to young financial advisors is best expressed by something an early mentor told him when he was, at times, as much as $100,000 in debt and struggling: “Be prepared to live like no one else is willing to for five years, so you can spend the rest of your life living like no one else can.”

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