Last month, I co-chaired the 2008 Top Advisor Summit in Toronto with Tessa Wilmott, associate publisher and editor-in-chief of Investment Executive.Over the course of the day, we heard nine presentations from 10 outstanding advisors.

Some themes were repeated across multiple presentations. They were:

> a financial plan is the foundation for all the advice clients receive;

> proactive client communications;

> establishing minimum asset thresholds in order to provide a high standard of service and advice;

> reducing the number of client relationships to focus on the highest-value clients;

> building a strong support team;

> “above and beyond” activity and recognition for key clients;

> ongoing upgrading of professional credentials;

> giving priority to developing referral relationships with accountants and lawyers;

> the impact of charitable activities.

One of the most frequent messages related to the impact of taking a “whole wealth” approach to clients’ financial situations. Many of those in our business who call themselves “financial advisors” are financial advisors in name only. In truth, they are investment advisors or insurance advisors who prefer the broader description of financial advisor.

Being a true financial advisor means taking a comprehensive view of a client’s financial situation. That includes not just investments and insurance but also tax minimization, estate planning and cross-generational wealth transfer, charitable giving and cash-flow management.

Taking a wider view of a client’s finances doesn’t mean becoming an expert in all of these areas, but it does mean doing at least three things:

> engaging clients in conversations about more than just their investment or insurance situations;

> having sufficient expertise to highlight problem areas and talk about these with clients and their professional advisors;

> developing a network of professional advisors in these areas to which clients can be referred if needed.

In talking with advisors who have focused only on investments or insurance, I’ve heard three reasons why they won’t go the whole-wealth route. First, there is a perception that most clients don’t want or need broader advice. Second, it’s often outside an advisor’s comfort zone and existing expertise. And, finally, I’ve had advisors talk about how time-consuming it can be to get into a comprehensive conversation about a client’s total financial picture.

These advisors also express concern about how they would be compensated. Simply put, just talking to clients about their investment or insurance needs is a simpler conversation, and can lead to a faster sale than getting mired down in the minutiae of the clients’ financial lives.

All this is absolutely true — if we’re looking at things just from one point of view. But view things from our clients’ perspective, and we see quite a different story.

One of the speakers at the Top Advisor Summit who has made the shift to a whole-wealth approach was Kathryn Del Greco of TD Waterhouse Private Investment Advice.In her speech, she reviewed some U.S. research that indicates that retirees generally feel they have their financial needs well in hand, and primarily seek investment advice. Among affluent pre-retirees aged 45 to 64, however, a substantial majority are looking for comprehensive advice.

While Del Greco quoted U.S. data, the same situation probably holds true for Canada. Not every client is looking for an advisor who can provide a broader view of his or her finances, but a substantial number are — and there’s no reason to believe this number won’t increase.

Taking a whole-wealth approach has a number of benefits for advisors. By providing broader advice, you increase your value to clients and reduce the risk of client defections. You also have a competitive advantage in talking to prospective clients. At the same time, you reduce your reliance on investment returns to drive client satisfaction. And many advisors find that their conversations and relationships with clients become more rewarding as a result.

I recently talked to a Toronto-based investment-counselling firm that has established a charitable foundation to facilitate its clients’ charitable giving. This move was controversial: does it really make sense to encourage clients to give away assets and thus reduce the dollars available for investing? But this foundation has had significant success; not only does it help clients achieve their goals, it enables the principals of this firm to get into conversations with clients about their hopes and dreams, conversations that otherwise would not have taken place.

How far you go in engaging clients in conversations about their finances will vary with each advisor. Some advisors focus on investments, taxes and insurance, while others go much further. One of the speakers at the Top Advisor Summit was Wayne Baxter of Mississauga, Ont.-based Investment Planning Counsel. Among the services his team provides is reviewing clients’ banking arrangements to ensure the fees they’re paying are competitive; they will also refer clients to a mortgage broker affiliated with the firm to search the market for the most competitive mortgage rates.

@page_break@For advisors who want to position themselves as whole-wealth advisors, a number of things have to happen. Adopting a “whole-wealth mindset” is the first and most important step. You need to have the desire to talk to clients about every aspect of their financial lives. It’s also key to incorporate this discussion into every meeting and conversation.

But just having the desire is not enough: the right skill set is also required. Many advisors pursuing this route will have to upgrade their knowledge. Remember, the goal is not to be an expert in all areas but to have a working understanding of tax, insurance and estate planning, as well as investments.

Some firms offer programs to help their advisors beef up their abilities to engage in these conversations. There are also external programs for attaining designations such as the certified financial planner or the new chartered professional strategic wealth program offered by CSI Global Education Inc.

Another vital component in a whole-wealth practice is a focus on planning. Most advisors who focus on comprehensive advice use a financial plan as the linchpin of their approach. As an extreme example, Dodee Frost Crockett of Merrill Lynch & Co. Inc. in Dallas, who delivered the keynote speech at the summit, has dedicated planners on her team to support her US$1-billion book. You don’t need to have staff dedicated to planning, but you do need to have the capability to develop and discuss financial plans with clients.

Not to be overlooked is the right network. Advisors who take a comprehensive wealth approach typically work with clients’ accountants and lawyers to ensure co-ordination of their clients’ affairs. When clients don’t have these professionals in place and where the need exists, advisors with a whole-wealth mindset have a network of experts to whom they can confidently refer these clients. (One of the benefits of this approach is that this can lead to referrals in return).

Moving to a whole-wealth approach is not fast, easy or painless. An up-front investment of time and money to develop the expertise and infrastructure is required, as well as a major shift in mindset. But if you want to take the long view on your business, moving to a whole-wealth practice can be one of the most important moves you’ll make. IE