The first thing Wayne Kemick does when he meets a prospective client is start building a financial plan for that client. The goal of building a plan informs the structure of that first meeting.

“Most important, it gives me time to chat,” says Kemick, a senior vice president and wealth advisor with BMO Nesbitt Burns Inc. in Waterloo, Ont. He inputs the data into his computer as he chats.

“We want to keep the meeting structured, in that we are following one idea — the client’s future,” he says. “But we do not want to be so business-oriented that it’s cold.”

Asking the right questions is important, but listening is paramount, Kemick adds. The process is his opportunity to learn about the new client and his or her family, time horizon, hobbies, interests and financial goals.

“We are doing two things,” Kemick says. “We are learning a lot about our clients, and we are putting them at ease.”

Focusing on the plan not only structures each meeting; it also reinforces to clients the importance of thinking of the long term. As the conversation proceeds, the plan takes shape and, before the meeting is over, Kemick can tell if the client’s investment philosophy is compatible with his own.

If the prospect shares Kemick’s focus on long-term, realistic goals, they will work together; if he or she does not, they go their separate ways. In either case, the prospect gets the financial plan. Overall, the strategy works in Kemick’s favour: with a professionally prepared financial plan in hand, very few prospects back out.

Kemick hasn’t always been focused on long-term planning. When he started his practice in 1981, after completing an MBA at Queen’s University in Kingston, Ont., he built his business by cold-calling. Back then, he says, business was all about making trades.

In 1991, Kemick joined Nesbitt Burns and began repositioning his practice. By then, he had found that when it came to making decisions on trades, clients were often overwhelmed by market “noise” and could not help but focus on immediate consequences. So, he started using managed products and emphasizing planning. By placing clients’ assets in mutual funds and wrap accounts, Kemick could keep clients focused on the long term while the fund managers worried about the day-to-day trades.

“We aren’t doing it because the managers are that much better,” Kemick says. “Most people, we find, are just not comfortable making those decisions.”

Kemick also uses dividend-paying equities to generate income for his clients’ portfolios because, he says, the income stream will likely remain intact even if there is volatility.

Now, with associate Joel Widmeyer and assistants Debra Schell and Marlene West, Kemick manages a $160-million book and 240 client households in the Kitchener-Waterloo area. His focus is on long-term wealth management.

Putting clients at ease — making sure they understand and are comfortable with their financial decisions — is especially important to Kemick. “The investing side of our business is the easy side,” he says. “It’s the psychological part that we find to be the most important.”

Addressing that psychological part includes making sure clients understand downside risk. “When we’re making money, everybody is happy,” he says. “It is during the ‘down’ times that people get nervous and need hand-holding. What we don’t want to hear is a client saying, ‘If I had known that could happen, I would not have done it’.”

Kemick likes to explain downside risk this way: “You start off with $1 million. A year from now, I’m going to lose you 15% and I am going to charge you 2.75% to do that. That means I am going to lose you $150,000 and charge you $27,000 to do it — and I am going to tell you that I did a good job. Are you OK with that?”

The client’s reaction can be anything from a laugh to a blank stare. But clients come around.

After more than two decades in the business, Kemick knows that tough years occur, both in the markets and in life.

Before going to Queen’s, Kemick completed his BA at Wilfrid Laurier University, where he played football. His plan back then, the early 1970s, was to play professional football and become a teacher. A preseason knee-injury put an end to his football career.

@page_break@In 1978, Kemick took an unfortunate tumble while horsing around in the snow and broke his neck. He has been in a wheelchair ever since. Now, his working dog, an eight-yea-old labrador named Agar, trained by Canine Companions for Independence in the U. S., is always at his side, opening doors and fetching car keys among other tasks. When Kemick says “release,” Agar becomes just like any other affectionate family dog.

As for market downturns, Kemick shows his clients how their financial plans are designed to account for these difficult periods.

“The markets contract one year in five,” he says. “But nobody knows which year it is going to be.”

Kemick uses the financial plan as a tool to equip his clients to weather bear markets. For example, Kemick always runs very conservative numbers to show that even modest returns will not derail a client’s long-term goals. “When it comes time for portfolio reviews,” he says, “the plan is the saviour.”

As is the case in the first meeting, the financial plan provides the structure for clients’ portfolio reviews. Every client has his or her plan in a binder so Kemick and the client can refer to important sections during the meeting. Items that need to be discussed are highlighted. The aim is to reassure each client that, despite the immediate storm, the long-term financial plan is still on track.

“If you can bring a client in right now and put them at ease, you are going to keep their business,” he says. “But more important, it is going to make them feel OK.”

Financial plan keeps clients thinking long term



Part 7 of a series shot on location at the 2009 Top Advisor Summit. Wayne Kemick, an advisor with BMO Nesbitt Burns Inc., describes his first use of financial planning methods and how planning helps deepen and maintain his relationships with clients.

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