MPW focusing in on expansion

“We have been successful in helping advisors poach assets from other firms and, therefore, grow their relationships with their existing clients,” says Bernard Letendre, vice president and managing director of MPW, a unit of Toronto-based Manulife Financial Corp. “I think it’s simply the platform we’ve put together resonating with clients quite strongly.”

Greater overall income

MPW works with both Manulife advisors, drawn from the parent firm’s various distribution channels, and third-party advisors to provide investment management, private banking, trust, tax and estate planning, as well as other advisory services, to HNW clients. (At MPW, HNW clients are defined as those with $1 million or more of investible assets, $1 million or more of banking assets or $1.5 million in combined investing and banking assets.)

Advisors are paid an ongoing, quarterly referral fee, which is set according to a grid and may be at a lower rate than what the advisor had been earning on the business before he or she signed on with MPW. However, the expectation is that the client will consolidate more of his or her assets on the MPW platform, creating a much bigger pie and thus greater overall income for the advisor.

“The advisor is earning more on that relationship,” Letendre says, “than he or she would have done doing it on his or her own.”

MPW provides the client with in-house investment counsellors, private bankers, and tax and estate professionals, as well as other experts, and takes care of advisors’ compliance and other administrative issues. Advisors are free to determine the degree to which they want to remain involved in managing the client’s affairs, but, Letendre says, the relationship between the advisor and the client is always respected.

“We don’t push out advisors; we augment their capabilities,” Letendre says. “If the advisor has done some planning for the client, we will bolt our own advice onto that.”

MPW limits itself to dealing with clients on a discretionary portfolio-management basis.

MPW opened its Vancouver office in September, a year after opening its Toronto office. There are plans for at least two more offices – in Calgary and Montreal – and possibly a fifth in a city yet to be determined.

The business model is successful, Letendre says. MPW is working with some 430 of the 1,025 advisors in the Toronto area whom MPW has identified as good candidates to partner with. In Vancouver, MPW has relationships with 123 of the 400 advisors it’s targeting in that region.

In broad terms, Letendre says, there are three types of advisors who are attracted to MPW’s services: those who want to capture a greater slice of a client’s book but have been unable to; those who are coming to MPW as a defensive play against having their clients poached by the private-client arm of a bank or other firm; and those who want to work with MPW in order to land a HNW prospect.

Opportunity exists

Although there are many competitors in the private-client space, Letendre believes that there is more than enough opportunity in the HNW segment, especially among entrepreneurs and business-owner clients who will be looking to sell their businesses in the coming years. Says Letendre: “There is a mind-boggling amount of wealth out there still waiting to get crystallized.”

Keith Sjögren, senior consultant and managing director of consulting services at Investor Economics Inc. in Toronto, agrees that there is opportunity in the HNW space, although there will be a limit to the number of entrants that will be able to exploit it.

“The opportunity will be harder to realize as more competitors emerge,” Sjögren says. “Not only that, existing competitors are honing their strategies and allocating capital to building their presence.”

One way MPW differentiates itself, Letendre says, is in its approach to investment management. The firm emphasizes its global outlook on asset management, which leverages the parent firm’s global reach; its “open architecture” products and asset management provide clients with both in-house and boutique third-party options; and a goals-based approach to investing helps clients invest and manage their money based on their various financial goals.

“The risk profile of the various investment strategies is tailored to each individual goal,” Letendre says. “And we take it one step further and actually report to clients by goals. If the goal is to buy a 60-foot boat in five years, the account will actually say ’60-foot boat’.”

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