Within the investment industry, there’s a natural tendency among many to associate the word “alpha” with the traditional definition — the return on or outperformance of an investment. And while that description is absolutely accurate, it’s not the only kind of “alpha” to focus on when it comes to your wealth goals and planning. Beyond your investment portfolio and its performance, it’s important to view wealth planning more holistically, including everything from investment and tax considerations all the way to retirement, estate and wealth transfer planning. As your perspective broadens in this regard, so too can your definition of “alpha,” and this is where “wealth planning alpha” comes into play, that being the extra value you get when working with a qualified advisor and multi-layered team of experts across a range of disciplines.
To get a better sense of what “wealth management alpha” is and its distinct benefits, let’s first take a step back and think about the core relationship between value and service. In any type of industry or business, there’s a value clients and customers generally associate with every service they receive or experience they have, whether it’s a meal at a restaurant, purchasing a vehicle, home renovations, or planning guidance from a wealth advisor. As a business, we acknowledge the tremendous importance of adding value for our clients in everything we do, and we also recognize that this value is magnified because of the very nature of the wealth management industry. While in the most literal sense, “wealth management” can be described as planning for and managing a client’s wealth, there is so much more to it when you dig deeper and understand what that actually encompasses. What it’s really about is taking the time to truly understand our clients’ lives and families, their feelings and values, their circumstances and goals, and then developing customized plans that specifically cater to individual needs. It’s about recognizing that wealth planning is an ongoing journey in which no two paths are ever the same.
For advisors, generating this broader form of alpha comes with the recognition and respect that clients come to them and rely on them for support and guidance in working towards their short- and long-term wealth goals. While investment decisions are a piece of this, what it comes down to is the time, resources and expertise devoted to the entire spectrum of wealth planning. This is something that’s deeply embedded within our business and our approach, and creating this alpha for our clients hinges on two key aspects — comprehensive planning and relationships.
When you work with a qualified advisor, you gain not just the expertise of that particular advisor but also knowledge and experience from a vast team of experts who handle everything from investment and wealth management to trusts and insurance to business owner planning to wills and estates. This type of structure further bolsters the value, because the interconnectedness ensures planning is smooth and streamlined, regardless of a client’s complex or unique needs.
From a relationship standpoint, no matter whether you’re settling into a career, raising a family, running a business, or nearing or in retirement, your advisor is there to provide direction and insight every step of the way. From the onset, there’s a deep commitment to building a strong sense of trust and reliability, which supports the growth of long-standing — often lifelong and multi-generational — relationships. As your advisor sees you in different markets, different environments and different life stages, you gain the invaluable benefit of having someone with a 360-degree view of your situation, as well as how you react to stressful or changing circumstances. As a result, your advisor and supplementary team can go above and beyond what you expect from that relationship, providing appropriate guidance specifically for you and your family and finding a range of avenues through which to generate alpha. For example, when your advisor and his or her team help you put a tax strategy in place, the tax savings is part of that broader alpha; when they work to maximize your savings while still meeting your current objectives, that additional savings is alpha; when they help navigate and plan around issues or unexpected events your family may be dealing with, that’s yet another source of alpha.
So while your investments are, without a doubt, an important component in your overall plan, they’re really one part of a much broader picture. To look at “alpha” only in terms of investing, without looking at tax, without looking at your goals and family dynamics, without looking at the succession of your assets and how you own your assets, you’re only looking at the situation in black and white. It’s only when you widen the lens to include all aspects of wealth planning that you can gain the full picture. Professional wealth advisors, through their expertise, experience and supportive teams, see in colour in addition to black and white. They consider all aspects of wealth planning and how they can be intertwined in the most effective manner, and in doing so, generate true wealth planning alpha for their clients. To find out more about how we are driving wealth planning alpha, hear what some of our clients have to say.