Advisor insists financial planning is a profession

By Grant McIntyre | December 2009

Lenore Davis has her work cut out for her. A fi-nancial planner with Dixon Davis & Co., she was recently appointed president of the Institute of Advanced Financial Planners, replacing Scott Robertson.

Now, in addition to running her business and serving clients from her office in Victoria, Davis is charged with steering the organization that confers the registered financial planner designation — at a time when the financial services industry and the IAFP itself are facing declining numbers.

Davis’s approach to both tasks is driven by a commitment to the process of comprehensive financial planning. “I believe that financial planning is a profession,” she says, seated at a window table in a hotel lounge in London, Ont., the site of the IAFP’s annual conference. “The sales aspect is an industry.”

That distinction underlies the way Davis operates her practice and serves her clients. Davis, who holds both the RFP and certified financial planner designations, is a fee-only planner who provides advice but has no involvement in product sales.

Davis’s advice to clients covers the six general areas of financial planning: tax planning; cash-management planning; investment planning; retirement planning; risk management; and estate planning. Implementation of these components of the financial plan is up to the client. If the client doesn’t have relationships with advisors licensed to sell these products, Davis will refer the client to an appropriate specialist.

Davis doesn’t serve a particular professional or demographic niche. Her clients’ single common characteristic is a willingness to pay Davis a set fee and make Dixon Davis their No. 1 financial planner. “[Clients] have to believe in the process that Dixon Davis creates for them in the financial plan,” Davis says, “and be willing to follow it.”

Davis charges an hourly fee of $150. Alternatively, clients can choose to pay an annual retainer of $2,000, which covers approximately 15 hours of service in any area of financial planning. “We do income tax preparation for 90% of my clients,” she says. “We do counselling with the next generation, and we talk about education funding options. Any time [clients have] a question that relates to their financial health and well-being, they call me and they get an answer.”

Davis hopes to increase her client roster to 100 families — but no more — and is building her book mostly through referrals from existing clients. She also receives calls from prospects who have found her through Internet searches. Davis is listed on “find a planner” rosters on personal finance websites and the IAFP site.

Davis found her way into the fee-only model almost by accident. She began her financial services career in 1987 as a life insurance “salesman” — her word — with Mutual Life of Canada, now Sun Life Fi-nan-cial (Canada) Inc. She was licensed to sell life insurance, disability insurance and mutual funds, but found that occasionally clients would ask questions for which Davis’s answers didn’t involve a sale.

One client engaged Davis for some extensive advice that included guidance on tax planning. At one point, the client said: “You’ll send me a bill for this, won’t you?”

“And I thought, ‘Jeez, that’s an idea’,’ Davis recalls. “I scratched something on a piece of paper, and she paid it.”

Davis has never looked back. In 1988, she formed Dixon Davis, a partnership with Howard Dixon, then a colleague at Mutual Life, who eventually became Davis’s husband in 1994. The couple ran their fee-only planning firm as a separate entity while still working as agents with Mutual Life until 1998. Then, they severed ties with the insurer and made fee-only planning their full-time occupation.

Dixon has recently retired and now teaches a financial planning course at University of Victoria. He often makes a “guest appearance” in the Dixon Davis office to lend a hand at tax time. Meanwhile, Davis, 56, runs the firm with the help of Margie Parikh, who is learning the profession under Davis’s mentorship. Parikh is also taking formal training at the University of Victoria toward a diploma in financial planning, with plans to work toward a CFP designation and an RFP. Sounds like a succession plan, but Davis is noncommittal: “We’re discussing that.”

Succession is a concern that extends throughout the financial services industry, and with the national firms and independent advisors looking for new advi-sors to carry the torch, the IAFP is looking for new members. The institute has slightly fewer than 400 members, and its ranks are declining as members age and retire. The group includes many advisors who are with such firms as Investors Group Inc. and Assante Financial Management Ltd. “But they’re all getting old,” Davis says with her characteristic frankness. “We need the younger ones to come on.”