Now that the economy is in recovery mode, more financial advisors have begun to trim the lower-asset clients in their books in favour of high net-worth prospects. However, some advisors at smaller, independent dealers remain steadfast in their belief that the silver lining lies in the middle-class market.

That’s the approach being taken by advisors with Oakville, Ont.-based Canfin Magellan Investments Inc. Rather than going after clients with multimillions in investible assets, this mutual fund dealer has a more modest strategy: since its inception in 1997 as a subsidiary of Oakville-based Canfin Financial Group, Canfin Magellan’s backbone has been an integrated wealth-management model, with comprehensive financial planning as its heart and soul.

Canfin Magellan does not have a platform for HNW clients; rather, it seeks to represent the market segment beneath. Says Tony Mahabir, CEO and chairman of Canfin Financial Group: “Middle-tier clients have been, and will continue to be, our base because they are poorly served, underappreciated and have quite often been served in a piecemeal, transaction-oriented fashion.”

Canfin Magellan focuses on providing services such as estate planning, insurance planning and tax planning. It also offers mortgages and loans through referrals.

“[Middle-tier clients] require assistance with budgeting, debt management, estate management and tax management, in addition to the traditional investment management and risk/insurance management,” Mahabir says, noting that Canfin Magellan’s philosophy is, “One source, multiple services.”

Adds Manny DaSilva, president and chief compliance officer of Canfin Magellan: “Everyone should have a financial plan, as opposed to just having investments. [A plan does] not just prepare clients for emergencies along the way. It gives people a road map; it allows them to be prepared for whether they die too soon or live too long. Without one, it really doesn’t matter how much the client has.”

At Canfin Magellan, only those advisors who have a certified financial planner designation are compensated for drawing up financial plans. However, having multiple licences is also encouraged.

“It creates multiple income streams,” says DaSilva, “and it helps [advisors] manage and control the client experience better.”

Adds Mahabir: “By offering solutions to clients that go beyond those items that pay commissions, the advisor is able to cultivate trust and loyalty. It is difficult and expensive to do, but we’ve consciously slowed our growth down because we want to grow that culture.”

Specifically, Mahabir says, Canfin Magellan is “not looking to attract what we call the ‘superstars’ of the industry. I don’t want to offend our competitors, but the ‘superstars’ are the prima donnas who are only interested in maintaining the status quo. A business model that acts like a distribution model doesn’t work.”@page_break@Canfin Financial got its start in 1995, when Mahabir and DaSilva were running Canfin Capital Group Inc., a managing general agency. Although they were processing their mutual fund sales through another dealer firm, DaSilva and Mahabir soon realized they could manage both businesses. However, the partners added their own twist by emphasizing the high importance of financial planning.

“Procurement of product was secondary to us,” Mahabir recalls. “The winning formula, we thought, was like going to a doctor — you get a thorough checkup and then you shop for your medicine.”

Because of this financial planning-centric approach, DaSilva says, few of Canfin Magellan’s clients suffered portfolio erosion during the recent recession.

“We focus on client objectives and risk tolerance, as opposed to rate of return,” he explains. “So, if they’re within so many years of retirement, there would have been a minor adjustment — if any at all.”

And at a time when many in the financial services industry were shedding their sales forces, Canfin Magellan was growing. The firm has recruited 28 advi-sors in the past two years, growing into a mid-sized dealer with 87 advisors.

“When everybody’s comfortable, nobody makes changes,” DaSilva says. “So, I think people overlook certain things when they’re making money and things are going well. During market downturns, we find that it’s usually a very good time to recruit good advisors.”

Canfin Magellan’s ideal sales force would number 250 advisors, DaSilva adds. That task is on the shoulders of Arman Parsi, the firm’s business-development manager, whose goal is to recruit 25 advi-sors a year.

Although experienced advi-sors are preferred over rookies, the firm does offer monthly training and one-on-one coaching.

“We have a financial planning process, all the way from engagement to invoicing, that [advi-sors] don’t have to work out,” says DaSilva. “We have a referral program, so they don’t have to worry about interviewing lawyers and accountants.”

Adds Mahabir: “We want the mid-tier type of advisor who feels like the existing system isn’t working, wants an integrated wealth-management advisory model and is passionate about financial planning.”

Mahabir believes that employing such an approach will lead to long-term success because Canfin Magellan’s comprehensive offerings to the mid-tier market serves “a segment [of the population] that others find unprofitable. Their business model was poorly designed to chase the HNW segment.” IE