In a world where virtually every investment product available to clients has become a commodity, New Outlook Wealth (NOW) continues to differentiate itself from the competition.
In fact, the business plan of the Winnipeg-based financial services company looks nothing like what investors will find at the bank-owned brokerages, mutual fund companies and credit unions. The age-old wealth management model, where financial advisors are licensed to sell products while simultaneously providing advice, simply doesn’t make sense for clients, says Michael van Lierop, president and founder of NOW.
Such a scenario presents an obvious conflict of interest because advisors have an innate need to defend their decisions. Is advice truly unbiased and in the clients’ best interests if the advice can be driven by the product that pays that advisor? Dealers can manipulate advisor behaviour by paying more for one product over another. A common example of this is proprietary, or in-house, funds.
NOW advisors and their clients are less exposed and better insulated from the numerous conflicts of interest that have become widespread in financial advice in Canada.
“That’s what the industry should be about, but it’s not. That’s the core of what we believe, separating financial advice from investment management and putting that line in the sand,” he says.
From a client perspective, the NOW wealth management model represents a two-for-one deal — they get a qualified financial planner plus an experienced portfolio manager. Not only do clients receive better value in this kind of set-up, but they also have direct access to the professional managing their portfolio. This two-for-one deal is often at much lower cost than traditional mutual funds.
“In the traditional model, you never speak to that person,” he says.
“What’s powerful about that is the financial planner and the client get to sit on the same side of the table and hold the portfolio manager’s feet to the fire when appropriate. Our advisors aren’t answering for poor performance, picking the wrong stocks and making wrong investment decisions. That’s very different from what you’d expect in the traditional wealth management business,” he says.
The fiduciary duty in NOW’s business model rests with the portfolio manager so client assets are invested by somebody who has a legal obligation to do what’s in the clients’ best interests. This fiduciary duty does not exist among mutual fund licensed advisors.
“The merits for the client are enormous,” he says.
But the NOW business model isn’t just a win for clients, there are also significant advantages for advisors. First, they don’t have to satisfy a compliance department for every investment decision they make on a client’s behalf.
“That, in itself, is a game-changer for advisors,” he says. “The biggest frustration for advisors today is compliance and a big part of that is because they’re responsible for making investment recommendations that they’re not equipped to make.
Founded in 2020, NOW has built its assets under advisement to just shy of $500 million, a figure that is growing steadily with robust portfolio management and advisor recruitment. Van Lierop is confident that the pace of growth will not only continue, but accelerate.
“A big part of what we do is educate advisors. We go to three or four national conferences a year and we
present at those events. We educate advisors that there’s a better way to do business and as that message gets out, we expect to attract more advisors who share that vision,” he says.
NOW services clients across Canada from its head office in Winnipeg and with regional advisory teams
throughout Manitoba, Saskatchewan and Alberta. NOW also provides the wealth management platform for Montreal-based Movative Financial.
“We’re in a spot today where we’re much more selective about who we bring on board. We have great planners who know how to take care of their clients’ best interests,” he says. “Everyone who is successful in the wealth management business has an ego of some sort. All we ask is that their ego gets parked at the door. There’s no place at NOW for the toxicity of financial services success. If an advisor thinks they are God’s gift to the world, they’re better off staying where they are.”
Mergers and acquisitions are definitely part of the company’s growth strategy as well as the recruitment of individual advisors and their teams, provided they’re the right fit for the company.
Andrew Smart was the first advisor to join NOW in October 2020 after deciding to leave IG Wealth
Management. The Brandon-based veteran says NOW’s client-centric focus was the key motivator behind his move.
“I have the ability to bring lower costs to clients, a broader selection of products and offerings and I’m
able to focus on true fee-for-planning services,” he says.
Because he’s not picking individual investments, he’s able to act as the general manager through the entire process for clients to make sure everything goes smoothly.
“I don’t have to deal with what the stock market is doing on any given day or picking any funds. I have so much more time and capacity to focus on strategizing to achieve my clients’ goals, gathering information from them and helping them solve their problems,” he says.
Jack Wozniak, a Regina-based financial advisor at NOW, feels much the same way. He joined the company three-and-a-half years ago after two decades at IG Wealth Management because he didn’t believe he was serving his clients as well as he could with a proprietary product shelf.
Today, his clients can choose from the product line-up at the dozen portfolio manager companies with which NOW works.
“My clients pay less and they get way more value and way more expertise than they did before,” he says. “I have more power to work effectively for my clients than I ever did in my life. I have more experts, more variety and more exact needs of my clients are being met.”
Wozniak says one of NOW’s differentiating factors is having direct access to the portfolio managers making the investment decisions.
“My clients see the expertise in our corner and the team of people working for their futures,” he says.
NOW recently took its people to Puerto Vallarta, Mexico, where they were able to relax, recuperate and rejuvenate in the sun with an umbrella in their drinks. Van Lierop says he’s never been on a business trip with so many people with whom he wanted to spend time.
“We share the same vision and the same values. There are lots of differences of opinion but we all get along. That’s extremely rare in this industry, which is known for its toxic work environments, egos and stiff competition,” he says. “I don’t tolerate that. We like friendly competition. We like people to strive and grow.”
NOW has a different fee model for clients and van Lierop says he is a big advocate for advice-only planning.
“If clients have investments at another firm, that’s fine with us, especially if they want to pay for planning. There’s a whole segment of the population that still needs financial planning, even if they don’t have investments with us or investments at all. A lot of entrepreneurs have put all of their profits back into their businesses,” he says.
Farmers, in particular, are prime candidates for such services, because the traditional model isn’t designed to include small business owners.
“All of a farmer’s net worth is tied to their land, equipment and livestock, not investments. It’s the same for business owners. Their net worth is tied up in equipment, technology and inventory, not a mutual fund portfolio or life insurance product,” he says.
Finally, van Lierop says another differentiator for NOW is avoiding sales grids and achievement levels to rank their advisors.
“Advisors who are paid based on grids are constantly striving to meet sales targets to maintain their revenue for the next year or, if they’re lucky, grow it. Sales targets have nothing to do with client outcomes. The advisors are being strong-armed into selling more, rather than advising. It’s a conflict. There’s no sales model for firms in advice. The sooner that people learn that, the better all Canadians will be,” he says.
