After working in chemistry research and agricultural science, Cameron Graham learned his mother-in-law was hunting for a successor for her advisory practice.Iuliia Anisimova/iStockPhoto / Getty Images
In Buy the Book, advisors discuss their experiences acquiring a book of business, from practice valuation to client retention.
Cameron Graham, a 35-year-old former chemist in Sarnia, Ont.
After years of post-secondary education and jobs in chemistry research and agricultural science, Mr. Graham grew tired of the solitary work. He still enjoyed the problem-solving and wondered how to apply those skills in a different and more social profession.
He sought career advice from family members and learned his mother-in-law, Jennifer Davies, was hunting for a successor for her advisory practice, DNA Financial Logistics, under Olympian Financial Inc., a mutual fund dealer.
While moving to financial services from chemistry didn’t seem like a natural transfer of skills, he says the problem-solving and critical analysis are similar.
Cameron Graham, CFP at DNA Financial Logistics in Sarnia, Ont.iStockPhoto / Getty Images
“Instead of creating experiments and analyzing results from a scientific perspective, it’s applying this skillset and framework to the questions and problems surrounding personal finance,” he says.
Mr. Graham obtained his certified financial planner (CFP) designation this year and has been an advisor since 2022. He started as an associate in 2020 when he earned his mutual fund licence.
The book
Ms. Davies transferred her book of 200 clients to Mr. Graham in 2022. Ms. Davies, trained as a chartered professional accountant and CFP, had focused on holistic financial planning and estate planning. The firm also offered tax preparation services.
The clients fell into two camps: full-time employees at the end of their working careers and younger entrepreneurs contemplating incorporation or other business structures. And in a twist of fate, the firm’s name, DNA Financial Logistics, aligned perfectly with Mr. Graham’s background.
Mr. Graham switched dealers in 2023 to Sterling Mutuals Inc., but is still serving those same clients.
The process
Mr. Graham was hired at Ms. Davies’s firm in 2020, joining an in-house accountant and an administrative assistant. He spent two years meeting clients, learning about their financial challenges and handling their paperwork. The COVID-19 pandemic wasn’t an ideal time to meet clients, but Mr. Graham persevered through the new normal of remote communication.
“The goal was to have conversations with as many clients and try to establish a relationship, ... [which was] difficult when your in-person interactions were incredibly limited,” he says.
The plan was for clients to know Mr. Graham well before Ms. Davies retired, and to tell them directly about her pending retirement and succession plan. That way, the actual handoff would be less of a shock.
“We had a pretty long runway for the transition,” Mr. Graham says. “When the actual time came, it was more just the formality of signing some paperwork, but relationships had already been established.”
This made a difference with client retention, and the firm was able to keep more than 95 per cent of the clients. Ms. Davies remained on the payroll for four years to help with the transition and offer support where needed.
The price
Mr. Graham bought Ms. Davies’ book for 2.5 times recurring revenue, which, according to industry experts they consulted, was an average amount at the time of purchase. He negotiated a direct finance deal with Ms. Davies.
“There weren’t any loans or bridging that I had to worry about on that side,” he says. He made a down payment and makes monthly payments for five years.
Next steps
Mr. Graham embraced Ms. Davies’ holistic approach and continues to offer all the services she provided. He has introduced low-cost index funds to replace higher-cost mutual funds, and he’s doing more extensive cash-flow and tax planning reviews with clients.
Advice for buyers
Advisors need to ensure the book is the right fit for their business.
“There needs to be a succinct relationship with what the previous advisor was doing and what you intend to do,” he says. “Otherwise, there could be some conflicting messaging.”
Are you a financial advisor or financial planner who recently bought a book of business? Globe Advisor would love to speak with you about your experience. Candour, especially around the finances, is appreciated, and your name and photo will be used for the column. Please e-mail dgage@globeandmail.com and include a brief synopsis of your situation.