Alysha Tse, wealth advisor and associate portfolio manager at Richardson Wealth Ltd. in Vancouver.Supplied
In Buy the Book, advisors discuss their experiences acquiring a book of business, from practice valuation to client retention.
Alysha Tse, a 33-year-old wealth advisor and associate portfolio manager with Chernick James Tse & Associates Wealth Counsel at Richardson Wealth Ltd. in Vancouver
When Alysha Tse didn’t know the answer to a financial question, a running joke is that she earned a designation to learn more. To date, in 14 years, she’s earned eight professional designations, including the certified financial planner and trusts and estates practitioner, to build deeper expertise.
She got her start in the business at the age of 19, working as an investment advisor for an independent firm. In those early years, she thought investments were the main focus for understanding client situations, but quickly realized her inexperience.
“I didn’t have any of the groundwork on the [financial] planning side,” she says. “After working with clients, I realized they also needed someone who had good judgment, planning skills, communication, continuity and someone who can guide them through complex decisions over time.”
She joined Richardson Wealth in 2021 as part of the firm’s tax and estate planning department. She enjoyed immersing herself in technical solutions for high-net-worth clients.
The book
Ms. Tse’s technical work for Richardson Wealth’s clients meant she had a front-row seat for how advisors managed client cases.
She came up with solutions for several of the 115 clients who were part of a top advisory practice led by Nevin Chernick. In April, 2022, Mr. Chernick was planning his succession and approached Ms. Tse about becoming a partner.
“The timing required careful consideration because the discussions coincided with an important period in my personal life,” Ms. Tse says. “We spoke openly about my plans to have a second child and my daughter was born in September, 2023.”
The terms of the succession agreement were finalized in 2024. Jack James, a long-time portfolio manager on Mr. Chernick’s team, was named the other partner.
Ms. Tse says her and Mr. James’ skills were complementary. While Mr. James brought extensive portfolio management and investment expertise, she concentrated on financial planning, insurance and tax and estate planning.
“The common thread across the practice is complexity,” she says. “Our clients are looking for more than investment recommendations. They want an advisory team that understands the full financial picture, identifies issues before they become problems and co-ordinates the various professionals involved in their affairs.”
The purchase
While the purchase arrangement was finalized, the transaction hasn’t yet commenced. Over a five-year period, an agreed portion of the practice’s revenue will be directed to Mr. Chernick, who is now semi-retired, Ms. Tse says.
Richardson Wealth will facilitate the transaction internally. Ms. Tse says the firm’s payout structure reflects the back office, compliance, marketing, legal and tax and estate planning support it provides.
The agreed purchase price is below the commonly cited industry benchmark of 2.5 times recurring revenue, Ms. Tse says. The valuation accounts for the internal nature of the succession, continuity for clients and adjustments based on the practice’s revenue composition, metrics and client demographics, she adds.
The transition
Ms. Tse and Mr. James have taken the reins on day-to-day management, client strategy, portfolio oversight, financial planning and long-term direction.
Mr. Chernick, who previously served as branch manager for Richardson Wealth’s British Columbia offices, has since retired from that leadership role within the firm. He continues to be involved in select client relationships in which his history with a family provides valuable continuity.
“Nevin’s continued involvement has allowed the transition to unfold in a deliberate and personal way, rather than feeling abrupt or transactional,” Ms. Tse says. “We also value his perspective and enjoy working together.”
In addition to Ms. Tse, Mr. James and Mr. Chernick, the team includes a senior associate investment advisor and an associate team co-ordinator who handles client operations.
Advice for buyers
Ms. Tse advises buyers to be upfront about their expectations.
“Be transparent with the lead advisor about where you see yourself in the practice and your timeline,” she says.
From there, the potential buyer needs to assess whether the outgoing advisor is committed to helping with the transition. Buyers also need to ensure the acquisition will work financially.
“Are the economics realistic after factoring in your time, staffing, planning work and service obligations? Does the type of practice you’re buying work with the practice you want to run in the future?”
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.