Christopher Dewdney, certified financial planner at Dewdney & Co. in Mississauga.Supplied
In Buy the Book, advisors discuss their experiences acquiring a book of business, from practice valuation to client retention.
Christopher Dewdney, a 44-year-old certified financial planner at Dewdney & Co. in Toronto
Christopher Dewdney and his family immigrated to Canada from Jamaica with dreams of building a better life when he was five years old.
He graduated from the International Academy of Design and Technology in Toronto with a diploma in fashion merchandising. He wanted to focus on the business side of fashion, but a chance meeting with a friend’s father a few years later changed his career trajectory.
The father, a successful financial advisor, also of Jamaican origin, spoke passionately to Mr. Dewdney about how advisors help clients achieve financial independence and how immigrants are underserved and often seek advice from someone in their own community.
The pitch resonated with Mr. Dewdney. In university, he had wanted to invest $1,000 he’d saved, but found advisors at the financial institution he visited were uninterested because of the small amount.
“I saw there was an opportunity to leave an impact and do good for the community,” he says. “I could be the change I seek. We don’t have unlimited amounts of wealth, but we have a great amount of need. We have a great amount of untapped opportunity, but nobody was willing to take us on.”
He started at an insurance firm in 2004, helping as many clients as possible regardless of assets. More than 20 years later, Mr. Dewdney runs his own independent firm focused on comprehensive financial planning. He employs two associate advisors, two administrative staff and one group benefits specialist to serve 1,000 clients.
While most of the clients he serves personally have more than $1-million in investable assets, he continues to bring on small clients. He also conducts pro bono work for those who can’t afford professional advice.
“I don’t turn a blind eye,” he says. “We dedicate 10 hours a month to clients who don’t necessarily fit our ideal structure. I made it a mandate to service these clients.”
The book
At the insurance firm at which he started, Mr. Dewdney was one of two Black advisors in an office that employed 100. The two advisors shared Jamaican roots and often ate lunch together. In early 2022, the advisor said he was planning to exit the business and sell his book.
The seller wanted someone with similar cultural values to serve his 350 clients of Jamaican descent. The majority were 60 or older, with a third of them being Gen X or millennials.
Formal conversations commenced in June, 2022, and Mr. Dewdney and the seller came to an agreement in the second quarter of 2023.
The purchase
Mr. Dewdney paid around three times recurring revenue for the book, less than the 3.5 times the seller initially wanted. The shared cultural values bumped up Mr. Dewdney’s cachet as a buyer.
The seller also liked that Mr. Dewdney had his CFP and chartered life underwriter designations and that he volunteered at professional industry associations.
Before buying, Mr. Dewdney conducted a due diligence process that included a profitability report and a review of the client list and assets, using his dealer’s internal resources to help with the analysis. He determined it was a good book.
He paid the full amount up front.
“I had the cash flow, so there was no financing, holdback or attrition clause involved,” he says. “Because [the seller] was taking less money, he received better terms.”
The transition
The seller mailed letters to all clients introducing Mr. Dewdney and called the top 20 per cent.
Mr. Dewdney notes that the seller, who stayed on as a client, made himself available to answer questions about clients. Mr. Dewdney managed to keep all of them.
Technology was the first big change as the seller used paper files for clients. Since the pandemic, he notes that more clients have now embraced virtual meetings.
Advice for buyers
Buyers need to get the word out that they’re looking for books − to their dealer, managing general agency, colleagues and branch manager, Mr. Dewdney says.
Several online platforms also exist that connect buyers and sellers.
And speaking to experienced buyers is paramount.
“No two deals are alike,” he says. “They are going to be specific to whatever is negotiated between a buyer and seller, but fundamental truths stay consistent.”
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.