A Year of Momentous Change
A Year of Momentous Change
Last year may have been one of the most trying years for clients of Innova Wealth. On an absolute basis, 2022 was the most difficult year for balanced investors since World War II, as both bonds and stocks fell sharply. The first ten months of 2023 were equally grim with modest rallies that fell shy of bringing investors back to break-even. In early November, economic data seemed to indicate that the inflation dragon had been tamed, and a late-stage rally saved bonds from what may have been their first three-year negative period in history. Finally a bit of light at the end of the tunnel for investors who had not seen such stagnant returns since the 2008 financial crisis! One of the key factors that made this period much more emotionally difficult for investors was the simple fact that we are all fifteen years older, and that much more sensitive to changes in our portfolio values. For those who take solace in relative performance figures, our strategies performed admirably compared to peers over the past two years, while providing a much smoother ride along the way.[i]
Amid a trying year for investor confidence, our securities dealership, Aligned Capital Partners Inc, and its new parent company CI Financial, launched a brand-new nominee platform. This is the first major innovation undertaken in over more than a decade in the Canadian financial custodian landscape. Billed as a ground-up modernization of the plumbing that keeps the retail investment world running, and one that would grant complete agency over this key component of our core business, Innova was excited to take part in the working groups and beta testing teams. As the initial transition date approached, it was evident that the product would be launched in iterative versions. Weekly patches addressed issues as they arose, but not without endangering client relations over missed and duplicated transactions, among other issues.
The shortcomings of the incomplete platform were particularly evident as we undertook the onboarding of more than four hundred new households and more than six hundred new accounts as part of the Sound Financial Strategies merger. Manual tasks that needed to be repeated several hundred times caused great strain on our human resources, especially on Barbara, Susan, and Evan, our new team members from Sound FS, who bore the brunt of the administrative workload of this transition.
As of the time of this writing, the back-office software has evolved into a very useable platform, one whose flexibility and rapid deployment times hold great promise for the future of this crucial system.
For our clients, the transition period impacted them in three ways, all of which were painful in the short-term: An overburdened service team, interruption to online access, and new client statements. Originally promised to be easier to read and more client-friendly, the statements issued in 2023 were lacklustre as this project fell to the wayside in the wake of a growing list of priorities for the new platform. Having seen the development road map for the online platform and client statements, I am hopeful that this period of frustration will be worth the resulting improvements to these elements of client experience.
On behalf of the Innova team, Thank You to all our clients for your patience during this time of change and uncertainty. We recognize that transitions of this magnitude can cause significant strain on the trust relationship we have built with every one of you. Between the online accounts and paper statements showing nil values, transaction errors and response time delays, the financial peace of mind we strive to instill in all our clients was jeopardized.
“Despite these considerable challenges, we managed to maintain our near-perfect client retention rate.”
It is with deep gratitude, humility, and a strong desire to improve that we head into this New Year, one in which we commit to consolidating our enterprise and refocusing our efforts on the client experience.
- Refining the Service Advisor model.
Throughout 2023, we introduced a new approach to client services at Innova. In our industry, most financial advisory firms operate with a single person who tries to do it all, for all clients. The partners are all familiar with this model as we operated with that structure independently for many years and appreciate how cared for clients feel when they know they have their advisor who is aware of all aspects of their financial lives. The drawback is that this model lends itself to the 'jack of all trades, master of none' scenario rather than the specialization we are aiming for at Innova.
For that reason, we have shifted to a team-centered approach in which each family is paired with a relationship manager (Service Advisor) who acts as the central point of contact, spearheading client communications, account change requests, and portfolio updates. The Service Advisor will know each client household intimately but will be able to draw upon our team of specialists and have them attend focused meetings as needed (ex: estate planning).
In most cases, this change will mean having two advisors joining meetings for the foreseeable future in order for our seasoned professionals to help mentor each of our Service Advisors. They are an exceptional group of individuals, and we will focus on developing their skill sets as advisors through osmosis to complement their expanding educational credentials.
By alleviating the pre and post meeting duties from our seasoned advisors, this adjustment will allow for more advanced strategic planning and investment management for clients. From estate planning to retirement projections, a wider array of propriety investment solutions, and greater availability for meetings, we expect to deliver on better client service and planning outcomes.
Here's a video that explains this in greater detail:
- Systematizing and creating team-wide visibility into the client request tracking systems.
As part of our 2023 objectives, we set out to re-think our Client Relationship Manager (CRM) to integrate a more robust tracking system for client requests. We are starting to see the fruits of this labour as more advisors make use of our growing pool of processing specialists. From insurance account updates to investment trades, all service requests are now centralized and attached to client records. This system allows for tracking of service times and minimizes the possibility of transaction requests slipping through the cracks. Our next iterations will be focused on harvesting and displaying the data in advisor and processing specialist dashboards to help our team members get a bird’s eye view of their responsibilities and service requests.
- Modernizing the insurance servicing platform.
Where the investment industry was operating on systems from the dot-com era, the insurance industry is still on dot matrix! With hopes of reducing the manual nature of most requests, we changed our Managing General Agency in 2023, moving from a smaller, legacy broker Bridgeforce to Canada Life’s independent channel, Financial Horizons. We are hopeful that their scale and investment in technology will translate to more efficient workflows, to everyone’s benefit. For clients, there was very little change as policies are still held directly with the carriers. From our perspective, this was another substantial transition that meant learning all new systems and migrating account access over an almost nine-month period. We are very happy to report that this transition is also in the rear-view mirror and our insurance support team can now fully dedicate themselves to client service.
- Launching new client experience initiatives.
We are in the process of creating a new role within Innova that will be focused on the client experience. This person will take the lead on client events, educational seminars, marketing and communications, and new client coordination. All of these items presently sit on the desk of the advisory team where a myriad of competing priorities can sometimes take priority over these initiatives. We are hopeful that this new role will translate into more consistency within this aspect of our business while granting more time to our leadership team.
- Expanding our product offerings.
Following the successful launch of the Innova Enhanced Growth Pool in 2022, we were pleased to complement this offering with a more conservative approach. The Innova Dedicated Defensive Pool was launched on November 1st at what we believe to have been an opportune time for fixed income, GICs, and structured products, all of which benefitted from interest rates peaking. With this low-medium risk offering, we believe our proprietary products can now service more than 90% of our total asset mix.
Furthermore, Tyler Stott joined as a new partner who is solely focused on Health Benefits and Employer savings plans, which has translated to better access to comprehensive solutions for our business-owner and c-suite clients.
Lastly, working with external software developers, our team has developed of a comprehensive Education Planner that creates personalized grant maximization plans and family funding forecasts. Armed with this new tool, our service advisors have started creating and presenting personalized plans to our clients with education savings plans. We hope to develop more advanced planning tools and launch advanced estate planning services in 2024.
A Year of Change
As you can see, 2023 was a year of momentous change at Innova. We entered the year stewarding $350 million in client assets, and we will close out the year with more than $545 million in assets under administration. In large part, this change was a reflection the relative performance of our core strategies and David Yurich’s drive to migrate every Sound Financial client to Innova.
Looking ahead, Allain Labelle’s leadership with the Connor, Clark & Lunn client group and our growing presence in the institutional marketplace, promises to be a strong driver of growth in 2024.
Having migrated both our insurance and investment back offices, tripled our head count, and doubled our office space in 2023, we look forward to a year of consolidation with a renewed focus on deeper client relationships.
We are deeply grateful for the opportunity to act as stewards and advisors to you and your loved ones. Through continuous improvement, we remain committed to contributing to your financial peace of mind and Thank You for your continued trust.
[i] Innova Tactical Asset Allocation fund versus Wealth Simple Balanced Fund.
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