Adviser's cross-border niche targets Canadians moving south, and vice versa

Jeff Sheldon launched his advisory firm, Cardinal Point Wealth Management, 12 years ago after witnessing the tax and estate planning challenges facing Canadian retirees who live part of the year in the United States.

“I was seeing firms that I worked for turning away business because they didn’t have the infrastructure, knowledge or platform to serve cross-border clients,” he said of his experience working for Canadian wealth management companies prior to launching his own firm.

“We would lose business because the clients would move or we’d have to turn away business because it wasn’t in the client’s best interests to advise them because we only knew the Canadian side,” he added.

But Sheldon, who maintains dual citizenship through his American mother and Canadian father, said the cross-border realities have been present throughout most of his life. Thus, developing a cross-border niche was a logical, if challenging, move.

“It seemed like a niche I understood, and then I looked at the landscape and saw there were no firms doing this on a holistic basis that were built and founded to serve clients with assets in both countries,” he said.

Sheldon, 42, was born and raised in Canada, and now works from an office in Boca Raton, Florida, one of Cardinal Point’s three U.S. offices.

Cardinal Point, which is being acquired by Focus Financial Partners, also has two offices in Canada.

While the original focus of the $1.2 billion advisory firm was to serve Canadian snowbirds who own property and spend several months a year in the U.S., Sheldon said most of his new clients these days are younger working people who are being pulled across the border both ways for work.

“It was overwhelming because I had no idea, until we had an operating business, about the sheer number of those people that need our help,” he said. “Our business is transformed in that we work with a lot of young professionals. That is the fastest-growing part of our business.”

While one can imagine the normal challenges of serving clients with incomes and properties in more than one state, Cardinal Point, which has as many Canadian clients as U.S. clients, is dealing with different tax laws, regulatory frameworks, registration requirements, trading systems, statement reporting, and even different currencies.

“We’re a firm registered in both countries,” Sheldon said. “There was no roadmap for us to follow on how to build a cross-border firm, or on attracting the right type of talent that could advise on tax and estate planning, or portfolio management. There is a very limited scope of professionals that have that skill set because Canadian-U.S. financial advisers don’t grow on trees.”

ORGANIC GROWTH

Except for two small acquisitions, Cardinal Point has grown mostly organically, which is the path Sheldon plans to follow, especially with the boost of back-office support that will come from Focus when that deal is completed later this year.

In terms of marketing, Cardinal Point relies on a strong web presence that is presented through blogs about cross-border financial planning and tax management.

“Because many of us have worked in Canada and the U.S., and have built up networks, we are referred business by those in investment advisory, tax, estate planning,” Sheldon said.

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While Sheldon might not have chosen the easiest niche to manage, he is pleased with the progress.

“Now we’ve built out a platform that could expand beyond just Canada and the U.S.,” he said. “This is our focus now and we’re really enjoying it and having success, but it can absolutely be applied to other cross-border scenarios.”