The most important shift happening in wealth management and why advisors keep asking me the same 3 questions

Morning to you!

Something funny happened over the last few weeks.

As I’ve been learning more about discretionary portfolio managers, how they work, how they get paid, and how you get paid, my inbox has been lighting up with the same three questions over and over again:

1. “Which discretionary portfolio manager should I choose?”

2. “What are the fees really like?”

3. “Will this be as profitable as mutual funds or seg funds?”

And the honest answer?

It depends who your clients are…

what kind of assets they have…

and what type of advisor you want to become.

But the reason people keep asking me these questions is simple:

Advisors are suddenly realizing they can compete for wealth they’ve NEVER been able to touch before.

Not seg fund assets.

Not RRSPs or TFSAs.

Not the $300K corporate account.

I mean the real money.

The $2M, $4M, $7M portfolios sitting at the big banks.

Until now, you had no way to compete for those assets.

Now you do.

And honestly? I don’t think the industry realizes how big this shift is yet.

Let me walk you through what I learned — and why this matters so much.

A few weeks ago, I didn’t fully “get” this world either

I’ll be honest.

A month ago, if you had said “direct lending, structured credit, evergreen funds, liquidity premiums,” I’d stare blankly like I was reading IKEA instructions.

I knew discretionary managers existed, but I didn’t understand the machinery.

Then three things happened almost back-to-back:

1. A real case study fell into my lap

2. I had a conversation at the Ottawa Estate Planning Council

3. I sat through a Kinsted presentation that finally tied all the pieces together

Once it clicked… it clicked.

Let me start with the case study.

Case Study: The $7 million inheritance locked inside BMO Nesbitt Burns

A couple months ago, one of our advisors was planning with a business owner couple.

Typical fact-find stuff:

– Segs

– Mutual funds

– Some cash

– Corporate retained earnings

– Basic structure analysis

And then, casually, the wife mentioned:

“Oh, and we also have about seven million at BMO Nesbitt Burns. That was from an inheritance.”

Seven million.

Sitting at BMO.

Barely touched.

Barely reviewed.

Historically, this is where the story ends for most insurance advisors.

You note it.

You shrug.

You mentally file it under “assets I’ll never get.”

But not this time.

The advisor referred it to a discretionary PM, Cardinal Asset Management.

Cardinal reviewed it and moved over the majority of the $7M.

That advisor now earns recurring revenue on wealth they could NEVER compete for.

That was “aha moment” #1.

But I still didn’t fully understand why it worked.

Then came the second conversation.

The Ottawa Estate Planning Council: the anti-private-assets rant

Before the Kinsted presentation, I spoke with a discretionary PM who used to work in a family office.

His view?

“These private funds are horrible. Lock-ups, illiquidity, clients get stuck for 10 years.”

I didn’t know enough at that point to agree or disagree.

But then I went to the Kinsted presentation…

And everything he said flipped upside down.

The Kinsted presentation that tied EVERYTHING together

Again, I’m not endorsing Kinsted.

I’m telling you what I learned because it illustrates the industry shift.

The entire focus was on private assets and how they add return through the liquidity premium:

Private assets often earn 200–400 bps more

than their public equivalents

because they aren’t publicly traded.

Their portfolio included exposures you never see in traditional wealth channels:

• Direct lending

• Structured credit

• Pharma royalties

• Music royalties

• Patent litigation

• Sports franchises (they hold a slice of the LA Chargers)

• Trade finance

• Infrastructure

• Private real estate

• Farmland & agriculture

• Hedge funds

• Venture capital

THIS is where pension funds go.

This is where multi-billion-dollar endowments go.

This is where the wealthy go.

And your clients could go too — through a PM.

But the liquidity concern was still on my mind.

So I asked.

“What if your top 5 clients all demanded redemptions at once?”

Brilliant advisor question.

Kinsted manages around $1.7B.

Their top five clients represent roughly $600M.

They run this stress test EVERY WEEK.

If all five clients redeemed simultaneously?

They have ~$1.1B liquidity available.

Meaning:

Even a catastrophic scenario is fully covered.

How?

Their structure:

30–40%

Cash + ETFs + evergreen funds

(liquid, lower lock-up, but mimic private asset behaviour)

60–70%

True private LPs

(where the alpha lives)

You get the liquidity you need AND the liquidity premium.

This is NOT the old-school “10-year lock-in private fund” world.

This is modern discretionary management designed for real clients with real liquidity needs.

That’s when everything clicked.

Now let’s talk about revenue, the part advisors care about

Kinsted’s fee schedule:

• First $1M → 1.70%

• Next $1M → 1.20%

• Next $3M → 1.00%

• Above $5M → 0.80%

A $2M average client ends up around 1.45% all-in.

Then:

Advisor receives 50% of that fee, paid through your grid (85–90% for most people).

Meaning:

You can earn almost equivalent compensation to mutual funds…

without managing ANYTHING.

And the money you bring in?

It’s usually new money you would’ve NEVER earned before.

This isn’t replacing MFDA revenue.

It’s adding asset-based recurring revenue you’ve never touched.

And here’s the real secret, you don’t need just ONE discretionary PM

This is where the strategy gets fun.

You can split assets like a CIO:

ModernAdvisor / robo-PM

For smaller accounts, simple portfolios, clients who’d never buy mutual funds anyway.

Kinsted-style private-asset PM

For high-net-worth clients who want private credit, royalties, structured credit, etc.

Another PM

For heavier equity, more liquidity, lower-volatility mandates, whatever complements the mix.

You quarterback.

They execute.

Your value goes up.

Your revenue grows.

Your business becomes scalable.

Why this matters for insurance advisors (and why the industry is sleeping on this)

For 15 years, the banks and PMs slowly poached your insurance business.

Now the pendulum is swinging back.

Because:

YOU know the client better than the portfolio manager ever will.

You understand the corporation.

You understand the estate.

You understand the tax exposure.

You understand the family dynamics.

You understand the insurance.

They understand investments.

That’s why this works.

You become the quarterback.

They become the engine.

And now, here’s the big news

I’m officially bringing back my monthly private colleague call.

But this time:

• It’s 100% free

• It’s open to ANY advisor, not just PPI

• And we’re digging even deeper into discretionary PM strategy, private asset positioning, fee structures, portfolio construction, case studies, and how to integrate this into an insurance-led practice

**The next session is:

Monday, December 15th

10:00 AM Eastern

60 minutes on Microsoft Teams**

If you want to join:

Reply to this email or message me directly, and I’ll send you the Teams invite.

No form.

No signup portal.

No automation.

Old-school.

Just say “Add me to the December 15th call” and I’ll send you the link.

By that date, I’ll have even more case studies, deeper analysis of the PM landscape, and a clearer breakdown of which PMs fit which clients.

If this is the direction you want your business to go (and trust me, the industry is heading this way), you’ll want to be on this call.

Reply and I’ll send the invite.

Andrew