A wealth management firm has identified a growing niche serving clients in the U.S. and north of the border.
The Cardinal Point Group of Companies has launched an independent, cross-border wealth management firm to offer American expatriates in Canada — or vice versa — a range of holistic and integrated wealth management services, the company said Monday.
James Sheldon, the chief executive and co-founder of Cardinal Point, said he and the firm's two other principals saw a niche forming around several trends. The traditional relationship between the two nations' currencies has been upended, with the Canadian dollar gaining parity on the greenback about a year ago, and occasionally surpassing it since. With more purchasing power, Canadians bought 23% of the real estate sold to international purchasers in the U.S. in the year that ended March 31, the top foreign purchasers, according to the National Association of Realtors.
"For Canadians who come and work in the U.S., it is not a matter of selling your house and walking across the border," said Jeff Sheldon, the president and co-founder of Cardinal Point. The firm expects to see more migration from Canada to the U.S. Sunbelt, as Canadian baby boomers reach retirement age.
Meanwhile, Canada is experiencing a boom, with industries cropping up around its natural resources, Sheldon said. "There is a heavy stream of American executives taking part in that," he said.
Cardinal Point operates in the U.S. as Cardinal Point Wealth Management LLC in San Jose. Cardinal Point used to be part of Assante Capital Management in Whitehorse, Yukon. Its Canadian office is in Toronto.
"For a number of years, each year, we'd lose one or two clients, because they moved to the U.S.," Sheldon said. "We would have to relinquish the client, because once they become a resident that Canadian advisory firm is not licensed to manage taxable investments or retirement money in the U.S."
Lately, though, it started happening often enough to convince the Sheldons that there was an open niche in the wealth management space. "We had so many people asking us 'can you look after my financial affairs?' " Sheldon said. "It took us a good couple of years to plan this. It was not simple."