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I read something recently that really struck me about why it can be very empowering for those who have money to realise they have opportunities to immediately improve their situation, but for those who are complacent and don’t properly appreciate what they have, it can be very dangerous and costly.

It works like this: A bottle of water can cost $1 in the supermarket, $3 in the cinema and $6 at the airport. It is always the same bottle of water; its value only changes depending on where it is located.

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Capital and labor are highly mobile in today’s globalized world. This is often overlooked by many in academia, government, and even industry.

For example, we have seen the changes to capital gains tax introduced by the German government on the advice of some academic economists who are calling for equal taxation of income, dividends and capital gains. However, this completely ignores the differences in capital gains tax rates around the world.

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As a result of the recent changes, Canada’s highest marginal tax rate on capital gains drops from a mid-range ranking among the Organisation for Economic Co-operation and Development (OECD) to the third highest, just behind Denmark and Chile.

Add to that much better affordability, coupled with lower taxes and better-paying jobs, and people will start leaving the country. That’s already happening, with emigration from Canada to the United States hitting a ten-year high. In 2022, 126,340 people will leave the country, a 70 percent increase from the last decade, according to data from the CBC.

Still, it would not be surprising if Justin Trudeau’s government next considered a wealth tax. France introduced one, and between 2000 and 2016, over 60,000 millionaires left the country. French economist Eric Pichet estimated that the government lost twice as much revenue as it collected through the wealth tax.

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Unfortunately, the same mentality is widespread in the Canadian industry, especially among our overconfident oligopolies. Take, for example, the Canadian bank brokers who are currently trying to steal investment advisors from their clients through proprietary products and reduced network payouts, and ultimately replace them with employees.

One of the main reasons many advisors leave their firms and join firms like our parent company is simply to be recognized as business owners of the client relationships they have built through countless hours of hard work. As a result, I have seen numerous advisors join since our partnership four years ago, increasing Wellington-Altus Financial Inc.’s assets under management from $4 billion to over $30 billion.

There is also an important lesson for investment advisors: If your clients don’t feel valued, they will leave.

On the other hand, you can benefit if you’re willing to adapt and offer services that go far beyond selling investment results. This includes things like goals-based investing, risk management, advanced wealth planning, and other services that combine to help you become a trusted advisor.

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Since adopting this approach ourselves, our assets under management have almost tripled in less than five years. This has been achieved by focusing all of our efforts on working with our existing clients in all aspects of their financial lives, treating and viewing them like family. No marketing, just appreciation for those we have been fortunate enough to work with.

I think the secret to showing appreciation is to be grateful for those who are an important part of your life and find ways to help them. By helping them, you help yourself in return. This is a lesson I think many of us can learn from, especially in our government, academia, and industry.

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., doing business as TriVest Wealth Counsel, a private and institutional investment firm specializing in discretionary portfolio risk management, investment due diligence/monitoring, and advanced tax, estate and wealth planning. The opinions expressed do not necessarily reflect those of Wellington-Altus.

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