A wealth management firm has identified a growing niche serving clients in the United States and north of the border.
The Cardinal Point Group of Companies 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 announced Monday.
James Sheldon, president and co-founder of Cardinal Point, says he and the firm’s two other principles saw a niche forming around several trends. Things have gone a bit “loonie” between the two nation’s currencies, after the Canadian dollar gained parity on the greenback about a year ago, and has since surpassed it.
Canadians purchased 23% of real estate sold in the U.S. in the calendar year ending March 31, and were the top foreign purchasers of property in the United States last year, according to statistics from 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, president and co-founder of Cardinal Point. Cardinal Point expects to see more migration from Canada to the U.S.’s Sunbelt, as Canadian Baby boomers reach retirement age.
The flipside is that Canada is experiencing a boom, with industries cropping up around its natural resources, Sheldon added. “There is a heavy stream of American executives taking part in that,” he said.
Cardinal Point operates in the United States as Cardinal Point Wealth Management LLC, based in San Jose, Calif. The firm is planning to open an office in the West Palm Beach, Fla., area by early winter, Sheldon said, who is based in San Jose.
In Toronto, the firm goes by Cardinal Point, Inc., where James Sheldon, chief executive officer, co-founder and Jeff’s father, splits his time between that office and the one in San Jose. A third principal, Jonathan Samuel, is a senior executive vice president and is based in Toronto.
Sheldon says the firm currently serves about 85 families, and that its ideal client has a net worth of at least $5 million. Its core patronage though, Jeff Sheldon said, comes from clients with a net worth between $500,000 and $5 million.
Cardinal Point used to be part of Assante Capital Management, based in Whitehorse, Yukon Territory, Canada.
“For a number of years, each year, we’d lose one or two clients, because they moved to the US,” 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.”