Snowbird specialist outlines the parts of his business he sees changing and where cross-border specialization will always have demand
Gerry Scott is watching firsthand as the profession of cross-border advice changes. The creator of the Snowbirds US Day Tracker app, and advisor with a major cross-border wealth management firm, has built his business in the niche of cross-border services. He educates and advises Canadians who winter in warm US states, Americans who move north of the border, and Canadians returning home after a career In the Untied States. Scott is now seeing a few sudden and slow-moving shifts in cross-border behaviour that advisors looking to offer more cross-border services might want to pay attention to.
While Scott believes some of the ‘elbows up’ rhetoric of Canadian snowbirds abandoning their US properties over political tensions are overblown, he does see a degree to which the snowbird generation is getting “squeezed” by political issues and real estate trends. Amid all those headline-grabbing trends, however, he highlights a deeper issue that cross-border advisors may want to take note of, younger Canadians don’t want to be snowbirds.
“I believe that this is coming more down to more of a generational shift, more than anything. We've done podcasts on this and what I think is happening is if you were born in 1960s and your parents had a place in Maui you would have loved that lifestyle, you and you and your siblings, when mom and dad became angels, probably were able to maintain that property inherited as a family asset, and share the cost,” Scott says. “So I think now what's happening is that some of the families are just dropping out of it because their kids don't have as fond memories of these places as maybe mom and dad did with their parents.”
Where baby boomers have shown a proclivity to ‘nest’ in a desirable place over the winter months in their retirements, Scott is seeing more of a preference for adventure among gen X and millennials. Those generations’ overall consumer preference for experience and exposure to travel through much of their lives has seen a shift away from a retirement split between two locations. These generations, Scott says, are more transient and are willing to take a very different form of retirement.
That is not to say there aren’t shorter-term factors impacting snowbirds’ demand for US properties. Scott notes that in addition to political tensions, the cost of home insurance in hurricane-ravaged Florida and the wildfire-threatened Southwest US have made these properties prohibitively expensive to maintain. But those forces, he notes, are perhaps less relevant for advisors looking at their careers than the larger economic and demographic trends he highlights.
So much of a cross-border advisor’s career, Scott explains, was built around the preferences and tastes of the baby boomer generation. The largest and wealthiest generation in North American history set the tone and the tempo for advisors, becoming snowbirds, preferring travel in the US, and now entering their twilight years showing a preference for proximity to cancer centres, quality long-term care homes, and the next generations of their families. As that generation begins to twilight, financial advisors in the cross-border space need to find out how younger generations will impact them.
Where Scott continues to see demand for cross-border advice, he says, is in those Canadians who work, rather than retire, in the United States. Managing their needs around taxation, various overlapping forms of investment accounts, and any eventual moves back north of the border in either retirement or a career change remains highly in demand. Moreover, while the snowbird trend may slow with generational shifts, there is still an ongoing need for cross-border advice, even if it’s more focused on the disposal of retirement assets than it is on building a dream retirement.
While he calls out these fundamental shifts in demographic trends, as well as shorter-term tailwinds and headwinds, Scott emphasizes the fact that right now cross-border advice is still a growing business, constrained more by accountants’ capacity than advisors’ willingness to take on more work.
“It's a specialized field and I think the point of entry is very high. Clients in this field come from accounting firms, but if you look at cross-border accountants these guys are overworked. It's hard for them to take on more clients. So the industry has to kind of catch up with the accountants first,” Scott says. “Practices are growing by $60 million plus in assets every year, but it’s hard to have a platform for this, only a few firms can build that. But I think it’s going to continue to grow, but now it's growing because Canadians are coming home.”
