Wealth Professional 5.04

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Get to know 10 companies that are leading the financial technology revolution


Franklin Templeton’s Edward Perks on investing in the US in the Trump era

FINANCIAL LITERACY Can teaching financial concepts to kids fix Canada’s mounting debt problem?


YOUNG GUNS The brightest of wealth management’s next generation and how they’ll change the industry

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*As of February 28, 2017. Morningstar Research Inc. A decile is used to describe a small group composed of 10% of a larger group. The performance of Franklin U.S. Monthly Income Fund Series F is ranked in the top 10% of the Morningstar Global Neutral Balanced category over one year (24th out of 1,262 funds), two years (4th out of 1,020 funds) and three years (18th out of 880 funds). The indicated rates of return are historical annual compounded total returns, including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or fund facts document before investing. Series F is available to investors participating in programs that do not require Franklin Templeton to incur distribution costs in the form of trailing commissions to dealers. As a consequence, the management fee on Series F is lower than on Series A. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. Š 2017 Franklin Templeton Investments Corp. All rights reserved.

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ISSUE 5.04

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UPFRONT 02 Editorial

What you call yourself matters

04 Head to head

Are Canadians ready for retirement?




06 Statistics

Tracking the impressive global reach of Canada’s pension funds FEATURES


From established players to innovative startups, meet 10 fintech firms every advisor should know


This month’s big movers and shakers

12 Alternative update

The bright side of oil sands asset sales

14 ETF update

Bond ETFs as a fixed-income alternative

16 Opinion

58 Delegating for success FEATURES

AGF Management’s Blake Goldring reveals how his firm rose from the ashes of the financial crises

10 Intelligence


These 25 up-and-comers represent the new face of wealth management – and they’re ready to shake up the industry


Should advisors help improve financial literacy levels?

Analyzing the federal budget’s potential impact on clients



08 News analysis


Franklin Templeton’s Edward Perks weighs in on the benefits and pitfalls of investing in the US right now


A new tech solution promises to ease the compliance burden for advisors

PEOPLE 22 Portfolio manager

Leih Wang takes his core investment strategy from Empire Life to Sentry

52 Advisor profile

Andrew Ellis explains why he’ll always be bullish on Canadian investments

63 Career path


A lifetime of hard work has paid off handsomely for Luke Kratz

64 Other life FEATURES


Six tips for keeping stress from taking over your life

Kicking it with advisor and martial arts instructor Arthur Yrenaya


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What’s in a name?


ust what is a financial advisor, and who can accurately describe themselves as such? It’s not a question with an easy answer – there are different interpretations of the profession. This has created a grey area, making it difficult for investors to differentiate between those providing sound financial advice and those simply in the business of flogging products. Such ambiguity was one of the reasons the Ontario Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives was established last year. The group released its final report and recommendations last month, calling for the title ‘financial planner’ to be restricted to only those who are professionally certified. This was welcomed by industry bodies, including the Financial Planning Standards Council, whose recent membership poll revealed that 97% of respondents believe advisors owe a professional duty of care and loyalty to their clients.

“They’re under pressure to hit certain numbers and targets to keep their jobs … they’re not true advisors” Is it just semantic quibbling to ask: financial planner or advisor? Or advisor or adviser? Should these titles have stated requirements and educational standards that eliminate any confusion regarding their use? This was brought into sharp focus with the scandal that rocked TD Bank last month. A report by CBC News highlighted the fact that, in addition to the various ethical improprieties alleged by TD’s own employees, the bank’s tellers are now called ‘front-line advisors.’ The news didn’t sit well with those in the advisory business who have worked hard to improve the reputation of their industry. Samuel Waxman of Millennial Financial Group told WealthProfessional.ca, “They’re under pressure to hit certain numbers and targets to keep their jobs … they’re not true advisors. They’re not able to offer all of the products and services needed to truly meet a client’s needs.” Just what separates a legitimate advisor from a pretender is something that needs to be rectified, sooner rather than later. The team at Wealth Professional

wealthprofessional.ca ISSUE 5.04 EDITORIAL


News Editor David Keelaghan

National Accounts Manager Dane Taylor

Writers Joe Rosengarten Libby Macdonald Leo Almazora

Associate Publisher Trevor Biggs

Executive Editor – Special Features Ryan Smith

Project Coordinator Jessica Duce

Copy Editor Clare Alexander

CONTRIBUTORS Trevor Parry Karen Gately

ART & PRODUCTION Design Manager Daniel Williams Designer Randy Pagatpatan Production Manager Alicia Chin Advertising Coordinator Kay Valdez

General Manager, Sales John Mackenzie

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil Global COO George Walmsley Global CEO Mike Shipley




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Are Canadians saving enough for retirement? Between spiralling real estate prices and growing debt loads, are consumers neglecting to save for their later years?

David Bullock

Debbie Ammeter

André Frazer

CEO Wealth CUSO Saskatchewan

Vice-president, advanced financial planning Investors Group

Financial planner Networth Financial Corp.

“It depends. Many Canadians – boomers in particular – who have benefited from DB pension plans over their careers and can count on CPP to supplement their income in retirement are likely in very good shape. Younger Canadians and those who have not participated in DB plans are more likely to be in a situation where they have not accumulated enough to be comfortable in retirement. Lastly, younger Canadians currently experiencing the real estate pricing booms in Toronto and Vancouver and stretching to buy in those markets are likely to be very challenged to save much at all.”

“Probably not, in most cases. Setting accurate retirement savings targets requires you to be optimistic about your longevity and pessimistic about high healthcare costs and your ability to save. Rising life expectancy amongst Canadians means retirement savings need to accommodate additional years of spending. At the same time, we’re seeing an increase in the number of children living at home into adulthood, which eats into savings and makes it difficult to downsize. My advice: Decide what lifestyle you want in retirement, and seek help and advice from a professional financial planner to set realistic expectations and save as much as possible.”

“Can Canadians save enough for retirement, given challenges such as low interest rates and higher living expenses? In my experience, building a sufficient nest egg involves more than simply saving. Using and optimizing available opportunities through a well thought-out plan with a reasonable timeframe still enables most diligent and flexible savers to meet their retirement goals. I’ve found that the final seven to 15 years before retirement are often the most important for securing a successful retirement – even at this late stage of retirement planning, earlier mistakes, oversights and procrastination can still be overcome.”

FUNDING THE GOLDEN YEARS In its 2016 benchmark report, the Canadian Institutional Investment Network reported that Canadians’ annual pension contributions tend to be in the range of 9% to 10% – well down from the typically advised figure of 15% per year. Perhaps even more ominous: Figures from Statistics Canada indicate that less than one in every four tax filers paid in to RRSPs in 2014. These trends are taking place against a backdrop of increased longevity due to medical advances, which makes saving for retirement even more crucial. Meanwhile, the age at which one becomes eligible for Old Age Security has moved twice in recent years: first to 67 under the Harper government, and then back to 65 under the current government, echoing a worldwide trend of countries moving to raise their minimum pensionable age.



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Not shy and retiring

Canadian pension funds are an investment force to be reckoned with worldwide CANADIAN PENSION funds have investments that span the globe and assets under management of around $1.7 trillion. The top eight public-sector pension plans in Canada, known as the Big Eight, account for the lion’s share of the nation’s pension assets, which are a jaw-dropping 15% of all assets in the Canadian financial system. Faced with an ultra-low interest-rate environment at home, diversification has


Overall growth of Canadian pension plans in the third quarter of 2016

become a central plank of the investment strategy for Canadian pension funds; assets include a world-famous luxury retailer, a South American electricity provider and major shipping ports in Australia. While the funds have massive international exposure, they wield major influence at home, too, investing approximately $600 billion in Canadian enterprises, including $149 billion in real estate, infrastructure and private equity.

6.2 million Number of Canadian employees in an employersponsored pension plan



Approximate proportion of foreign investments in pension fund assets

Number of Canadian pension funds in the global top 20

North America CPPIB: Has $164 billion invested in North America OTPP: Has 54% exposure in Canada; 20% exposure in the US OMERS: Invested $2.1 billion in Boston-area high rises

A WORLD OF INVESTMENT Canadian pension plans hold investments in all corners of the globe and across a variety of industries. The Big Eight plans are among the world’s top infrastructure and real estate investors, comprising four of the top 20 global real estate investors and six of the top 20 investors in infrastructure.

Sources: Statistics Canada, The Boston Consulting Group



The safety of bonds provides a lure for employer-sponsored pension funds – more than a third of all the assets held by these funds are in bonds.

Canada’s top eight pension funds account for two-thirds of the nation’s pension assets. The top three funds – the Canada Pension Plan, Caisse de dépôt et placement du Quebec and the Ontario Teachers’ Pension Plan – hold the global ranks of 8th, 14th and 20th, respectively.


CPPIB $278.9 billion CDPQ $270.7 billion Bonds 35.0%

OTPP $175.6 billion

Stocks 27.8% Mortgages 1.1%

bcIMC $121.9 billion

Real estate 8.8%

PSPIB $116.8 billion

Short-term 4.5% Other assets 22.3%

AIMCo $90.2 billion

Assets, funds under $10 million 0.6%

OMERS $85.2 billion HOOPP $70.4 billion $10 billion Source: Statistics Canada


$100 billion

$200 billion

$300 billion

Sources: CPPIB, March 31, 2016; CDPQ, Dec 31, 2016; OTTP, Jan 1, 2017; bcIMC Corporate Annual Report 2015-2016; PSPIB Annual Report 2016; OMERS, Feb 24, 2017; HOOPP 2016 Annual Report; AIMCo 2015 Annual Report


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Europe CPPIB: Has approximately $54.3 billion invested regionally OTPP: 10% exposure in the UK and Europe CDPQ: $850 million investment (30% stake) in Eurostar

Latin America AIMCo: A 50% stake in the Grupo SAESA electricity distributor CPPIB: More than $8.2 billion invested regionally OTPP: Has 4% exposure in Latin America

Australia CDPQ: A 27% stake in the Port of Brisbane AIMCo: Majority share of Forestry Investment Trust, a 2,500-square-kilometre area spread across six Australian states OMERS: Purchased the Port of Melbourne as part of a consortium

Source : CDPQ; CPPIB; OTPP 2016 Annual Report; PR Newswire; OMERS Annual Report 2016



According to the most recent figures for the Big Eight pension funds, OMERS and HOOPP came out on top – both posted returns of more than 10% for 2016. At the other end of the spectrum, with returns of 1% or less, were the BC Investment Management Corporation and the Public Sector Pension Investment Board.

Profits from the sale of securities outstripped contributions as the main source of income for employer-sponsored pension funds in Q3 2016.






$13.53 billion

7.6% 5%

$11.13 billion





$18.75 billion







$1.86 billion OMERS



Sources: CPPIB, March 31, 2016; CDPQ, Dec 31, 2016; OTTP, Jan 1, 2017; bcIMC Corporate Annual Report 2015-2016; PSPIB Annual Report 2016; OMERS, Feb 24, 2017; HOOPP 2016 Annual Report; AIMCo 2015 Annual Report

$347 million

Revenue from Investment Net profit Miscellaneous Revenue, contributions income on sale of revenue funds under securities $10 million Source: Statistics Canada


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School of finance Personal debt in Canada continues to rise, putting the challenge of how to improve financial literacy under the microscope

JUSTIN TRUDEAU’S second federal budget has sparked plenty of debate across Canada. Critics of the prime minister argue that his ambitious spending plan will simply saddle future generations with debt. Budgets and debt are not just a concern for governments, however. Before wealthbuilding can begin, financial advisors must first help clients to manage their finances. Personal debt in Canada now exceeds $2 trillion – a debt-to-income ratio (how much we owe compared to how much we earn) of 167.3% – suggesting that there are a lot of people in need of professional guidance. Advisors, more so than other professionals, are well aware that many Canadians simply do not understand the long-term implications of living on credit, which has led to the current personal debt balloon. We all know what happens when a balloon overinflates, so policymakers are keen to prevent such an outcome –

to offer a high-school course on financial literacy, but Tricia Barry of the Money School of Canada believes this is too little, too late. Barry has called on the government to introduce the subject at Grade 9 level, with measures put in place to evaluate the education ministry’s efforts. Students in Ontario currently receive classes on managing money at Grade 10 level, but Barry says this is insufficient. “There’s a lot of research into financial literacy education and its impact on future economic inclusion and well-being,” she says. “Starting in Grade 10 is too late, as attitudes and behaviours have already formed. Also, there is no measurement for Canadians to understand the impact of this education.” Having previously worked in the banking sector with B2B Trust and CIBC, Barry founded the Money School of Canada six years ago and regularly gives lessons at schools across Ontario. This has allowed her to develop

“Parents are not in a position to teach their kids how to manage money. They don’t understand it themselves” Tricia Barry, Money School of Canada and many are realizing that to achieve that, it’s best to start young. In Ontario, Bill 69, the Financial Literacy for Students Act, is currently awaiting its second reading. The bill calls for school boards


a strong sense of the current deficit in financial literacy levels. “Financial well-being is linked to knowledge,” she says. “I have personally taught thousands of kids about financial literacy. It is about

understanding the overall financial impact of using credit. There is a real lack of understanding about this simple mechanism. Adults don’t even understand this.” A $2 trillion personal debt chasm certainly supports that view, which is why Barry believes the education ministry and the schools have a vital role to play. “There are pundits out there who say it’s the parents’ job – keep it out of schools,” she says. “I teach the parents as well – they are not in a position to teach their kids how to manage money. They don’t understand it themselves.” In 2014, Canada appointed its first-ever financial literacy leader, Jane Rooney. As the federal government’s representative on this issue, a key part of Rooney’s job is to develop the National Strategy for Financial Literacy, which strives to align the provinces’ standards


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SNAPSHOT: CANADIAN FINANCIAL LITERACY Every five years, the Financial Consumer Agency of Canada conducts a survey to assess financial literacy in Canada; the next one will be in 2019. Results from the 2014 survey revealed that:

45% 93%

of Canadians have household budgets

of those who have a budget say they stay within it most of the time


of young people are not confident in their financial knowledge


of Canadians do not know how much they will need to maintain their desired standard of living in retirement for financial education. “I think financial education needs to start off as young as possible,” Rooney says. “There is a model that was developed in the US by the Consumer Financial Protection Bureau. It

Efforts to improve financial literacy for schoolchildren are clearly a positive development, but that doesn’t address the fact that debt and proper financial planning are a major concern right now. Advisors therefore have a

“I think financial education needs to start off as young as possible ... you can introduce concepts at a very young age” Jane Rooney, Financial Literacy Leader showed that you can introduce concepts at a very young age. Children from the ages of three to five should learn about delayed gratification. Then between the ages of six to 12, [you can] introduce concepts about money.”

key role to play in improving the situation. Claude Montmarquette and Nathalie Viennot-Briot’s oft-cited study on the value of financial advice, released by CIRANO last year, revealed that those with a higher level of

financial literacy or a post-secondary diploma are much more likely to use a financial advisor. That isn’t too surprising; what does raise an eyebrow is the finding that investors using an advisor accumulate three and a half times more assets over a 15-year period than comparable non-advised investors. The study also showed that households that dropped their advisors between 2010 and 2014 gained significantly fewer assets compared to those that continued to be advised. Finance is a complex subject to grasp, and that’s a difficulty that remains right through life. When it comes to a lack of understanding about money, there is clearly no age bias. Directing clients on their investments will always be a major part of an advisor’s job, but with personal debt mounting, the education component will only grow in importance.


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A shareholder vote in May will determine whether CIBC’s acquisition of the Chicago-based firm can move forward

Morgan Stanley

StennerZohny Investment Partners+

Upon completion of the acquisition, StennerZohny will be known as the StennerZohny Group of Graystone Consulting at Morgan Stanley


Central Fund of Canada

Sprott made a $3.1 billion takeover bid for its bullion rival in early March




Bridgehouse Asset Managers

Morningstar Associates

Bridgehouse has filed a prospectus to launch a managed investments program with Morningstar



Canada’s two largest pension funds are partnering to invest in warehouse properties in Singapore and Indonesia

National Bank optimizes fund lineup

National Bank Investments has announced plans to terminate more than 20 funds through mergers set to occur between May 12 and May 19. Thirteen funds and series have also been slated for outright termination around May 11, including the Westwood Global Dividend Fund (F5 and T5 series), the National Bank Money Market Fund (institutional and M series) and the National Bank Short-Term Yield Class. Meanwhile, new H and FH series have been created for the NBI US High Conviction Equity Private Portfolio and the NBI International High Conviction Equity Private Portfolio.

StennerZohny looks across the border with move to Morgan Stanley

Vancouver-based advisory firm StennerZohny Investment Partners+ is joining the Graystone Consulting Group of California-based Morgan Stanley International. The acquisition will see StennerZohny amicably separate from long-standing partner Richardson GMP. Founded by Thane Stenner and Youssef Zohny, StennerZohny Investment Partners+ has been approached by at least three Canadian bank-owned wealth management firms over the past five years, but Morgan Stanley caught the firm’s attention with its broad global platform as well as prospects for exclusive investment opportunities. Around half of the current team will be relocating to California as part of the deal. Among those moving are Stenner, who will become managing director; Zohny, who will be senior vice-president; and associate Song Jochlin, who will be the group’s international country market specialist. Stenner and Zohny will also be portfolio managers and institutional consulting directors.


CI Investments introduces automatic preferred pricing

Starting May, CI Investments will automatically apply discounts through its new CI Preferred Pricing and CI Private Wealth programs, pending regulators’ receipt of disclosure documents. Discounts will apply to investment management and administration fees on core mutual fund offerings (class A, class F and class P). In Evolution Private Managed Accounts, fees for the United Funds (class E and class F) will also be discounted. Discounts for most funds begin at $150,000 per account; family accounts with at least $250,000 in total can be linked for additional pricing discounts.


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PEOPLE Mackenzie moves to lower costs for clients

Starting on April 13, Mackenzie Investments will automatically switch investors with a minimum of $100,000 per fund and households with at least $250,000 into the appropriate lowerfee Private Wealth Series. Mackenzie’s new pricing model will also incorporate a high-water mark, letting investors lock in the highest market value their portfolio has reached, net of redemptions. In addition, effective April 3, the firm has reduced management fees and trailing commissions for certain Laurentian Bank fund series, as well as other select fixed-income funds and series.

Desjardins changes risk profile of 17 funds

Desjardins Investments has announced a reduction in the risk level of 17 of its funds. The changes were prompted by a new methodology introduced by the CSA to assess the funds’ risk. Among the funds affected are the Desjardins Global Corporate Bond Fund (which moves from ‘low to medium’ to ‘low’), the Desjardins IBrix Low Volatility Emerging Markets Fund (from ‘high’ to ‘medium’) and the Chorus II Dynamic Growth Portfolio (from ‘medium’ to ‘low to medium’). The reductions took effect on March 31.





Daniel Moore



Chief risk officer

Stasha Ninkovic

CIBC Mellon

LOGiQ Asset Management

Chief operating officer

Michael Overvelde

Raymond James

Crown Capital Partners

Senior vice-president, finance

Mary Anne Palangio

Ontario Retirement Pension Plan Administration Corporation

LOGiQ Asset Management

Chief financial officer

Suzann Pennington

CIBC Global Asset Management

Foresters Asset Management

Chief investment officer

Bert Powell


BMO Nesbitt Burns

Director, Canadian and UK research

John Sanchez


The Horwood Team at Richardson GMP


Horwood Team selects new vice-president

The Horwood Team at Richardson GMP has appointed John Sanchez as its new vice-president. Sanchez has been with the Horwood Team for 13 years, during which time he has spearheaded improvements in investment analytics. Using a unique blend of tax planning, investment returns and commitment to service, Sanchez has addressed the needs of accredited investors, business owners, entrepreneurs and professionals. He also has a record of collaborating with accountants and lawyers to develop customized solutions for tax minimization. A graduate of Ryerson University’s aerospace engineering program, Sanchez has continuously applied out-of-the-box thinking to search for the most efficient tax and investment strategies to help clients achieve their financial goals.

Foresters chooses new CIO

Middlefield Group completes fund mergers

Middlefield Group has merged its COMPASS Income Fund and YIELDPLUS Income Fund into the MINT Income Fund. The mergers were done on a tax-deferred rollover basis; costs associated with the mergers were not imposed on unitholders, but were borne by the funds’ manager, Middlefield Limited. Following the mergers, units of COMPASS and YIELDPLUS were exchanged for units of MINT as appropriate, using the relative net asset value per unit of the non-continuing funds compared to the NAV of MINT at the close of trading on the TSX on March 21.

Foresters Asset Management has selected Suzann Pennington as its new chief investment officer. An investment professional with more than 30 years of industry experience, Pennington was previously CIO, managing director and head of equities at CIBC Global Asset Management, where she managed the Canadian allcap equity mandates and oversaw portfolio management and research. Prior to CIBC, Pennington held various senior roles at Mackenzie Financial, as well as the position of vice-president of equities and head of international research at Sceptre Investment Counsel. Pennington will be taking over responsibilities from R. Gregory Ross, FAM’s current CIO and head of fixed income. Aside from overseeing equity, fixed income, asset allocation and alternative investment strategies, Pennington will also be working with the Foresters US investment team.


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ALTERNATIVE INVESTMENT UPDATE NEWS BRIEFS CDPQ finances alternative energy project Caisse de dépôt et placement du Quebec [CDPQ] has provided a $90 million term loan to finance the Mont Sainte-Marguerite wind farm project in the Chaudière-Appalaches region of Quebec. The project includes the development and operation of a wind farm with 46 wind turbines and a capacity of 147 megawatts. HydroQuebec will buy the power generated under a 25-year agreement with the developers. To date, CDPQ has provided financing for four other wind farm projects in Quebec, as well as wind farms in the US and the UK.

AIMCo pitches in for Fairfax acquisition Thanks to the Alberta Investment Management Corporation [AIMCo], Fairfax Financial Holdings has gotten an additional US$500 million worth of capital for its US$4.9 billion acquisition of Swiss insurer Allied World Assurance Company Holdings. The contribution will give AIMCo a more than 10% stake in Allied World. Fairfax had already raised $1 billion in capital from the Ontario Municipal Employees Retirement System [OMERS] and approximately $100 million from other unnamed backers. The cash contributions will help Fairfax avoid having to sell 3.5 million of its own shares to finance the deal.

Fengate unveils new private equity platform Fengate Real Asset Investments has launched the LPF Equities Fund with initial assets of $100 million. Leveraging the firm’s experience and connections in infrastructure and real estate, the new private equity fund will scour a targeted range of North American industry sectors for investments in


mid-market, growth-oriented operating businesses and strategic platforms. Its first investment is in the Cricket Energy Group of Companies, which provides residential water heater and other home comfort rentals, condo in-suite metering and monitoring, and natural gas and electricity retailing services.

NEO announces platform support for OM funds The Aequitas NEO Connect platform is now hosting offering memorandum funds, allowing purchase and redemption of both prospectus and OM funds in a similar fashion to ETF trading. The platform currently hosts 32 funds offered by 10 investment dealers, and more are signing up. “With NEO Connect now supporting OM funds, we are not only growing our offering, but taking our first operational step towards servicing the Canadian private markets, in line with our original commitment,” said NEO Connect president and CEO Jos Schmitt.

CIIAM launches global real estate fund CI Institutional Asset Management [CIIAM] has launched a global real estate fund in partnership with CBRE Global Investment Partners [CBRE GIP]. An actively managed, Canadianbased trust, the new CI Global Private Real Estate Fund lets high-net-worth investors and smaller Canadian institutions gain exposure to the CBRE GIP Global Alpha Fund, an open-ended fund with more than 1,900 direct investments in properties spanning North America, Europe and the AsiaPacific region. The CI Global Private Real Estate Fund is available to institutional permitted clients with a minimum investment of US$2 million, and to accredited investors with a minimum investment of US$150,000.

Foreign oil players bet on locals’ resilience Many in the industry have taken a pessimistic view of recent asset transfers, but there is a silver lining While observers may regard Royal Dutch Shell’s sale of its oil sands assets to Canadian Natural Resources Limited [CNRL] as an ill omen, the terms of the selloff could be a signal of cautious confidence in the industry. As Shell retreats to focus on decreasing its sizeable debt through quick-return opportunities, it seems to be betting on CNRL’s ability to thrive in a tough business, according to the Globe and Mail. By agreeing to accept shares in CNRL as part of the payment in the selloff, Shell is retaining exposure to resources and capital it has used for years. Essentially, this means that CNRL’s success – which is probable, given CNRL chairman Murray Edwards’ record of picking up assets that have fallen out of favour and getting them to operate effectively – would benefit Shell as well. Investor pessimism concerning the oil industry has kept bids on oil assets low. This has created a gap between buyers’ and sellers’ views on value, which has in turn kept M&A activity depressed. The practice among sellers of accepting shares as payment helps narrow the bid-ask spread, increasing the chances of deals pushing through. The CNRL deal is the second such transaction Shell has entered into in Canada.


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In October, the global oil titan sold British Columbia and Alberta natural gas properties worth $1.4 billion to Tourmaline Oil, accepting about $400 million in Tourmaline stock as part of the payment. The cash-plus-

By agreeing to accept shares in CNRL, Shell is retaining exposure to resources and capital it has used for years equity structure of the payment was suggested by Mike Rose, CEO of Tourmaline and a former Shell employee, who, like Edwards, has maintained a reputation for shrewd dealmaking throughout the oil downturn. In a move similar to Shell’s, Norwegian multinational oil outfit Statoil ASA sold its oil sands assets to Calgary-based Athabasca Oil, a deal valued at up to $832 million. Statoil agreed to acquire 100 million Athabasca shares, giving it an approximately 20% stake in the company. CNRL and Shell’s announcement of the US$8.5 billion oil sands deal on March 9 ignited speculation and provoked differing readings on the state of the oil & gas industry. One side contends that global oil players are turned off by taxation and environmental policies implemented by Alberta Premier Rachel Notley’s New Democratic Party. However, others hailed the acquisition, saying it indicates optimism in the province’s resources from a significant home-grown player in the oil exploration and production industry.

Corrado Russo Senior managing director of investments and global head of securities TIMBERCREEK ASSET MANAGEMENT

Years in the industry 20+ Fast fact Timbercreek has around $5.5 billion in assets under management, and more than 500 employees spread throughout 18 offices in Canada, the US, Europe and Hong Kong

REITs ride sectoral shifts Timbercreek predicted that real estate’s reclassification as a stand-alone sector under GICS would make REITs more visible to investors. Has that been the case? We definitely saw it in 2016. Fund inflows ended the year at $14.5 billion to $15 billion, up from about $2 billion in 2015. In 2017 so far, we’ve actually seen some outflows. I think that’s driven by interest rate hike fears and some profit-taking, but I think you’ll see those inflows come back. Most money managers are extremely underweight because until recently, real estate has been masked within financials. If managers were to get to equal weight as they become more focused on the sector, we estimate total inflows of about $105 billion to $110 billion.

You’ve pointed out that rising rates are not a problem for REITs, as long as they’re coupled with economic growth. Can you talk a little more about that? If rates do go up, it’s likely going to be a function of GDP growth, job growth and inflation – and the Fed’s been very clear to say that things are data-dependent. What we have found historically is that real estate is more correlated to the economy than it is to rising rates. Ahead of rate hikes, REITs tend to underperform because of the immediate effect on cap rates. But once rates start to rise, REITs outperform because of the lag effect of the economic impact.

Economists have noted that the heat from the Vancouver housing market is spilling over into other regions. Will that affect your outlook for Canada’s multi-family market? I think it’s going to have an impact for sure, mostly on the demand side. If you can’t afford a new home, or can’t get a mortgage with some of the new rules, you’re a forced renter. At the same time, people are understanding that perhaps buying a home is not the best investment today. With new multi-family [developments] and some of the more sophisticated renovation work that some landlords are doing, there are more higher-quality apartments for rent.

Can you comment on any unconventional real estate sectors that have been showing promise for REITs? Data centres are an incredible new space. It’s simple to see where the demand is coming from: We’ve all got cellphones, we use video, and we’ve got cloud networking. It’s been difficult to play that space through the Canadian REIT market, but there are some very good opportunities in the US – Digital Realty is one of the names we like. One other out-of-the-box play is self-storage. Homes are getting smaller, and the need for self-storage is getting higher. With respect to online sales, people are using self-storage to store their goods until they’re sold online. What’s making it attractive for investors is the free cash flow. With offices and retail and multi-family, you have to keep them competitive by putting money in. In self-storage, the capex is so low, so the cash flow margins from rent are very high.


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The next big thing in fixed income For investors looking for decent returns without too much risk, bond ETFs are an attractive proposition

bond ETFs provide investors with access to a diversified basket of hundreds (sometimes thousands) of bonds in a single issue. They also help to cut costs, which is a top priority for the majority of investors in the current market. “Considering where yields are today relative to history, costs make up a larger and larger percentage of returns,” Schlanger says.

“They are an effective way of implementing asset allocation at a low cost, which is really important in the lowerreturn environment”

Returns in upcoming years are expected to be lower than in recent years, putting advisors under pressure to be creative as they help their clients build effective portfolios. For Vanguard senior investment strategist Todd Schlanger, one particular product type stands out as a good solution in the current environment: bond ETFs, which he sees as having four distinct advantages for investors. “They provide a broadly diversified portfolio in a single holding, they can be imple-


mented at a low cost, they’re liquid and transparent, and they provide easy reinvestment of capital and income,” he says. “Individual bonds also have advantages, but they come with a ‘control premium,’ which makes them have a higher cost.” Although the ETF market continues to grow at a rapid rate, many advisors are still building portfolios using individual securities, particularly on the fixed-income side. While individual bonds still have a role to play,

Cannabis-based ETFs look ready to bloom

As the federal government moves toward recreational marijuana legalization in Canada, the investment industry is taking notice. US-based ETF Managers Trust has applied to list the Emerging Agrosphere ETF, made up of medical marijuana companies, on the NYSE Arca Exchange. Horizons ETFs, meanwhile, has listed the Horizons Medical Marijuana Life Sciences ETF on the TSX. The fund provides exposure to North American companies directly and indirectly tied to the medical marijuana industry.


With valuations in developed markets looking full, advisors should be preparing their clients for muted returns. Looking to the next decade, Vanguard forecasts equity returns in the 5% to 7% range and fixedincome returns in the 2% to 3% range. Therefore, in a portfolio made up of 60% equities and 40% bonds, investors are looking at real returns of 3% to 4% for the next 10 years once inflation is accounted for. “That’s down 100 or 200 basis points relative to history,” Schlanger says. “Tying that in with the message around ETFs, they are an effective way of implementing asset allocation at a low cost, which is really important in the lower-return environment.”

Study finds highnet-worth clients shifting to ETFs

A survey published in late 2015 by US-based Spectrem Group found that respondents with $100,000 to $1 million in assets had invested 14% of their portfolios in ETFs, compared to 43% of ultra-highnet-worth investors (those with assets of $5 million to $25 million). Canadian advisors, meanwhile, say wealthy clients are shifting to ETFs for reasons that include easier trading, diversification and lower fees, along with evidence suggesting that over the long term, active managers tend to underperform a comparable ETF portfolio.


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Warren Collier Head of iShares, Canada BLACKROCK ASSET MANAGEMENT CANADA

Years in the industry 18 Fast fact A 2016 study by BlackRock Canada and Greenwich Associates revealed that institutional investors have 21% of their assets in ETFs, and a third of the investors surveyed said they plan to increase their ETF allocations in 2017

Canadian institutions step up ETF usage Liquidity was cited among the institutional investors BlackRock surveyed as a primary reason for their investment in ETFs. Has that always been concern among institutional investors?

BlackRock’s report posited that increased institutional ETF use could be partly due to a trend toward external asset management. Can you elaborate?

While it’s always been important, institutions are looking more and more to ETFs to source liquidity needs as it becomes more challenging in the traditional bond market. What is new is the higher capital ratio requirements for banks. They have traditionally been the intermediary in the fixed-income market, but they’ve really stepped back from that, as they have from derivatives because it’s much more costly for them now. At the same time, we’ve had a very low-interest-rate environment, so more debt is being issued at very low interest rates. However, a much smaller inventory ends up on the intermediaries’ desk, so institutions are using ETFs as a way to get their exposure.

Institutional investors are doing two things. First, many are managing assets internally, and they continue to use ETFs for diversification and some core holdings, but they are increasingly moving into smart-beta fixedincome and other ETFs that can deliver potentially greater returns. To some extent, institutions are also tapping external asset managers, which the survey shows are big ETF users as well, for income and greater returns. So whether we continue to see outsourcing of asset management or not, the trend for ETF usage is going to continue upward.

Another benefit that survey respondents cited was single-trade diversification. Why do you think institutions are turning this way? As a portfolio manager, you can put together a list of securities and pay commission on the ones you can find. While it may be easier with Canadian equities, if you go outside our borders, this becomes more challenging. For example, international securities don’t actually trade during the full Canadian trading day. ETFs make it easier for investors to access these funds; in a single trade, you can get exposure to the current market price for securities you simply can’t buy otherwise.

Wealthsimple forges ETF partnership

Wealthsimple has partnered with Forstrong Global Asset Management to let advisors invest client assets in any of Forstrong’s seven active ETF portfolio investment strategies. Forstrong has a long track record of managing globally balanced ETF portfolios. The Wealthsimple for Advisors platform will enable users to access Forstrong portfolios with no minimum account size or discretionary fees. Advisors on the platform can also easily handle compliance, investment management and client communication concerns.

In terms of smart-beta ETFs, what can you say about the possibility of returns being eroded by crowding in a specific strategy? Smart-beta ETFs look at factors such as growth, value, quality, size, dividend income and other nontraditional factors. Historically, different factors outperform in a different year. If everybody believes growth stocks are going to outperform this year and go overweight there, their market value will go up. But eventually, as the market price of growth stocks goes up, the relative value proposition of another factor like value increases, and it eventually right-sizes itself. We think about it the way we think about supply and demand impacting capital markets generally.

Invesco unveils high-dividend, low-volatility ETFs

Invesco has launched the PowerShares S&P 500 High Dividend Low Volatility Index ETF (UHD) and PowerShares S&P Global ex. Canada High Dividend Low Volatility Index ETF (GHD) on the NEO Exchange. The products target Canadian investors seeking income and growth potential from stock price appreciation, providing exposure to liquid, high-yield international equity securities. The ETFs have both a dividend yield screen and a volatility screen to give investors improved returns while limiting their risk exposure.

TDAM adds managed ETF portfolios

TD Asset Management has launched a new line of managed ETF portfolios. The products, described as lowcost managed portfolios of TD index ETFs, are customized to fit a variety of investor risk profiles. Designed by TDAM’s team of investment professionals, they are available to self-directed investors as D series mutual funds. “We are excited to offer self-directed investors a new suite of all-in-one index solutions that provide multi-asset exposure to TD ETFs within a single portfolio,” said TD Mutual Funds’ Paul Orlander.


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GOT AN OPINION THAT COUNTS? Email wealthprofessional@kmimedia.ca

A budget of reprieve Despite rumours of dramatic change, the latest federal budget largely stays the course – but that could change at any time, writes Trevor Parry THE 2017 Canadian federal budget contained virtually none of the controversial elements budget-watchers had feared, such as an increase to the capital gains inclusion rate or changes to the taxation of employee stock options. Instead, Finance Minister Bill Morneau brought forward a status quo document that reads more like a budget update than a full budget, while nevertheless clearly signalling the Trudeau government’s appetite to eat away at particular tax benefits “as soon as the time is right.” In the wake of the budget announcement, rumours are now circulating that, like his Conservative predecessor Jim Flaherty in 2011, Morneau may table a second federal budget in a single calendar year; pundits have suggested that second budget could appear in the fall. The 2017 budget tabled on March 22 is organized around five main themes:

1. Skills, innovation and middle-class jobs The government wants to invest $4 billion over the next five years in such areas as developing ‘superclusters’ (dense areas of business activity) to spur innovation, the creation of a strategic innovation fund, funding and promotion of clean technologies, and growing Canada’s advantage in artificial intelligence.

2. Investing to create jobs and strong communities The government plans to accelerate implementation of the Canada Infrastructure Bank, modernize Canada’s transportation system, work with the provinces and territories


to invest in green infrastructure, support families through early learning and child care, improve indigenous communities, and build a new National Housing Strategy. While these programs account for almost $21 billion in expenditures over five years, they will be funded by reallocating current budget dollars.

cient tax measures, and providing greater consistency in the tax treatment of similar types of income. The government estimates specific initiatives will increase tax revenues by almost $5 billion over five years.

5. Equal opportunity In its 2016 Fall Economic Statement, the govern­ m ent committed to completing and publishing a gender-based analysis of budgetary measures, starting with Budget 2017. Included in this budget is a discussion on how specific proposals will have a positive impact by addressing gender inequality. So why such a milquetoast effort? Speculators have concluded that Trudeau et al are waiting and watching actions south of the border before making any bold strokes here at home. What this means for the Canadian high income-earner, business owner or entrepreneur is a continuing requirement to remain

“For high income-earners, business owners or entrepreneurs, this budget means a continuing requirement to remain vigilant and engage in defensive tax planning” 3. A strong Canada at home and in the world Included under this theme is new investment in home care and mental health, creating healthier First Nations and Inuit communities, providing greater support for veterans and their families, and enhancing the security and safety of Canadians. Some of the funding for these initiatives will come from the reallocation of almost $1 billion that had previously been set aside for defence funding of largescale capital projects.

4. Tax fairness for the middle class This theme focuses on ensuring that the tax system is fair in both design and implementation. This is to be accomplished by closing tax loopholes, cracking down on tax evasion and combating tax avoidance with an additional $500 million investment over the next five years, eliminating ineffective and ineffi-

vigilant and engage in defensive tax planning for the upcoming months. What could be on the chopping block for the next budget round (whenever it comes)? Everything from income sprinkling from a testamentary trust to holding passive investments within a corporation to tightening the rules that allow family members to share income (a common strategy used by familyowned businesses). Thus, when the Liberals decide to move back above the treetops to mount their full assault, as they have telegraphed in their actions to date, Canadians would do well be prepared with effective countermeasures. Trevor Parry is president of the TRP Strategy Group, which provides authoritative counsel in the areas of executive compensation, retirement planning and wealth preservation for ownermanagers and incorporated professionals.


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EMBRACING CHANGE AGF Management CEO Blake Goldring discusses the firm’s ongoing reboot as it celebrates its 60th anniversary this year

THE OPENING sentence of AGF Management’s 2016 annual report is a pretty good summary of where the firm sees its future: “At AGF, we believe a tiger can change its stripes.” Part of its company logo, the tiger is synonymous with AGF, and this is an institution that is clearly in the midst of great change. Overseeing the transition is CEO and chairman Blake Goldring, the son of company founder C. Warren Goldring. The elder Goldring was a pioneer of Canada’s mutual fund industry – as a 2009 Globe and Mail article put it: “What Henry Ford did for cars, Warren Goldring brought to the world of Canadian money management. His simple concept was to make Bay Street’s high-end portfolio management skills available to Main Street’s investors.” That approach brought the company great success, which lasted for decades until the 2008 financial crisis and its aftermath devastated AGF’s business. Assets under management, which peaked in 2007 at $56 billion, went into free-fall, necessitating a strategic retreat in 2012. Since then, the firm has made a series of moves to reposition itself as a diversified global asset manager with a new focus on high-net-worth clients, as well as the institutional and alternative spaces. According to the captain of this mammoth ship, AGF’s rebuilding strategy is now starting to bear fruit. “This organization started as a mutual


fund company; my vision for the firm has always been that we should be more than that – we should truly be a global asset management firm,” Goldring says. “That means you have to be in other asset classes than just mutual funds.” A major part of AGF’s evolution as a global investment manager has been its willingness to take a chance on different businesses. Even before the financial crisis, the company was beginning to branch out in a number of different ways.

is a greater focus for Goldring now. As he explains, despite some lean years, mutual funds are still the company’s bread and butter, but there will undoubtedly be much more on AGF’s plate heading forward. “Investment management is still the engine of this whole organization,” he says. “We spent quite a bit of time searching out our new CIO and president, bringing in Kevin McCreadie. He brings great acumen in investments, focusing on low volatility, a discipline he brought from PNC Financial Services.”

“My vision for the firm has always been that we should be more than [a mutual fund company] – we should truly be a global asset management firm. That means you have to be in other asset classes than just mutual funds” “In the early 2000s, we created AGF Trust, which we ultimately sold for $420 million to B2B Bank,” Goldring says. “That was a move into a different sector that allowed us into mortgages and various RSP loans. It was a good money-maker for us, and by selling, we decided we wanted to reinvest into different areas, one being infrastructure.” AGF celebrates its 60th anniversary this year, and while the company is very proud of its legacy, what it will do in the future

Turning tide A graduate of the University of Toronto, Goldring also has an MBA from INSEAD in France. He began his career in financial services in 1983 with BMO, working in international, corporate and government banking before moving onto the family business in 1987. He was named CEO of AGF in 2000 and chairman in 2006, but the decade since has been a trying time. As has been the case with many mutual fund providers,


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PROFILE Name: Blake Goldring Title: AGF Management Company: Chairman and CEO Years in the industry: 34 Fast fact: Goldring is also chairman of Canada Company: Many Ways to Serve, an apolitical organization he created in 2006 to bring community leaders across Canada together to support the Canadian military and their families.


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mass redemptions have been commonplace at AGF since 2008, although that tide finally appears to have turned. In the fourth quarter of 2016, AGF reported a 26% increase in mutual fund flows, which is welcome news for the company’s top brass. The financial crisis left its scars, however, so diversifying the firm is paramount for Goldring.

Staying active

“In our strategic retreat of 2012, we decided we needed to get into the world of

One of the major criticisms of the mutual fund industry in Canada and firms like AGF

After a long descent, it appears AGF is finally heading on an upward trajectory again. “These are interesting times,” Goldring says. “I think for a firm like AGF, given our size and the capital we can invest in different markets, but also small enough that we are fleet of foot, this is the perfect environment.”

“These are interesting times. I think for a firm like AGF, given our size and the capital we can invest in different markets, but also small enough that we are fleet of foot, this is the perfect environment” alternatives,” he says. “The idea of having hedge funds wasn’t that exciting to us, so we wanted to do something different. We looked for partners in the alternative space and came across Greg Smith, who had just finished a sterling career with Macquarie, Brookfield and RBC.” Smith ultimately joined AGF in 2014 and has since set about building its infrastructure platform. Central to that is the InstarAGF Essential Infrastructure Fund, which is expected to reach its target of $750 million and close in the second quarter of 2017. The crown jewel of the fund is its interest in Toronto’s Billy Bishop Airport, acquired in 2015 as part of the Nieuport Aviation Infrastructure Partners consortium. Looking at the company today, it’s clear that AGF is fully committed to its transition. Of its $34 billion in assets, $23.9 billion is in the mutual fund space, while alternatives account for $685 million, its burgeoning private client business has amassed $4.9 billion, and its new venture, the quantitative solutions ETF platform AGFiQ, has $4.7 billion.


is that performance has lagged while fees remain high by global standards. With ETFs now offering a different option for investors, the industry has responded, and fees have come down across the board. AGF is no different – it lowered fees by 10 to 60 basis points on 23 of its largest funds in 2016. While there has been a lot of change at the company in recent times, one thing that won’t change is its commitment to active management, both in mutual funds and its newly launched ETF suite. As Goldring says, we live in interesting times – but they’re also very unpredictable, possibly tumultuous times. It’s a well-worn axiom that the markets hate uncertainty, and while that hasn’t proven to be the case so far in 2017, no one knows what lies ahead. “We have a change in policy in the United States, and every day seems like we are seeing something new,” Goldring says. “The best algorithm in the world won’t be able to anticipate that. Not only do you need to look at historical correlations, but marry that with real-time analysis by professionals.”


Founded by C. Warren Goldring and Allan Manford in 1957

Takes its name from the initials of the American Growth Fund, the first mutual fund in Canada to invest solely in US equities

The company went public on the Toronto Stock Exchange in 1968

By the following year, AGF had $350 million in assets, which represented 12.4% of the industry

Today, its assets stand at $34 billion

AGF has offices in Toronto, London, Dublin, Beijing and Singapore


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Wealth Professional_8.25” x 10.875”

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PowerShares Canadian Dividend Index ETF Performance and Morningstar ratings are as at March 31, 2017. 1-year 3-year 5-year






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out of 305 funds

High conviction means we go beyond traditional indices. Think beyond average. Visit invesco.ca. Commissions, management fees and expenses may all be associated with investments in exchange-traded funds (ETFs). Unless otherwise indicated, rates of return for periods greater than one year are historical annual compound total returns, including changes in unit value and reinvestment of all distributions, and do not take into account any brokerage commissions or income taxes payable by any unitholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Please read the prospectus before investing. Copies are available from Invesco Canada Ltd. at powershares.ca. The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. ETFs and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Nasdaq®, OMX®, and Nasdaq OMX® are registered trademarks of The Nasdaq OMX Group, Inc. (“Nasdaq OMX”) and LadderRite® is a registered trademark of LadderRite Portfolios LLC (“LadderRite”). Nasdaq®, OMX®, Nasdaq OMX® and LadderRite® are collectively the “Marks”. The Marks are used under licence to PowerShares Capital Management LLC and Invesco Canada Ltd. The product(s) have not been passed on by Nasdaq OMX or LadderRite as to their legality or suitability. The product(s) are not issued, endorsed, sold, or promoted by Nasdaq OMX or LadderRite, and NASDAQ OMX AND LADDERRITE MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S). There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Ordinary brokerage commissions apply to purchases and sales of ETF units. Most PowerShares ETFs seek to replicate, before fees and expenses, the performance of the applicable index, and are not actively managed. This means that the sub-advisor will not attempt to take defensive positions in declining markets and the ETF will continue to provide exposure to each of the securities in the index regardless of whether the financial condition of one or more issuers of securities in the index deteriorates. In contrast, if a PowerShares ETF is actively managed, then the sub-advisor has discretion to adjust that PowerShares ETF’s holdings in accordance with the ETF’s investment objectives and strategies. † Inception date is June 8, 2011. Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. PowerShares® and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC (Invesco PowerShares), used under licence. © Invesco Canada Ltd., 2017

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New challenges Sentry Investments’ new senior portfolio manager, Lieh Wang, reveals the career touchstones that helped shape his investment strategy

JOINING A new company can be a daunting proposition, but for Sentry Investments’ new vice-president and senior portfolio manager, Lieh Wang, the transition has been pretty painless so far. Having distinguished himself during a seven-year term at Empire Life, where he led the Canadian equity team and later managed the US equity fund, Wang was looking for a fresh start earlier this year when he moved to Sentry. Welcoming him were some familiar faces, including Gaelen Morphet, who made the same leap from Empire Life to Sentry in 2016. For Wang, hitting the ground running with the Sentry Growth and Income Fund was a top priority. “Fortunately for me, I inherited a portfolio of quality companies,” he says. “So in that respect, I don’t see any major shifts in strategy. My investment philosophy and process are very consistent with the in-house philosophy here at Sentry. Having said that, I will put my own stamp on the portfolio over time.” Michael Simpson, who manages the company’s flagship Sentry Canadian Income Fund with $6 billion in assets, previously oversaw the Sentry Growth and Income Fund, so Wang has some pretty big shoes to fill. Fortunately, it’s a challenge he relishes. Wang explains his selection process for the fund.


“It is predominantly focused on Canadian stocks, but I have the flexibility to invest in foreign stocks as well,” he says. “There are the Canadian banks, as well as a lot of highquality industrial companies like CN Rail and MacDonald Dettwiler. It is a well diversified fund – there are some REITs as well. I also try to focus on dividend-growing stocks in Canada and the US, and not just stocks with a high yield.” Wang started his career with AMI Partners in 1994; in the 23 years since then, he has navigated both the dot-com crash and the financial crisis of 2008. Both were formative periods in his development as a money manager. “It really hit home that to build wealth over time, it is critical to make sure to protect and preserve capital on the downside,” he says. “Those downturns made me even more conscious of the downside risk in the portfolio. That is what I think about coming into the office every day – not the upside.” It’s an approach that has served him well over the years and will shape the Sentry Growth and Income Fund going forward. His investment philosophy isn’t rocket science, but it is one that requires a great deal of discipline. “What we learned from the 2008 crisis is that you can’t invest with emotion,” Wang says. “You would have missed a great buying

opportunity in March of 2009 – equity markets in the US are up over 200% since that time. When stocks are fundamentally cheap, you shake off any emotion, look at your due diligence and then decide to step into a position.” Industry opinion is split on whether the strong market performance will continue for much longer, but Wang’s investment strategy means being prepared for any downturn that should materialize. In that respect, the current uncertainty doesn’t cause him undue concern. “I’m not necessarily bearish on the markets, but I did expect more volatility this year, given the geopolitical issues out there,” he says. “We haven’t seen that so far, and the markets continue to grind higher. The North American economy continues to be positive. It’s not growing gangbusters by any stretch of the imagination, but we are continuing to see some decent growth prospects.” That said, the only inevitability of a bull market is that eventually it will end. Wang doesn’t worry about forecasting what might be coming. He deals in facts – strong fundamentals and proven quality. In doing so, he protects the interests of any investor


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WHO IS LEIH WANG? Education: Graduated from the University of Waterloo in 1994 with an honours bachelor of applied science degree in mechanical engineering Early days: Began his career as a research analyst with AMI Partners, later becoming a portfolio manager and partner with the firm Career growth: Developed his reputation as a specialist in North American equities after stints with CIBC Global Asset Management and Empire Life Investments New challenge: Joined Sentry Investments in January, where he oversees the Sentry Growth and Income Fund, which has an AUM of more than $770 million using his funds. “We are in the eighth year of the recovery now, and we could continue to grind higher, but the easy money has clearly been made,” he says. “I’m being vigilant to see if there is downside, but what I have learned in over

sees an options portfolio as part of the Sentry Alternative Asset Income Fund. Previously, the fund was comprised of three different sleeves: high yield, REITs and global infrastructure stocks. After hiring Wang, Sentry decided to add a fourth sleeve – options –

“What we learned from the 2008 crisis is that you can’t invest with emotion. When stocks are fundamentally cheap, you shake off any emotion, look at your due diligence and then decide to step into a position” Leih Wang, Sentry Investments two decades in the industry is that it is very difficult, almost impossible, to time the markets. So if I invest in a basket of highquality companies and I’m comfortable where the downside is, the upside should take care of itself.” In addition to managing the Sentry Growth and Income Fund, Wang also over-

based on his expertise. “Options don’t have to be complex,” Wang says. “I sell options premiums to manufacture a different income stream on a consistent basis. I am, in effect, collecting income by selling insurance to investors who are bearish on a stock or selling further upside potential to investors who are bullish on a stock. By

In his own words: “When everyone is euphoric about a company’s prospects, or the markets in general, you have to be disciplined and not fall in love with the stock. You must have a disciplined investment process to build wealth over the long term.” regularly harvesting this premium as income, it both adds to returns and acts to dampen the portfolio’s volatility during rough patches in the market.” The fund offers an alternative strategy that Wang believes will be attractive to investors searching for diversification and alternative income in this low-rate environment. Managing the fund with him are Gaelen Morphet, James Dutkiewicz, Andy Nasr, Michael Missaghie and Gajan Kulasingam – a talent pool that suggests the company has high hopes for the fund’s success. “You are getting a product that is not as correlated to the overall equity markets or bond markets,” Wang says. “By introducing options into this product, you introduce an element that will diversify the portfolio and enhance the yield even more.”


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It’s not easy out there for the new breed of financial advisors, but these 25 young professionals are flourishing as they shape the future of wealth management MAKING YOUR mark as a young financial advisor has never been more challenging. A clear division has emerged between the high-networth segment and the mass market, creating a glass ceiling for new entrants. As the industry shifts toward a fee-based model, critics have suggested that ordinary Canadians are simply being directed toward bank branches for their financial planning needs – branches that are increasingly coming under fire for pushing products with little regard for their suitability for clients. Advisory firms are under pressure themselves, of course, so often there is little leeway for someone still learning the ropes. Many of this year’s Young Guns highlighted just how crucial mentoring by senior advisors can be – such guidance often means any bad habits can be nipped in the bud before they become a real problem. This year’s Young Guns are passionate about their work and keen to remove any stigma associated with the profession. However, they’re also acutely aware of the many difficulties rookie advisors face, from unreasonable sales targets to the difficulty of building relationships with fellow millennials in the industry. Above all, they’re conscious of the fact that a financial advisor is only as good as his or her reputation. As Tim Butler of Investors Group put it: “My job is to show the value I provide and ensure the clients understand that I am more than just a salesman – I am a financial planner.”



Aaron Arnold

Luft Financial


Andrew Feindel

Richie Group


Benjamin Waite

Your Investment Manager


Cameron Wilson

Wilson Wealth Management


Chelsey Chartren

The McClelland Financial Group


Cliff Steele

The Steele Group Financial


Colin Reid

Aligned Capital Partners


Dan O'Shaughnessy

O'Shaughnessy Financial Services


Harry Jawanda

Richardson GMP


Hutton Wierzbicki

Sun Life Financial


Jamie Townsend

Lawton Partners


Jason De Thomasis

De Thomas Wealth Management


Jay Dowhaniuk

Raymond James


Jay Gangnes

JR Financial


Kyle Johnson

Alexandra Horwood and Partners


Lakshmi Pillai

Manulife Securities


Nicholas Cup

Cup Wealth Management


Raj Seekumar

Investors Group


Sean Moir

Mandeville Private Client


Simon Jochlin

StennerZohny Investment Partners+


Simon Partington

Partington Wealth Management


Sylvia Zheng

Sun Life Financial


Thomas Cook

Affinity Financial Group


Tim Butler

Investors Group


Tyler Purves

BMO Nesbitt Burns


THOMAS COOK Investment advisor AFFINITY FINANCIAL GROUP Age: 31 Years in the industry: 9

Thomas Cook sees a lot of grey area around the role of a financial advisor, which he believes is hurting the profession. The Nova Scotia-based principal of Affinity Financial Group has strong feelings about advisors who prioritize their own earning power over the needs of their clients. “The industry needs to turn its focus to providing quality, client-first solutions, as opposed to focusing on product sales that help the bottom line of a parent company,” he says. Now running his own operation in Halifax, Cook values the independence of such a venture. In recent years, he has moved away from a commission model, and the switch has given him greater freedom to pursue his clients’ best interests. “I am not pushed to use proprietary products like most of the industry,” he says. “Clients seem to like the transparency of costs, as well as the mindset of hiring someone to manage their wealth, as opposed to their advisor being compensated by selling them a product.” Nearing a decade in the business, Cook is approaching veteran status even though he’s still in his early 30s. He believes certain changes in the industry have been a long time coming, and he hopes to see professional standards for financial advisors raised across the board. “I hope they institute a minimum education level and clear disclosure requirements so clients are aware of what is available to them based on their advisors’ licensing or education level,” he says. “Currently there are no disclosure requirements. Something needs to be done to make this completely apparent before engaging in business.”


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COVER STORY: YOUNG GUNS 2017 KYLE JOHNSON Associate investment advisor ALEXANDRA HORWOOD AND PARTNERS (RICHARDSON GMP) Age: 31 Years in the industry: 5

Finding your feet at Canada’s largest independent wealth manager doesn’t come easy. Part of Alexandra Horwood and Partners at Richardson GMP, Kyle Johnson had to pay some dues at the firm to reach his current position. “When I started, I was an unlicensed assistant, so I was the one getting the coffee, setting up meetings and completing the miscellaneous administrative duties required to run a successful practice,” he says. “I think it was necessary to have this solid foundation of understanding how the business works in order for me to move on to ‘bigger picture’ responsibilities.” The bigger picture, in this case, is the actual nuts and bolts of being a financial advisor with a successful practice boasting $173 million AUM. Now a licensed associate investment advisor, Johnson’s main responsibility is to build, deploy and monitor the team’s model portfolios, as well as manage all operational trading activity. Currently in his fifth year in the advisory business, Johnson is a shining example of the young talent wealth management needs a lot more of, but has struggled to attract. He feels there’s a simple explanation for – and perhaps an equally simple solution to – the industry’s talent shortfall. “I believe the wealth management business has been given a bad rap by being associated with Wolf of Wall Street types of brokers and corporate greed,” he says. “If new talent were aware there are benevolent brokerage teams out there seeking the common good with stakeholders, they would discard these false preconceived beliefs.” More advisors will mean more competition in what is already a very competitive marketplace. Because clients are a lot more knowledgeable about investments and financial planning these days, advisors need to go the extra mile to prove their worth. “Clients are becoming a lot more cost-conscious,” Johnson acknowledges, “so advisors will need to add value wherever possible instead of focusing purely on investment management.”


ANDREW FEINDEL Financial planner RICHIE GROUP (INVESTORS GROUP) Age: 35 Years in the industry: 13

Soon after finishing his graduate studies, Andrew Feindel had a tough decision on his hands. He knew he wanted to enter the financial world, but he was torn between investment banking and wealth management. His appearance on this list gives away his final pick, of course, and he has no regrets. “I was always good with numbers and had an interest in finance and economics,” Feindel says. “The difference for me was the flexibility and the ‘being your own boss’ element of being a financial planner. There is literally no ceiling in this industry.” Being a financial advisor in 2017 means wearing many hats and providing clients with a one-stop shop for their wealth management needs. A successful advisor must be able to multi-task at a high level, which is an aspect of the job Feindel definitely enjoys. “It really is the ideal entrepreneurial dream: knowledge (markets and taxes), communication (being able to simplify it to clients), management (of an administrative team), marketing (how to connect with the right clientele), service (basic but also going above and beyond), and being trustworthy and likeable,” he says. The advisors who are adaptable and open to change are those who will succeed in the years ahead, Feindel believes. In his opinion, clients expect a lot from their advisor today, so demonstrating value has never been more important. “The real question every advisor should be asking is: ‘What are we doing for clients other than managing their money?’” he says. “Are we involved in their tax planning, restructuring corporations, dividend/salary mix, insurance planning, estate planning and trust structuring? The advisors doing this – and giving all clients written financial plans, beating benchmarks and having an absolute focus on reducing family taxes – will be picking up a ton of business in the years to come. The salespeople selling mutual funds, stocks or bonds, with not a whole lot of advice, will lose out big time.”


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Having just turned 25, Chelsey Chartren is one of the youngest members of this year’s Young Guns list. Her youth hasn’t stopped her from finding a place at the table at one of Assante Capital Management’s top-performing advisory teams. Personally managing $9 million of The McClelland Group’s $400 million AUM, Chartren has risen through the ranks at a fast pace, and she has every intention of continuing that climb heading forward. As someone who is relatively new to the industry, Chartren is well placed to comment on why financial advice isn’t a career many of her generation consider. “There hasn’t been much innovation, and it may be portrayed as an ‘old-school’ job,” she says. “The industry has been making some steps in the past few years to become more tech-savvy, but continuing to improve in this area will definitely help.” Anyone coming into the wealth management space this year will be entering a business in a state of flux. Regulatory change is by no means finished, and if anything, it will likely to ramp up in the coming years. This isn’t something that concerns Chartren, who believes anything that increases accountability is clearly a positive. “Unfortunately, the history of the financial industry has given it a bad rap,” she says. “All these new regulations being put into place will hopefully clear the air and move our industry in the right direction in terms of disclosure and ensuring that our clients are well educated. There are still a few things that have slipped through the cracks even with the new CRM2 regulations. We will continue to see more and more regulations being put in place to ensure advisors are completely transparent. Our office has fortunately been fee-based and completely fee-transparent since 2004, so we will be happy to see these changes in years to come.”


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COVER STORY: YOUNG GUNS 2017 TYLER PURVES Wealth advisor and assistant branch manager BMO NESBITT BURNS Age: 32 Years in the industry: 11

Tyler Purves realized the advisory business was for him while working at a summer job with BMO Nesbitt Burns. Today, he remains with the firm and has witnessed a great deal of change in his 11 years there – although he points out that the core elements of financial planning remain the same. “I think it’s important to acknowledge that the foundation of what we do – providing our clients with professional advice, acting with integrity and offering a fair value proposition – has not changed,” he says. While that’s true, clients’ expectations are also higher now, and advisors need to be able to meet them if they want to succeed in this business. At Nesbitt Burns, Purves directs his clients on investing, will and estate planning, trust services, and private banking as part of a highly detailed financial plan. “The job demands a high level of organization and a personal touch that perhaps wasn’t always required in the past,” he says. “The shift toward dealing with fewer clients, but offering a more comprehensive experience, is a big change.” As the industry evolves, it’s also struggling to attract new advisors – a trend Purves believes will get worse before it gets better. “The barriers to entry are high and only becoming higher,” he says. “Unlike the legal or accounting professions, which attract swathes of graduates each year, our profession doesn’t have the same type of progression system in place.” What that means is that young advisors are often thrown in at the deep end, which can be daunting. There is little margin for error when dealing with people’s finances. “Even with developing advisor programs, employer expectations are high from the outset,” Purves says. “Many firms have instituted high client minimums and are focused on providing a high level offering to clients. Young advisors may not be viewed as having enough experience by high-net-worth clients.” It’s a quandary that many firms are working on, and Purves has some ideas about how best to overcome it. “Rather than focusing solely on revenue generation, we should focus on developing the skills and experience required for young advisors to serve the needs of sophisticated clients in the future,” he says. “Our firm has recently introduced an advisor mentorship program that allows for this type of arrangement between an experienced advisor and a developing one.”

CLIFF STEELE Advisor THE STEELE GROUP FINANCIAL Age: 31 Years in the industry: 7

Deciding to become a financial advisor wasn’t that difficult a decision for Cliff Steele. His father, Norm Steele, is the founder of The Steele Group Financial, and his success obviously had a lasting impact on his son. The business caters to both individuals and employers, offering the full gamut of wealth management, as well as health insurance and benefits solutions for companies. With assets under management of $151 million, the wealth side of the business is clearly in good health. In Steele’s opinion, a lot of that can be attributed to the collaborative environment of his family business, which also helped him find his feet in the industry. “I feel that working with an established practice is the best recipe for success for a new advisor,” he says. “Having established processes and procedures helped me to be able to focus on my clients and their needs versus chasing paperwork. I feel this is why the industry fails to attract new people – as a stand-alone advisor, it can be a lonely and overly demanding job.” This is why Steele thinks such cases will become rarer and rarer moving forward – between compliance demands and the evolving needs of digitally savvy consumers, a one-person operation simply won’t have the time or resources to survive in this new environment. “I see the end of the one-man, lone wolf advisor,” he says. “The amount of paperwork and time needed has easily tripled in the seven years I have been an advisor. Now clients want an on-demand advisor – the ability to email or call and have a response almost immediately.”



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NICHOLAS CUP Wealth advisory planner, founder and director CUP WEALTH MANAGEMENT Age: 24 Years in the industry: 4

The way money works has fascinated Nicholas Cup from an early age, so it’s not too surprising that’s how he now makes a living. Running his own business, Cup Wealth Management, at the ripe old age of 24 points to an individual with a lot of drive – and Cup doesn’t mince words when it comes to some of the problems within his profession. “Right now, I believe the industry is filled with a lot of snake oil salesmen,” he says. “You can become a fully licensed advisor by not having a criminal record and passing a few multiple-choice tests. Can I become a doctor taking some month-long crash course and passing a few multiple-choice tests? Can I become a lawyer this way? An accountant?” Strong words, but they’re not the only ones he has for an industry that is struggling to attract younger advisors. “If you look at the stats and [business] failure rates for new advisors, it’s a huge turn-off,” he says. “Do you think a profession with a 90% failure rate looks attractive?” It’s an unfortunate trend, because as Canada’s wealth makes its way into the hands of millennials, the wealth management business needs to reflect that. Cup is a good example of this, and being able to adapt and move with the times is a central plank of his practice. “I think in the next five to 10 years, traditional broker/dealers will either have to completely change their business models or face extinction,” he says. “I see a huge opportunity for robos to step in and shake things up. I don’t think the robos will revolutionize investment management – I think they will revolutionize the broker/dealer industry.” Cup welcomes the shift toward robo-advisors; in fact, offering digital platforms is already a key way he differentiates himself from his competitors. “I don’t know what all the fuss is about with robos stealing our jobs – I genuinely think they complement us,” he says. “In fact, I see them as huge partners and key players to my success in the future.”


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COVER STORY: YOUNG GUNS 2017 COLIN REID Portfolio manager and financial advisor ALIGNED CAPITAL PARTNERS Age: 34 Years in the industry: 6

TIM BUTLER Financial consultant INVESTORS GROUP Age: 28 Years in the industry: 2.5

Having graduated from UPEI with a degree in economics, Tim Butler was working with the Island Storm of the National Basketball League of Canada when an encounter set him on a completely different career path. Seeking sponsorship for the team, he approached the regional director for Investors Group, who convinced him to instead join the organization as a financial consultant. That was in 2014, so Butler is still in the process of learning his trade in the wealth management space. He reflects on what it takes for a new entrant to prosper in this industry. “Building a book of business from scratch is a scary proposition, and I have been through months where my revenue did not surpass my expenses,” he says. “I can see some institutions moving toward more of a legal model in how they bring in new blood – hiring young associates and giving them a base income in the first few years until they can build their practice to the point they can be sustainable.” It’s been challenging for Butler to gain a foothold with Investors Group, but the hard work of those frustrating early days is starting to pay off. Part of his baptism by fire has been the industry’s shift when it comes to the compensation model for financial advice. “A great change for myself as a young consultant was our company’s move to eliminate DSCs completely from our product shelf,” he says. “It was a move that was needed to keep us in line with our competitors and eliminate those uncomfortable early redemption fee conversations.” This new fee-conscious environment means advisors need to be able to demonstrate value at all times – but this is a positive, in Butler’s view. “If you do not build value in the clients’ eyes, how can you justify the fee they see on their statements?” he says. “A quote I use with my clients when talking about fees is: ‘Price is only a concern in the absence of value.’”


Canadians’ financial literacy is a national concern, and it’s an important issue for Aligned Capital Partners advisor Colin Reid, too. Now in his sixth year in the business, Reid believes the industry’s difficulty in attracting new talent is linked to the financial myopia that holds back the population in general. “Lack of financial literacy has always been a problem, but it seems more so today, and the amount of knowledge and expertise needed in our field is continuously growing,” he says. “The knowledge inequality gap grows larger and seems to act as a deterrent to young advisors who wish to enter our industry. The time and work required to become a top advisor now seems overwhelming.” While the learning process can be arduous, being able to change people’s lives for the better was a real selling point for Reid when he began his career. Another plus is being involved in a fast-moving industry, which allows him the chance to test himself and develop new skills. “Many people need financial help, and it is very fulfilling to provide that through the role of a financial advisor,” he says. “But it wasn’t just the ability to help people that attracted me to this industry – it was also the vast amount of knowledge to explore. I love to learn, and the ever-evolving financial landscape ensures there is something new to learn every day.” Education is clearly important to Reid, who believes wealth management has a role to play in making Canadians more financially savvy. “I believe kids should be taught financial literacy at an early age, and the education system should make it a mandatory subject of study – our industry could help develop the programs,” he says. When it comes to the day-to-day demands of his job, Reid is concerned that increased regulatory pressure could have the opposite of the intended effect – after all, an environment where compliance supersedes customer service will not benefit clients. “Managing wealth, researching the investment landscape, building optimal portfolios for clients and developing strategies is a time-consuming and difficult job,” he says. “We have to be careful we do not pass the point where the advisor is spending more time on compliance than helping clients reach their financial goals.”


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SIMON PARTINGTON Director of wealth management and portfolio manager PARTINGTON WEALTH MANAGEMENT (RICHARDSON GMP) Age: 34 Years in the industry: 12

One of Wealth Professional’s Top 50 Advisors for 2017, Simon Partington is a Young Gun who has clearly hit his stride in the industry. He has amassed assets under management of $163 million and oversees his own team at Richardson GMP – all before his 35th birthday. He chalks his current success up to 12 years of hard work as he progressed through the ranks at Canada’s leading independent wealth manager. His time at Richardson GMP has provided a valuable learning experience – one he believes is increasingly harder for young advisors to find. “The big banks don’t want small accounts or households, and that’s how most of the large advisors today started 20 years ago,” Partington says. “Rookie programs don’t work out for many young advisors because they tend to burn out after a couple of years of cold-calling and prospecting family and friends. It’s challenging to start from scratch in this industry, and that’s when young advisors either get discouraged or do not meet that company’s expectations and ultimately leave the business.” High turnover is an issue for the industry today and is likely to become even more of a problem in the years ahead. To address it, Partington says firms should do more to support younger advisors as they learn the ropes. “The industry needs to develop a coaching or partnering strategy to help get young advisors up to speed to a point that they can be independent – not only as a great advisor, but also to help grow their practice,” he says. In offering this suggestion, he’s speaking from experience; the support he received at Richardson was a major factor in his development. “There was always an open-door policy with most senior advisors, and by the end of my second year working at the firm, I had met most of the senior partners and found out how they managed investments, grew their practices and built a great business model,” he says. “This can be more challenging with other firms, as it seems as though everyone is in competition with each other.” In Partington’s opinion, the primary duty of a wealth manager today is to preserve assets, rather than load on risk for returns that may never materialize. “Clients remember 2008 all too well, and I have found that clients want their money protected more than they want you swinging for the fences for returns,” he says. “Furthermore, it should be a discussion around goals-based investing versus market returns.”

BENJAMIN WAITE Investment advisor YOUR INVESTMENT MANAGER Age: 27 Years in the industry: 7

It was during his time at the University of Regina that Benjamin Waite decided to become a financial advisor. By age 20 he had made his start, and now seven years down the line, he manages a $25 million book of business. However, he admits that success stories like his don’t come easy for his generation. “Generally the avenues of access are sales-based, which doesn’t always attract graduates,” Waite says. “The real challenge is it makes starting up tough; most advisors have to go through a starvation phase to get to where they want to be.” Another impediment is the fact that millennials’ wealth is often too small to require management. This makes the prospecting phase more difficult for advisors of that generation. “Young advisors’ natural market – their peer group – doesn’t have the money to invest, and older advisors don’t seem to be retiring/passing on their books of business,” Waite says. However, he is evidence that younger advisors can succeed – their ability to harness technology is a clear advantage over their older competitors. “In 2016, my AUM grew by 36%,” Waite says, “and 15% so far this year, which has necessitated greater use of technology to monitor portfolios, as well as keep track of client interactions. Being younger, technology has always been a factor in the workplace for me, but now it is becoming a bigger factor by the day.”


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COVER STORY: YOUNG GUNS 2017 SEAN MOIR Portfolio manager MANDEVILLE PRIVATE CLIENT Age: 31 Years in the industry: 11

When it came time to decide where his life was headed after finishing school, Sean Moir identified his strengths and asked how they could translate into a career. His father was in the advisory business, so he already had an insight into that world, which dovetailed nicely with his skill set. “I’ve always been fond of listening; I thought in high school that I might want to venture into the therapy field, but I wasn’t gifted in science, so that was out,” Moir says. “This business involves a lot of listening – it’s important to understand who your client is and what their goals are in order to identify a solution.” Fast-forward 11 years: Moir is now approaching veteran status at Mandeville Private Client, and he has a few thoughts on where wealth management is headed. “It’s going to be tough to fight the perception that cheaper is always better,” he says. “Having a dedicated partnership between an advisor and a client is expensive, yet rewarding for all parties over the long term. Fighting to get that point across will be tough in the face of smartphone solutions to access low-cost, vanilla investing options that completely forget that this business is 80% psychology and 20% math.”

SYLVIA ZHENG Financial advisor SUN LIFE FINANCIAL Age: 28 Years in the industry: 6

Sun Life Financial’s Sylvia Zheng was just 22 years old when she made her start in the advisory business, and over the course of her six years in the industry, wealth management has seen significant change. “The job I signed up for has evolved into a business,” she says. “I am focused on the planning process, ensuring my clients have a positive experience and understand that our relationship is long-term and goal-oriented. It is enormously gratifying when someone places their trust in you.” With assets under management of $12.2 million, it’s apparent there are plenty of people placing their trust in Zheng, who foresees financial advice becoming less transactional and more relationship-focused in the future.




International market specialist

Investment advisor


Simon Jochlin is a prime example of the new breed of financial advisors that are driving innovation in the industry. A highly valued member of the StennerZohny team, it was Jochlin who introduced the concept of portfolio analytics to Richardson GMP. Simplifying statistics and probabilities for clients, his Moneyball approach to wealth management has given him a stellar reputation for advanced modelling techniques and for being able to break down complex financial data for clients in a straightforward way. Another specialty is alternative investing through private equity and hedged assets, where he believes “risk-conscious investing is needed most when market psychology becomes euphoric.”

MANULIFE SECURITIES Age: 27 Years in the industry: 5

Managing a $26 million book of business, Lakshmi Pillai has clearly earned the trust and respect of her clients in her five years in the advisory business. That’s not something she has taken lightly as she has grown into her role with Manulife. “This job has certainly made me more appreciative of the hard work and effort families put into building financial security,” she says. “You become more mature, responsible and mindful of how different people react to different scenarios. You become much more sensitive to worries or concerns clients may have and learn what you can do to reassure or help them.”


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JAY DOWHANIUK Wealth manager RAYMOND JAMES Age: 35 Years in the industry: 16

In becoming the financial advisor he is today, Jay Dowhaniuk identifies two figures who were instrumental in his life: his grandfather, who ran a successful gravel business in Edmonton, and family friend Paul Johnson. Johnson, who had his own practice at Raymond James, was a mentor to Dowhaniuk after he joined the firm. The two later became partners, an arrangement that lasted for 12 years until Johnson’s untimely death last year. Dowhaniuk looks back on those early years with great fondness, and identifies why younger advisors sometimes struggle to make their mark. “Unless a young advisor can partner with a well established veteran advisor, like I did, it’s almost impossible for them to earn a decent living in the first few years,” he says. “I think more mentorship programs would be a great help to those wanting to enter this business.” Now that he is established, Dowhaniuk is thankful to have had the support of a firm the size of Raymond James. In his 16 years in the business, he has seen many independent names swallowed up as the banks extended their reach. “Over time, the bank-owned firms slowly started to interfere and influence how their financial advisors dealt with their clients,” he says. “They incentivized advisors to build ‘model portfolios’ and become the client’s actual portfolio manager. I see a time down the road when all financial advisors at bank-owned firms will be on salary selling bank-branded products. I’m not convinced this is the best solution for clients.”


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CAMERON WILSON Investment advisor WILSON WEALTH MANAGEMENT (RBC WEALTH MANAGEMENT) Age: 35 Years in the industry: 11

JAMIE TOWNSEND Wealth manager LAWTON PARTNERS Age: 34 Years in the industry: 11

A valued member of Winnipeg-based firm Lawton Partners, Jamie Townsend and his team oversee more than $250 million in assets. In building that business, Townsend has put great emphasis on the power of the collective. When it comes to financial planning in 2017, he believes having a group of dedicated professionals under the same roof is a huge plus for clients. “The change we are experiencing in Canada has already happened in the US, Britain and Australia,” he says. “If you look at those countries, the professionals who thrived were the ones who worked in teams and continued to push the level of value they provided to clients.”


After a four-year stint with Scotiabank earlier in his career, Cameron Wilson really found his feet upon joining RBC Wealth Management in 2010. Today he presides over the Wilson Wealth Management team at Canada’s largest bank, specializing in tax-efficient investment strategies and estate planning for his clients. Based in Abbotsford, BC, Wilson commits a great deal of time and effort to improving his knowledge and skill set in the investment space. Not only has he obtained CIM, CPCA, FCSI and CIWM designations, but he also completed the CSA’s Futures Licensing Course in 2014, offering his clients more options when it comes to their investment strategies.


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7/04/2017 8:22:40 AM


Working for giants of the industry like Goldman Sachs or Bank of America Merrill Lynch is what many people aspire to, but for Dan O’Shaughnessy, it left him unfulfilled. Instead, he decided to scratch his entrepreneurial itch by setting up his own firm, O’Shaughnessy Financial Services, which specializes in life insurance and estate planning. “The industry needs to do more to promote itself in higher education to attract well-educated professionals to the space,” he says. “The story that should be told is the huge opportunity for young professionals with the rising age of advisors, the flexibility of schedule, the great clients you can get if you do the right work and the entrepreneurial freedom that comes with growing your own business.”


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HARRY JAWANDA Associate (registered representative licensed) RICHARDSON GMP Age: 25 Years in the industry: 2

Becoming a financial advisor wasn’t always Harry Jawanda’s end goal. In university, he originally studied mechatronics engineering before specializing in mathematics and economics. Those disciplines left him with plenty of options, but he ultimately decided to go down the path of financial planning. He’s now two years into that journey, and despite plenty of challenges, it’s a decision that has so far been vindicated. Central to that has been the support he has received at Richardson GMP, which Jawanda believes is crucial for the development of young advisors. “It can be difficult if you are trying to build your own book and just starting out fresh in the industry,” he says. “There is tremendous leverage if you have a great mentor, which I am lucky to have, who can help accelerate your learning curve and build relationships among clients and industry professionals – warm leads are always better than cold ones.”


AARON ARNOLD Investment advisor LUFT FINANCIAL (HOLLISWEALTH) Age: 33 Years in the industry: 10

Marking a decade in the wealth management business this year, Aaron Arnold has witnessed a lot of change across the industry in that time. His firm, HollisWealth, is currently in the process of being acquired by iA Financial Group; such deals are becoming the norm for independent firms. The shift to a fee-based model is another trend, and Arnold believes advisors who prefer the commission model have a harsh adjustment period ahead of them. “I think we will continue to see consolidation amongst smaller independent dealers in the short term, which will eventually lead to new dealers opening up,” he says. “Embedded commissions will be a thing of the past, and more advisors will transition to discretionary portfolio management. I think we will see a reduction in fees across investment products, which will benefit the investor.”


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JAY GANGNES Owner/director JR FINANCIAL Age: 35 Years in the industry: 14

As the owner of Vancouver-based JR Financial, Jay Gangnes realizes better than most that clients expect more from their financial advisor these days. When Gangnes started his business, insurance was his primary focus, but it has since morphed into a full-service, holistic model, offering services like corporate tax and estate planning for the high-net-worth segment. It’s a timely transition, given the overall shift that’s happening in wealth management. “I feel we are at the starting point of a major transition to the fee-for-service model, similar to those offered in the UK and Australia,” Gangnes says. “It will be extremely important to add significant value above and beyond a simple higher return or cheaper price.”


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COVER STORY: YOUNG GUNS 2017 HUTTON WIERZBICKI Associate manager SUN LIFE FINANCIAL Age: 29 Years in the industry: 6

A graduate of Wilfrid Laurier University, Hutton Wierzbicki has been on a steady climb up the career ladder since joining Sun Life Financial in 2011. Starting off as a junior partner with the Wilson Claxton team, he has since risen to become a managing partner in the Kitchener/ North Waterloo Wellington Financial Centre. The office is a leading light for Sun Life’s Canadian operations, with more than $1.3 billion AUM. A large part of that success can be attributed to finding the right talent to drive business, which is a key focus for Wierzbicki, who is responsible for training and developing new advisors.

RAJ SEEKUMAR Financial consultant

JASON DE THOMASIS Financial planner and chief compliance officer DE THOMAS WEALTH MANAGEMENT Age: 34 Years in the industry: 11

Joining the family business in 2007, Jason De Thomasis didn’t have much time to learn the ropes before the industry was completely flipped on its head. Figuring things out during the financial crisis had its benefits, however, and today he manages more than $45 million in client assets. Aside from his bread and butter of financial planning, De Thomasis also serves as the firm’s chief compliance officer – a hugely important role, given the current regulatory climate. In addition to completely overhauling the compliance structure at De Thomas Wealth Management, he also found the time to complete his CFP designation in 2014 and LLQP in 2015.


INVESTORS GROUP Age: 32 Years in the industry: 4

It was advice from a family friend that convinced Raj Seekumar to pursue a career in financial advice. Now with Investors Group, where he has $5 million in AUM, Seekumar is keen to offer similar guidance to others. “Generally, people in undergraduate and master’s programs do not have knowledge about this career,” he says. “They do not know how rewarding, interesting and challenging it can be. The lack of awareness, I think, may be one cause for not attracting new talent. We all need to spread the good word and tell people about the industry and how amazing it is.”


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Complete cash flow models Current and future pro-forma viewable T1, T2, and T3 taxes Accurate estate planning Life, Disability, Critical Illness, and Long-Term Care insurance needs

Vision Systems Offers Canada’s Premier and Only Complete Financial‐Planning Software Suite

• Flexible planning options Choose the “best fit” planning approach based on client expectations and your business model □ Retirement Plans □ Financial Life Plans • Promote Retirement Plans to Financial Life Plans • Increase efficiency by importing client data from PDF questionnaires • Flexible reporting options • Easily create Microsoft PowerPoint® client presentations To learn more visit: www.visionsystemscorp.com Email: info@visionsystemscorp.com Call: 888-578-3247, ext. 100 or Option 1

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LEADERS OF THE FINTECH PACK Financial technology – also known as fintech – is putting Canada on the global innovation map. Here are 10 companies leading the revolution in how financial services are delivered WHEN IT comes to innovation, Canada has always lagged behind its much larger and better resourced neighbour to the south. Perhaps the comparison isn’t exactly fair, but both the Canadian government and the private sector are keen to narrow the gap, and progress is being made on that front. In particular, Canada is emerging as a force to be reckoned with in the fintech space. Last year, venture capital investment in Canadian financial technology companies was $264.8 million – its highest level in almost two decades. This represented a rise of nearly 74% from 2015, according to data from Thomson Reuters. Support also looks to be forthcoming from Ottawa. In its 2017 federal budget, the government committed to helping “fintech entrepreneurs realize their full potential by bringing together high-skilled talent, financing solutions, business and advisory services, and export support.” In the wealth management space,


fintech companies are having a significant impact on the evolution of the industry. The disruptive influence of robo-advisors has clearly exerted downward pressure on fees for financial advice. But rather than regarding these platforms as competition, many advisors are using robo-advisors to streamline the process for clients. The companies featured here provide

a diverse range of services, but all are driving change across the investment industry. Some are well established household names, while others have just started their journey. What links them is a passion for ingenuity and an enterprising spirit – exactly the type of firms Prime Minister Trudeau speaks of when he talks about Canada as an innovator.

TORONTO’S TECH HUB A recent report in the Globe and Mail described the province of Ontario as having one of the highest concentrations of tech firms outside of Silicon Valley. At the centre of this developing hub is Toronto’s MaRS Discovery District. Founded in 2008, MaRS established the country’s first dedicated fintech cluster, where four of the innovation leaders in this report can be found. The district is drawing international attention – even from countries such as Japan that have long been considered tech trailblazers. “We are being recognized more as a centre for financial services and fintech companies on a global scale,” says Dinaro Ly, director of finance and commerce at the MaRS Discovery District. “We recently established an international partnership with NTT Data based in Japan – they wanted access to our entrepreneurs and the products we are developing to bring back to integrate into the Asian markets.”


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INVISOR Location: Oakville, Ontario Founded: 2014 Leadership: Pramod Udiaver, CEO Products: Managed investment portfolios and the goal-planning solution InvisorGPS; also an insurance subsidiary that offers life and health insurance products Client base: Canadian retail investors PART OF the acclaimed MaRS Discovery District, Invisor marks its third anniversary this month. The company markets itself as a means for ordinary investors to get expert portfolio management online, so its financial professionals can always be available at the client’s request. Dan Poole, COO at Invisor, explains some of the difficulties in establishing a brand that is attempting to shake up the industry. “The financial services and advice landscape in Canada is confusing and difficult for people to navigate,” he says. “Many take the

path of least resistance and deal with their bank, although there are lower-cost, higherquality alternatives available.” Invisor believes it is one such option, but the company is still in the process of convincing the Canadian public. As with any other disruptor, it takes time to gain credibility, but progress is being made, Poole says. “People are rightfully concerned about who they trust to manage their money,” he says. “We work hard to educate our clients about the many ways their savings are protected – from the custody relation-

IN TERMS of bringing something new to the marketplace, Nvest really stands out. The firm classifies itself as a stock recommendation platform that crowdsources from mass financial data sources. Through that, it generates sentiment analytics, combined with reasoning and performance-tracking. In layman’s terms, it provides faster stock recommendations for investors, or as company founder and CEO Fredrick Zhou puts it, “reducing the research time, enhan-

cing trust, presenting a comprehensive report including bull/bear reasoning, best strategy, past performances and top-down sentiments in one click.” In today’s climate of instant gratification, the Nvest value proposition is sure to prove attractive. It’s still early days for the firm, which was founded two years ago, and there are many roadblocks that could hinder its development. “Regulation has single-handedly destroyed

NVEST Location: Toronto Founded: 2015 Leadership: Fredrick Zhou, CEO Products: Nvest Crowdsourced Stock Recommendation Platform Client base: Self-directed equity investors; also provides data to investment firms

ships we establish to the CIPF protection their accounts are covered under and the bank-level security we use to protect their personal information.” In a space where many startups flounder, Invisor is proof that a new way of doing things will be accepted if it can improve on the status quo. Many people consider Toronto a hotspot for innovation in North America, and Poole is no exception. “There are some fantastic innovative companies in Canada, and the support for these entities is growing in terms of incubators, capital providers and acknowledgement from regulators that ‘disruption’ does not mean ‘rule-breaking,’” he says. “However, there is room for improvement in all three areas, especially from a regulatory perspective. Regulators must understand that technology is moving quickly, often driven by client demand, and the policies and procedures they have in place must adapt to reflect the current landscape.”

a handful of fintech startups,” Zhou says. “Canadian investors generally are not well informed about investment. Financial advisors in big banks are selling inferior products and are forbidden to talk about cheaper alternatives. As a result, Canadians are paying unnecessarily high fees just to have subpar returns.” It was this belief that spurred Zhou to start his company in 2015. It’s not an easy thing to do, so he is grateful for the support he received at the MaRS Discovery District. “Places like the MaRS Discovery District and UTEST have done wonderful things to put together a supply chain that supports a company from seed to IPO,” Zhou says. “The community has been very supportive as well. I have seen many instances where entrepreneurs go out of their way to help other startup companies out of free will. This environment truly nurtures young entrepreneurs.”


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UNIVERIS Location: Toronto Founded: 1991 Leadership: Carmine Tullio, CEO Products: Enterprise Platform (including front-, mid-, and back-office solutions), WealthTech APIs, and RegTech APIs Client base: Advisors, compliance, customer experience, operations and technology within MFDA, MGA, EMD

MOVING WITH THE TIMES A pioneer in the mutual fund space, Univeris is extending its remit by helping advisors manage administrative tasks

ESTABLISHED IN 1991, Univeris has been around a long time, but that hasn’t dulled its ambition to blaze a trail in the wealth management space. The company was born under a different name, CTA Systemsource, as a custom developer of capital asset distribution systems, but it really made its mark with the introduction of Money Products Systems [MPS] in 1996. That platform provided the first real-time distribution processing system for mutual funds in Canada, and MPS has remained an industry standard ever since. By 2004, CTA Systemsource had rebranded as Univeris, and MPS was renamed the Enterprise Wealth Management System [EWMS]. “EWMS, back when it was MPS, started out as a back-office system,” says John van Kralingen, vice-president of sales and client management at Univeris. “We have done a great job of ensuring we maintain the quality of the back-office system, but moving it toward a more advisor-focused solution. There is a lot of competition coming from the fintech industry, so over


the last few years, we have had to focus on giving advisors a differentiator over things like robo-solutions.” The challenge of being an innovation leader is that technology never stops evolving. What was forward-thinking when CTA Systemsource brought its distribution system to market in 1991 is unrecognizable to what is commonplace now. Univeris has remained at the forefront of that change for more than a quarter of a century by refusing to stand still on product development. “We were the first to come to market with a web-access solution for MFDA clients,” van Kralingen says. “Over the last number of years, we have been working on automating the whole end-to-end process – from the initial prospect meeting all the way to transaction and statement generation.” If advisors are wondering how a product like MPS can help their practice, van Kralingen is not short of words. “It includes things like e-signature, things like automating KYC into the onboarding

process,” he says. “It means freeing up an advisor’s time, reducing the amount of errors that could happen throughout the process. That ultimately allows advisors to focus on what they want to do, which is building their practice.” Univeris’ launch in the early ‘90s coincided with Canada’s boom period for mutual funds, so it was inevitable the two worlds would be linked. In 2017, there’s a


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plan is to launch our securities solution in late 2018 for IIROC dealers.” For companies dealing with the type of sensitive data that is included in financial statements, making sure platforms are secure is vital. Univeris therefore puts a lot of time and effort into safeguarding EWMS from hackers. “It is a big challenge,” says Emmanuel Gonnet, vice-president of product management at Univeris. “From a tooling point of view, we run our codes through many different scanners to detect any security breaches. We work with different partners to see if there is any security risk in the underlying components.” The difficulty with hackers is that as technology evolves, so do they. This means companies like Univeris need to go the extra mile to search for any product vulnerabilities. “We hire ethical hackers, who are profes-

host of other investment products to choose from, and Univeris’ changing product suite has reflected that shift. “We have expanded our product offerings to include things like GICs and insurance; ETFs will be next in 2018,” van Kralingen says. “Not only that, but we are moving into different regulatory spaces, including the exempt market dealer space, where we have had a lot of success over the last while. Our

sional security experts who try to break into our system,” Gonnet says. “If they find anything suspect, they report to us and we fix it. We implement those practices to make sure data is safe, and that’s with the various levels of encryptions we already have.” From security to ease of use, financial advisors need to know that all their bases are covered when they use wealth management software, and they have little to worry about in this regard when it comes to EWMS, according to Gonnet. “We take care of the client experience,” he says. “When the client comes in the first day, your proposal and the way you define your portfolios is well designed, quick and professional. To make the experience good for the advisor, we offer value-add applications like portfolio analytics. That means the advisor can do a very professional analysis and make corrections and make changes to the plan or portfolio.”

“It means freeing up an advisor’s time, reducing the amount of errors that could happen through the process. That ultimately allows advisors to focus on what they want to do, which is building their practice” Jon van Kralingen, Univeris


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WEALTHSIMPLE Location: Toronto Founded: 2014 Leadership: Mike Katchen, CEO Products: Wealthsimple, Wealthsimple for Advisors Client base: Retail investors, advisors FOR A DISRUPTOR to really become established, it is vital to earn the trust of clients. For Wealthsimple, that meant convincing both retail investors and financial advisors that its robo-advice platform makes investing much easier and more effective. “I think the biggest challenge was developing trust as a new financial services company,” says Dave Nugent, chief financial officer at Wealthsimple. “When we launched, we were told Canadians’ relationship with the big banks was too deep-seated and we’d never be able to get anyone to trust

“When we launched, we were told Canadians’ relationship with the big banks was too deep-seated and we’d never be able to get anyone to trust us. Now, over 20,000 Canadians trust us”

us. Now, over 20,000 Canadians trust us.” The company has become a leader in the robo-advice space by using ETFs for investors of all levels. Backed by Power Corporation of Canada, Wealthsimple has become a valuable tool for advisors keen to improve their value proposition for clients – a far cry from the prevailing sentiment of a few years ago, which painted robo-advisors as a threat. “Our advisor platform is helping advisors scale and modernize their businesses,” Nugent says. “It’s giving them a cost-effective way to handle clients of all account sizes, and to incorporate an excellent digital product into their business.” The other side of Wealthsimple is the products tailored for retail investors themselves. A central tenet of Wealthsimple’s business is that anyone, regardless of personal wealth, should be able to have access to the markets. That’s a major reason why the firm chose to build its platform around ETFs, which have been leading the way in democratizing investment for all Canadians. “We’re making smart investing accessible to everyone,” Nugent says. “Canadians used to not have a lot of options when it came to investing, especially those with smaller account balances. Companies like ours are making it really easy for people to access great investment products and services, no matter who they are or how much they have to invest.”

JUSTWEALTH FINANCIAL Location: Toronto Founded: 2015 Leadership: James Gauthier, co-founder and chief investment officer; Andrew Kirkland, co-founder and president Products: Online portfolio management services Client base: Retail investors and financial advisors ANOTHER LEADING light in the robo-advice field, Justwealth Financial was formed two years ago by industry veterans James Gauthier and Andrew Kirkland. Their vision was a marriage between the latest technology and the type of specialized financial advice they had built their careers upon. Innovation was a cornerstone of the company from the beginning and remains a driving force of Justwealth today. “We were the first robo-advisor in Canada to offer target date portfolios, the first to offer tax-efficient portfolios and full portfolio transitioning services,” says Gauthier, the firm’s chief investment officer. “We offer our clients 63 distinct investment portfolios using 32 different ETFs, which dwarfs the number of offerings at all other robo-advisor competitors and most traditional investment providers.” The company is also in the process of expanding its presence in the wealth management space. Justwealth sells its platform as a means for advisors to enhance productivity, increase online capabilities and access for clients, and fill product or expertise gaps.

Dave Nugent, Wealthsimple 44


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“In any business, outsourcing certain components of your business to an efficient, low-cost provider can present an effective way to increase profitability,” Gauthier explains. “Firms/advisors who are willing to embrace what robo-advisors can offer stand to benefit from a complementary relationship.” Another factor that will likely work in the favour of companies like Justwealth is the changing regulatory environment. The compliance burden for advisors is increasing every day, so any tool that helps ease it will be welcomed by the industry. “Regulators continue to discuss other issues such as strengthening the suitability standard and evaluating the usefulness of trailing compensation on mutual funds,” Gauthier says. “We believe that positive regulatory reforms in these areas would also greatly benefit investors and our business.”

IRESS Location: Listed on the Australian Securities Exchange with operations in Australia, New Zealand, the UK, South Africa, Canada and Asia Founded: 1993 Leadership: Andrew Walsh, CEO; Glenn Wilson, managing director, Canada Products: A broad range of technology solutions in the financial markets and wealth management sectors, including solutions for institutional and retail brokerages, investment/portfolio management, advisors and financial planners Client base: Approximately 9,000 clients worldwide, ranging from large multi-national institutions to boutique specialists SINCE IT was founded in Australia in the early ’90s, IRESS has spread its wings far and wide; today, the firm has operations across five continents. In Canada, IRESS uses a single technology platform that supports portfolio management, order management,

client management and advice. It recently launched SmartHub, a trade messaging hub that connects financial market participants across the globe, covering FIX and other trading communities. Overseeing the firm’s Canadian operation is managing director Glenn Wilson, who outlines how IRESS can help advisors build their practices. “Technology in financial services is about making the complex simple and providing scalability,” he says. “IRESS technology streamlines compliance and administration, reduces risk, delivers cost efficiencies, and frees up more time that advisors can use to focus on providing valuable planning and advice services.” As a global enterprise, IRESS has had to navigate the varied legislation and governance in the countries where it operates. Wilson believes Canada compares favourably when it comes to other nations, which has propelled its leadership in the fintech space. “We’ve certainly found Canada to be a market in which we’ve been able to be innov-

ative and able to attract talented and innovative people,” Wilson says. “Globally, all governments are rightly looking at whether they have the right settings to drive and encourage innovation. At IRESS, we have always seen innovation as our responsibility and are in the fortunate position of being able to draw on the skills and experience of 1,800 people globally to innovate.” Product offerings like SmartHub are the end result of that drive, but in the fintech space, R&D must be ongoing. The companies that thrive in this space are the ones that can stay ahead of their competition. For IRESS, this means an unwavering dedication to evolution. “We have a culture of anticipating the changing needs of clients and the sectors they operate in – we have invested in designing, developing and delivering our solutions to meet these needs,” Wilson says. “We are committed to ongoing investment and innovation to ensure the technology and product solutions we offer continue to evolve and lead the markets in which we operate.”


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ADVICENT Location: Milwaukee, Wisconsin Founded: 1969 Leadership: Phil Cunningham, CEO Products: NaviPlan financial planning software, Narrator Clients portal, Narrator Connect APIs, Figlo financial planning software Client base: Financial professionals across Canada

REINVENTING THE WHEEL Advicent offers a master class on how a tech company can evolve over decades and remain cutting-edge WHEN YOU talk about dynasty and lineage in the financial services space, banks and insurance companies usually come to mind. Tech companies, on the other hand, are relatively new on the scene, but that’s not to stay they don’t have their own storied histories. Advicent, headquartered in the US but with a strong presence in Canada, is one such firm. Its origins date back long before Apple was known as anything other than a fruit. It was 1969 when Gus Hansch, regarded as “the father of financial planning,” started work on the software that would eventually become Financial Profiles. Fast-forward almost four decades: In 2006, Emerging Information Systems Inc. [EISI] purchased Financial Profiles to complement its NaviPlan software. NaviPlan first came to market in 1992 and remains a cornerstone for the company, which became Zywave in 2011 and eventually Advicent in 2013. Today the firm has a global presence – and as vice-president of international sales Brad Joudrie explains, this brings a lot of advantages when it comes to product development. “It gives me a coverage model of all revenue-generating organizations in Europe


and Canada,” he says. “Fee disclosure really started in Europe, and it has evolved to the CRM2 regulations we see in Canada. Being a global organization puts us in a better position to be ahead of the curve. Instead of chasing regulation, we can see what is coming from our other markets a bit earlier.” The NaviPlan platform has been around for decades now and is used by thousands of financial professionals worldwide. The role of an advisor has changed a great deal in that period – and so must the platforms that service it. “There are two major challenges that advisors are facing today,” Joudrie says. “One is the increased cost of regulation because of the additional level of scrutiny and documentation, which is really increasing the cost of doing business. The other piece is the robo-advice insertion, which is lowering fees.” While robos have become popular with investors searching for low fees and convenience, there are clear advantages to dealing with human advisors. Increasingly, advisors are using technology to offer clients additional options. NaviPlan and its many sub-divisions are a case in point, Joudrie says.

“What we are looking to do with emerging technology is really provide a way for advisors to combat those challenges,” he says. “We are looking to provide our new Narrator solution set so advisors can provide more consumer-centric technologies for the end user. That way they can really compete from a technology standpoint with robo-advisors.” Another change in the advisory business has been the shift away from the independent model. Existing outside the influence of the banks or large advisory firms is become increasingly rare, but there is still a lot to be said for going it alone. In terms of its product offerings, Advicent doesn’t discriminate. “We provide the market products that are financial-institution-ready, but also for independent advisors,” Joudrie says. “The NaviPlan platform has been in the independent financial advisor platform for


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“We are looking to provide our Narrator solution set so advisors can provide more consumer-centric technologies. That way they can really compete from a technology standpoint with robo-advisors” Brad Joudrie, Advicent

over a decade. We have a great number of people who come to us and say they were very successful using our institutional platform and want to use the same solution with their own business – we absolutely do that.” One issue that has remained constant as Advicent has changed its name and expanded its reach over the decades is the importance of data protection, and it’s something the company takes extremely seriously. “We have an ISO 27001 certification, which is the highest data safety certification that financial planning technology has,” Joudrie says. “We go through that on an annual basis – it’s an ongoing protection mechanism that a number of large financial institutions demand of us. We feel it is very important because while we want to deliver as many financial plans as possible, we need to make sure the data is safe.”


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VISION SYSTEMS Location: Toronto Founded: 1997 Leadership: Michael Curtis, CEO Products: VisionWorks (personal planning software), CorpWorks (private corporation planning software), TrustWorks (personal trust software) Client base: Financial planners across Canada

VISION FOR THE FUTURE Accuracy is essential for advisors and the products they use – and that’s been a top priority for Vision Systems since day one IN CREATING the software that would establish Vision Systems as an innovator in the financial planning space, the company was careful to take its time. Years of painstaking R&D was required to bring VisionWorks to market in 2002, but it was more than worth the wait, says CEO Michael Curtis. “It took four and a half years to build,” he says. “One of many reasons for that was that we included the ability to integrate the terms of wills into a financial forecast. That is very complex and had never been done before.” Since then, Vision Systems has added CorpWorks and TrustWorks to its suite, but its commitment to innovation remains as strong as ever. “Virtually all the other software in the marketplace is static – what we have is dynamic software,” Curtis says. “Taking retirement as an example, our software assumes that life is not constant and things change over time. It is a technical innovation that we introduced for our products.” In driving the company forward, Curtis has identified five key factors that separate


the brand from its competitors. The first – scalability – refers to meeting clients’ expectations by producing software that can tailor a financial plan to fit any business model. The second factor is plan relevance – Vision Systems puts a lot of emphasis on creating plans that can answer clients’ needs both today and in the future. “Ultimately, the holy grail of planning is life planning,” Curtis says. This entails creating models that allow people to see the long-term implications of their current lifestyle choices, thus allowing them to make more informed decisions. Clients can make mistakes on the “practice field” of the software, Curtis explains, rather than making costly and irreversible mistakes in real life. The third factor is plan accuracy – in other words, the ability to accurately model a client’s current lifestyle and financial circumstances. Without accuracy, a client has little reason to trust an advisor with their financial well-being. Likewise, an advisor needs to be able to trust the programs they use. “Our ability to model clients’ circumstances correctly is key,” Curtis says. “In

other software, the client has to fit the mould – inevitably, there are things the software cannot model correctly about that client’s unique circumstances. As soon as you can’t portray those circumstances correctly, they will project that inaccuracy on the rest of the plan, and belief in output is severely undermined.” One area where accuracy is key is in tax planning. Vision Systems stands apart in that its software doesn’t just assess what a client’s liabilities are now, but looks at what they will likely be five or 10 years down the line. “Our three programs can do accurate taxes on a pro-forma basis looking into the future,” Curtis says. “If you put in someone’s employment income or RSP amounts, the software will give you an accurate tax return by province. That allows for very effective tax planning and tactics by the advisor.” Another key issue for the company is estate planning – a vital part of a financial advisor’s job. Making a distinction between retirement and estate planning is crucial, particularly when dealing with mass affluent


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TAX PLANNING WITH VISION SYSTEMS The Vision Systems software’s ability to project tax returns can help reduce clients’ tax burden, as shown in the federal tax example below. Employment income


Interest and other investment income


Total income


Registered pension plan deduction RRSP deduction

or high-net-worth clients. Estate planning can be very complex, so a program cannot assume anything about an individual’s family situation and still retain accuracy. This is why integrating the terms of wills into its programs was a priority for Vision Systems during the R&D stage. The final factor that Curtis believes differ-

entiates Vision Systems is modern technology. He’s keen to point out that most financial-planning software in use today was originally released more than 20 years ago. Various updates and redesigns may have occurred since then, but Curtis believes none can stand against his company’s programs in 2017.

“Our ability to model clients’ circumstances correctly is key. In other software, the client has to fit the mould – inevitably, there are things the software cannot model correctly about that client’s unique circumstances”

$6,821 $16,200

Total net income deductions


Net income


Taxable income


Total federal taxes


Basic personal amount


CPP/QPP contribution (employee)


Employment insurance premiums


Canada employment amount




Nonrefundable tax credits @ 15%


Total nonrefundable tax credits


Total tax credits


Basic federal tax


Net federal tax


Federal taxes payable


Michael Curtis, Vision Systems www.wealthprofessional.ca

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ated with investing.” In response, he built the Vuru web platform to simplify the process in a way customers could understand. Another member of the MaRS Discovery District, Vuru launched in 2014 and has become an important resource for both investors and advisors. In particular, the Vuru platform has given advisors the ability to demonstrate the process behind stock selection. “According to many of our advisor customers, trust has proven problematic during times of uncertainty in the market, as poor portfolio performance is attributed

to poor decisions on the advisor’s part,” Lawrence says. “With the right technology, we are able to provide education and transparency to both the client and advisor to ensure they are on the same page and collaborating instead of arguing.” Vuru uses an engine that leverages data aggregation, algorithms and machine learning to automatically analyze more than 10 years of data. It is then able to provide a ‘smart’ platform for users so they can easily make investment decisions in less time. Lawrence is another entrepreneur who believes Canada is nurturing innovation, although he thinks there’s more that can be done. “In order to become more globally competitive, we need to increase our risk tolerance and collaboration,” he says. “We can increase access to mentorship from corporate leaders and successful entrepreneurs, increase access to large corporations to encourage business partnerships, and work together to export Canadian services and products globally.”

he says. “The industry adheres to traditions. Fixed-income primary issuance is one of the few asset classes that still relies on timeconsuming and manual processes.” Manual in this case means emails, spreadsheets and phone calls, which are still the main channels for information exchange. Dealers send millions of market updates and bond pricing emails, and treasurers spend thousands of hours managing bond market information every year. Magdelinic saw a clear gap in the market, and Overbond is the result. The platform brings market participants together and provides access to an extensive dealer, issuer and investor network. In addition, it digitizes and streamlines the bond origination workflow, offering advanced data analytics and data visualization tools. This ultimately benefits everyone in the primary bond market through enhanced

market transparency, better price discovery and investor diversification, while reducing infrastructure and transaction costs for issuers, dealers and investors. Companies like Overbond point to a trend of Canadian companies leading the way when it comes to investment innovation. Magdelinic agrees with that assessment, pointing to some of the collaboration that is driving this change. “Canada is a hub for innovation and a fastgrowing player in the global fintech space,” he says. “Technology hubs such as Toronto, Waterloo, Vancouver and Montreal have attracted many technology and business talents, who are building some of the best and most innovative products in the world. Funding and support provided by governments and innovation centres such as MaRS are also instrumental to the rapid technology development in Canada.”

VURU Location: Toronto Founded: 2014 Leadership: Niles Lawrence, CEO Product: Web platform that enables investors to make smart investment decisions in less time Client base: More than 95,000 users on the platform While fees are undoubtedly an important issue for Canadian investors, Niles Lawrence of Vuru believes there are other issues that prevent people from using securities. Specifically, he feels there’s an education gap that’s preventing large swaths of the population from investing. “We noticed that the barrier to entry for most was not fees, as is often believed, but not knowing how to start and how to get over the complexity of investing,” he says. “The customer didn’t know how to quantify what makes a good investment and didn’t have the time to learn all the jargon associ-

OVERBOND Location: Toronto Founded: 2015 Leadership: Vuk Magdelinic, CEO Products: Overbond BPS, OverbondX Client base: Investment banks, institutional investors, corporations and governments Like all the other innovators featured here, Vuk Magdelinic’s first step in founding a fintech startup was realizing the system he used was inefficient and in need of improvement. His area of expertise is the bond markets, which hadn't fully embraced the shift into the digital age. “Fixed-income capital markets, and more specifically the bond origination process, are currently manual, inefficient and opaque,”



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7/04/2017 8:40:07 AM



Playing the markets Veteran advisor Andrew Ellis of Raymond James explains the merits of a home bias when it comes to stocks

FOR RAYMOND JAMES advisor Andrew Ellis, being able to generate returns for his clients through the equity markets is a primary focus. In that respect, the past year has been fruitful – the TSX has broken records on a consistent basis, reaching a new high point in February. Ellis does foresee momentum slowing somewhat this year, but he isn’t changing his investment strategy markedly from what worked so well for him in 2016. “I am a little more cautious now on materials and energy companies,” he says. “I have taken some profits from our small-cap stocks where necessary. The US market looks not too bad, but at the same time, I have taken some profits here and there and have a little bit of cash piling up right now – not a lot; I am probably something like 85% to 90% fully invested.” In terms of investments, Ellis’ clients tend to favour domestic stocks. There’s sound reasoning for this, he explains, and it has been a productive strategy since he first entered the advisory business in 1993. “I will always have more exposure to Canada,” he says. “There is a certain comfort level that my clients have with knowing where their investments are. If they have shares of CIBC, they can see that, but Bank of America or Goldman Sachs they only hear about it. They are not as comfortable with things that are far away.” While both US and Canadian stocks are performing well currently, that could change pretty quickly if outside forces like the


OPEC supply deal or Donald Trump’s trade policies shake up the markets. There are reasons for caution, to be sure, but Ellis is pretty optimistic that equities will remain buoyant this year. “I think the US and Canada will be pretty similar in 2017,” he says. “I think Canada might even be a little stronger if we start to see some inflationary pressure, either from rising interest rates or currency changes.” In directing his clients’ financial needs, Ellis eschews the traditional 60-40 split between stocks and bonds, particularly during a time when low interest rates continue to stymie fixed-income returns. In his 24 years in the industry, Ellis has held firm to the idea that a financial advisor should provide returns for clients. Generally, the equity markets are the place to do that – so while fixed income has its uses, it’s not a priority for him. “When the market is rolling, everyone is happy, but if you are 60-40 at a time like that, you only get 60% of the upside,” he says. “But there are good reasons why some people don’t need 100% exposure. My clients may have

some GICs in their account, or some highinterest savings products – those are 100% guaranteed. I’m not playing around trying to improve the yield on that side of the account.” His reasoning for using safe products like GICs is simple – it’s what his clients want. Conservative investors put a premium on preserving their assets, so Ellis minimizes any chance of losing money on the fixedincome side. “People don’t care if their account goes up 5% to 6%,” he says. “But if they lose that amount, they are way more concerned. So by using GICs, their money is secure. That’s the foundation of the account.” Ellis’ practice consists of a mix of fee- and transaction-based accounts, but the majority of his business is still commission-based. This has worked well for him and his clients for decades now, so growing speculation about a commission ban is somewhat worrying to him. “The compliance issues that have come from the regulators the past few years – I think some of those requests have been

FOREIGN EXPOSURE While Ellis is unabashedly Canada-centric when it comes to his investment strategy, he does look further afield when searching for diversification. When it comes to foreign assets, however, he prefers to leave it to the experts – in this case, the fund managers who specialize in international markets. “I use mutual funds for international opportunities,” he says. “That provides good diversification from a Canadian-focused portfolio. There’s a problem with buying individual stocks for countries you have never been to. You may look at some reports, but you aren’t doing due diligence like an Excel or Fidelity does.”


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Formed in 1962 and went public on the New York Stock Exchange in 1983

Serves more than 1.9 million individuals and families across Canada and the US

Has approximately 7,100 financial advisors under its banner

“I will always have more exposure to Canada. There is a certain comfort level that my clients have with knowing where their investments are” absurd,” he says. “We have had a few rotten apples in the barrel, and in order to clean that up, we have to clean everyone.” He believes the regulators’ aim of greater transparency is the right one, but their method of achieving that goal is wrong-headed and potentially harmful. In particular, he warns that a commission ban could make financial

advice too expensive for ordinary Canadians. “I don’t buy into the reasoning the regulators have given us for a ban on commissions,” he says. “If someone is actively trading, then a fee-based account is probably better for them. If you are primarily a buy-and-hold investor, then a transaction-based account is best. I don’t see a ban as [putting] clients first.”

Holds close to $604 billion in client assets

Is currently in the process of acquiring longstanding Canadian advisory firm 3Macs


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7/04/2017 8:24:43 AM



Coming to America Edward Perks, chief investment officer at Franklin Templeton Equity, discusses the challenges of managing a successful US-based portfolio in the current environment

IN THE MONTHS after Donald Trump’s election victory, US equities rallied strongly on the heels of the president-elect’s pledges to deregulate the financial sector, reform US corporate tax rates and increase infrastructure spending. Three months into his presidency, it appears the honeymoon period is over, and the markets are engaged in something of a holding pattern. Whether Trump’s major policies will actually pass through Congress is a matter of contention, and with the Fed raising interest rates, fund managers have a lot of variables to consider. For Edward Perks, executive vice-presi-

dent and chief investment officer at Franklin Templeton Equity, volatility brought on by the political climate creates plenty of opportunities for those who know where to look.

Building a portfolio Perks joined the firm in 1992 and has risen through the ranks; today, he oversees the Franklin Equity Group, Templeton Global Equity Group, Franklin Mutual Series and Franklin US Value. Prior to becoming CIO, he made his name as a portfolio manager for the Franklin Income Fund and Franklin Balanced Fund.

“The opportunity to earn attractive dividends really exists today across a far greater range of sectors than before. That, combined with the low interest rate, is what led us to have a substantial equity tilt” 54

The fund he manages today, the Franklin US Monthly Income Fund – boasting $207 million in assets and a five-star rating from Morningstar – remains a central plank of the firm’s suite for Canadian investors. “The asset mix has shifted quite substantially in the past year,” Perks says. “Last year the cash in the portfolio was a more typical, low single-digit level. We had 60% weighting in equities and slightly less than 40% in fixed income. That equity bias has driven a lot of the performance over the past year.” The fund’s cash position in March was as high as 20%, but with interest rates rising, Perks and his colleagues are now considering


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increasing the weighting in fixed income, and they expect the cash weighting to decline accordingly. The fund’s equity portfolio, its main driver in 2016, is also being repositioned. “We are a little more concerned about risks creeping into the market,” Perks explains. “The best example of that would be our utility sector exposure, which over the past year has gone from about 9% to 5%. The concerns there include both sensitivity to rising interest rates and valuations, as the relative scarcity of yield in a low-rate environment has driven especially strong demand for yield-oriented equities such as utilities.”

The value of active management is readily apparent during transitional periods like these. As the Fed makes meaningful changes to US monetary policy, Perks and the other managers of the Franklin Monthly US Income Fund have been actively adjusting its holdings. “As the Fed raised rates and we saw volatility in the corporate markets, we have been able to redeploy a fair amount of that cash into corporate bonds,” Perks says. “We like high-yield corporate bonds, particularly the shorter and intermediate maturities where we think fundamentals remain quite strong.”

Investment strategy A key tenet of the US Monthly Income Fund is its flexible selection mandate. The fund’s managers – Perks, Matt Quinlan, Todd Brighton and Richard Hsu – choose the underlying securities by looking at a number of key fundamentals, as well as various outside forces. It’s a liquid process, and the fund is constantly evolving, which is central to its success, Perks says. “I have been a manager on Franklin income strategies since 2002 and a lead manager since 2004 on our US strategies,” he says. “When I look back over that period, the opportunity to earn attractive dividends


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Equities 43.1% Fixed income 34.8% Cash and cash equivalents 20.3% Covertibles 1.8%













really exists today across a far greater range of sectors than before. That, combined with the low interest rate, is what led us to have a substantial equity tilt.” In terms of outside forces, monetary policy by central banks is one of the most important considerations for fund managers. A manager must be able to anticipate possible central bank policy changes and understand how these changes could impact the individual securities in a portfolio. “We just saw a rate hike by the Fed; the market expects two more this year and two or three next year,” Perks says. “We generally agree with that path. The 10-year US Treasury yield had a pretty substantial adjustment from the middle of last year, when it bottomed out at 1.04%. We expect further increases to be a little more moderate than the strong upturn we have seen over the past six months.” In the corporate space, March saw the highest-ever weekly total for high-yield bond issuance in the US. Companies are clearly keen to take advantage of still-low interest rates and issue new, longer-term corporate debt. “We have seen some pretty strong performance in corporate debt with declining credit spreads across the board in the highyield market,” Perks says. “Going forward, we want to be more selective with our credit selection, as well as where we are in the maturity spectrum. I think more opportunity exists in the shorter- to intermediate-term securities where yields are still attractive and where we can best manage the risks associated with rising interest rates.” When it comes to stocks, the Fed’s policy movements will be beneficial to some companies, while the opposite will undoubtedly be true for others. Perks explains how he has adjusted the fund to reflect the new interest-rate environment. “On the equity side, we have reduced our

weighting in utilities quite substantially from a year ago,” he says. “Part of that is the valuations we see in that sector, but also the sensitivity to higher long-term interest rates. That’s also a potential risk for REITs, telecom services and even staples companies that benefited from the overall market environment of fairly low growth. We are less exposed to those areas today.” But what is one sector’s albatross is another’s opportunity, and such is the case in the US today. “With rising interest rates, we think financials continue to make sense,” Perks says. “That’s our second highest sector weighting on the equity side. That’s followed by a mix of opportunities we see in markets like industrials, technology, materials or an area like healthcare. “There’s a lot of uncertainty there tied to the political environment,” he adds, “and we see that creating some long-term opportunities for investors.”

The value of active management The past few years have been difficult for active managers – beating benchmarks has been tough proposition for many. The Franklin US Monthly Income Fund has had a 12.66% annualized return since its inception in 2013, with some peaks and valleys along the way. As a 25-year veteran of the business, Perks realizes that the next bear market may not be too far off, which increases the need for active management. “When I think about what has influenced the markets since the financial crisis, it is very macro-dominated, with a strong influence from monetary policy by central banks,” he says. “I think when you are in that situation, it is difficult for the active, research-driven investor. Our flexibility to invest across multiple asset classes gives us greater opportunities to navigate these factors.”


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Wealth Professional magazine features a series of industry reports recognizing the achievements of key individuals and businesses as well as providing the latest in business best practice. Access every emag from our website or download on your iPad from the iTunes store for access anywhere, anytime.

Wealth Professional Online is an industry hub committed to delivering the latest news, opinion and analysis for today’s sophisticated investment professional. Subscribe to the exclusive e-newsletter and get up-to-the-minute reports delivered to your inbox daily.


18/09/2014 8:32:14 7/04/2017 8:42:47 AM AM



Delegating for success Transcend president Chris Ambridge explains how advisors can lessen their workload and boost profits at the same time

IF ADVISORS were asked to rank their key responsibilities, most would put keeping clients satisfied at the top of the list. It’s a priority many in the profession feel doesn’t receive enough attention, as compliance requirements often divert their focus elsewhere. Provisus Wealth Management’s new investment platform, Transcend, seeks to ease that burden, allowing advisors to concentrate on adding value for clients through financial planning and tax assistance. “We can help advisors transition from their existing business structure and focus on financial planning as opposed to compliance, administration or trading,” explains Chris Ambridge, president of Transcend. “It

is outsourcing the portfolio management to focus on additional planning services and client retention.” Transcend’s research shows that a financial advisor’s workload usually breaks down to a 60-40 split between servicing clients and portfolio management/compliance. Using this program means that 60% can increase to 100%. “If an advisor wants to slow down but still wants to keep all their clients, we are offering an alternative to the current structure,” Ambridge says. “Essentially it is 40% less work, 40% more pay, and they can focus on what makes them better advisors.” In these fee-conscious times, clients are

“If an advisor wants to slow down but still wants to keep all their clients, we are offering an alternative to the current structure” Chris Ambridge, Transcend 58

asking a lot more of advisors, and those unable to meet increased demands will be left behind, Ambridge points out. “Advisors need to adapt or become irrelevant,” he says. “Advisors who fail to react will face severe challenges to their future profitability and growth. Competition will force their hands. To compete successfully, advisors must differentiate themselves; otherwise, they will have to compete on price to win or retain clients.” Catering to a wide range of retail investors, Provisus has $440 million in assets under management and has been selected as one of Profit 500’s Fastest Growing Companies in each of the last three years. Transcend is an offshoot of the Transcend Separately Managed Accounts Program, which has proven to be a real success for Provisus. The new entity is especially noteworthy, as it offers a pay-for-performance model within its equity pooled fund suite. It’s a novel approach, and one the company’s president believes really sets it apart from its competitors. “With the advent of CRM2 and more of an onus on cost and performance, we need to put our money where our mouth is,” he says. “If we don’t beat the benchmark, then we won’t get paid. Ask any other money manager out there if they are willing to issue the same edict – I don’t think you’ll find many.” Under this structure, clients pay a base fee of 0.25%, which covers administrative costs for the equity funds used in a client’s portfolio. If a fund performs better than the benchmark, it will trigger a performance fee equal to 20% of the fund’s performance above the benchmark. Of course, it will be tougher in some years to achieve that target – 2016 being a case in point. “We were essentially around the benchmark for most of the year, and a little under at the end,” Ambridge says. “We can take hiccups like this, though, because over a long-term basis, we add value.”


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7/04/2017 8:26:27 AM



Avoiding burnout Leadership expert Karen Gately explains the six typical drivers of burnout in business leaders and offers practical tips to help you avoid them

HAVE YOU ever reached the point where you felt like you simply couldn’t go on? Have you found yourself losing concentration and lacking the motivation to do the things necessary to drive the performance of your business? It’s common for CEOs and senior leaders to experience periods of disengagement from their roles and teams due to the extreme exhaustion they feel, and many fail to recognize the state of burnout they have reached. Burnout is a state of emotional, mental and physical exhaustion caused by excessive and prolonged stress. Typically reflected in our energy and behaviours, burnout unquestionably undermines any CEO’s ability to lead a thriving organization. Despite its devastating impacts not only on job performance but also on quality of life, many of the senior leaders I work with fail to take the necessary steps to avoid reaching this state of exhaustion and disengagement. The following are six typical drivers of burnout in business leaders and some tips for how to avoid them.



There are always more things you could do in any given day. But the reality is that it isn’t possible to explore, plan and execute all of the ideas and even priorities you are likely to have. Your ability to invest energy and resources wisely depends on your ability to know what matters most. While deciding what you will do is important, arguably more so is deciding what you won’t.


TIP Create a business plan on one page. Identify the priorities that will have the greatest influence on your success, and anchor your focus, and that of your team, to them. Review progress regularly, and identify ways in which you need to bring focus back to these critical objectives. Strike things off your to-do list that add little value and distract you from your main mission. Learn to say no.



The need to make tough decisions and have difficult conversations is inevitable when leading a team or organization. And yet so many of the leaders I work with avoid them.

Strike things off your to-do list that add little value and distract you from your main mission. Learn to say no The consequence of failing to address issues is continuing to live with the stressful impacts of underperformance and uncertainty. Fear of having the conversations or implementing the actions necessary to drive change is common among leaders who experience burnout.

TIP Work with someone who is able to guide you in shifting the thoughts and feelings that cause you to hesitate to do what is necessary. Find a mentor or coach you trust to challenge your thinking and hold you accountable for dealing with issues that arise.


Executing poorly

Even when decisions have been made, executing them can be difficult. Most often what I observe are senior leaders who recognize what needs to be done but fail to act decisively. These leaders fail to apply disciplined approaches that ensure priorities are achieved. Commonly, a lack of planning, review, and deliberate decision-making about priorities and resource allocation leads to costly mistakes and wasted resources. The pressure and workload demands on leaders and teams when things go wrong can be immense.


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and the desire to be with our friends and family. We’re likely to reach burnout if we fail to give our mind, body and spirit the nurturing needed to thrive.

TIP Establish routines that ensure you take time out for you. Switch off the tech­ nology that allows you to stay connected with your work world, and spend time with the people you love and doing the things that energize your spirit. Maintain a level of activity and diet that allows your mind and body to be healthy.


Worry and regret

Reflect for a moment on how much time and energy you waste worrying about things that are outside of your control. How often do you worry about things that haven’t yet happened and may never happen? Do you expend vital energy on concerns that can’t be resolved? Feeling helpless and regretful drains our energy and is likely to erode our resolve to keep striving.

TIP Develop your organization’s ability to manage projects well. Develop your own ability to set a clear vision, establish prior­ ities and drive change. Also develop the capabilities of leaders at all levels of your organization to drive strategic priorities through to successful implementation.


Aiming for perfection

Let’s face it – worrying about being perfect all the time is stressful. Many of the perfectionists I have worked with have recog­ nized this tendency in themselves but have failed too see the seriousness of its conse­ quences soon enough. The simple truth is that none of us or our businesses are perfect. Investing unnecessary time, energy and resources in striving for standards beyond what our staff or customers expect is a

common reason CEOs are overworked.

TIP Understand the 80/20 rule and apply it. The rule states that 80% of your outcomes come from 20% of your inputs. The impor­ tant thing to understand is that in your life, 20% of the activities you do account for the majority (80%) of your happiness and success.


TIP Recognize when you are worrying. Start by asking yourself whether the problem is something that can be solved, and whether it can be solved by you. For example, is the problem something you’re actually facing, or is it just a ‘what if ’? Is your concern realistic? Can you do something about it or prepare, or is it really out of your control? If it’s an unsolv­ able worry, recognize that fact, put it out of your mind and move on. Avoiding burnout comes down to making necessary and balanced choices – those that allow you to deliberately invest time, energy and resources in achieving what matters most. Know when to let things go, choose to focus on today, and keep an eye on the future.

Work-life imbalance

We all need time away from work to slow down, unwind and recharge. No matter how much we love our work, if the time we spend doing it disproportionately consumes our focus and energy, our health and rela­ tionships are likely to be impacted. It’s difficult to avoid feeling stressed when conflicted between the demands of our job

Karen Gately is a leadership and people management specialist and the founder of Ryan Gately. She works with leaders and HR teams to drive business results through the talent and energy of people. Gately is also the author of The People Manager’s Toolkit: A Practical Guide to Getting the Best from People and The Corporate Dojo: Driving Extraordinary Results Through Spirited People.


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WORKING THE PLAN For Luke Kratz, a lifetime spent focusing on the inputs has culminated in some sterling outcomes

Growing up in Alberta, Kratz worked in the family hotel/ restaurant, contributing from the age of five by doing tasks as making beds and mowing lawns. As he got older, he moved from behind-the-scenes work to a customer-facing role, which was pivotal in honing his people skills “By the time I was in my teens, I was working the front desk. It was a key transition into dealing with clients and addressing their needs. I was not given any quarter; I was expected to perform”




HITS THE FIELD A passion for football determined Kratz’s choice of university, and he spent four years playing football at San Diego University while earning a commerce/finance degree – an experience that continues to inform his approach as an advisor “Football is so regimented, it’s almost like being in the military. Having an athletic background and focus has helped me an enormous amount. The chief focus I have with clients is goals”


BECOMES A MENTOR After moving to WaMu, Kratz became a sought-after mentor “I wanted to work with people who wanted to have my job – they had deep motivation. Most everyone who worked with me picked up the habits – we were successful as a team, but it was the focus on our activities that made us successful”


STARTS FROM SCRATCH Taking advantage of the havoc wrought by the financial crisis, Kratz rebuilt his business via informational seminars imparting his goals-focused, planningdriven approach. The message resonated with shell-shocked investors

“Complexity sells, but simplicity gets tangible results. Have goals, plan to achieve those goals, and then work your plan. Our actions are all we have control over. If I’m reacting to things I can’t control, I will fail. All success comes from acting; all failure comes from reacting”


READS A LIFE-CHANGING BOOK Kratz’s childhood ‘servitude’ resulted in a burgeoning interest in growing his earnings; when he happened upon the book The Wealthy Barber at age 15, it crystallized his path “It presented ideas that had me contemplating the long term – ideas that would be beyond the comprehension of most teenagers. It got me thinking about investing. I decided I wanted to have a career in it”


BEGINS PROFESSIONAL CAREER When a friend from Wells Fargo reached out, Kratz was able to snag his first professional position, where his unparallelled work ethic and determination soon came to the fore “Each client interaction was about developing a plan they could follow and go on to be a long-term investor. I don’t know that I was better than anyone else, but I could outwork everyone”


RETURNS TO CANADA, A PIECE AT A TIME While Kratz was working in Seattle, his family returned to Canada to settle in Victoria, necessitating weekly border crossings “It worked quite well – other fathers would say, ‘You see your kids more than I see mine’ – until the kids got older. I left the States, where I was very successful, and moved to Canada, where I had zero. I was giving up the best job I’d ever had to raise my sons in Canada”


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Advisor Arthur Yrenaya’s passion for martial arts compelled him share it with others as a teacher

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YOU COULD say Arthur Yrenaya was born into martial arts: His father was a black belt in karate, and as a child, Yrenaya was a fervent fan of Bruce Lee and Jean-Claude Van Damme movies. Once the Ottawa-based financial advisor finally gave martial arts a try as an adult, it resulted in drastic changes. He began working out at the dojo up to five times a week, dropped 25 pounds and eventually attained a top rank in kickboxing. But perhaps the most meaningful change was stepping into the role of teacher. “I had such a passion for martial arts – and still do – I wanted to become a


Estimated number of hours Yrenaya has spent training


professional,” Yrenaya says. “It just so happened that [an instructor] was leaving, and they thought I was a good fit.” He was such a good fit, in fact, that the volunteer gig turned into paid parttime employment, and Yrenaya became a staple of K2 Martial Arts in Ottawa. The multidisciplinary nature of the school – where students are regularly exposed to complementary disciplines – informs Yrenaya’s progress. As he points out, he’s still learning himself. “I teach because I’m committed to the students,” he says. “I like giving back to the studio because they’ve given me so much.”


Age of Yrenaya’s youngest student (the oldest was 76)


Number of martial arts styles Yrenaya actively studies


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