Wealth Professional 8.05

WHERE TO INVEST NOW The best investment bets in a time of social distancing and remote work

RISING IN THE EAST Why the COVID-19 crisis is prompting investors to take another look at Asia

WWW.WEALTHPROFESSIONAL.CA ISSUE 8.05 | $12.95

POST-VIRUS OUTLOOK

Could emergency fiscal and monetary policy hamper the economy’s ability to rebound?

TOP TEAMS

How eight of Canada’s most successful advisory teams are using a collaborative approach to better serve clients

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1/05/2020 4:49:16 AM

What’s considered normal anymore?

Escalating economic and geopolitical uncertainties will continue to disrupt capital markets. More than ever, risk-management requires a multi-asset, multidisciplinary approach that considers the many facets of an increasingly globalized world.

Since 2001 Forstrong’s active macro strategies have been utilized by financial professionals as an effective style offset to conventional bottom-up approaches. By focusing on global themes versus individual stocks we have an ability to generate returns that have a lower correlation to Canadian or North America-centric portfolios.

The goal is safer, more predictable returns for investors because in the new normal, there is no normal.

Are you overinvested in Canada? forstrong.com

Tyler Mordy President & CIO

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1/05/2020 4:49:46 AM

ISSUE 8.05

CONNECT WITH US Got a story or suggestion, or just want to find out some more information?

CONTENTS

@WealthProCA facebook.com/WealthProCA

WEALTH PROFESSIONAL AWARD FINALISTS, P46

UPFRONT 02 Editorial

Advisors are rising to the challenge in the current crisis

PEOPLE

38

ADVISOR PROFILE

20

Victor Medina-Leal’s international background has given him an independent, globally minded approach to wealth management

For 3iQ president and CEO Fred Pye, getting The Bitcoin Fund listed on the TSX is just the beginning of his firm’s leadership in the cryptocurrency space

16

Is healthcare investing primed for a resurgence in 2020?

08 News analysis

How the COVID-19 pandemic is rewriting the macroeconomic outlook

10 Intelligence

ETFs’ structure is helping investors weather the current market volatility

FEATURES

40

A SHIFT IN GLOBAL LEADERSHIP INDUSTRY ICON

06 Head to head

12 ETF update

TOP TEAMS

PEOPLE

Key data that should be on your radar

This month’s big movers and shakers

SPECIAL REPORT

The leaders of eight of Canada’s top advisory teams explain how they’ve been able to achieve more with a collective approach than they ever could have on their own

04 Statistics

The coronavirus crisis is shaping Eastern Asia into the next great investment destination

14 Alternative investment update A new fund aims to shield investors from downside risk

19 Opinion

Why private equity is an essential component of modern portfolios

FEATURES 34 A team of experts

How joining forces has bolstered JMRD Watson’s capabilities

36 A partner in changing times

Manulife Investment Management is all about enabling well-rounded service

42 FEATURES

THE SOCIAL DISTANCING TECH WINNERS Which tech companies are poised to realize long-term benefits from the new normal?

44 Changing of the guard

Which healthcare investments to seek out – and avoid – during the pandemic

PEOPLE 56 Other life

Taking a leap with advisor and track and field star Michelle Hastick-Cowell

WEALTHPROFESSIONAL.CA CHECK IT OUT ONLINE www.wealthprofessional.ca

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1/05/2020 4:49:56 AM

UPFRONT

EDITORIAL

The human touch in a time of turmoil

A

mid the upheaval the world and the financial industry have faced over the last several weeks, Wealth Professional has been happy to hear that advisors are hardly cowering under the table. The general sentiment many advisors have expressed to WP is that a market downturn was something they expected. While none would claim to have predicted a health or financial crisis of this severity, many advisors’ overall preparation has enabled them to manage the situation and their clients’ emotions well.

Many of the advisors WP spoke to outlined preparations that take into account both their own operations and the transition to remote work, as well as the financial plans they produced for clients. Those plans are a huge advantage at a time like this, as many of them account for potential drops in the market and can illustrate to clients if they’re still on track with their financial goals despite the pandemic. That sets advisors apart from the robo-advisors out there that are simply building portfolios.

While times are indeed tough, the current crisis presents a great opportunity for advisors to prove their value The human touch is a critical value-add in times of crisis. It’s important for advisors to communicate regularly with their clients, which many have been doing – and those who have built a sustainable practice with a manageable number of clients are reaping the rewards of being able to do so more easily than those who have taken on significant numbers of clients.

While times are indeed tough, the current crisis presents a great opportunity for advisors to prove their value, not only through proper planning and communication, but also by positioning clients for success once the crisis is over. With good companies trading at a reduced price, there are many opportunities for advisors to buy now and enable their clients to benefit from a potential rebound.

Getting through the COVID-19 outbreak is the main priority, but at a time when clients need their advisors most, it’s also a chance for advisors to demonstrate why they deserve to be trusted to manage people’s finances.

The team at Wealth Professional

wealthprofessional.ca ISSUE 8.05 EDITORIAL

SALES & MARKETING

Editor Darren Matte

Vice President, Media and Client Strategy Dane Taylor

Writers Leo Almazora James Burton David Kitai Executive Editor Ryan Smith Copy Editor Clare Alexander

CONTRIBUTORS Joe Pochodyniak Darrell Hardidge

ART & PRODUCTION Designer Marla Morelos Production Manager Alicia Chin Production Coordinator Kim Kandravy Traffic Manager Ella Dayandante

National Account Manager Alan Stewart National Account Manager Blase Wasser Vice President, Sales John Mackenzie Project Coordinator Jessica Duce

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

EDITORIAL INQUIRIES

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tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca

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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss

1/05/2020 4:29:43 AM

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1/05/2020 4:29:47 AM

UPFRONT

STATISTICS CONSUMER CONFIDENCE TAKES A DIVE

JOB LOSSES MOUNT ACROSS CANADA COVID-19 has hit the Canadian economy hard. During the month of March, more than 1 million jobs were eliminated across the country. While most of the losses have been categorized as temporary layoffs and the federal government has stepped in with stimulus packages, the carnage has brought the unemployment rate to 7.8% – a level not seen since the 2008 financial crisis.

41%

of Canadians expect home prices to decline (up from 13% a month ago)

ALBERTA

117,100

BRITISH COLUMBIA

132,400

79%

SASKATCHEWAN

20,900

of Canadians believe the economy will get worse over the next six months

MANITOBA

25,300 MARCH JOB LOSSES BY PROVINCE

37%

of Canadians say their finances have gotten worse over the past year

LIQUID ALTERNATIVES OUTPERFORM EQUITY INDEXES According to Scotiabank’s latest analysis, alternative mutual funds have outperformed broader equity indexes during the COVID-19 crisis, losing substantially less than the S&P 500 and S&P TSX.

Month-over-month return

5%

Year-to-date return

-5%

-2.04%

-6.61%

-8.23%

-8.69% -10%

22%

of Canadians are at least somewhat concerned about losing work Source: Bloomberg Nanos Canadian Confidence Index, April 2020

-12.51%

-15%

-13.40%

-17.74% -21.59%

-20% -25%

1.50%

0.35% 0.69%

0%

Scotiabank Alternative Mutual Fund Index Equal-Weighted

S&P TSX Composite

-20.00%

S&P 500 (USD)

S&P 500 (CAD-adjusted)

DEX 91-Day Treasury Bill Index

DEX Universe Bond Index Source: Scotiabank

4

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1/05/2020 4:30:11 AM

GOLD REACHES A NINE-YEAR HIGH

MARCH JOB LOSSES BY EMPLOYMENT TYPE 1 million

As concerns surrounding COVID-19 simmer, investors continue to turn to gold as a safe haven, causing the precious metal to reach nearly US$1,800 an ounce in mid-April, its highest level since 2011.

830,200 800,000 600,000

474,000

536,700

400,000

GOLD PRICE PER OUNCE

$2,000

200,000

144,600 35,900

0

Full-time

Part-time

Public sector

Private sector

Self-employed $1,500

QUEBEC

264,000

NEWFOUNDLAND AND LABRADOR

5,800 $1,000

ONTARIO

PRINCE EDWARD ISLAND

402,800

2,100

$500

NOVA SCOTIA NEW BRUNSWICK

15,200

24,800

$0

2/17 2/24 3/2 3/9 3/16 3/18 3/24 3/27 4/1 4/7 4/14 Source: Goldprice.org; all figures in US$

Sources: : Scotiabank Economics, Statistics Canada

CORPORATE BOND TRADING VOLUME RISES

OPEC+ TRIES TO GET OIL BACK ON TRACK

The trading volume of Canadian corporate bond ETFs has risen significantly during the COVID-19 crisis. During the week of March 16, turnover averaged $250 million, nearly triple the bond ETF trading volume from mid-February, suggesting that in an environment with frozen liquidity, bond ETFs have been a vehicle for investors looking to exit.

In mid-April, OPEC+ agreed to cut global petroleum output by nearly a tenth to address the reduced demand that has severely hit oil prices across the globe. At the end of the month, Brent crude was trading at just over US$20 a barrel, down from the mid-$60s at the start of the year, while West Texas Intermediate slid even further, to around US$16 a barrel.

AVERAGE DAILY ETF TRADING VOLUME

Brent crude price per barrel

$300m

$70

$250m

$60

$200m

$50

$150m

$40

West Texas Intermediate price per barrel

$30

$100m

$20

$50m

$10

$0 Dec 30

Jan 6 Jan 13 Jan 20 Jan 27 Feb 3 Feb 10 Feb 17 Feb 24 Mar 2

Mar 9

Mar 16

Sources: NBF ETF Research, Bloomberg

$0

1/1/20

1/15/20

2/3/20

2/17/20

3/2/20

3/16/20

4/1/20

4/14/20

4/29/20

Sources: Oilprice.com; all figures in US$

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1/05/2020 4:30:14 AM

UPFRONT

HEAD TO HEAD

Will healthcare investing see new life in 2020?

While the sector struggled in 2019, the COVID-19 pandemic could shine a new light on healthcare investments

Michael Dehal

Paul MacDonald CIO Harvest Portfolios

SVP of private equity and portfolio manager PenderFund

“With recent events of the COVID-19 pandemic, healthcare investing has come to the forefront, and I believe we could see this sector grow. As pharmaceutical companies look for vaccines for this virus and potentially others, we could see more focus on clinical research and development, better preparedness from healthcare providers on equipment and supplies, and possibly increased spending from governments and the private sector into healthcare.

With an aging population and the need for greater healthcare resources, we could see more technological advancement in pharmaceuticals and surgical areas. As a result, we could see healthcare investing grow this year and moving forward.”

“Structural growth in the healthcare sector is driven by investment themes of the global aging population, technological innovation and increased health expenditures in developing economies.

Investor sentiment remained weak in much of 2019 due to political comments indicating potential extreme structural changes. Views between – and within – the US parties differ widely, making implementation of extreme policy changes difficult. Sentiment improved in Q4 2019; this may continue as concerns surrounding extreme proposals subside, coupled with robust financial performance and attractive valuations.

Volatility around political posturing represents an opportunity for mediumterm investors to increase exposure.”

“COVID-19 is changing the way we live and work. Healthcare is being forced to innovate, but we already have many tools. Artificial intelligence can quickly and cost-effectively screen existing and developmental drugs, robotics can be used for everything from diagnostic testing to treating patients in hospital, and 3D printing can create personal protective equipment. However, for innovation to thrive in healthcare, there must also be solutions to drive efficiencies in coordinating and improving standards, procurement, and delivery.

The healthcare investing space has shifted dramatically. Many of these innovations being developed here in Canada offer promising investment opportunities.”

SVP and portfolio manager Dehal Investment Partners, Raymond James

Maria Pacella

REASONS FOR OPTIMISM Deloitte’s 2020 outlook on the healthcare sector outlined several challenges, including growing healthcare costs, changing patient demographics and evolving consumer expectations. However, Deloitte also pointed out the opportunities in the sector – financial operations and performance improvement, care model innovation, digital transformation and interoperability, and the future of work will all impact healthcare and create new opportunities for investment. With healthcare spending expected to rise at a compound annual growth rate of 5% between 2019 and 2023 (a forecast made prior to the COVID-19 outbreak), these opportunities could drive more investment in the sector.

6

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1/05/2020 4:30:42 AM

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Get real time insights from teams that can help put the current environment in perspective so you can do what you do best – help clients.

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1/05/2020 4:30:43 AM

UPFRONT

NEWS ANALYSIS

The economy after COVID-19 With the markets taking a severe hit and numerous policy adjustments in place, how will the macroeconomic outlook change post-COVID-19?

SINCE LATE February, the economies of countries across the globe have been hit hard

by COVID-19. To counter the effects, governments and central banks have stepped in with policy reforms, such as slashing interest rates. But what do all these emergency policies mean for the economic world post-crisis?

“You either believe this is a transitory shock or something of a longer-lasting depression,” says Tyler Mordy, president and chief investment officer of Forstrong Global Asset Management. “Our firm believes it is more of a transitory liquidity shock. There have been some comparisons to 2008, 1989 and 1929, and it has some elements. However, in 2008,

Without those parallels to the 2008 crisis, that makes the current situation tough to compare, which means it’s more important to monitor the developments. “The big risk is financial contagion – if corporate bond and high-yield spreads blow out and it creates its own self-fulfilling recession,” Mordy says. “We are clearly going to have a horrific Q2, but our base case is on that transitory side.”

One area many in the industry are keeping an eye on is central banks’ policy response.

Fred Demers, director of multi-asset solutions at BMO Global Asset Management, has observed how the markets felt pain quickly and received a swift response, which he

“This [crisis] is different ... This is more of a liquidity shock rather than the bursting of a major asset bubble” Tyler Mordy, Forstrong Global Asset Management there was a massive housing bubble in the US and overvaluations. This is different – there were no real identifiable asset bubbles around the world, no real imbalances. This is more of a liquidity shock rather than the bursting of a major asset bubble.”

8

believes is an indication that central banks are attempting to use the lessons learned from the 2008 crisis. However, because this is a different type of event, Demers wonders if central banks have done too much, ultimately making it harder for the global economy to

normalize after the crisis.

“The Fed is the leading central bank and the last resort for the entire world,” he says. “It wasn’t surprising they cut rates because they had room to cut. The European Central Bank and Bank of Japan didn’t have as much room.

Quantitative easing is the next phase of their tool set they can deploy. They could always buy outright stocks and ETFs to further support the market if need be. While I don’t think this is something they will do, it could be a possibility.”

When it comes to policy moves, one of the big differences Mordy sees between the 2008 crisis and this one is that the fiscal lever, not just the monetary one, is in play. That has led to the rapid emergence of different programs.

“When you have a fast-moving virus, you clear the way for radical thinking and policy,

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1/05/2020 4:31:08 AM

INFLATION SINCE THE 2008 FINANCIAL CRISIS Given the fiscal programs being introduced to dampen the impact of COVID-19 and near 0% interest rates, US inflation could rise again to levels last seen after the 2008 financial crisis.

3.8%

2008 2009

-0.4% 1.6%

2010

3.2%

2011

2.1%

2012

1.5%

2013

1.6%

2014 2015 2016 2017

0.1% 1.3% 2.1% 2.4%

2018 2019 2020*

1.9% 2.3% Source: USinflationcalculator.com; *2020 data as of February

which is what we have seen,” he says. “In the US, for example, all the features that took 18 months during the 2008 financial crisis to resurrect now only took three weeks. The

I think these programs are here to stay, and even in a post-virus world, you can count on the fiscal lever to keep firing.”

One thing that both Demers and Mordy

“I think we will see inflation shoot up …

This will be the path of least resistance, but it will be bad news for bond holders” Fred Demers, BMO Global Asset Management fiscal lever has been engaged differently than the transmission mechanism – monetary policy. You can lower rates but can’t force people to borrow – that’s what people got wrong post-2008. The fiscal side is completely different because it is direct money spending.

foresee in the aftermath of the crisis is a spike in inflation. “We are looking to this post-virus world, and once you get capacity up again, what ends up happening is the stimulus measures in place are inappropriate for an economy with no major imbal-

ances,” Mordy says. “If you think the fiscal stimulus keeps going and you have interest rates at 0%, it sets the stage for a longerrunning period of inflation. We aren’t talking about 1970s-style, but as you move into the mid-2020s, you could see inflation creeping up to the 3.5% range in the US. I think that will surprise people and be necessary to extinguish the debt building up on the publicsector balance sheet.”

Demers adds that it will be interesting to see how this plays out over the next year or two. “I think we will see inflation shoot up, and policymakers will be happy about that when you look at the stimulus they put in place,” he says. “This will be the path of least resistance, but it will be bad news for bond holders – you are going to need real assets to mitigate it.”

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1/05/2020 4:31:15 AM

UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

G2S2 Capital

TerraVest Industries

G2S2 has acquired around 14% of the outstanding common shares of fuel storage manufacturer TerraVest

Interlapse Technologies

BuyBitcoinCanada.com

Interlapse’s acquisition of BuyBitcoinCanada.com will allow it to become a leading Canadian virtual currency platform

Jefferson Capital

Canaccede Financial Group

The deal expands Jefferson Capital's global footprint and strengthens Canaccede's leadership in the Canadian consumer debt solutions space

Securities Industry Data Exchange

Keystone Fund Solutions

The merger of the two firms will provide capital market participants with subscription-based business and digital transformation services

PARTNER ONE

PARTNER TWO

COMMENTS

BlackRock

Microsoft

BlackRock’s Aladdin infrastructure will be hosted on the Microsoft Azure cloud platform

Crypto.com

Oveit

The partnership enables cryptocurrency payments for more than 3,500 offline and virtual event organizers

Nexus Investment Management

Focus Financial Partners

Nexus is joining Focus, a leading partnership of independent fiduciary wealth management firms

Counsel enhances tiered pricing program

Counsel Portfolio Services has made several changes to its tiered pricing program, including the extension of management fee reductions to Series A, B and T units of Counsel funds. All series offered under the Counsel funds prospectus will now qualify for management fee reductions when unitholders reach certain account asset level thresholds. Counsel is also lowering the initial threshold for management fee reductions from $250,000 to $150,000 and will increase the discount for investors with combined assets above $1 million. Eligible accounts with $2 million and $7.5 million in assets will also receive additional fee reductions.

BlackRock partners with Microsoft

BlackRock and Microsoft have formed a strategic partnership to host BlackRock’s Aladdin infrastructure on the Microsoft Azure cloud platform, bringing enhanced capabilities to BlackRock and its Aladdin clients, which include many of the world’s most sophisticated institutional investors and wealth managers. Its adoption of Microsoft Azure will allow BlackRock to accelerate innovation on Aladdin through greater computing scale, as well as unlock new capabilities to enhance the client experience. BlackRock will also leverage Microsoft Azure’s network of global data centres and capabilities to meet the localized needs of Aladdin clients.

“As both a user and a provider of Aladdin, this decision reflects BlackRock’s ongoing commitment to continuous innovation and scalable operating solutions,” said BlackRock COO Rob Goldstein. “Aladdin infrastructure deployed on Microsoft Azure’s cloud platform will provide BlackRock with enhanced capabilities to deliver the best outcomes for our Aladdin clients.”

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RBC sees almost $3 billion in mutual fund redemptions

In March, RBC Global Asset Management received mutual fund net redemptions of $2.8 billion.

Long-term funds had net redemptions of $3.3 billion, while money market funds had net sales of $552 million. RBC’s redemptions were in line with those witnessed across the industry; the Investment Funds Institute of Canada reported that mutual fund net assets declined by 10% between February and March, from $1.6 trillion to roughly $1.4 trillion. The decrease was partly attributable to redemptions across nearly all categories of long-term funds, from which investors pulled a total of $18 billion.

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1/05/2020 4:31:48 AM

PEOPLE New index concept focuses on remote work

Inspired by the COVID-19-driven shift to remote work, index developer Solactive has introduced a concept for a new index focused on telecommuting. Solactive said its Flexible Office Index Concept “provides exposure to companies offering key technological infrastructure and services that help enable working remotely,” including cloud technology, remote communications, cybersecurity and workflow management solutions. US-based fund provider Direxion has said it is seeking regulatory approval to develop a new Work from Home ETF based on the index concept.

NAME

LEAVING

JOINING

NEW POSITION

Benoit Arsenault

Fidelity Investments

Raymond James

Vice-president, business development, Quebec

Howard Atkinson

N/A

Pascal Financial

Chief strategic advisor

Stephen Boland

N/A

Raymond James

Managing director and equity analyst – diversified financials

Hillary Dawson

Mohawk College

FP Canada

Chief brand officer

Tom Hamza

Fortune Larkfield Management Consulting

FP Canada

Executive director – learning, development and innovation; head of the FP Canada Institute

Adam Hornung

Russell Investments

SEI Canada

Senior client portfolio manager

Jean-Philippe Lemay

N/A

Fiera Capital

Global president and COO

Fiera Capital appoints new global president VCIB launches GIC aimed at business investors

Vancity Community Investment Bank (VCIB) has launched a new GIC designed to help organizations affected by the coronavirus pandemic.

VCIB’s new Unity GIC offers a non-redeemable 12-month term at a 3.00% interest rate. It is only available to Canadian businesses, non-profits and charities, rather than individual investors; unlike the bank’s other GIC products, the investment threshold is $25,000 rather than $50,000, with a maximum investment cap of $250,000. VCIB said the funds raised through the GIC will enable loans and other financial relief for businesses and non-profits impacted by the COVID-19 crisis.

BlackRock moves to set up China mutual fund business

BlackRock has applied to set up a mutual fund business in China as Beijing pushes ahead with financial sector deregulation despite the coronavirus pandemic. The China Securities Regulatory Commission said it has accepted applications from two money managers, BlackRock and New Yorkbased Neuberger Berman, as the country scrapped foreign ownership caps in the sector as of April 1.

A mutual fund unit would expand BlackRock’s footprint in China, where it already owns a private fund management unit and a joint-venture mutual fund house.

Fiera Capital has named Jean-Philippe Lemay as its new global president and COO. A 20-year industry veteran, Lemay has led Fiera Capital’s Canadian division since 2017. Prior to that, he held positions as chief investment officer and senior portfolio manager of liability-driven investments. In his new role, Lemay will take charge of the firm’s Canadian, US and European divisions and will also join the internal boards of directors of Fiera Private Alternative Investments and Bel Air Investment Advisors.

“I am confident that our broad and high-quality investment platform across public and private markets is exceptionally well suited to deliver superior investment outcomes across different economic cycles,” Lemay said, noting that Fiera Capital’s team is “committed to investment excellence and providing trusted investment advice.”

Pascal Financial names chief strategic advisor

Pascal Financial, the developer of an AI-powered digital investment platform, has appointed Howard Atkinson as chief strategic advisor. Atkinson’s industry experience includes investment advisory and capital markets positions at CI Funds, Mackenzie Investments and Wealthbar. Most recently, as chairman of 3iQ, he helped the company secure regulatory approval to launch North America’s first major exchange-listed Bitcoin fund. He also pioneered actively managed ETFs in Canada as the former president of Horizons ETFs and the introduction of iShare ETFs into Canada at Barclays Global Investors Canada.

“Howard’s appointment is a further validation of our game-changing technology and the team we’ve put in place to deliver the change,” said Pascal CEO Frances Zomer. “As an entrepreneurial leader, Howard will provide strategic direction to amplify Pascal’s growth and industry transformation as advisors who use technology replace those who do not.”

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1/05/2020 4:31:57 AM

UPFRONT

ETF UPDATE NEWS BRIEFS Canadian ETF flows stay positive amid March madness

During the market chaos brought on by the COVID-19 pandemic, the Canadian ETF space managed to retain some of its strength. According to the latest report on Canadian ETF flows from National Bank, ETFs collected an aggregate $2.9 billion in March. Equity ETFs led the charge with inflows of $4 billion, which National Bank attributed to “investors opting for rapid market exposure after liquidating single-security positions.”

Equity inflows were led by market capweighted, thematic and sector ETFs, particularly financial and energy ETFs, which National Bank said might reflect contrarian buying.

The first nontransparent ETFs begin trading in the US

A new type of ETF debuted in the US in early April after more than a decade of being touted by the industry as the next big thing. American Century launched two non-transparent ETFs, one focused on growth and the other on value, using a structure licensed from Precidian Investments that was approved by the SEC last year. The non-transparent structure allows issuers to publish their holdings once a quarter instead of daily and calculates the indicative value of the ETF’s assets every second to help the fund’s price stay in line with the value of the securities it holds.

Franklin Templeton reduces fees on three ETFs

Franklin Templeton Canada has reduced management fees for three of its ETF products: the Franklin Liberty Core Balanced ETF (FLBA), the Franklin LibertyQT Emerging Markets Index ETF (FLEM) and the Franklin LibertyQT

12

Global Dividend Index ETF (FLGD).

FLBA, which actively invests in North American equity and fixed-income securities, and FLGD, which tracks the LibertyQ Global Dividend Index, both now have a 0.30% management fee; FLEM, which tracks the LibertyQ Emerging Markets Index, now has a management fee of 0.45%.

Invesco Canada launches S&P 500-focused ESG ETF

Invesco Canada has launched its first ESG-focused ETF, the Invesco S&P 500 ESG Index ETF (ESG), which offers exposure to companies that meet the environmental, social and governance criteria for inclusion in the S&P 500 ESG Index, a subset of the S&P 500 focused on companies with sound ESG practices. According to Invesco, the new ETF provides “a way for Canadian investors to access US large-cap companies that better aligns with their personal ESG values, while still offering a risk/return profile similar to the benchmark S&P 500 Index.”

Horizons ETFs offers rebate for high-interest savings ETF

In response to the Bank of Canada’s dramatic lowering of its key policy rate in the face of the coronavirus crisis, Horizons ETFs has instituted a 10-basispoint rebate on the annual fee of its Horizons Cash Maximizer ETF (HSAV).

The rebate went into effect on April 1 and will be kept in place until further notice, giving HSAV an effective annual management fee of 8 basis points, including applicable sales taxes. “Given the dramatic decline in the income being generated by HSAV in this low interest rate environment, we have reduced the cost of investing in HSAV so that unitholders can retain more of its income,” said Horizons president and CEO Steve Hawkins.

ETFs’ role in a crisis By encouraging investors to buy and hold, ETFs can offer protection during a crisis like COVID-19 The COVID-19 pandemic has brought on a new level of market volatility. Markets have taken a hit, which has led many investors to panic sell. Advisors who have heavy weightings of ETFs in their portfolios might be questioning if they should continue to hold or exit.

Daniel Straus, vice-president of ETFs and financial product research at National Bank of Canada Financial Markets, says ETFs are “ideal buy-and-hold investments. They have ease of access and very low fees. However, because of their liquidity and trading intraday, they encourage tactical trading as well.”

Those dual advantages create a fine line for investors to walk, especially during a crisis, Straus says, but he believes that ultimately, ETFs protect and encourage buy-andhold strategies.

“If you look at the intraday trading tape of an ETF that is getting beaten up in the market and compare it with the end-of-day NAV, you see a dislocation,” he says. “It is important to understand that dislocation is often transitory. The way it protects long-term is the market price has nothing to do with the outcome through the holding period – it only impacts the point of entry and exit. If you are not panic selling, you won’t suffer any consequences to the remaining portfolio.”

That isn’t the case with all investment vehicles, he adds.

“If it happens in a mutual fund, managers have to meet redemptions, and remaining unitholders suffer from a progressively less liquid

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basket of securities,” he explains. “Most of the large passive ETFs do in-kind creation redemptions. What happens is the basket is redeemed to the market maker, and the entire portfolio is handed out on a pro-rata basis. Remaining unitholders are not diluted, and the illiquid securities don’t increase in concentration after the redemption. That structural artifact is extremely important and protects long-term unitholders.”

“The market price has nothing to do with the outcome through the holding period – it only impacts the point of entry and exit” While Straus stresses the benefit of staying invested in ETFs, he does note that this might not be best in all cases, and advisors should consider each investor to determine the best course of action.

Ultimately, he believes the trend of more investments moving into ETFs will continue after the pandemic is over. “Investors are moving to lower-cost investments, and ETFs have been the beneficiary – we think it will continue,” he says. “ETFs get a lot of headlines but are still small compared to mutual funds and directly held securities, but we think cash will make its way back into ETFs.”

Q&A

Scott Johnston Head of product, Americas VANGUARD CANADA

Years in the industry 15 Fast fact In 2019, Vanguard’s Balanced ETF Portfolio (VBAL) asset allocation ETF had a capital return

by NAV of 12.20%

Asset allocation ETFs take off Why have asset allocation ETFs become so popular?

There are three main reasons, which are ease of use, low cost and broad diversification. Balanced products are very popular in Canada with mutual funds, and this builds on that within a single-ticket ETF. Previously, you had many investors who were using passive ETFs as building blocks for their own portfolios, and this creates a more simplified solution.

We have seen one recent benefit with market volatility.

Previously, if you were building your own ETF portfolio, this would have required you to be fairly sophisticated in terms of rebalancing.

Asset allocation ETFs simplify this process with daily monitoring by investment teams to ensure the allocation remains very close to the target of the fund.

How can advisors take advantage of asset allocation ETFs? For advisors, these products can serve as a scalable, broadly diversified, low-cost solution. These ETFs can allow them to focus on what really matters to clients – value-added services that build trust, like behavioural coaching, education, estate planning and tax services. Advisors are using them either as the whole portfolio for smaller accounts, or within a core-satellite approach for larger accounts, where the core is the asset allocation ETFs, supplemented by active satellite holdings. Some advisors are also using VEQT and VCIP as a simple way to tactically tilt a portfolio to higher or lower risk.

What did you learn from your initial suite of asset allocation ETFs that led you to expand it?

Due to the sharp rise in assets following our launch and what we heard from investors and advisors, we felt like there was a lot of pent-up demand for these types of low-cost and well-diversified multi-asset products, backed by an organization with a long track record in offering these types of enduring solutions.

Given that context, we added two more [VEQT, VCIP] in 2019 to our initial suite of three [VGRO, VBAL, VCNS] that launched in 2018. We recently took a similar single-ticket approach with our new Vanguard Aggregate Global Bond ETF [VGAB], which, rather than being part of the asset allocation range, is designed to be a building block in a wider portfolio, giving access to over 15,000 fixed income securities in a single ETF ticket.

Where do you see asset allocation ETFs going from here?

Clearly in Canada, there is a rise in solutions-oriented products like asset allocation ETFs. Canadians are increasingly looking for global solutions that are easy to use and well managed, which is why we have seen such strong interest. People saving for retirement are well served with existing products in the market. In the future, we see additional growth in these types of products as Canadians look for broadly diversified and low-cost options that give them income to spend if they are already in retirement.

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UPFRONT

ALTERNATIVE INVESTMENT UPDATE

Navigating volatility via structured yield Purpose Investments’ new active mutual fund aims to shield investors from the current market turmoil

coupon payments and contingent protection against losses.

“Uncertainty can manifest in many different ways,” says Greg Taylor, Purpose’s chief investment officer and one of the managers of the fund. “The recent turbulence is a great example of how that uncertainty can come in very unexpectedly. The Purpose Structured Equity Yield Portfolio II capitalizes on these markets by providing an

“We want to give investors the ability to access a product with the appropriate levels of contingent downside protection” Following the success of the active derivatives strategy it introduced last October, Purpose Investments launched the Purpose Structured Equity Yield Portfolio II in mid-April. Similar to its predecessor, the new fund uses an active equity-based derivatives strategy to replicate the outcomes of multiple structured notes in a mutual fund. The fund’s corporate class structure gives it attractive tax-efficient yield, and it also has strong protection against losses.

“Given the recent turbulence in the markets, we want to give investors the ability to access a product with the appropriate levels of contingent downside protection for the

NEWS BRIEFS

current environment,” says Som Seif, Purpose Investments founder and CEO. The fund aims to provide high income and protection through lower correlation to broad equity markets, as well as diversification by way of a multi-factor selection strategy that includes analysis of earnings, dividend yields, interest rates, economic/business cycles and geopolitical risks, among other factors.

The fund’s selection of global and North American equity indexes gives investors both domestic and international exposure, and its investment in derivatives offers exposure to selected indexes, attractive income through

3iQ launches its Bitcoin fund on the TSX

Digital asset manager 3iQ has launched its highly anticipated Bitcoin Fund (QBTC.U) on the TSX. With total assets of around US$14 million, the fund seeks to provide investors with exposure to Bitcoin and the daily movements of the digital currency’s US dollar price. In its final prospectus, 3iQ stressed that the fund “will not speculate with regard to short-term changes in Bitcoin prices” but is “appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.”

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attractive and tax-efficient yield with contingent protection built into the fund.”

With the addition of the Structured Equity Yield Portfolio II, Purpose now manages approximately $8 billion in assets, including more than a dozen alternative strategies.

“When you think about risk management and access to alternative strategies, we were doing that in 2013 when no one was thinking about it – now everyone is thinking about it,” Seif says. “We launched the first structured note product because they are important in portfolio construction, diversification and risk management. We think about things, then we position into them.”

Ninepoint Partners eyes launch of new debt fund

Ninepoint Partners is planning to launch a new debt fund as early as June, aiming to tap into demand for investment products that offer yield by snapping up bonds and loans made cheaper by the COVID-19-fuelled market selloff. The alternative asset manager said the fund will invest in investment-grade and highyield bonds and will put up to 10% of its assets in private credit and add credit default swaps to protect against an environment like the current one, with a rising risk of defaults.

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Q&A

Bill DeRoche CIO and head of AGFiQ alternative strategies AGF INVESTMENTS

Years in the industry 25 Fast fact The AGFiQ US Market Neutral Anti-Beta CAD-Hedged ETF (QBTL), which uses a dollar neutral strategy focused on capturing the strong performance of low beta, saw a nearly 12% increase in returns between February 20 and April 9

Bright spots in the COVID-19 crisis Has the performance of your market neutral ETF, QBTL, exceeded your expectations during the COVID-19 crisis?

I’d say it’s pretty much in line. Looking at the up-capture ratios we experienced since the market high of February 19, it has been pretty close to what we would have forecasted. What we didn’t anticipate was that prior to the last month, when we look back at last year, even on up days in the market, low beta outperformed high beta.

When low beta starts outperforming high beta, there is information on where the market is going forward.

How is this strategy different from other market neutral strategies?

All market neutral funds are a little different. I describe this fund as dollar neutral because, depending on who you talk to, market neutral means beta neutral. Equity market neutral, for most people, should be uncorrelated to the market in that it has a zero beta. Because this fund was designed purposely with a negative beta, a lot of people wouldn’t consider this as market neutral.

Are there any areas that have been key in the fund’s performance during the crisis?

The fund rebalanced at the end of February, which was timely. When there is outperformance, you end up with net long exposure because either your liabilities have dropped more than your longs, or your longs have gone up more than liabilities. In this case, it was the former – our liabilities have dropped substantially; at

Hedge funds pushed to the edge in March meltdown

While some hedge funds have been able to prove their worth during the recent market selloff, many suffered steep declines that brought them close to tripping NAV triggers in certain contracts, according to a survey by investment consulting firm NEPC. Preqin reported that its all-strategies hedge fund index was down 8.96% in March, with particularly significant losses in equity and event-driven hedge funds, which declined by 11.71% and 14.69%, respectively.

Still, the overall decline was less than the S&P 500’s drop of 12% for the month.

the same time, our long portfolio assets have dropped, just not as much. This fund would normally have 200% gross leverage, but it’s actually much lower because of the drop in the overall equity position, both on the long and short.

What risks will this strategy face as the crisis tapers off?

The fund underperforms dramatically when we are in a high beta or high junk rally, where people are selling quality and buying the riskiest names. If you go back and look at October 2011 or April 2009, those would be good examples. When those events occur, high beta significantly outperforms low beta, and you will have significant underperformance of the long portfolio versus the short.

How should advisors approach strategies like this now and in the longer term?

There is still a strategic allocation to this. Our view is there will potentially be rally to the upside and we’ll have that risk-on event, but we still see risks to the downside.

There is a lot of conflicting information that depends on what happens. If we aren’t able to get back to normal, that would create potential for more downside, and you would want allocations to a product like this for insurance. If the opposite, then the risk is to the upside, but you’ll want to have as much exposure to equity as possible. For us, once the all-clear has sounded, we’ll get back to a more strategic allocation.

Brookfield Asset Management adds public debt offering

Brookfield Asset Management has announced a public debt offering, subject to market and other conditions, of notes due in 2030. The notes will be issued

by Brookfield Finance, an indirect 100% owned subsidiary of Brookfield, and will be fully and unconditionally guaranteed

by Brookfield. The net proceeds from the sale of the notes will be used for general corporate purposes. Deutsche Bank Securities, HSBC Securities and Citigroup Global Markets will act as joint book-running managers for the offering.

Exponential launches digital asset fund

Exponential, a global financial services company focused on digital asset investing, has launched its actively managed Digital Asset Fund on investment crowdfunding platform FrontFundr and private market dealer platform DealSquare. The $100 million fund offers exposure to companies that “bet on the promise of emerging and distributed ledger technologies” and, according to Exponential co-founder James Wallace, “positions our investors for market disruptions.”

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PEOPLE

INDUSTRY ICON

CRYPTOCURRENCY PIONEER Fred Pye, president and CEO of 3iQ, saw the opportunity in Bitcoin five years ago. Today, his hard work has come to fruition as his firm celebrates the launch of Canada’s first Bitcoin fund on the TSX

APRIL MARKED a milestone for crypto­ currency investors in Canada as 3iQ success­ fully launched The Bitcoin Fund (QBTC.U), the first of its kind, on the TSX. For 3iQ president and CEO Fred Pye, it was the culmination of five years of hard work, but just the latest accomplishment in a long career in the financial industry.

“My interest in the industry was pretty simple – my best friend’s father was the president of Guardian Trust,” Pye says.

“He always taught us to not take no for an answer, to be logical, courteous and stern on your belief of what is right.”

After graduating from Concordia University with an MBA in economics, Pye joined Guardian Trust in 1983. During his time there, one achievement foreshadowed his latest triumph. “At Guardian Trust, we listed gold, silver and platinum certificates on the Montreal Stock Exchange in 1986,” he recalls. “Now, 34 years later, I have done the same thing with ‘digital gold.’”

After leaving Guardian Trust, Pye moved on to Fidelity Investments during its early days, which led to a career highlight. “I was at Fidelity from 1989 to 1995,” he says. “We took the company from eight employees and

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$80 million in assets to 450 employees and $7.5 billion in assets.”

The road to a Bitcoin fund Fidelity might have been a high point, but it was hardly the end of Pye’s contribu­ tions to the industry. He formed @rgentum Management & Research, where he ran

asset momentum portfolio,” Pye says. “We were running that portfolio for Horizons ETFs. Everything we were managing was correlated. Most managers are on a quest to find a non-correlated asset class. At the time, Bitcoin was around $300, so I was a bit apprehensive because it had gone up a lot.

In 2014, I wanted to put Bitcoin in the fund;

“At my age, you want something that people are not invested in yet. Sure, Warren Buffett can afford to pay $100K to get in later, but most average investors can’t” the first quantitative money management structure in Canada and created the first long/short mutual fund the country had seen. Throughout the early 2000s, Pye held numerous positions, leveraging his expertise as a portfolio manager. That brought him to Landry Investment Management in 2012, which led to the creation of 3iQ. “3iQ was originally created to distribute product for Landry, including a multi-

everyone thought I was crazy, so I went out and began this quest to list Bitcoin.”

The quest would become the biggest challenge of Pye’s career, encompassing five years and millions of dollars. The original prospectus for 3iQ’s Bitcoin fund was filed in March 2017. Pye and his team expected it to be approved by June, but they ran into a roadblock when the OSC put terms and conditions on their firm to manage digital

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PROFILE Name: Fred Pye Title: President and CEO Company: 3iQ Corp.

Age: 60 Years in the industry: 37 Career highlight: Helping to grow Fidelity Investments from eight employees and $80 million in assets to 450 employees and $7.5 billion in just over five years

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PEOPLE

INDUSTRY ICON

assets. They needed to obtain permission, which took another year.

During that time, Bitcoin also went on a run, but Pye was forced to start the process again in 2018. The OSC had undergone its own changes, and a new management team wanted to understand the process from square one. Meanwhile, Bitcoin collapsed, and 3iQ’s prospectus was rejected. The firm obtained a formal rejection and challenged the ruling in a public hearing. In October

He adds that one of the most common misconceptions revolves around not being able to spend Bitcoin everywhere, but Pye stresses that you would never spend your store of wealth. He urges investors to look deeper at the blockchain technology that allows for secure transactions, which is where he sees the future of digital currency. Pye is also the co-founder of Stablecorp, which produced Canada’s first official digital dollar.

It’s these stablecoins, which sit on something

“We want this company to be big enough to support blockchain in Canada. We need to scale our partnerships to make a difference – we can’t waste the opportunity to help the sector in Canada” 2019, 3iQ won its case; on April 9, 2020, The Bitcoin Fund debuted on the TSX. “This really is the pinnacle of my career,” Pye says. “I am 60 this year, and it’s great to have it listed. It was a full team effort. We had everything thrown at us along the way.

I am thrilled for our team and everyone who worked on parts along the way.”

Crypto advocacy Pye continues to see great potential for Bitcoin. While it’s often misunderstood, Pye says it’s simply an evolution of the internet.

“At my age, you want something that people are not invested in yet,” he explains.

“Sure, Warren Buffett can afford to pay $100K to get in later, but most average investors can’t.

All this is is access to secured internet you pay for. Miners get paid for creating newly minted Bitcoin; users pay for their transaction. When people come around and realize it is just the evolution – not fake money, but a real thing – more people will invest in it.”

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like the Bitcoin blockchain, that he believes will be the currency of the future.

Establishing that stablecoin is one of Pye’s goals. However, his current focus is on spreading The Bitcoin Fund around the world. “We now have a regulated fund on a regulated exchange, so I can take it and get co-listing arrangements,” he says. “I want this Bitcoin fund in London, Singapore and Hong Kong. In May, we are looking to list it on the exchange in Gibraltar.”

In addition, he sees 3iQ becoming an advocate for blockchain and cryptocurrency here at home. “We want this company to be big enough to support blockchain in Canada,” he says. “The blockchain relies on venture capital, of which there is so little in Canada.

It’s one of my biggest pet peeves – Canadian companies invest in US companies and leave little for Canadian opportunities. We need to scale our partnerships to make a difference – we can’t waste the opportunity to help the sector in Canada.”

3IQ AT A GLANCE

YEAR FOUNDED 2012

HEADQUARTERS Toronto, ON

NUMBER OF FUNDS 2

MILESTONES The Bitcoin Fund (QBTC.U) is the first cryptoasset fund to be listed on a major Canadian exchange and available to all Canadian investors

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UPFRONT

OPINION

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

The need for private equity Traditional investment sources are no longer providing desired returns, but private equity can enhance yields, writes Joe Pochodyniak OUR CLIENTS’ desire for lower volatility and higher income hasn’t changed much over the years, but in this low rate environment, it’s no longer coming from traditional sources. Clients are increasingly becoming discouraged with traditional investment sources – and for good reason. Bond yields are negligible, and equities are increasingly volatile, particularly in connection with the ongoing spread of the coronavirus and its implications on economic growth and the recent fall in crude oil prices. These factors are leading investors to look at other options.

For years, private equity has been a mainstay in many institutional and endowment fund portfolios. These institutions’ allocations to alternatives, and as a result private equity, have grown from an average of 6% in 1999 to 25% in 2017, according to McKinsey.

In 2019, the Canada Pension Plan Investment Board allocated 24% of its portfolio to private equity, while the Ontario Teachers’ Pension Plan allocated 19%, the Yale Endowment Fund allocated 38%, and the Harvard Endowment allocated 20%.

Private equity is an asset class that consists of operating companies that are not publicly traded on a stock exchange. Private equity is a source of investment capital from highnet-worth individuals and asset managers, and it functions to secure equity ownership in companies, as well as lending to them.

Private equity has a low correlation to other asset classes, can act as counterbalance in a portfolio and can provide investors with overall capital appreciation where investments can benefit from additional oper-

ational expertise or capital. Private equity is not a liquid investment, and it’s not for the impatient.

As an asset class, private equity has been growing significantly over the last two decades. According to McKinsey’s 2019 Global Private Markets Review, private equity’s net assets have grown more than sevenfold since 2002; global private market AUM now totals $5.8 trillion. That rate of growth is twice as fast as global public equities.

within a three-year timeframe, and we have approximately one-third of our alternative asset program allocated to private equity.

Though we invest in a wide variety of privately held firms, our focus recently has been on data analytics and artificial intelligence, particularly with a focus on healthcare. Many of our healthcare names in this space enable their clients to better connect with patients in their local markets. By offering proprietary cloud-based tools in a systematic, HIPAA-compliant manner, many of these companies are able to offer highly scalable data management solutions to allow medical clinics to enhance profit margins and smooth revenues.

Examples of companies in this space include California-based PatientPop and Utah-based AdviceMedia. These are firms that are tracking at 50% EBITDA margins and are able to raise capital effectively.

For example, in 2019, Connecticut-based Diameter Health, a clinical data integration company, raised nearly $10 million in a Series A funding round led by Optum Ventures.

Considering that healthcare digital

“Even larger investors that once shied away from the asset class are now allocating to private markets as a means of gaining diversified exposure to global growth” The number of private equity investment opportunities has also risen. In 2006, there were approximately 4,000 private-equitybacked companies in the US. By 2017, that figure had jumped to approximately 8,000.

Over the same period, the number of publicly traded companies dropped by 16%, from 5,100 to 4,300. McKinsey’s report also notes that even larger investors that once shied away from the asset class are now allocating to private markets as a means of gaining diversified exposure to global growth.

At MacNicol & Associates Asset Management, our private equity strategy seeks opportunities where capital exit strategies are clearly defined and are likely to occur

marketing spending is predicted to rise, according to eMarketer, and that 5% of all Google searches are health-related, our Emergence Fund is well on its way toward offering unitholders opportunities to enhance their portfolios with a data-driven way to participate in the growth of the primary care industry in the United States and globally.

Joe Pochodyniak is a senior portfolio manager at MacNicol & Associates, where he focuses on real estate, private equity, hedge funds and alternative asset class strategies. He has more than 15 years of experience in asset management and private investment counselling.

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SPECIAL REPORT

TOP TEAMS

TOP TEAMS

Wealth Professional spotlights eight teams across Canada that have found success by combining a variety of expertise to provide clients with a full suite of services

THE FINANCIAL industry is constantly changing, which means the role of an advisor must also continually evolve.

The days when a single advisor would handle all aspects of the business are gone. Now advisors must either team up with others or have a complete roster of specialists on call in order to succeed.

In addition to building teams, advisors are also increasingly carving out a niche or targeting clients who can be best served by their areas of expertise. Whether they’re focusing on a specific profession, small business owners,

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multi-generational planning or even a particular gender, these teams are finding ways to stand out.

The eight teams profiled on the following pages are both large and small, and they hail from locations across the country. They represent both bank-owned and independent firms and include advisors of all ages.

Whether you’re running your own practice or are part of a large bank-owned or independent branch, the strategies presented here can help you round out your own team, no matter the size.

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KINGSFORD AND ASSOCIATES

Firm: BMO Nesbitt Burns Location: Calgary, AB Year established: 1986 Employees: 5 AUM: $200+ million Target clients: Anyone who needs guidance

Kingsford and Associates, part of BMO Nesbitt Burns, is one of the more unique teams in the Canadian wealth management space.

The Calgary-based team is made up entirely of women, something that has created a singular opportunity, says vice-president and senior investment advisor Thalia Kingsford.

“There are many great women-led teams, but I wanted an all-woman team because I think women have a special skill set,” she says.

“The ability to talk and listen to clients, women do well naturally. We listen for cues in a conversation. Women can identify what someone is worried about or asking for and have a transparent and honest conversation. We have diverse and sophisticated financial capabilities behind us with a large company like BMO, but

I think it takes basic skills: listening, building trust and asking the right questions.”

After establishing a solid reputation based on her community involvement, Kingsford started the practice on her own in 1986. As it grew, so did her team. She now works with two associate portfolio managers who have been with her for more than a decade. “I think we have created a special place,” she says. “We work hard and enjoy our group collaboration.”

For Kingsford, evolving into a team came out of necessity. “When I built my team, it was because I had more business than I could cover with the level of quality that was my standard,” she says. “I added people who were smarter than me but had a similar philosophy. As the business grew, so did the team in order to service more clients. The thing that also makes us unique is we all have different credentials, so we are experts in multiple areas.”

Financial planning is at the core of Kingsford and Associates’ service. The team’s other portfolio managers, Stacy Soutière and Cheryl Smith, both have financial planning designations. “It’s a big thing for us,” Kingsford says.

“BMO has resources we can draw on, but if we

can generate a great plan within the team, we feel it is an advantage. By drawing up financial plans ourselves, based on our belief that we know the clients best, we can tailor the plan for their unique situation. We go beyond just the standard questions. That second degree of questions really makes a difference.”

In addition to a financial planning designation, Soutière has an MBA and the Family Enterprise Advisor (FEA) designation, a credential that focuses on advising families who are moving assets between generations.

Smith has a US securities licence, which allows her to accept clients who have US accounts. The team is rounded out by Anna Gilliland, a career financial administrator, and the newest member, Meghan Hilderman.

The team’s approach is conservative, led by a mission to educate clients. They aim to create a comfortable environment that explains the rationale behind recommendations.

“We have many women clients who have come from a situation where they were less comfortable,” Kingsford says. “It can be difficult and challenging for women when it comes to managing wealth. Even if they are eager to learn market strategy and prudent financial management, they often have just been told what they should do. That’s not our style – we focus on building their understanding.

“Our clients are making decisions guided by our advice. We explain the rationale for the composition of their investment portfolio and make recommendations. We find this empowers our clients and develops loyalty. We take the time to listen very carefully. What is the client really asking for, and how much risk is acceptable? Then we can present a portfolio that is suitable for them, and we can help them understand why.”

That approach is something Kingsford feels will continue to pay off as more wealth comes into the hands of women.

“Women are very special investors,” she says. “We know they will be in control of a large amount of assets within the next decade, and advisors need tactics to handle that.

BMO itself is launching numerous initiatives

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SPECIAL REPORT

TOP TEAMS

“We already have a history of attracting women clients because we listen, understand and empower them”

CAPITAL WEALTH PARTNERS

Thalia Kingsford, Kingsford and Associates to work with this major change in control of wealth, but we already have a history of attracting women clients because we listen, understand and empower them. And the more we understand, the better and more effectively we can help.”

While Kingsford and Associates has found its niche, the team still faces several challenges.

Bringing new clients up to speed with the same level of service offered to existing clients is an ongoing effort. The COVID-19 pandemic has also changed things considerably.

“It has been a challenge for our team because we used to be in one room collaborating, and now we are working from home, isolated in our individual houses,” Kingsford says. “We try to have a daily meeting to get up to date on everything we are doing.”

Being based in Calgary has presented additional challenges. Not only have Albertans been affected by the declining price of oil, job losses and severely reduced budgets, but they share the fear of the unknown impact of COVID-19 and its growing health risks.

Still, these are all challenges Kingsford and Associates is prepared to handle. Moving forward, Kingsford realizes that she will retire at some point, but she hopes that what she has created will endure.

“My goal is for our practice to continue with this group of women doing the best they can to educate clients and maintain all that I think has made us special: building on the natural strengths of women,” she says.

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Firm: Mandeville Private Client Location: Ottawa, ON Employees: 10 AUM: $350 million (branch) Target clients: Advice-seeking individuals with assets of $250,000 or more

This September will mark 34 years in the wealth management industry for Michael Prittie, portfolio manager, senior financial advisor and branch manager of Capital Wealth Partners at Mandeville Private Client.

Throughout the years, Prittie has learned a lot, and he shares those lessons with his team as his branch continues to grow.

Prittie started out at a large financial planning/investment firm. It was there that he hired one of his most respected team members. “I hired and mentored Duane Francis, who followed me once I moved to an IIROC platform in 2001,” Prittie says. “Then others followed, and we grew from there.”

Prittie moved his practice to Berkshire Securities, which was founded by Portland Holdings chairman and CEO Michael Lee-Chin. In 2008, it became part of Manulife Securities. In 2013, when Lee-Chin formed Mandeville, Prittie was the first to move back.

“Mandeville provided access to private equity investing and a managed account platform,” he says. “I think I was the first advisor

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to ‘repatriate’ to the new firm.”

Since then, Prittie has seen his branch grow steadily. The team now has 10 members, including five advisors, all of whom have numerous designations and plenty of experience. Prittie’s son, Adam, has also joined the team to follow in his father’s footsteps.

“I’ve had steady growth since the beginning, but my assets under administration really went on an upward trajectory after I joined Mandeville,” Prittie says. “The ability to manage portfolios and run discretionary/ managed accounts with access to world-class alternative private investments was something my clients really embraced. It led to increased referrals and multi-generational business.”

The private offerings are one differentiator for Capital Wealth Partners, but Prittie feels it all comes down to customer service. “We are regularly complimented on our client service and attention to detail, and I think that is what has made us successful,” he says. “We pride ourselves on doing what is right, not what is easy, and we really try to put ourselves in our clients’ situations.”

With that success comes trust from clients, who are confident the team will do what is best for them. “We spend a lot of time on research and controlling emotions,” Prittie says. “I follow the mantra of being greedy when others are fearful and vice versa. Last summer, for example, we started to move away from equities and built up income in our portfolios. Now, with the pullback, we are in a good position to take advantage of some of the companies that are well priced. Our clients have been through other downturns – in my case, dating back to 1987 – and they are understanding and accepting. They know to stay the course, not sell and take advantage of the opportunity.”

When it comes to his team’s approach, Prittie aims to mirror two successful leaders: Warren Buffett’s philosophy of owning great businesses with a track record of growing revenue and earnings, and Michael Lee-Chin’s teachings for creating and preserving wealth.

In doing so, his portfolio construction meets

the unique needs of his clients.

“For each household, we develop personalized investment policy statements and written financial plans that address their needs – factors like time horizon, risk tolerance, taxation and liquidity needs,” he explains. “We pay careful attention to that when we are building the portfolios and include a combination of public and private securities. We seek to take advantage of the illiquidity discount within privates in order to increase yields and longterm growth. We will rebalance prudently and systematically to take advantage of current market conditions.”

The team also puts a heavy focus on tax planning, looking for tax reduction strategies so clients keep more of their money. To help with this, Capital Wealth Partners prepares a wide variety of tax returns each year, from personal to corporate to estate returns. This in-house service has been very popular – around 300 families use it.

While Capital Wealth Partners’ advisors operate on their own, they rely on collaboration with the rest of the team. Prittie hosts weekly training sessions for all staff, and the advisors meet monthly to discuss strategy, marketing ideas and anything else that might benefit all of their clients. In addition, they host evening seminars and special events for clients throughout the year, and Prittie writes about financial topics for an Ottawa-based magazine.

This spirit of collaboration definitely helps when it comes to tackling challenges. Last year, the key challenge was finding great investments at reasonable prices, Prittie says.

That has changed in light of the COVID-19 pandemic, so now the team is focused on keeping emotions in check and finding longterm opportunities for clients in the midst of the crisis.

Moving forward, Prittie’s goal is for his team to continue to grow its professional presence in the Ottawa community. “We are very involved in the community in a number of initiatives,” he says. “We are seen as leaders and educators in the industry and people who can be trusted with capital.”

“We are regularly complimented on our client service and attention to detail, and I think that is what has made us successful. We pride ourselves on doing what is right, not what is easy, and we really try to put ourselves in our clients’ situations” Michael Prittie, Capital Wealth Partners

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SCHNEIDER FINANCIAL GROUP

Firm: National Bank Financial Location: Regina, SK Year established: 2017 Employees: 5 AUM: $310 million Target clients: Families, intergenerational

Last November, the Schneider Financial Group at National Bank Financial was recognized at WP’s Women in Wealth Management Awards as the top women-led advisory team. It was quite an honour for investment advisor and senior vice-president Donna Schneider, as it was recognition of her team’s focus on listening to clients to truly understand their needs and goals.

Schneider has been in the industry for 27 years. She began as an associate to an advisor, whom she worked with until he retired in 2017. During that time, Schneider stayed with the practice as it moved from Midland Walwyn, which was acquired by Merrill Lynch, to TD and then to Wellington West, which was sold to National Bank. When the advisor retired, Schneider decided to buy the business and continue building on the work they had established throughout the years.

“It was an easy transition because I was already connected to the clients,” she says.

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“Those I may have known less well, I started to meet more and connect with. Our client retention was 100%.”

Since then, Schneider has grown her team to five members, including two advisors, two associates and an administrator. Before she took over the business, her daughter, Stephanie, had joined the practice as a senior administrator. Now she’s followed in her mother’s footsteps and has earned the credentials to become an advisor.

is going on in people’s lives. What are their goals, what do they want to accomplish, what things might be coming up? We incorporate insurance and financial planning and make sure we have all parts looked after.”

One of the areas where Schneider feels her team members stand out is in their ability to listen to clients. “There is an emphasis on listening,” she says. “Many people who have been referred to us say they were told that we take the time to listen, ask questions and try to understand the client’s complete situation.”

This approach is something Schneider takes great pride in. “I really do empathize with each client’s situation, and I genuinely care,” she says. “I approach each client by trying to help in any way I can. I don’t always have all of the answers, but if I don’t, I will find them, because that’s the level of service I am committed to providing.”

A veteran of the industry, Schneider has watched it evolve over the years. While her approach hasn’t changed, one major area where she has seen a change is fee structures.

“I have always been open about how

“There is an emphasis on listening.

Many people who have been referred to us say they were told that we take the time to listen, ask questions and try to understand the client’s complete situation” Donna Schneider, Schneider Financial Group “I hope that now she can work with clients through the next transition when I decide to retire,” Schneider says.

The Schneider Financial Group’s approach to working with clients aims to be allencompassing. “We look at portfolios last,” Schneider says. “We are more focused on what

people are charged and what the underlying costs are,” she says. “One major enhancement was the evolution of fee-based platforms.

At National Bank, our myWealth program provides complete fee transparency for clients and allows us the flexibility to group households together to reduce management fees for

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all family members. Unlike years ago, when client fees were largely hidden in embedded costs, regulatory reform and program evolution have allowed us to show clients what they pay and give them options to save.”

The myWealth platform is just one of the benefits Schneider has realized from partnering with National Bank Financial. She also points to the support the firm offers with financial planning, insurance, CRM tools, research and managed accounts.

“It is a very open structure for clients, and the support for advisor teams is first-class,” she says. “NBF really understands what advisors need to look after clients. We wholeheartedly connect with the organizational mission to have a positive impact in clients’ lives to help them achieve their goals.”

Schneider adds that she’s been impressed with the support NBF has shown to women in the financial industry, highlighting the Young Women’s Mentorship Program, which promotes the wealth management profession to young women in business schools.

Having access to these tools has allowed Schneider to create efficiencies in her business, freeing up time to concentrate on other areas. She says one of the biggest challenges is staying on top of the ever-changing industry, but it’s something she embraces.

The team prepares for external factors, such as issues impacting aging clients, to support clients and their families through all stages and life events.

Schneider is proud of the work she’s done and the impact she and her team have made in their clients’ lives. Moving forward, her goal remains the same: to help as many people achieve their goals as she can.

“It is an honour to do this job,” she says.

“There aren’t many industries where you can be as involved in an individual’s life and make such a significant impact. I feel very blessed to have a career built on helping people.”

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

ALLAN SMALL FINANCIAL GROUP Firm: HollisWealth, a division of Industrial Alliance Securities Location: Scarborough, ON Year established: 1999 Employees: 6 AUM: $200 million Target clients: Anyone who can be helped

In the financial industry for more than 25 years, Allan Small has worked for trust companies, banks, mutual fund companies and independent advisory firms, which has given him quite the background to bring to his practice. Since 1999, Small has seen his team grow from him and an assistant to a team of

HollisWealth umbrella, a division of IA Securities, and run our businesses as we see fit. As long as you are compliant and ethical, you can run it your way.”

That has allowed Small, a self-described “student of the market,” to focus on building portfolios, which is something he feels sets him and his team apart.

“I think it is very different than other advisors who follow some sort of pre-arranged guidelines or portfolios that someone sitting 20 floors up on Bay Street built,” he says. “I build portfolios from the research we get and monitor. We have ongoing communication with clients, which they appreciate. They know we are always watching out for them, and that’s what they want from us.”

“These days with compliance and regulation, practices almost need one or two individuals who are dedicated to just that. I now have to delegate a lot more and rely on the expertise of my staff” Allan Small, Allan Small Financial Group six, all of whom bring different expertise so he can focus on his strong suit: building portfolios from scratch to meet his clients’ goals.

Small established his practice at Edward Jones before moving to Dundee Securities in 2002. Dundee eventually became HollisWealth when Scotiabank purchased it; HollisWealth then became a division of Industrial Alliance Securities.

“All of the advisors who are a part of HollisWealth work for ourselves,” Small explains. “We are all independent under the

While building portfolios is one of Small’s specialties, he’s also an insurance advisor with Hollis Insurance, which allows him to provide multiple types of coverage, and he and his team put a priority on retirement and estate planning. If there’s a service he doesn’t have in-house, he works with other professionals to provide the right referral.

Small and his team work with a wide range of clients, which requires going beyond a cookie-cutter approach.

“Every client is different, and everyone has

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their own needs,” he says. “It takes a lot to get to know the person and what their financial goals are. Asking what they are investing for can be a tough question for many because they don’t have an answer. They know they want their money to grow but not why. We try to establish that, then work backwards. We figure out when and what it will take to reach their goals, then target the investments to reach those goals within the client’s risk tolerance.”

With so much customization for so many different types of clients, Small has to put most of his time into building portfolios, which has made it vital to have a team in place that can help with other aspects of the business.

“I have an assistant whose job is to read all the research, summarize and generate ideas based on all the material that comes in because we receive so much,” he says. “At the same time, more paperwork is being required, and there is more compliance. These days, with compliance and regulation, practices almost need one or two individuals who are dedicated to just that. I now have to delegate a lot more and rely on the expertise of my staff, especially on the administrative side.”

Compliance is one of the major challenges Small identifies for any practice; the other is growing a practice from scratch.

“Growing the business is very difficult, especially for independents,” he says. “It’s not always a level playing field when competing with the banks. Many people still have a mentality that if you need something in the financial industry, you go to a local bank.

More and more that’s changing, especially with younger generations, but it’s a tough go.”

One way Small has overcome that challenge is by being involved in multiple forms of media, which he says has helped him stay sharp and develop a solid understanding of the markets.

That’s something he’s been able to bring to clients through the portfolios he builds.

“To me, being an investment advisor is not a job – it’s a lifestyle,” he says. “I am always on and connected. I look for my business to continue to grow and to help as many investors as I can obtain their financial goals.”

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ERIC BENNETT, SCOTIA WEALTH MANAGEMENT

Firm: Scotia Wealth Management Location: Calgary, AB Employees: 2 Team: 6 Target clients: Business owners and professionals

Eric Bennett’s wealth management team might not be very big, but thanks to his firm, Scotia Wealth Management, Bennett has been able to surround himself with an array of specialists to provide his clients with wellrounded advice. This has been one of the biggest assets to Bennett as he has built his practice over the past 10 years – knowing he

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has access to those specialists has allowed him to focus more on client relationships and overall business growth.

Bennett established his practice with ScotiaMcLeod in 2010 after spending several years as an associate, during which he learned the importance of marketing when growing a wealth management business.

“When I was working as an associate, each month we would look at the revenue numbers, and if we had an exceptional month, we would continue to reinvest in our brand and creating awareness of what we could offer to clients,” he says. “That continues to be my approach today.”

When he started the practice, Bennett poured resources into marketing initiatives like seminars and cold calling. When he first moved to ScotiaMcLeod, he still needed to tap external specialists to create a fullservice offering. But that changed five years ago when the firm decided to do away with silos and create a more collaborative, holistic offering, formally launching Scotia Wealth Management.

“What drew me to ScotiaMcLeod was all of the support they offered,” Bennett says.

“Here were the people to help you; here was everything you need to build your business the way you want. When they made the switch, it just unified the team process into one that is quite seamless for our clients.”

Now, in addition to a senior associate, Bennett has an estate and trust consultant, insurance expert, financial planner, and private banking director as part of his team.

“It makes things so much easier,” he says.

“Having conversations with new clients and being able to put them in the hands of a professional who can create their financial plan, help with trust and estate planning, and then report back to me ensures each client can have the entirety of their wealth management needs delivered in one place by one team. I think it really has been the reason we have been able to grow the way we have.”

Bennett’s team works primarily with business owners and professionals who tend to

have complex structures in place and who are mainly dealing with pools of capital in non-registered accounts. Because of that, his approach stresses that it isn’t what you make, but what you keep. That has also led to a focus on tax planning and structuring.

“We have found that leading with a tax-first point of view tends to get interest from our clients,” Bennett says. “When we look at a portfolio, there may be good returns, but if the client is in a high tax bracket, we look at how we can structure them to potentially move into a lower bracket, avoid punishing clawbacks and reduce overall tax liabilities where we can. When we do that, it tends to

to boosting client engagement. That has taken him from holding multiple seminars a year to focusing more on the client experience, which has led to a series of events he calls the Enriched Thinking Series.

“It is a series of talks on all subjects, not necessarily investment-related,” he says. “We bring clients out with their friends and family.

We feel that they may have been to more than their share of investment presentations; however, this is another way to get in front of folks and offer a unique shared experience.”

At a recent event hosted at a local Tesla dealership, Bennett brought in an expert to talk about the history of artificial intelli-

“I just started to have real conversations with people. I realized managing behaviour is a better strategy to achieve better outcomes, instead of selling a product to someone” Eric Bennett, Scotia Wealth Management create a positive emotional response. We find that people are very open to strategies to avoid paying unnecessary taxes.”

While that tax focus is one element that has made Bennett and his team successful, another is their attention to the behavioural side of finance.

“Early on, I realized I wasn’t great at picking stocks or individual fund managers,” Bennett says. “I can remember starting out with a pitch book to sell to potential clients. I soon realized it’s not much use if you don’t know anything about them in the first place. That’s when I just started to have real conversations with people. I realized managing behaviour is a better strategy to achieve better outcomes, instead of selling a product to someone.”

In the last decade, Bennett has also shifted his business focus from building a client base

gence. After the talk, he and his clients got to test some of the cars. Bennett’s efforts have clearly paid off: He was one of the top 20 fastest-growing advisors across Canada within Scotia Wealth Management last year, and he has been nominated for multiple industry awards.

Moving forward, Bennett says his goal is for his team to focus more on the financial planning side of the business to create plans that are updated in real time, 24/7. For now, though, like many other advisors, he’s just looking to confront the challenges the world has seen in the last few months.

“We are not here to defend an old map; we are here to be the guides in a changing landscape and provide the best tools for clients,” Bennett says. “Having access to the people we do during these unforeseen times is extremely valuable.”

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NOUR PRIVATE WEALTH

Locations: Oakville and Toronto, ON; PointeClaire and Montreal, QC Year established: 2018 Employees: 80 AUM: $500 million+ Target clients: Varies by advisor

It took time and required overcoming numerous challenges, but Elie Nour, founder and CEO of Nour Private Wealth (NPW), achieved his dream of creating his own independent firm in 2018. Since then, he’s been expanding his locations and services and is poised to grow even further as he looks to offer more to clients.

“When we started in 2018, we saw the strengths and the weaknesses of our business,” Nour says. “Our focus was on building a strong compliance environment. We recognized that a robust compliance structure is the backbone

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of any successful company in this industry.

We also made sure that we continue investing in our infrastructure by always looking years ahead into the future to determine what clients and advisors alike will need.”

Nour sought to establish a solid foundation before adding more advisors to his team.

He started by building a stronger compliance team, then hired a business development manager and a chief operating officer as he expanded the business. Now NPW has 80 employees in four offices spread across Ontario and Quebec; the newest office, in Montreal, opened in October 2019. Nour also recently added a marketing team to help share his company’s success story and value proposition to attract new advisors who are looking for more independence and recognize the value of a technologically advanced firm.

That investment has paid off: Nour says NPW has received considerable interest from

advisors who are looking for a more advisorcentric firm that will allow them to offer more to their clients.

“Transition is never easy for people in this industry,” Nour says. “Our experienced team helps onboard new advisors and sets timelines and expectations for the process from start to finish while maximizing client retention and with minimal disruption. We focus on helping advisors grow their practice by providing them a wide range of investment tools and services that they can offer their clients. We also offer them the support they need to distinguish themselves and show their true value to clients. We have monthly meetings with advisors and weekly meetings with associates to discuss market conditions, portfolio adjustments, tax strategies, new investment opportunities and overall business planning.”

Nour is a big believer in continuing education, which is why NPW has created an incen-

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tive program to encourage all employees to further their own knowledge.

“It’s a big responsibility to manage people’s money, and advisors have a responsibility to go beyond their clients’ expectations and become the best in their field,” Nour says. “They need to educate themselves on a regular basis to demonstrate that they have the knowledge and skills to manage wealth with high-level investment strategies and to examine their clients’ entire financial picture at the highest level of complexity. The program we have created supports advisors’ and associates’ continuing education by helping them get reimbursed for any course successfully completed through the CSI, FP Canada and other associations for investment professionals. My opinion is that advisors with a higher education prove their dedication to a higher professional standard and add credibility in the eyes of clients, peers and the regulators.”

Nour adds that it’s vital for advisors to listen to clients and understand their financial goals and needs. “We allocate a good amount of time to collecting information and analyzing clients’ situations while focusing on the human aspect: dreams, goals and expectations,” he says, adding that his team is conservative and disciplined when managing wealth, which mirrors the company’s philosophy and operations.

One recent initiative Nour is especially proud of is NPW’s ability to offer alternative investments to clients. “We started our due diligence on this asset class not long after we launched, but we officially approved it for advisors’ use earlier this year,” he says. “Most of the industry has been focused on public securities. Studies have proven that alternative investments can increase diversification and reduce volatility, given low correlations to more traditional investments. They can also offer the potential for enhanced returns due to the wider investment opportunity set.”

Alternative offerings are just one of the benefits Nour has been able bring to his clients since going independent. Another is NPW’s ability to invest in 19 different curren-

cies. “We are not restricted to only the North American markets,” Nour says. “Our advisors have access to trade on 28 different stock markets worldwide.”

Nour has also dealt with plenty of challenges along the way. Aside from COVID-19, he says the main ones his team faces today are staying on top of compliance requirements and avoiding cybersecurity issues.

“Three years ago, cybersecurity was not an item on our agenda,” he says. “Today, cybersecurity threats pose significant risks to financial firms, investors and the markets. As we increasingly rely on technology to collect, store and manage our data, we recognize the need to have guidelines and provisions for preserving the security of the firm’s information. For this reason, NPW has put in place a series of security controls and risk management techniques and designed a policy that establishes mandatory conduct from all parties involved in the company’s operations.”

Moving forward, Nour has three primary goals. First, he hopes to have a discretionary trading platform up and running by the end of the year. Second, and perhaps most boldly, he’s in the process of setting up a presence in Dubai, which he believes would be a first for a Canadian firm.

“It is uncommon for Canadian firms to operate outside North America,” he says, “but there is a large concentration of wealth in the UAE and a lot of Canadians working mainly in Dubai who would be more comfortable trusting the management of their wealth to a Canadian company.”

Finally, NPW plans to obtain US registration to better serve its clients with dual citizenship and/or interests south of the border. “Given the increasing number of work and retirement-related mobility cases in North America, demand for specialized crossborder financial advice, including immigration, tax, estate and investment planning, is growing,” Nour says.

Given all the initiatives in the pipeline, there’s no doubt that the NPW team is poised for more success as it continues to grow.

“It’s a big responsibility to manage people’s money, and advisors have a responsibility to go beyond their clients’ expectations and become the best in their field. They need to educate themselves on a regular basis” Elie Nour, Nour Private Wealth

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DEKKER HEWETT GROUP “As clients have demanded more, it was becoming more taxing on our industry to keep up with what they need.

The only way we could provide everything to clients was by having a team-based practice” Erik Dekker, Dekker Hewett Group

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Firm: Canaccord Genuity Location: Vancouver, BC Year established: 2007 Employees: 6 AUM: $700 million Target clients: Those who focus on wealth management, not trading

Erik Dekker and Mark Hewett, portfolio managers and SVPs of the Dekker Hewett Group, have both been with Canaccord Genuity for their entire careers. After breaking into the industry in the late ’90s, the two began working together and officially joined forces in 2007. By creating a team-based practice, they have been able to take care of all aspects of their clients’ wealth management, something both partners say would have been impossible on their own.

“It’s a lot easier for us to serve our clients having a team-based practice,” Dekker says.

“We started with Mark and I, and it has grown from there. One of the big reasons for creating a team and having that team atmosphere is so clients can benefit.”

Dekker and Hewett decided to merge their practices when they noticed that the wealth management business was changing and clients were demanding more. Now they view themselves as their clients’ CFO, able to answer questions about anything related to their finances.

“As clients have demanded more, it has become more taxing on our industry to keep up with what they need,” Dekker says. “The only way we could provide everything to clients was having a team-based practice. It started with a merger between Mark and I and an assistant. Then we added more two assistants, a marketing manager to make sure clients get their info on a regular basis, an investment specialist and then an associate advisor who can talk to clients when we are busy.”

This all-encompassing approach is something the pair takes pride in. They don’t attempt to know everything individually; instead, they rely on specialists to delve into different areas of the financial industry, including insurance, financial planning, estate planning and philanthropic activities.

“When you can bring all of the specialists together and offer that level of service to clients, you have a pretty amazing practice because you give people what they need,” Dekker says.

One element that makes the team unique is its attention to client communication. “One of the things we built our team on is making sure we have a well-defined communication schedule with every client, driven by what the client wants,” Hewett says. “We sit down with them in the beginning and find out everything about their situation, including how much they want to hear from us. We have an in-depth knowledge of who our clients are and what they want.”

“That regular communication is key because their lives are fluid and dynamic,” Dekker adds. “Regular communication is important because people die, get inheritance and lose jobs. If we don’t know what’s going on, we can’t service them to the level we would like. We also pride ourselves on the fact that when clients call our office, they don’t get voicemail.”

While the financial industry has changed a great deal since the Dekker Hewett Group was established 13 years ago, Dekker and Hewett say their vision has not. They still aim to make sure their clients are well looked after and have everything they need.

“The surrounding financial market has changed and made us make little tweaks, but our big-picture vision has never had to change,” Hewett says. “The online aspect and the regulatory environment have changed, different fee structures have come down, and the industry has gone from more trans-

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actional to more fee-based, but ultimately our vision is the same.”

One reason they’ve been able to maintain their vision, Dekker and Hewett say, is because of the support they’ve received from Canaccord. “They give us the independence to manage our clients as we see fit, as long as we are compliant,” Hewett says. “We are also not tied to structured products. Canaccord does have a couple small proprietary things, but there is no pressure to use them. They have always given us what we feel are the best tools in the business.”

Those tools have helped the team manage various challenges, including the transfer of wealth from older clients to the next generation, as well as managing personalities and emotions.

“People are all different, so when you talk about wealth transfer from a parent to a child, you are dealing with two personalities who may have different thoughts for those funds,” Dekker says. “Communicating and meeting new people is very important, and making sure both parties understand where things are going.”

Dekker and Hewett see themselves remaining in the industry for another 10 to 15 years, and they are committed to their vision of growing a team that looks after all of their clients’ needs.

“At some point, the business will transition to younger advisors,” Hewett says. “But at this point, the goal is to continue to build a solid business within Canaccord that people can be proud to be part of.”

“The surrounding financial market has changed and made us make little tweaks, but our big-picture vision has never had to change” Mark Hewett, Dekker Hewett Group

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O’CONNOR ENGELBERT INVESTMENT GROUP

Firm: Richardson GMP Location: Vancouver, BC Year established: 2009 Employees: 5 AUM: $500 million Target clients: Current or former entrepreneurs, complex financial situations, high- and ultra-high-net-worth individuals

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Since 2009, the O’Connor Engelbert Investment Group has been tackling the complex issues of high- and ultra-high-networth clients. The team is the result of a partnership between Rory O’Connor and Tim Engelbert that combines their areas of expertise to provide the strategies and solutions needed to help this segment of clients.

The two teamed up in 2009, bringing together their extensive experience in the industry. O’Connor began his career with

Merrill Lynch in the late ’90s, where he learned how to build a practice and the notion of his team’s current niche was born.

“A big part of what I learned early on was more clients isn’t always better,” O’Connor says.

“You want the right kind of clients for a couple reasons. First, if you stick to principles, you end up with a business that is more scalable and enjoyable. The second factor is if you want to add value to clients, you need the time to do so.”

That’s why O’Connor decided to focus on

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high-net-worth entrepreneurs who have a level of complexity to their finances. “It’s not easy to grow that type of business because there are less of those households in Canada,” he says. “If you do it right, it means you have fewer clients, but they have more invested assets. You get to know your clients better and add more value.”

Engelbert, a Vancouver native, was working for Citibank in London during the financial crisis. With a background in risk management and investing capital on behalf of the bank, he had a different approach than O’Connor. But when Engelbert decided to return to Vancouver, a mutual friend put the two in touch, and they realized their skill sets were a perfect complement to each other.

“Tim has a different skill set that fit well with my background on the structural and wealth management side,” O’Connor says.

“I understand the complicated things like trusts and corporations, and pairing that with someone like Tim, who is sound on the risk management and portfolio analytic side, has been really powerful.”

O’Connor and Engelbert have built their approach around prudent risk management and thoughtful capital allocation. However, O’Connor notes that because of the wealth they’re dealing with, they often must think differently than other advisors.

“What we try to do is think like a pension plan or endowment,” he says. “Knowing this is more wealth than clients will need for their lifetime, it tends to be viewed as intergenerational and lends itself to a longer time horizon.

We can take an approach that mirrors that of institutional asset managers with exposure to real estate and different asset classes to build resilient portfolios. Luckily, at Richardson GMP, our flexibility to design portfolios like that is quite robust.”

That institutional approach is something O’Connor feels sets the team apart. “You can’t compete in this market if you’re going to tell clients you’re buying government bonds and owning the TSX 60 – that doesn’t cut it; it’s too simplistic. The institutional approach is a differentiator, but it has taken many years to

get to this stage and to do it effectively.”

One of the benefits that has come out of working with high-net-worth individuals is access to their clients’ large networks, which means O’Connor and Engelbert are routinely introduced to others who might have investment opportunities.

When it comes to handling complex financial matters, O’Connor says the team’s approach is to show what their shared knowledge can bring to a situation. While every client is unique, he says, certain similarities arise within this niche – so while each client’s circumstances must be considered, there’s value in the fact that the team has likely encountered a similar issue in the past.

“There is a lot of shared knowledge, so we can look though a situation and understand how to add value,” he says. “We have seen enough of these cases to understand if a client is on the right track or has missed the mark.”

As for challenges, O’Connor says the biggest concern among clients tends to revolve around the transfer of wealth to the next generation.

“It’s trying to wrap your head around how and when to do it and how to communicate it all,” he says. “It is the biggest area of planning for us, and the hardest part is coaching people through the process of communicating the information to the next generation because it’s not something that comes naturally to everyone. As well, there isn’t a simple ‘one strategy fits all’ approach. Every situation requires a unique approach, and we highly recommend the use of a qualified family facilitator – it can make a world of difference.”

After more than a decade together, the O’Connor Engelbert Investment Group now tries to keep its goals simple. “Our number-one goal is to make sure our existing clients are well serviced, happy and have everything they need – their investments are performing well, and their estate plan is well articulated and communicated,” O’Connor says. “If we don’t lose a client, that is a powerful statement – and what ends up happening is, if we are doing an exceptional job for our clients, they introduce us to other people like them.”

“You can’t compete in this market if you’re going to tell clients you’re buying government bonds and owning the TSX 60 – that doesn’t cut it; it’s too simplistic. The institutional approach is a differentiator, but it has taken many years to get to this stage and to do it effectively” Rory O’Connor, O’Connor Engelbert Investment Group

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SPECIAL PROMOTIONAL FEATURE

TEAMS

A team of experts Reg Jackson and Adam Watson of the JMRD Watson Wealth Management Team tell WP how they’re using a deep bench of talent to deliver holistic service

IT’S ALL well and good to call yourself a holistic advisor, but the number of tasks and range of knowledge that label covers are so varied that providing an integrated service offering as a solo advisor is a nearly impossible task. One firm has taken a different approach to offering comprehensive advice by building a team of experts.

Investment associates assist with managing accounts for children and grandchildren, bringing the whole family on board.

That approach won the JMRD Watson team National Bank Financial’s 2019 Wealth Management Excellence Award, which is given to a team that exemplifies a clientcentred approach. The merger of the two firms

“When JMRD and Watson made the decision to merge, it was the culmination of 20 years of friendship and business partnership” Adam Watson, JMRD Watson Wealth Management Team Up to and through its merger last year, the JMRD Watson Wealth Management Team has focused on delivering complete multigenerational family advice through specialization. This approach starts with the older generation, which has the team’s portfolio managers to look after their investment portfolios. From there, financial, estate and insurance planning experts step in to paint a full picture of the family’s financial needs.

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– JMRD Wealth Management and Watson Wealth Management – has broadened that effort and allowed team members to become experts in their specific areas. But this specialization hasn’t impacted JMRD Watson’s functioning as a cohesive, unified team, even as all team members have begun working remotely during the COVID-19 pandemic.

“To call yourself a full-service advisor, there are probably 100 different things you

should be able to provide,” explains Reg Jackson, co-CEO of JMRD Watson. “There’s no chance a single advisor and their assistant can provide those 100 things well. What we had at JMRD and what the Watson Wealth Management Team had was a very good back office – we could take those 100 areas and divide them out over seven or eight people.

Now, with a team of 18, we can really focus and build expertise.”

JMRD Watson is building that expertise across the team, which was initially spread between four offices in Southwestern Ontario and is now spread further into 18 separate homes. Team members handle the areas where they’ve developed the deepest expertise; the result is a higher quality of service for clients and their families.

Working as a team allows everyone to bring their strengths and abilities to the table.

Since the merger, the JMRD Watson team has been sharing best practices, technology solutions and marketing strategies with one another. Through a dedicated integration team and weekly meetings, they’ve turned the merger into a series of successive wins.

That process didn’t come without challenges, though JMRD Watson prefers to frame them as opportunities. The merger meant they were managing four offices in Toronto, Kitchener-Waterloo, London and Chatham. Moreover, the advisory team stretches across generations, from young advi­ sors in their 30s to veterans in their 60s. The core team at JMRD Watson had to ensure the group felt like a single entity. To do that, they pulled from the cultural similarities between the JMRD and Watson Wealth Management teams that led to the merger in the first place.

“When JMRD and Watson made the decision to merge, it was the culmination of 20 years of friendship and business partnership coming together for what we hope will be the next chapter in our business’s future,” says Adam Watson, portfolio manager at JMRD Watson, former co-manager at Watson and the new Chatham team lead. “We were quite fortunate that our cultures were similar, and

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JMRD WATSON AT A GLANCE Practice: JMRD Watson Wealth Management Team Firm: National Bank Financial Year founded: 2019 Locations: London, Toronto, Waterloo and Chatham Number of team members: 18 Awards: 2019 Wealth Management Excellence Award from National Bank Financial

we were able to set up a schedule for regular meetings with various people in the offices, as well as a few fun events for everyone to get to know each other better.”

That has resulted in a team that, despite its geographic spread, has a high level of trust and open communication. Watson and Jackson recall that in mid-March, when markets were falling, clients were calling and the practice had to suddenly go remote, one of their advisors’ home internet connections went down just as he received a trading order from a client. Using his data plan and the team Slack communication tool, he got three team members ready to execute the order, placed the order over the phone and ensured that his client’s needs were met by another member of the team, exemplifying how the JMRD Watson team operates as a unified whole.

“The coronavirus is one of those black swan events that you just can’t prepare for,” Jackson says. “You can think you have all of your systems and technology and processes in place, and then something comes along that tests everything you’ve been working on for the last months and years. We are so fortunate

“We believe that having a team working together with one common goal is the only way to move forward” Reg Jackson, JMRD Watson Wealth Management Team to have National Bank as our partner, as they have stepped up and made going remote quickly and efficiently a top priority – 18 people in 18 different locations would have been unthinkable only a few years ago, but with the advances in technology over the years, this has become a new normal.”

There was some luck involved, too. Just six months ago, the whole team shifted to laptops and began using tools like Microsoft Teams and Slack, which have become resources they can’t live without. Now that they’re remote, the team holds a daily office video call, a portfolio manager video call and weekly team meetings. They’re even using video conferencing functionality on client calls to help ease the transition for clients at a moment when they need seamless service

and want to stay connected to their advisors.

Through the crisis, the JMRD Watson team hasn’t lost sight of its big-picture goal: better serving clients as a team of experts.

“The size of our team and the people on our team are our greatest assets,” Jackson says. “We have decades of experience, multiple industry and university accreditations, and a range of specialists who like to focus on certain aspects of wealth management, including financial planning, portfolio management and insurance. We believe that having a team working together with one common goal is the only way to move forward.”

National Bank Financial - Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

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1/05/2020 4:38:40 AM

SPECIAL PROMOTIONAL FEATURE

FINANCIAL PLANNING

A partner in changing times Leaders at Manulife Investment Management tell WP how they’re helping advisors demonstrate value in a changing industry

MANULIFE Investment Management understands that the advisory business sits at an inflection point. The firm’s tax and investment specialists meet with advisors on a regular basis, seeking to identify their pain points and offer services that can best help them demonstrate their value. They see an industry in flux and a need among advisors to move toward a value proposition built on smart asset allocation in tandem with tax and estate planning.

John Natale, Manulife Investment Management’s head of tax, retirement and estate planning services, and Philip Petursson, chief investment strategist and head of capital markets research, explain that the firm supports advisors by showing them how to demonstrate value in rapidly changing times. The first step is taking the time to listen to advisors.

“I think people are really focused on the markets and volatility right now,” Natale says. “In addition, advisors are facing product commoditization and fee compression. By providing advice and tax, retirement, and estate planning ideas and strategies to the client, advisors can distinguish themselves and significantly strengthen

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their value proposition.”

Natale and Petursson preach that gospel through teams that speak to advisors every day. Manulife Investment Management’s core team of lawyers, accountants and tax professionals travels across the country, meeting with advisors, consulting with them and supporting their efforts to guide their investments and strengthen their tax and

“There are two very important aspects to investing: how much you earn and how much you keep,” Petursson explains. “I deal with earning, and John covers saving. I don’t think you can just focus on one without the other. At the end of the day, regardless of your portfolio’s performance, if you’re not structured properly, if you haven’t taken advantage of the opportunities within your

“There are two very important aspects to investing: how much you earn and how much you keep … I don’t think you can just focus on one without the other” Philip Petursson, Manulife Investment Management estate planning acumen. They answer thousands of questions from advisors every year about the particulars of tax and estate planning. They provide case-by-case consultation services and give educational presentations to advisory teams, offices and conferences.

Petursson even hosts a biweekly podcast, Investments Unplugged.

various accounts, the tax implications might be that you don’t keep as much as you could.”

The team also advocates for sensible asset allocation. Since last June, they’ve taken an underweight position in equities, which has helped advisors and their clients in the recent coronavirus selloff.

Manulife Investment Management

doesn’t just speak to advisors – the firm also collects information from the end client to get a complete picture of Canadians’ investment, tax and estate planning needs that is communicated back to advisors so they can build the client’s holistic financial plan together. In Manulife Investment Management, advisors get a partner with the resources, knowledge and professionalism to help build long-lasting plans for clients.

One of the firm’s key goals is managing behaviour, with the understanding that weak portfolio performance is more often a result of irrational human decisions than market performance. The team studies behavioural economics to understand the challenges advisors face during volatile times. Just as they try to add rationality to market decisions, the team has built out tools to take the emotion out of both asset allocation and estate and tax planning.

Natale cites the example of estate planning, where a client might be concerned about giving an inheritance to their child, worried they’ ll spend it unwisely. He

espouses the annuity settlement option, which designates the inheritance received in the form of an annuity, delivering guaranteed instalment payments rather than a lump sum. In a potentially contentious inheritance situation, the Manulife Investment Management team advocates for segregated funds, a key investment tool that can protect a segmented inheritance from the public eye, or even other family members if necessary.

“What we’re trying to do is preach discipline – discipline in terms of asset allocation, discipline in terms of how we make decisions, how advisors should make decisions based on fundamentals, not the latest panic in the news,” Petursson says. “If you stick with discipline to the process, when the markets are down, you’re going to suffer some downside, but not nearly as much because discipline guided you to the right decisions.”

In the end, Manulife Investment Management’s tools are there to help advisors who are juggling a lot right now.

Between finding new money, retaining

clients, managing portfolios in a trying market and justifying fees, advisors can often feel like they’re spinning plates. Natale thinks advisors manage the big-picture stuff well, but their jobs now include a range of details that, if overlooked, could make or break an advisor’s strategy. He says Manulife Investment Management’s job is to help take care of those details.

“One of my biggest sources of happiness is demonstrating the potential value that we can bring to advisors and their clients,” Natale says. “Our goal here is to help individuals with their tax, estate and retirement planning goals, and we see the advisor as the key to that. Advisors have the clients’ best interests at heart, and I think they pick up on our tax and estate planning advice really quickly. We’re able to impart that to advisors in a way that they can not only understand it, but they can then explain it to their clients so that they can understand it. And I think that’s very rewarding for them and for their clients’ end goals, too. It just breeds more success.”

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PEOPLE

ADVISOR PROFILE

A global perspective Victor Medina-Leal’s international education and background have given him a wider view that continues to inform his professional relationships

AS A FINANCIAL advisor with Raymond James, Victor Medina-Leal currently works out of Toronto. But getting there has taken him all over the world and through some unique fields, which has given him not only a global perspective on wealth management, but also a strong sense of professionalism that has led him to become a trusted advisor to his clients.

Born and raised in Peru, MedinaLeal attended university in Canada and Switzerland, where he studied mathematics before moving on to philosophy. He did postgraduate studies in political science, international relations and economics, which helped him develop his global, multidisciplinary perspective.

“My education and experiences trained me to look at everything from a critical perspective and with a healthy sense of skepticism,” he says. “It led me to question the prevailing ways of doing things when I joined the profession in 2004. I was attracted to a new paradigm based on the academic theory and empirical research that was flourishing in those days – Modern Portfolio Theory and subsequent developments – and away from the guesswork that was at the heart of the dominant approach: the notion that fund managers could add value through stock selection and market timing.”

Rethinking the way things had been done became a core part of Medina-Leal’s practice.

“I think it’s important that my clients benefit

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from the investment opportunities that are available overseas, and that’s why the investment portfolios I run are global in architecture,” he says. “By contrast, Canadians as a group hold about 65% of their investments domestically, even though Canada is only about 4% of the world capital markets.”

Throughout his career, Medina-Leal has observed numerous changes to wealth management that he feels have benefited Canadians, including the emergence of ETFs. Yet he still feels that the way wealth management is run in Canada doesn’t give investors enough access to all opportunities.

“Canadians now have access to investment vehicles that are far superior to the expensive, underperforming mutual funds that were all they or their parents could invest in,” he says. “This is real progress, but unfortunately, not enough Canadians are given the opportunity to benefit from these developments. There is still too much of the old-school way of thinking and self-interest

in the industry.”

While opening up all available investment opportunities is one challenge, the greatest obstacle Medina-Leal sees for advisors is earning the trust of their clients.

“To me, that means trust in our professional competence and trust in our professional integrity,” he says. “The qualification standards for our profession could be much higher, and it would certainly enhance our standing. There are still far too many areas of potential conflicts of interest and a lack of transparency in our profession. I think that is largely a systemic problem of the industry that the regulators are not addressing fast enough.”

In 2009, Medina-Leal became part of Raymond James, as he believed the firm’s values and structure were well aligned with his own. “For me, it’s very important that I’m not expected in any way, not even through incentives of one kind or another, to recommend in-house investment solutions that

A TRUE PROFESSIONAL Victor Medina-Leal says being regarded as a professional by his clients is one of the highlights of his career. “I had a vision for myself when I went into wealth management that I wasn’t going to be a commissioned salesperson; that never interested me,” he says. “I was going to be a knowledgeable and competent advisor and consultant to my clients – their financial steward, so to speak, who worked for my clients for clearly disclosed fees. I wanted my clients to think of me as that. I think I have largely met those goals. I am especially proud that I have never compromised my principles or intellectual integrity and have always put clients at the centre of our relationship.”

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FAST FACTS: VICTOR MEDINA-LEAL

FIRM Raymond James

LOCATION Toronto

“I think it’s important that my clients benefit from the investment opportunities that are available overseas, and that’s why the investment portfolios I run are global in architecture” may not necessarily be the best options for my clients,” he says. “I think my clients value my independence as much as I do and that ultimately I work for them.”

Now, with an older client base, MedinaLeal sees his next challenge and goal as helping his clients make a successful transition to retirement.

“It’s one thing to manage portfolios for growth and accumulation; it’s another to manage portfolios designed to generate

steady income streams that will last for a lifetime,” he says. “There are a lot of variables that need to be taken into account when you are managing a retirement portfolio that are not as important in the accumulation stage.

The framework of analysis is completely different, and the math is more complicated.

It means that advisors need to learn a new set of analytical tools and competencies if they are to help their clients make the transition to retirement successfully.”

YEARS AS AN ADVISOR 15

CERTIFICATIONS CIM, FMA, CFP, options and insurance licences

EDUCATION Honours degree in philosophy from the University of Victoria and a master’s degree in political science from the University of Toronto, along with graduate studies in international relations at the Graduate Institute of International Studies in Geneva, Switzerland

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1/05/2020 4:39:41 AM

SPECIAL PROMOTIONAL FEATURE

GLOBAL INVESTING

A shift in global leadership Forstrong president and CIO Tyler Mordy tells WP how the coronavirus pandemic has accelerated a trend he’s witnessed for a long time: a change in the world’s perception of Asia

THE EARLY movers in the coronavirus crisis appear to be cementing their place as global economic leaders and some of the best prospects for investors right now, according to Forstrong Global Asset Management president and CIO Tyler Mordy.

Mordy says the coronavirus pandemic has highlighted an outlook Forstrong’s investment team has held for a long time: that the best investment value sits in East Asia, and therefore modern portfolios need to include exposure to the region. Though Mordy is well

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aware the crisis isn’t over yet, he thinks the handling of the pandemic in countries like China, South Korea, Taiwan and Singapore has set the stage for a quicker economic rebound in those countries, as well as the formation of a more robust economic region capable of sustaining much of its own growth.

“We’ve been Eastern Asian bulls for some time,” Mordy says. “But the interesting thing through this is that typically when you have a crisis, you’d see Asian assets under­perform and with greater volatility. What’s now

happening is China’s stock, bond and currency markets have all outperformed with lower volatility than the rest of the world. We’ve always forecasted that the safe-haven label would start shifting towards those countries that haven’t embraced massive and unconventional monetary and fiscal responses. So when investors think about a post-virus world, we think emerging Asia will come out the other side looking very good.”

Mordy attributes that prediction to two key factors. The first is how well countries like China and South Korea seem to have managed the coronavirus outbreak. The second is the way these countries have responded on the monetary side, treating the coronavirus as an immediate liquidity shock, rather than the onset of a new depression. Interest rates remain higher in Eastern Asia, where central banks have more bullets in their guns than Western developed economies, which have exploded debt and risked inflationary pressures through stimulus.

Mordy believes that while government and corporate institutions in China, South Korea and much of the region have been strengthened by the crisis, Western institutions have been moving in the wrong direction. A collective crisis of this kind should have been bread and butter for the EU, a supranational institution supposedly better equipped to deal with common problems, he says. Instead, the EU has so far seen political bickering, mixed responses and a more

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severe outbreak than in Asia.

Mordy explains that the crisis is writing an important macro story: The performance of Eastern Asian countries in combating the virus, coupled with the outperformance of some Eastern Asian assets, will “chip away at the outdated stereotypes” that many investors hold about the region. Mordy thinks investors will have to ask themselves if the asset outperformance has any reason not to continue.

Even before the outbreak, Mordy and Forstrong were long on China and Eastern Asia and underweight US equities, based on a price relative to expectations calculus. Mordy sees US equities as the most expensive global market, without as much room to appreciate as other markets. At the same time, he sees China, South Korea and much of the rest of Eastern Asia as deeply undervalued and far more likely to deliver larger returns from upside surprises.

“When expectations are so low, positive surprises that re-rate assets higher become much easier to deliver on,” he explains.

Inherent in that calculus, too, is the fact that the US economy represents about 26% of global GDP, but US markets comprise 56% of global market capitalization, as measured by the MSCI All-Country World Index at the end of 2019. Meanwhile, the entire universe of emerging markets only accounts for about 12% of global market capitalization, yet these countries are growing much faster than the US. “Trump taking a wrecking ball to the postwar order – Bretton Woods institutions, free trade and all those staples of postwar stability – chips away at the perception of the US as a stable country to put your capital in,” Mordy says. “I’m not saying that the US is going to lose its leadership role completely – this is a trend that will be measured in several years. But markets work at the margin, and all you need is a decrease in perceptions at the margin.”

Mordy thinks the idea of a V-shaped recovery, which has been bandied about since the crash began, is beginning to happen in China and Eastern Asia. He believes this

AN EYE ON CHINA’S PERFORMANCE As the coronavirus crisis has escalated across the globe, the CSI 300 Index, which tracks stocks in Mainland China, has outperformed the broader MSCI World Index.

CSI 300 Index versus MSCI World Index

30% 25% 20% 15% 10% 5% 0% -5% -10% -15%

January 2020

February 2020

March 2020 Sources: Macrobond, Bloomberg, MSCI, Forstrong Global Asset Management

“I think the post-virus world will be very kind to assets from those countries that have managed it quite well” Tyler Mordy, Forstrong Global Asset Management nascent recovery is disproving some of the critiques about the region’s ability to rebound independently without resurgent consumer confidence in Western developed economies to drive demand. Mordy notes that since 2011, China has transitioned away from heavy industry toward service production and has developed a massive consumer sector.

In addition, although corporate debt levels are high in China, private debt levels are low, and savings rates are high. That, coupled with the wider diversity of development in the region – from South Korea’s huge hightech consumer market to Vietnam’s booming industrial output – makes Eastern Asia a self-sustaining growth region with China as the keystone.

Mordy says the takeaway for advisors is diversification. A longtime advocate of

globally diversified portfolios, Mordy says that when advisors talk to their clients about the market carnage, they should begin discussing greater exposure to Eastern Asian equity markets like China and South Korea, which are priced for growth. On the income side, too, he believes debt from those emerging markets can help supply income when Western bond markets are priced for the end of the world.

Ultimately, Mordy says, Eastern Asian economies are writing a new chapter in the story of their emergence as a result of the outbreak. This chapter will change their macro perception from a risky place to invest to a region that can handle even the most unprecedented shocks.

“I think the post-virus world will be very kind to assets from those countries that have managed it quite well,” Mordy says.

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SPECIAL PROMOTIONAL FEATURE

TECH SECTOR

The social distancing tech winners The leaders of Harvest Portfolios tell WP why some tech stocks have boomed despite the recent market crash and how investors can capitalize on social distancing WHILE THE S&P 500 lost around 30% of its value in March, video conferencing company Zoom saw its stock value rise by 101%. Though Zoom’s share price has readjusted somewhat since that initial boom, the tech company is clearly reaping the benefits of allowing businesses, universities and even families to keep functioning during a time of social distancing.

But which of the tech companies supporting a more remote, socially distant world could prove to be long-term growth leaders? For Harvest Portfolios’ investment

at companies like Zoom or DocuSign, there’s been a long-term shift towards flexible work arrangements. But obviously with COVID-19, it’s really accelerated this shift in a very short period. Companies like Zoom and DocuSign, whose main value proposition is trying to facilitate remote collaboration, are likely to see a pretty dramatic benefit, at least in the short term. They see a large influx of new users and add existing users who begin using it on a wider scale. The key question is really, for any of these story stocks, how sustainable

“When, like now, there’s a systemic shock that’s hitting everything, people start looking for those ‘story stocks’ – companies that might provide kind of a port in the storm” James Learmonth, Harvest Portfolios team, the key is to look for sustainable investments that have clear advantages beyond the ‘story stocks.’

“When, like now, there’s a systemic shock that’s hitting everything, people start looking for those ‘story stocks’ – companies that might provide kind of a port in the storm,” explains portfolio manager James Learmonth, who is responsible for the Harvest Tech Achievers Growth & Income ETF (HTA). “When we look

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is this boost going to be in the longer term?”

The Harvest investment team sees the potential for companies that enable workplace efficiencies to deliver long-term, as it appears the coronavirus outbreak has only accelerated a wider shift toward remote and flexible workplaces. They’re aware, though, that stories can create bubbles for select stocks and that those values will correct as stories subside, as witnessed with Zoom’s significant increase

in volatility. Harvest’s focus is the same as it has always been: investing in high-quality companies and delivering income to investors.

“Harvest’s investment philosophy is centred around finding opportunities in areas that are poised to benefit from strong long-term dynamics,” says Harvest president and CEO Michael Kovacs. “Focusing on the dominant companies in these areas, with strong fundamentals and trading at reasonable valuations, helps to avoid the temptation of chasing shortterm ‘story stocks.’ Within technology specifically, this involves analysis of sustained sales and earnings growth, return on equity, strong cash flows, balance sheets, and growth-adjusted financial ratios, among other metrics.”

Class A units of Harvest’s HTA fund were down around 21% from February 20 to the end of March, the same as the market-capweighted S&P 500 tech sector; however, the equal-weighted S&P 500 tech sector was down around 24%. Learmonth explains that Harvest’s focus on larger-cap companies and a diversified basket of equally weighted tech stocks positions its funds for a recovery after significant declines in the market. More crucial for investors, though, is that fact that Harvest’s covered call strategy is paying out income.

Learmonth explains that HTA employs an active covered call strategy, reconstituted on a quarterly basis with 20 equally weighted large-cap tech names. Over the past few months, as the coronavirus started

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US TECH SECTOR MULTIPLES LARGER THAN ENTIRE TSX $6trn $5trn

MARKET CAP

$5.374 trillion

$4trn $3trn

~4x larger

$2trn

$1.396 trillion

$1trn

spread outside of China, Harvest has been writing call options at more aggressive levels, selling call options at levels well above what’s needed to meet the company’s distribution requirements.

At the same time, HTA is set up to benefit from the long-term shift to cloud-based

bigger customers are the streaming services we’re all leaning on for entertainment during social distancing.

“The tech sector has led for most of this cycle,” explains Harvest CIO Paul MacDonald. “In this correction, that leadership has been muted, but as we enter a new

“Focusing on the dominant companies, with strong fundamentals and trading at reasonable valuations, helps to avoid the temptation of chasing short-term ‘story stocks’” Michael Kovacs, Harvest Portfolios infrastructure that the Harvest team has observed. HTA is invested in companies that focus on software as a service models, such as Microsoft, Adobe and Salesforce, as well as companies like Intel and Cisco that will benefit from increased spending on data centres. They’re also looking at hidden gems like Akamai Technologies, which provides solutions to streamline high-quantity and -quality data transfers. Some of Akamai’s

normal, I don’t think there’s any question that technology will play an equivalent, if not more important, role in our day-to-day lives.

I think as the bottom is found in the market, tech will resume that leadership.”

As they look for that bottom, the Harvest investment team is keeping an eye on one set of numbers above any other: the infection, recovery and death rates of COVID-19.

They understand that an economy and stock

$0

S&P 500 Information Technology

S&P/TSX Composite Index

market defined by a health crisis will only recover when that crisis abates.

MacDonald explains that Harvest prides itself on operational agility and has been able to quickly make its investment management teams remote and ready to take advantage of any opportunities they see as the situation evolves. While Harvest’s covered call strategy is benefiting from market volatility, it requires a dedicated team executing and monitoring it on a regular basis. Today, the team is positioned to keep doing exactly that: using volatility to deliver income.

Overall, MacDonald and Learmonth feel their strategy of picking long-term winners and generating income through covered calls is best suited for this era of high volatility.

“We’re in the heat of the moment now, but we have confidence in the companies within all of our portfolios,” MacDonald says.

“The way we’ve established our mandate is to really own best-in-class, high-quality companies. We’re comfortable with how we are positioned in this challenging environment, and the fund is poised to benefit as the markets stabilize.”

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SPECIAL PROMOTIONAL FEATURE

HEALTHCARE INVESTING

Changing of the guard Middlefield president and CIO Dean Orrico and Dr. Richard Evans of SSR Health tell WP why healthcare investing needs a targeted approach in the coronavirus era THE COVID-19 pandemic has brought attention to healthcare investments and the importance of the sector to social welfare and economic prosperity. Healthcare looks ripe for investment as hospital infrastructure and pharmaceutical testing begin to ramp up.

But while healthcare is an attractive growth opportunity, it’s also a complex industry where not all investments are created equal.

In a broadcast call, Middlefield’s CIO and president, Dean Orrico, spoke with Dr. Richard Evans, the founder of independent research firm SSR Health, which serves as

“Before the coronavirus, you had a mix of elective and emergency procedures. Those elective procedures have just been washed out of the system.”

Among the companies to avoid, according to Evans, are those supplying orthopaedic and dental technologies, as they largely meet a demand for elective procedures that are being deferred, particularly as laid-off workers in the US lose their healthcare coverage.

Bio-pharma seems safer, Evans said, though he noted that investors need to be selective in this market segment. Large-cap

“I think the best way to frame the coronavirus impact is just as an enormous shift in the demand for healthcare” Dr. Richard Evans, SSR Health an exclusive industry advisor to Middlefield’s three healthcare-focused investment strategies. Both Orrico and Evans stressed that active management, guided by dedicated experts, is essential for navigating the complicated healthcare industry, where sub-sectors have been uniquely affected by the COVID-19 pandemic. For example, med tech (equipment, tools, etc.) will face headwinds as demand shifts from lucrative elective procedures to emergency care.

“I think the best way to frame the coronavirus impact is just as an enormous shift in the demand for healthcare,” Evans said.

44

pharmaceuticals have short-term cash safety nets, but they will see revenue slowdowns as people avoid doctor’s offices. Moreover, pharma companies with significant sales in indebted, pandemic-impacted countries are likely to see drug price discounts imposed by governments and fewer medications prescribed. In addition, clinical trials for anything unrelated to COVID-19 are likely to grind to a halt.

The nuances in bio-pharma alone confirm the need for skilled stock selection by a professional manager, Evans said, adding that inves­ tors should hold well-positioned bio-pharma

THE MIDDLEFIELD GLOBAL HEALTHCARE DIVIDEND FUND’S TOP 10 HOLDINGS Abbott Labs Bristol-Myers Squibb CSL Danaher Corp.

Gilead Sciences Johnson & Johnson Regeneron Pharmaceuticals Roche Holding Thermo Fisher Scientific Vertex Pharmaceuticals Source: Middlefield Group

companies with superior product flow and innovation, some of which have promising antivirals being tested to fight COVID-19.

“I’m really quite heartened by the intensity and scope of the effort being put into therapeutics and vaccines,” he said.

Middlefield’s healthcare strategies have weathered the recent market volatility well.

After witnessing strong performance in its healthcare funds in 2019, Middlefield saw the impact of the coronavirus early. The firm emphasized capital preservation at the start of 2020, finding shelter in income-producing healthcare companies with liquidity to navigate growing uncertainty. In early April, US equities were down between 15% and 20% from December 31, and Canadian equities were down around 20%. During the same period, Middlefield’s healthcare strategies were only down 7% or 8%, which Orrico attributes to the funds’ active management.

“It’s our job at Middlefield, together with the ongoing input we get from Richard and his team, to generate positive performance by those proper asset management decisions,” he said.

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WEALTH PROFESSIONAL AWARDS FINALISTS 2O20

September 30, 2020 • Toronto The 6th annual Wealth Professional Awards are coming later this year.

WP presents the group of stellar finalists vying for the big prizes

On September 30, Canada’s wealth management industry will gather to celebrate the country’s leading wealth professionals, advisors, fund providers and service providers and the outstanding achievements that have redefined success in the industry over the past year.

As ever, it was a fantastic year for nominations. Wealth Professional was taken aback by the sheer quality and variety of talent this industry has to offer and would like to extend a massive ‘thank you’ to everyone who made their voice heard during the nomination process. This event relies on the input of hard-working wealth professionals like you.

On the following pages, you’ll discover the individuals, teams and organizations that have been shortlisted for awards across 23 prestigious categories. Be sure to attend on the night itself and cheer on the winners in style. For more information, visit wpawards.ca.

#WPAwardsCA Wealth Professional Canada

@WealthProCA

Wealth Professional Canada Magazine

AWARD SPONSORS

46 www.wpawards.ca

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THE ICM ASSET MANAGEMENT AWARD FOR ADVISOR OF THE YEAR – ALTERNATIVE INVESTMENTS

THE BLACKROCK AWARD FOR

y Alexandra Horwood

y Arthur Salzer

y C had Larson

y Elie Nour

y Bart Hunter

THE MANDEVILLE PRIVATE CLIENT INC. AWARD FOR

CANADIAN ADVISOR OF THE YEAR

Richardson GMP

Nour Private Wealth

y Faisal Karmali

Popowich Karmali Advisory Group (CIBC Wood Gundy)

y Jamie Suprun

Suprun Wealth Management (HollisWealth, a division of iA Securities)

y Jason Pereira

Woodgate Financial

y Kelly Hemmett

Hemmett Anseeuw & Associates (Harbourfront Wealth Management)

y Kyle Richie

Richardson GMP

Northland Wealth Management Scotia Wealth Management/ ScotiaMcLeod

y Carolyn Seaforth

Pinnacle Wealth Brokers

y Dan Wynnyk

The Waterfront Group (CIBC Wood Gundy)

y Darcie Crowe

Canaccord Genuity Wealth Management

y Francis Sabourin Richardson GMP

y George Halkidis Richardson GMP

y Michael Hayhoe

Mandeville Private Client

y Larry Short

y Paul Tyers

y Marvin Schmidt

y Rob Tétrault

Short Financial (HollisWealth, a division of iA Securities) The Schmidt Investment Group (CIBC Wood Gundy)

y Nader Hamid

Total Wealth Management Group (HollisWealth, a division of iA Securities)

Portfolio Stewards Tétrault Wealth Advisory Group (Canaccord Genuity Wealth Management)

y Travis Forman

Harbourfront Wealth Management

y Rob McClelland

PORTFOLIO/ DISCRETIONARY MANAGER OF THE YEAR

MLD Wealth Management Group (Canaccord Genuity Wealth Management)

y Colin Ryan

Wellington-Altus Private Wealth

y F rancis Sabourin Richardson GMP

y J ames Gauthier Justwealth

y J ason Del Vicario

Hillside Wealth Management (HollisWealth, a division of iA Securities)

y John (Jay) Nash

Nash Family Wealth Management (National Bank Financial)

y K evin Haakensen

PWM Private Wealth Counsel (HollisWealth, a division of iA Securities)

y M artin Gendron

Desjardins Gestion de Patrimoine

y Martin Pelletier

Wellington-Altus Private Wealth

y S ean Mackenzie

THE INVESCO CANADA AWARD FOR LIFETIME ACHIEVEMENT IN THE FINANCIAL PLANNING INDUSTRY As the highest honour at the Wealth Professional Awards, this award recognizes an individual who has made outstanding contributions to the wealth management and financial planning profession throughout their career. This award will acknowledge an industry icon with an established history of distinguished service and leadership within the profession, who has inspired others while putting the interests of the industry at the top of their priorities, as evidenced by their accomplishments. There are no finalists for this category.

The recipient will be revealed at the awards gala.

Mackenzie Wealth Management Group (National Bank Financial)

y S usyn Wagner

The McClelland Financial Group (Assante Capital Management)

CIBC Wood Gundy

y Tina Tehranchian

y W olfgang Klein

Assante Capital Management

Canaccord Genuity Wealth Management

y Todd Degelman

Wellington-Altus Private Wealth

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WEALTH PROFESSIONAL AWARDS FINALISTS 2O2O THE NOUR PRIVATE WEALTH AWARD FOR

THE ADVOCIS AWARD FOR

THE IFSE INSTITUTE AWARD FOR

RISING STAR ADVISOR OF THE YEAR

YOUNG GUN OF THE YEAR

y B randt Butt

y Adam Pukalo

y Alphil Guilaran

y Adam Schacter

y Heather Holjevac

y Darius Muica

y Jackie Porter

y Grant Dawes

y Joseph Bakish

y John Iaconetti

y Krista Kardash

y Kaif Lalani

y Matthew Ablakan

y Kalee Boisvert

y Pauline Shum Nolan

Endeavour Wealth Management (iA Securities)

y C al Kang

Edward Jones

y G loria Malek

The Malek Group (TD Wealth Private Investment Advice)

y K ate Parker

Ridd & Associates Wealth Advisory Group (BMO Nesbitt Burns)

y N icole Brookes Edward Jones

PI Financial Corp.

Mandeville Private Client Nour Private Wealth Northland Wealth Management The McClelland Financial Group (Assante Capital Management) National Bank Financial Kalee Boisvert Financial Services (Raymond James)

y Ladan Shokrgozar Harbourfront Wealth Management

y Steven Furtado

Zagari, Simpson & Associates (Mandeville Private Client)

FINANCIAL LITERACY CHAMPION

Financial Literacy Counsel Holjevac Financial Group Carte Wealth Management Richardson GMP

LCU Financial (Credential Asset Management) MC University Wealthscope

y Richard Infantino

THE MACKENZIE INVESTMENTS AWARD FOR

FEMALE TRAILBLAZER OF THE YEAR y Darcie Crowe

Canaccord Genuity Wealth Management

y Elizabeth Naumovski Caldwell Securities

y Julia Chung

Spring Planning

y Laurie Bonten

Wellington-Altus Private Wealth

y Nicole Deters

Harbourfront Wealth Management

y Tara Kelly

BMO Nesbitt Burns

y Tina Tehranchian

Assante Capital Management

RBC Dominion Securities

y Stephanie Vincec

Ten Toonies Financial Literacy for Kids

y Tracey Bissett

Bissett Financial Fitness

y Tuula Jalasjaa

The Women’s Collection

y Wolfgang Klein

Canaccord Genuity Wealth Management

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THE TMX GROUP AWARD FOR BEST ACTIVE MANAGER – EXCHANGE-TRADED DERIVATIVES

THE EDWARD JONES AWARD FOR EXCELLENCE IN PHILANTHROPY AND COMMUNITY SERVICE

THE FRANKLIN TEMPLETON AWARD FOR

y Avin Mehra

y Aaron Ruston

y Cresco Wealth Management

CIBC Wood Gundy

y Greg Flower

Red Barn Investment Counsel

y Ian Po

RBC Dominion Securities

y Idrees Baksh

Larente Baksh & Associates (TD Wealth Private Investment Advice)

y Jillian Bryan

TD Wealth Private Investment Advice

y Martin Gendron

Desjardins Gestion de Patrimoine

y Walter Harmidarow RBC Dominion Securities

Purposed Financial

y Ainsley Mackie

White LeBlanc Wealth Planners (HollisWealth, a division of iA Securities)

y Eric F. Bennett

Scotia Wealth Management/ ScotiaMcLeod

y Laurie Bonten

The Bonten Wealth Management Group (Wellington-Altus Private Wealth)

ADVISORY TEAM OF THE YEAR

(10 STAFF OR MORE)

Wellington-Altus Private Wealth

y Hemmett Anseeuw & Associates Harbourfront Wealth Management

y Northland Wealth

Management y Nour Private Wealth

y Marvin Schmidt

y Popowich Karmali Advisory Group

y Michael Dehal

y The McClelland Financial Group

y Nicholas Shinder

y White LeBlanc Wealth Planners

The Schmidt Investment Group (CIBC Wood Gundy) Dehal Investment Partners (Raymond James) Shinder Tremblay Group (Echelon Wealth Partners)

y Sonia LeRoy

LeRoy Wealth Management Group (IPC Securities)

CIBC Wood Gundy

Assante Capital Management

HollisWealth, a division of iA Securities

y Zagari, Simpson &

Associates

Mandeville Private Client

THE AGF AWARD FOR

ENGAGEMENT, LOYALTY AND CLIENT CARE

y Allen Private Wealth

HollisWealth, a division of iA Securities

y Britton Wealth Management and Planning Consultants y CIC Financial Group y Little Wealth Management Group

HollisWealth, a division of iA Securities

y Northland Wealth Management y Ortencio & Associates Wealth Management Group Raymond James

y Salina Edgren & Associates Private Wealth Echelon Wealth Partners

y Salus Wealth Manulife Securities

y The Bonten Wealth Management Group

Wellington-Altus Private Wealth

y The Schmidt Investment Group CIBC Wood Gundy

AWARD SPONSOR

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WEALTH PROFESSIONAL AWARDS FINALISTS 2O2O THE EQUITABLE BANK AWARD FOR MULTI-OFFICE ADVISOR NETWORK/ BROKERAGE OF THE YEAR

THE SIACHARTS INC. AWARD FOR

THE EQUISOFT AWARD FOR

THE WP READERS’ CHOICE AWARD FOR

FUND PROVIDER OF THE YEAR

SERVICE PROVIDER OF THE YEAR

y Cidel Bank Canada

y AGF Management

y Asset Vantage

y Harbourfront Wealth Management

y BMO Global Asset Management

y Broadridge Financial Solutions

y Canaccord Genuity Wealth Management

y iA Securities

y CI Investments

y Croesus Finansoft

y RBC Dominion Securities

y Dynamic Funds

y Equisoft

y Edward Jones

y Fidelity Investments

y Fundserv

y First Trust

y LTI Canada

y Horizons ETFs

y NaviPlan by Advicent

y Mackenzie Investments

y NEO Exchange

y Purpose Investments

y Portfolio Aid

y Sun Life Global Investments

y Univeris

y Assante Wealth Management y BMO Nesbitt Burns

y iA Securities (iA Financial Group) y Mandeville Private Client y RBC Dominion Securities

DIGITAL INNOVATOR OF THE YEAR

iA Financial Group

y The McClelland Financial Group Assante Capital Management

y Total Wealth Management Group HollisWealth, a division of iA Securities

y TD Asset Management

AWARD SPONSOR

AWARD SPONSOR

AWARD SPONSOR

AWARD SPONSOR

CANADA

50 www.wpawards.ca

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CEO OF THE YEAR

ADVISOR OF THE YEAR – RESPONSIBLE INVESTMENTS

BDM/ WHOLESALER OF THE YEAR

ETF CHAMPION OF THE YEAR

y Barry McInerney

y Carrie Lavack

y A lain Desbiens

y Alfred Lee

y A lain Samson

y Florence S. Narine

y A llan MacDonald

y Mark Noble

y D avid Clarke

y Michael Cooke

y D avid Wysocki

y Pat Dunwoody

y E lizabeth Dykes

y Som Seif

y G reg Rank

y Tammy Cash

y N athan Amor

y Tanya Rowntree

y P hilip Douglas

y Tyler Mordy

Mackenzie Investments

y David Gunn Edward Jones

y David Cusson

Echelon Wealth Partners

y Duane Green

Franklin Templeton Investments

y Greg Romundt Centurion Asset Management

y Jeff Carney

IG Wealth Management

y John Nicola

Nicola Wealth Management

y Kathy Bock

The Vanguard Group

y Kevin McCreadie AGF Management

y Steve Hawkins Horizons ETFs

y Tea Nicola

WealthBar Financial Services

Scotia Wealth Management/ ScotiaMcLeod

y Francine Dick

Carte Wealth Management

y Hussain Ahmad

Zagari, Simpson & Associates (Mandeville Private Client)

y Matteo Tino

RBC PH&N Investment Counsel

y Ryan Colwell

C&C Planning Group (Aligned Capital Partners)

y Ryan Fraser

Quiet Legacy Planning Group

y Sonia LeRoy

LeRoy Wealth Management Group (IPC Securities)

BMO Global Asset Management Franklin Templeton Investments TD Asset Management BMO Global Asset Management Harvest ETFs

Bridgehouse Asset Managers Mackenzie Investments Sun Life Financial Evolve ETFs

y R andy Beaudoin

BMO Global Asset Management AGF Management Horizons ETFs

Mackenzie Investments Canadian ETF Association Purpose Financial Horizons ETFs TMX Group

Forstrong Global Asset Management

Invico Capital Corporation

y R aphael Chow Horizons ETFs

y R yan Cipolla

Sun Life Global Investments

y T ommy Kotsopoulos Dynamic Funds

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WEALTH PROFESSIONAL AWARDS FINALISTS 2O2O ADVISORY TEAM OF THE YEAR (FEWER THAN 10 STAFF) y Bechtel McIntyre Lewis Wealth Management TD Wealth Private Investment Advice

MULTI-SERVICE ADVISORY TEAM OF THE YEAR

y Allen Private Wealth HollisWealth, a division of iA Securities

y Luft Financial

y Britton Wealth Management and Planning Consultants

y MLD Wealth Management Group

y Caring for Clients

y Summit Private Wealth

y CIC Financial Group y Endeavour Wealth Management iA Securities

y Kaspardlov & Associates

Canaccord Genuity Wealth Management Mandeville Private Client

EMPLOYER OF CHOICE

y AGF Management y Centurion Asset Management y Echelon Wealth Partners y Edward Jones y Harvest ETFs y IG Wealth Management

y Woodgate Financial

y National Bank Financial

y Zagari, Simpson & Associates

y Nicola Wealth Management

Mandeville Private Client

Manulife Securities

y Kingsford & Associates BMO Nesbitt Burns

y Orser Neuhaus & Associates Echelon Wealth Partners

y Shinder Tremblay Group Echelon Wealth Partners

y Tetrault Wealth Advisory Group Canaccord Genuity Wealth Management

y The Everest Group TD Wealth Private Investment Advice

y The Popescu Ashton Group Harbourfront Wealth Management

52 www.wpawards.ca

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2O2O JUDGING PANEL GREG POLLOCK

DANIEL COLLISON

President and CEO, Advocis

Managing partner, Advice2Advisors Instructor, Schulich School of Business

CAROLIN CHOW Vice-president and co-founder, Canadian Association of Alternative Strategies & Assets

PAT DUNWOODY

SANGEETA CHOPRA-CHARRON Management consultant, strategy and operations, Jennings Consulting

JUDY PARADI

Executive director, Canadian ETF Association

Partner, StrategyMarketing.ca

CLAIRE VAN WYK-ALLAN Director, head of Canada, Alternative Investment Management Association

ROD BURYLO

President, Advisor Practice Management

Business development manager, RN Croft Financial Group Director, Foundation for the Advancement of Entrepreneurship Author, speaker and instructor

KATIE WALMSLEY

PAULETTE FILION

President, Portfolio Management Association of Canada

Partner, StrategyMarketing.ca

GRANT HICKS

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PRESENTED BY

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FEATURES

CUSTOMER SERVICE

Seizing the golden opportunity Focusing on customer appreciation instead of merely delivering customer satisfaction will have a massive impact on the success of your practice, writes Darrell Hardidge

54

MANY A successful businessperson will have heard the adage that it’s at least six times more expensive to gain a new customer than to get an existing one to return. What’s so interesting about this well-known fact is that very few businesses can demonstrate how they measure customer loyalty and protect their future revenue. Part of the issue is that most are using the wrong theory and don’t even know it.

We’ve all seen advertisements by companies boasting that “our satisfaction ratings are the highest” or “you’ll be completely satisfied with our service” and offering a “100% satisfaction guarantee.” Whenever I read these statements, my first thought is, “As opposed to what, 80%?”

Delivering on customer satisfaction is basically about giving people what they paid

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for, but customers also expect efficiency, minimal fuss and a good price. There is an attitude of complacency around service, which is a real problem.

Think about how often you are wowed by your customer experiences. If you consider all of your personal transactions, you’ll discover that only about 15% go way beyond your expectations and provide an excellent experience, and this is where the golden opportunity of optimizing loyalty is hidden.

tion, you will see a massive impact on your bottom line.

Four steps to revenue In a competitive market, there are four specific categories that define and create revenue. It’s critical to master and manage these four areas if you want to build powerful ambassadors for your business and maximize margins. If you’re only delivering the basics of customer satisfaction, your primary focus will

3. Number of transactions Successful businesses have a high focus on creating repeat customers, as they know this is more profitable, especially because ambassadors for your company value experience over price and reward you with the maximum wallet share. Think about who you are loyal to and why you choose them first. If you don’t have customers’ loyalty, then you will have to compete on price to get them back.

4. Average sale value

Customer appreciation is a powerful and profitable currency. It’s rarely understood and grossly underleveraged in business The power of customer appreciation Think of the people in your life whom you care about, the ones you love and appreciate.

You have a strong heart connection to them.

For businesses, it can be the same: If you think about the businesses you are truly loyal to, you will find that it’s not because you got what you paid for, but because you got a whole lot more. It usually depends on the relationship you have with them and how they make you feel when you connect.

Customer appreciation is a powerful and profitable currency. It’s rarely understood and grossly underleveraged in business. It’s without a doubt one of the biggest weapons a business can have against its competitors. The challenge is how to define customer appreciation in the culture of your business.

It’s impossible to have extremely high customer loyalty with an average team culture.

Most companies don’t place a high enough importance on the relationship between team culture and customer experience. In fact, it’s rarely measured or implemented in team training. With customer appreciation as your objective instead of mere customer satisfac-

be on price. However, if you deliver very high levels of customer appreciation, then experience is the currency, and it’s about value.

Appreciative customers can spend considerably more in your business than just satisfied customers – often double the money. If your business has a high focus on delivering appreciation for service excellence, you will be rewarded with higher sales values. This area is often overlooked, as the speed to transact can override the opportunity gained from delivering service excellence.

The verdict 1. Lead generation Your marketing strategies are designed to bring potential customers into contact with your business and to attract the best prospects.

In the last three to five years, there has been an explosion in business marketing methods, and it’s expensive if you don’t measure and manage these wisely. The most effective lead generation strategy has always been and still is powerful referrals from loyal customers, as they know what they want, and they want to deal with you.

2. Conversion rate The fastest way to grow revenue is to increase conversion rates with prospective and existing customers. If you usually sell to two out of every 10 potential customers and you can increase your conversion rate to three out of every 10, that’s a 50% increase. Powerful referrals deliver the most effective and profitable conversion rates.

Customer satisfaction is the goal in a price-driven economy – a very fragile and unforgiving marketplace to operate in. Many businesses are stuck in the price trap and don’t even realize it.

Customer appreciation is the result of a value-driven economy – a secure and predictable space in which customers genuinely want you to succeed, as they want you to be there for them in the future. True customer appreciation creates an unshakable emotional connection to your business that ensures you have the most powerful advocates who will go out of their way to support you.

Darrell Hardidge is a customer experience strategy expert and CEO of customer research company Saguity, which works with businesses to develop customer appreciation. He’s also the author of The Client Revolution and The 10 Commandments of Client Appreciation.

To find out more, visit saguity.com.

www.wealthprofessional.ca

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PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email editor@wealthprofessional.ca

Hastick-Cowell was the first fe male Ca nadia n triple ju mper to ju mp over 14 metres

JUMPING FOR JOY Michelle Hastick-Cowell sees many parallels between her track and field career and her work as an investment advisor BEFORE MICHELLE HASTICK-COWELL, an Ontariobased investment advisor at Mandeville Private Client, began helping clients manage their wealth, she was leaping to new bounds as a long and triple jumper.

While attending York University, Hastick-Cowell was a multi-time provincial and national medallist. After university, she went on to have tremendous success, capturing national titles and international medals and setting Canadian records. She was the first Canadian to medal in women’s triple jump at the Francophone Games in Madagascar in 1997. In 2000, she served as the athletes’ representative at the Sydney Olympics, and she was inducted into York University’s Sports Hall of Fame in 2015.

Hastick-Cowell believes her background as an athlete provided a good foundation for her current career.

“In track and field, I learned so much about setting and achieving goals, about being able to have a vision and then creating an action to attain that vision,” she says. “The financial industry is similar to athletics in the sense that they both follow the same path, with an end goal and then working towards it. There is the constant drive for success and improvement.”

6

Number of Canadian championship gold medals Hastick-Cowell has won

56

4

Number of OWIAA medals Hastick-Cowell won during her time at York University

4

Number of senior national triple jump titles Hastick-Cowell won after university

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