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WWW.WEALTHPROFESSIONAL.CA ISSUE 9.05

MUTUAL FUND SPOTLIGHT Eight areas of Canada’s mutual fund universe that are worth a closer look

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ISSUE 9.05

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MUTUAL FUND SPOTLIGHT

MUTUAL FUND SPOTLIGHT The mutual fund industry continues to hold a significant number of assets in Canada. Wealth Professional examines eight funds and product suites that offer access to different classes and sectors THE GROWTH of ETFs continues to domi nate headlines, so it can sometimes be easy to forget just how large the Canadian mutual fund industry is. At the end of 2020, mutual funds accounted for $1.78 trillion of the total $2.04 trillion invested assets in Canada, according to the 2020 IFIC Invest ment Funds Report. And while new product development has slowed, there were still 3,459 total mutual funds at the end of the year – an impressive breadth of options avail able to Canadian investors. Last year was the first one in the past

decade when the total number of mutual funds decreased, and five firms pulled out of the mutual fund market altogether. However, IFIC attributed that decline largely to consolidation, pointing to the stronger competition in the industry, which ultimately benefits investors. When it comes to the types of mutual funds investors are gravitating to, IFIC reports that balanced funds account for nearly 50% of total assets, followed by equity at 33% and bonds at 14%. And while ETFs have outsold mutual funds for the past

three years, mutual fund gross sales have continued to trend upward. In 2020, mutual funds generated their largest ever gross sales at $300 billion. With so many assets still invested in the mutual funds, WP wanted to focus on some of the products and solutions that are available. With more than 3,000 funds, it’s difficult to capture the entire industry, but over the next few pages, WP explores a few different areas where mutual funds are excelling and their benefits for both advisors and investors.

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Taking managed solutions to the next level With multiple options in its managed solutions suite, Canada Life is giving advisors more ways to meet clients’ evolving needs SINCE 2008, investors have increasingly been turning to managed solutions. Allocations toward managed solutions grew from approximately 12% in 2009 to 25% in 2019, according to Investor Economics, and are expected to surpass 31% by 2028. It’s an area that Canada Life has taken note of, developing multiple solutions that allow advisors to leverage the trend and find the best option for their clients. “I think there are three main reasons [for this trend],” says Steve Fiorelli, SVP of wealth solutions at Canada Life. “One is the

is because they significantly improve business efficiency. By eliminating some of the administrative load associated with portfolio monitoring and rebalancing, it frees up time for advisors to focus on other value-added activities, such as holistic planning. “[Managed solutions] are turnkey solutions that offer advisors simple, scalable ways to carry out portfolio construction and management responsibilities,” Fiorelli says. The third area that has propelled managed solutions’ popularity is increasing regulatory expectations. With the incoming

“[Managed solutions] offer advisors simple, scalable ways to carry out portfolio construction and management responsibilities” Steve Fiorelli, Canada Life challenging market conditions. You simply aren’t going to get the big returns from an all-bond portfolio like you would 15 years ago. You need to diversify thoughtfully and cast a wider net when looking for return opportunities. You also have to put the right buffers in place so that client portfolios remain resilient.” That means advisors must stay on top of constantly changing market dynamics – and managed solutions help take some of that burden off the advisor. The second reason Fiorelli believes managed solutions have gained popularity

client-focused reforms, there is greater onus on advisors to understand and document the cost, risk and suitability of investment products that they recommend. Managed solutions can help reduce this burden in that they are often a simple, easy-to-understand investment solution that advisors can match to a client’s unique goals and risk tolerance, since most provide a spectrum of portfolios by risk level and growth potential. To meet the needs of advisors, Canada Life has a full suite of managed solutions. The company aims to cater to the unique needs of each advisor and their client base.

“We offer straightforward balanced funds, target risk asset allocation funds, more sophisticated risk-managed strategies and our goals-based investing managed program, called Constellation, for advisors who want that immersive customizable experience for clients,” Fiorelli says. Canada Life has recently expanded its balanced fund category to offer advisors even more choice. It launched five global balanced segregated funds in May 2020 and seven new mutual funds in September 2020. The target risk asset allocation funds are single-ticket solutions designed to provide diversified portfolios focused on return within a target risk level. Available in conservative, moderate, balanced, advanced and aggressive options, they look for best-in class investment strategies and managers from around the world and combine them in a mix that aims to achieve strong, consistent returns. Canada Life’s three Risk-Managed Portfolios (conservative, balanced and growth), launched last fall, are similar to the target risk asset allocation funds; however, they bring together traditional and non-traditional investments. “These have gained traction with advisors because they can offer clients more predictability and consistency in their portfolio,” Fiorelli says. “This is important to retirees and pre-retirees who have a shorter time horizon where they do not have the time to make up significant losses. The portfolios seek to mitigate risk without forgoing the upside returns.” What makes Canada Life Risk-Managed

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FEATURES

MUTUAL FUND SPOTLIGHT CANADA LIFE’S RISK-MANAGED PORTFOLIOS Launched this past fall, Canada Life’s Risk-Managed Portfolios are available in three options: conservative, balanced and growth. In addition to a traditional asset mix of equities and fixed income, all three funds in the suite can incorporate alternatives. TARGET ASSET MIX BY TYPE Equities Fixed income Alternatives

CONSERVATIVE

35%

60%

BALANCED

55%

20%

GROWTH

40%

75% Source: Canada Life

Portfolios unique is that they go beyond the traditional diversification typically found within most balanced funds. They leverage four distinct risk-management levers. The first is a risk reduction pool that uses an option strategy, specifically puts and calls, to create an upper and lower limit to equity returns, helping to mitigate extreme equity volatility. The second lever uses lowervolatility equity mandates. The third, a global tactical equity solution, is designed to reduce equity exposure in response to market volatility. Finally, liquid alternatives seek to provide positive absolute return through uncorrelated sources of return. What takes Canada Life’s offering to the next level is its Constellation Managed Portfolios – a goals-based managed investment program that provides advisors with a digital tool to select model portfolios and customize the investment fund mix to meet their clients’ unique financial goals. When it comes to building managed solutions, Fiorelli says Canada Life starts with a client-first mentality. “We look at challenges that investors are facing currently (e.g. low yield environment), what challenges they might face in the future (e.g. continued volatility, potential for rising rates and threat of inflation), and we design solutions

that help advisors address these issues for their clients.” Next, Canada Life designs its managed solutions around risk-aware portfolio construction. “If you look at what we are facing today – uncertainty combined with low returns – it is hard for advisors to generate the returns clients expect,” Fiorelli says. “There are also expectations from clients to reduce losses. So, we thoughtfully engineered a riskaware approach with growth potential.” Fiorelli believes the time for managed solutions is now, and he feels Canada Life is ushering them to new heights, especially with Constellation. “Digital capabilities are becoming increasingly important,” he says. “We have this interactive, goals-based investing digital interface for both advisors and investors, so advisors can give a first-rate experience to clients while also gaining efficiencies for their practice. We built our model portfolios in Constellation based on forward-looking capital market return assumptions and had them back-tested. We monitor these portfolios to ensure they continue to meet our return expectations. Advisors can select the right model portfolio that aligns with the client’s goals, time horizon and risk tolerance, and customize the underlying invest-

ment mix with a diverse selection of funds.” Client portfolios in Constellation are monitored daily and rebalanced if an asset class deviates from its target weighting in the portfolio. This is an important process to ensure clients’ goals remain on track, Fiorelli notes. “Our client portfolios are made up of taxable, tax-exempt and tax-deferred accounts,” he says. “Built into Constellation is a tax-efficient asset allocation strategy, known as asset location, that considers the different tax treatments on different investment income types and optimizes the allocation of assets within each account to help maximize after-tax returns.” Through these features, Constellation helps advisors create a very disciplined approach to investment management – and it’s also a very efficient way for advisors to run their practice because it reduces some of the back-office support needs. The program’s digital goals-based approach, which Fiorelli believes is a true enabler of successful investment planning, gives clients greater visibility into their plans by allowing them to digitally track their progress toward goals. “When we think about risk, we think about standard deviation of a portfolio, but risk should also be viewed as investors not reaching their goals,” he says. “It must be relatable, and the industry has lost that a bit. Risk is crucial in fund performance, but ultimately the most important measure of risk is not being able to pay bills or meet retirement needs. Constellation gives advisors a meaningful way to help clients visualize progress towards their goals and see the likelihood of reaching them, which can be way more important than any particular year’s return.” Canada Life Pathways funds and Canada Life Risk-Managed Portfolios are available through a segregated funds policy issued by Canada Life or as a mutual fund managed by Canada Life Investment Management Ltd. offered exclusively through Quadrus Investment Services Ltd. Make your investment decisions wisely. Important information about mutual funds is found in the Fund Facts document. Please read this carefully before investing. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. A description of the key features of the segregated fund policy is contained in the information folder. Any amount allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value. Canada Life Constellation Managed Portfolios, Canada Life Pathways, Canada Life and design are trademarks of The Canada Life Assurance Company.

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A balanced approach to innovation CIBC’s award-winning Global Technology Fund offsets single-sector risk by focusing equally on technology and healthcare

TECHNOLOGY AND innovation have been key areas in the realm of thematic investing. While many investors want to gain exposure to the latest innovations, detractors are weary of the sector’s volatility. That’s why CIBC took

something similar funds don’t have. “We are making a large bet that over the next couple decades, the world is going to continue to grow as a function of scientific and technological advancements in these

“In these sectors, people really don’t appreciate the lethality of ignorance. Either you have the expertise or not” Michal Marszal, CIBC Asset Management a different approach with its Global Technology Fund, which invests in both healthcare (human genomics, genetic engineering and personalized medicine) and technology (AI, IT and communications). The combination has given the fund a strong risk/return profile,

fields,” says Michal Marszal, who manages the fund along with Jonathan Mzengeza. “That is where we specialize and the principal philosophy of the strategy.” The duo essentially splits the portfolio management duties: Marszal focuses on

healthcare and Mzengeza on technology. Both have a background in those fields, and that expertise is something they believe sets them apart. “In these sectors, people really don’t appreciate the lethality of ignorance,” Marszal says. “Either you have the expertise or not.” The fund holds approximately 30 names at a given time. It’s currently slanted towards technology, given overall market trends. Marszal and Mzengeza start with more than 500 stocks in the universe and whittle them down using their own screens, including quality, return on invested capital and volatility. Both PMs know the companies thoroughly, which helps them make their core selections. While most of the names do appear in the benchmark, they’re not afraid to go outside it, especially when it comes to the fund’s tactical allocation, which is usually composed of small- and mid-cap names still in their development phase. Those companies usually hold three to five positions in the portfolio. The strategy behind the CIBC Global Technology Fund is driven by three main investment principles. The first is risk management, something Marszal believes is a true differentiator. “We’ve had a steady progression on performance in all periods,” he says. “That is largely due to the risk management process we implement. It is really 90% of what we do. We use it for core position sizing, analysis, stress testing scenarios and to figure out the downside.” The second pillar is long-term investing. Marszal notes that the fund’s core positions are typically owned for five to 10 years, and even its tactical positions will be held for 12 to 18 months. Finally, Marszal points to the team’s expertise, which helps to identify and avoid any risks – the overarching one, Marszal says, is security risk of underperformance in one of the sectors. In healthcare, he highlights potential concerns such as demand for services, drug pricing and reforms that can ripple beyond pharmaceuticals to impact

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FEATURES

MUTUAL FUND SPOTLIGHT TOP HOLDINGS IN THE CIBC GLOBAL TECHNOLOGY FUND

1 Microsoft 2 Alphabet 3 Apple 4 Mastercard 5 Cash and cash equivalents 6 ASML Holding 7 Takeda Pharmaceutical Co. 8 IAC (InterActiveCorp) 9 CVS Health 10_Sony

The stability of short-term bonds Franklin Templeton’s Franklin Bissett Short Duration Bond Fund looks to leverage the steadiness of the short-term bond market to help investors with fixed income exposure

Source: CIBC Asset Management, as of March 31, 2021

research and development. On the tech side, Mzengeza keeps an eye on the geopolitical landscape, trade tensions, intellectual property, conflicts, regulations, political backlash, cybersecurity and privacy. Yet because the two sectors are not correlated, even if a risk materializes in one, the other side of the fund can help it weather the storm. Ultimately, both Marszal and Mzengeza see the fund as a great complement for Canadian investors looking for exposure to these themes. “We are trying to provide Canadians with a breadth of investment opportunities with equities,” Marszal says. “What we are trying to do is tap in and extract opportunities on the innovation angle of these strategies. We try to provide a custom-made solution where investors can make a bet on innovation-driven industries outperforming broadly diversified assets and [have] this be their thematic exposure.”

THE SEARCH for yield has never been greater – and it’s pushed many investors up the risk spectrum. Yet those who still want fixed income exposure to protect capital aren’t looking at traditional offerings the same way, which has forced asset managers to create innovative ways to offer fixed income exposure. That’s exactly what Franklin Templeton is aiming to do with its Franklin Bissett Short Duration Bond Fund. The fund is similar to the Franklin Bissett Core Plus Bond Fund and Franklin Bissett Corporate Bond Fund, but it only looks at bonds with a maximum duration of five or six years. Seventy-one per cent of the

fund is allocated to corporate bonds, 15% to federal and 14% to provincial bonds. “We tend to be heavy corporate versus the index because we perceive the spread between corporate and government bonds to offer a bit of cushion,” says Adrienne Young, director of credit research at Franklin Templeton Canada. “So, in a volatile interest rate environment, where federal bonds get slaughtered when central banks increase short rates or because the market worries about inflation and long rates rise, we have a cushion to help reduce the blow.” Young adds that when it comes to corporate bond selection, the team leverages

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“We tend to be heavy corporate versus the index because we perceive the spread between corporate and government bonds to offer a bit of cushion” Adrienne Young, Franklin Templeton Canada the expertise of Franklin Templeton’s fundamental corporate credit analysts, which has generally led to outperformance versus the index. “We think in a tight market, you have to be picky, and we are very careful about credit quality,” she says. “We believe in in-house fundamental credit analysis to identify where there is value. So that is a pitch for active versus passive and looking under the hood.” That’s just one of the capabilities Franklin Templeton provides; Young believes there

are additional factors that help make the fund unique. “Because we are big enough to have our own loan group in San Mateo, California – whereas loans don’t trade in the secondary market in Canada – we have loans in the fund,” she says. “That helps to give us some diversification. We can invest in high-yield credit in the US, which we prefer because US high-yield is more liquid than the Canadian market. “We are also able to take advantage of quants that work in Franklin Templeton to spot opportunities in derivatives markets, so we buy currency derivatives. We also use interest rate derivatives. Rather than buying and selling bonds in order to get our duration down by half a year versus the index, we’ll manage that with interest rate swaps. Rather than selling bonds we like and know we can’t get back easily, we buy credit default swaps. It allows us to manage our credit exposure without having to sell the bonds we may be unwilling to sell.” Young acknowledges that a short-term fund like this might not offer the high returns many clients are looking for, but it will provide stability. The Franklin Bissett Short Duration Bond Fund has historically provided more

WHY SHORT-DURATION BONDS NOW? Adrienne Young offers a simple analogy to illustrate why advisors and investors need short-duration bond exposure now. “I think of duration as a diving board, anchored at one end, springy at the other,” she says. “If rates rise, the short end is somewhat anchored, and the long end is where you see the most volatility. You are going to see the most volatility in government bonds, and you will have a little cushion in corporate with the spread from governments, so you’ll have a little less risk. This kind of portfolio, which includes both corporate and government bonds and is at the short end of the curve, is a little more protective.” of a return than the index, money market funds and the Canadian Short Term Bond Index, with less volatility because of its shorter duration and added diversification. “I think in a slightly inflationary world,” Young says, “people looking for something that will preserve capital should find that attractive.”

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FEATURES

MUTUAL FUND SPOTLIGHT

Exposure to the ‘good life’ The staples in the RBC European Equity Fund offer exposure to many of the continent’s storied lifestyle brands

“The total luxury market is $1.4 trillion, and we believe it is a very important and a highly profitable industry. Europe is still top of the list in ... promoting the idea of the good life” Dominic Wallington, RBC Global Asset Management

IN RECENT YEARS, many advisors have looked to diversify their portfolios by going global, but one area that sometimes gets overlooked is Europe. However, the opportunities on the continent are unlike what investors will find in North America or in emerging markets. From luxury items like clothing and alcohol to consumer staples and pharmaceuticals, plus areas with quality intellectual property like engineering and health sciences, European companies can be a unique addition to portfolios. RBC Global Asset Management’s European Equity Fund dates back to 1987 and is managed by a team in London. It looks at

investments in continental Europe and the UK and has growth mandate. “More realistically, we are more interested in total return,” says Dominic Wallington, senior portfolio manager and head of European equities at RBC Global Asset Management in the UK. “Europe has a culture of paying and growing dividends on real bases, higher than inflation.” The fund aims to invest in companies with high, stable returns, targeting those that show high levels of return on invested capital. “We like companies that have low levels of capital intensity,” Wallington says. “The companies we invest in tend to be less expen-

sive to grow the top line. Many of them turn over their assets many more times on an annual basis. The reason we like these businesses is the cash conversion is higher and can be returned to shareholders or directed towards growing the business.” The companies that tend to fit the bill are usually ones with established brands, something Wallington says RBC GAM looks for. The fund’s 51 holdings include staples like alcohol, spirits, brewers, food companies and businesses with high-quality, sustainable intellectual property. Many of those staples are classified as luxury items, an area the fund targets. “The total luxury market is $1.4 trillion, and we believe it is a very important and a highly profitable industry,” Wallington says. “Scale and voice are important to keep brands in front of people, so we still see opportunity in luxury. Europe is still top of the list in soft power – use of attraction or persuasion – promoting the idea of the good life.” Wallington believes Europe is leading the way in and commercializing soft power, which is one of the opportunities he sees in a European fund. “There are pockets of companies all

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FEATURES

MUTUAL FUND SPOTLIGHT SECTOR ALLOCATION OF THE RBC EUROPEAN EQUITY FUND 100%

23.9% Industrials 21.5% Financials

80%

16.3% Consumer discretionary 12.4% Consumer staples

60%

An option for US mid-cap stocks A bottom-up ethos, informed by secular trends, has fuelled the success of Mackenzie Investments’ US Mid-Cap Opportunities Fund

10.0% Information technology

40%

8.8% Materials 7.0% Healthcare 20%

0.2% Telecom services

0% Source: RBC Global Asset Management, as of March 31, 2021

around Europe that we like to focus on,” he says. “We believe there are some great opportunities with intellectual property. One of the best semiconductor companies is based in Holland. In Denmark, there are great health sciences companies. Those different pockets are why I think the fund should be in portfolios.” Wallington notes that the fund deviates from the index, as RBC GAM believes the companies it selects will outperform over the long term. While the team has many processes in place to mitigate risk, investors do need to be aware that the fund can underperform during certain periods. Still, Wallington believes this approach will do better over the long term. Another potential area of concern for investors is the impact European politics can have on the fund. Wallington acknowledges the issue but notes that it can also provide discount valuations. “I think there are issues everywhere in the Western world, so I’m not sure how different Europe is,” he says. “What background politics does is allow for discount valuations compared to companies situated in, say, the US.”

FOR THE average fund manager, keeping up with the companies in their portfolio means listening to earnings calls, reading analyst reports, analyzing financial statements and poring over regulatory filings. But when Sonny Aggarwal, vice-president and portfolio manager within Mackenzie Investments’ Growth Team, says he and his fellow portfolio managers are familiar with the companies they invest in, he means it on a whole other level. “One great thing about being a portfolio manager in the mid-cap space is you have good access to the C-level manage-

ment teams of your portfolio companies,” Aggarwal says. “I can speak with the CEOs of most of our companies to talk strategy – what they’re looking at, what they’re trying to do and what their outlook is three or five years down the road.” Being on a first-name basis with CEOs of portfolio companies has enabled the Growth Team to get deep qualitative information to reinforce or counterbalance financial data and models. That’s just one of several capabilities underpinning the Mackenzie US Mid-Cap Opportunities Fund, which draws from the approach of Mackenzie’s US

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Small- to Mid-Cap Growth Fund. The US Mid-Cap Opportunities Fund has enjoyed considerable success since its launch a year ago. According to Aggarwal, it crossed the billion-dollar AUM mark in April, and it has been consistently in the top five of sales across all of Mackenzie’s retail funds since the beginning of 2021. Its performance has been remarkable, too. Since its debut, the US Mid-Cap Opportunities Fund has achieved a 56% return, compared to 40% for the S&P 500 and 53% for the overall US mid-cap space. Over the past 15 years, Aggarwal notes, US mid-caps have outperformed both the S&P 500 and the small-cap index, reinforcing the notion that mid-cap stocks are a desirable “sweet spot” in the world of equities.

“You see on one end of the spectrum, people invest in large-caps because they want established companies with diversified business lines,” he says. “But a lot of the time, ‘diversified business lines’ is code for mature companies with slow growth. On the other end of the spectrum, people invest in smallcaps because they want that fast-growth, home-run type of scenario. But just like buying lottery tickets, it could be a very risky investment strategy.” From where the Mackenzie Growth Team sits, mid-caps possess the best of both worlds: growth profiles akin to small-caps, but with more of the stability of large-cap stocks. That belief has translated into a high-conviction portfolio of between 30 and 35 names, which has been built through a well-considered

“People invest in large-caps because they want established companies with diversified business lines. But a lot of the time, [that’s] code for mature companies with slow growth” Sonny Aggarwal, Mackenzie Investments

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FEATURES

MUTUAL FUND SPOTLIGHT TOP 10 HOLDINGS OF THE MACKENZIE US MID-CAP OPPORTUNITIES FUND

Akamai Technologies 5.02%

Carter’s 4.94%

Westinghouse Air Brake Technologies Corp. 4.92%

Syneos Health 4.89%

Frontdoor 4.57%

Motorola Solutions 4.52%

Equifax 4.36%

Progressive Corp. 4.17%

Markel Corp. 4.03% Signature Bank

10 4.03%

Source: Mackenzie Investments, as of April 30, 2021

bottom-up approach. Aggarwal says his team looks for companies with strong prospects of sustainable growth, typically driven by large secular themes. To create an all-weather portfolio, they have identified 10 secular themes that well-positioned companies can benefit from not just over the next year, but also for the next three, five or 10 years. “One sector that we went overweight on initially was financials, which did struggle for the better part of last year while the NASDAQ reached all-time highs from tech valuations going to the moon,” Aggarwal says. “But we believed the financial sector and other cyclicals would have their time in the sun as the economy rebounded. We held on to financial companies that had a really good credit track record, and it’s paid off nicely over the past three to six months.”

A unique approach to Canadian exposure Invesco is using its global capabilities to add another dimension to its Premier Canadian Balanced Fund IT’S NO secret that Canadians tend to have a home bias when investing, and their portfolios tend to be made up of the country’s most prominent industries, such as financials and energy. Canadian balanced funds feature many of these same industries, but they do have other exposures. While many look to familiar areas like the US for additional exposure, Invesco has taken a different approach with its Premier Canadian Balanced Fund, which targets international exposures in both equities and fixed income. “The strategy falls under the Canadian neutral balanced fund category,” says Avi

Hooper, portfolio manager for Invesco Fixed Income. “There will always be 60% equity and 40% fixed income. As markets move, we’ll adjust monthly.” Richard Nield, senior portfolio manager at Invesco, adds that “the premise was a growth mandate on the equity side that invested in long-term quality compounders, and having Canadian and foreign equities. We have a little more foreign equities than our peers and not as much tilted to the US. We have a dedicated US team but look at Europe and Asia so we don’t put all our eggs in one basket.” The result is that the fund can have up to

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GEOGRAPHIC ALLOCATION OF THE INVESCO PREMIER CANADIAN BALANCED FUND

70.3% Canada

1.0% Ireland

13.4% US

1.9% Netherlands

2.1% China

5.5% Other countries/regions

1.3% Japan

“We look for growth companies, but not the fastest-growing growth companies. We look for sustainable growth” Richard Nield, Invesco 30% international exposure. Both Hooper and Nield use their expertise in that area to bring global opportunities to the fund. When it comes to selecting securities on the equity side, Nield says the team looks for growth but also cares about valuations. “We look for growth companies, but not the fastest-growing growth companies. We look for sustainable growth,” he explains. “We are happy to find businesses that can grow their earnings 10% to 15% per year.” On the fixed income side, Hooper says the team combines “macroeconomic broad themes with our credit research. Our best ideas, from the bottom up, are integrated in the portfolio.” Despite the fund’s international spin, both Nield and Hooper see opportunities in Canada. “We look at Canada as very

attractive at this point,” Nield says. “When we look at Canada, with vaccination rollout, having just gone through the pandemic, GDP is roaring back, and there is still a lot of stimulus. I think that bodes well for Canada. There is opportunity on the industrials side, financials are still a key contributor, and a good way to approach commodities is some of those energy names tilted to natural gas.” Hooper shares that positive outlook on the fixed income side. Right now, the fund is overweight toward corporate credit and underexposed to government debt. One of the reasons why is that banks and large insurance companies have offered subordinated debt, a higher-yielding hybrid structure. “The accommodating monetary policy leans to overweighting corporate debt,” Hooper explains. “Canada’s banking sector

1.2% France 1.2% UK

2.9% Short-term investments, cash and other net assets

Source: Invesco.ca, as of April 30, 2021

is incredibly strong; the banks have issued subordinated debt. It’s a great opportunity for us to enhance yield [and] reduce interest rate sensitivity, focusing more on the credit risk sensitivity with the highest-quality companies in Canada.” Because the fund gives investors a bit of everything, Invesco considers it a core product. While the international exposure makes it unique, Nield notes that the importance placed on valuations and the bottom-up construction are also key differentiators that make it less risky than similar funds. “Investors seem to like the one-stop shop,” Hooper says. “At a high level, it has equity and fixed income allocations but is very diversified across sectors and globally. Even though we are finding opportunities here, it’s how we leverage our global research team and take advantage of those capabilities. I see it playing an important role, and I value our approach of being global in our thought process.”

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FEATURES

MUTUAL FUND SPOTLIGHT

Taking advantage of real estate trends Middlefield’s established Global Real Estate Class Fund has capitalized on subsectors that were disproportionately hit by COVID-19, leading to an award-winning result

THE COVID-19 pandemic has made for an interesting time in real estate investing. Some subsectors, like e-commerce, have taken off, while others were hit hard. Yet those battered subsectors have presented opportunities for the team at Middlefield to buy in areas they felt were unjustly punished. That reallocation led to success in the form of a 2020 Lipper Award for the Middlefield Global Real Estate Class Fund. “It is a diversified real estate fund,” explains Dean Orrico, president and CIO at Middlefield. “Within real estate, you have sectors that have behaved very differently over the past 12 to 18 months. Several years ago, we decided to target one area that we

thought would go through a multi-year run of growth: e-commerce REITs.” While the fund’s exposure to e-commerce has helped make it successful, Middlefield’s decision to pivot its approach is what kept the fund strong during the pandemic. “We looked at those sectors that were left behind and thought it presented an attractive opportunity to invest in some of those companies,” Orrico says. “We rotated out of some of those e-commerce names – we didn’t sell them, but reduced their weight – and then invested in some of the areas that were left behind, mainly multi-family, brick-andmortar retail and select office REITs.” There were very specific reasons why

Middlefield thought those areas represented good opportunities, Orrico says. In brick-andmortar retail, an area hit hard by the rise of e-commerce, Orrico says there are still opportunities in open-air retail, especially anchored by needs-based stores like groceries. “We still think they have a lot of runway,” he says, “because they are trading at a valuation that is below where they were historically and at a discount to retail REITs in the US.” Another area where Orrico sees opportunity is the multi-family subsector. The transition to working from home didn’t correlate to people leaving the cities to purchase suburban houses because home prices are still high, he points out. He also feels that when Canada resumes immigration, with the government targeting 400,000 new arrivals per year, the demand for rentals will remain elevated. Finally, Middlefield is looking at select opportunities in the office space. While Orrico sees a future hybrid work environment split between home and the office, he believes many people will return to offices. One area Middlefield is targeting is purposebuilt office, which is more common in the US, but Orrico says the team likes companies focused on specific niches. He notes that the Middlefield Global Real Estate Class Fund can invest in any real estate subsectors and, because of its global nature, is not tied to one country; the current breakdown is roughly 50% Canada, 40% US and 10% international. While e-commerce REITs still hold a strong position in the fund (35% to 40%), it is well diversified across many subsectors, including retail REITs/open-air shopping centres (15% to 20%), multi-family REITs (15% to 20%), office REITs (5%), real estate services (10%), and healthcare REITs and other (10%). “Generally speaking, we are focused on larger-cap issuers – we tend to stay away from smaller-cap names because you can have a liquidity issue,” Orrico says. “We tend to be value-oriented, but I describe it as growth at a reasonable price – we like to see companies that can grow revenue streams, but we don’t really want to pay up for them.”

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“We rotated out of some of those e-commerce names and then invested in some of the areas that were left behind” Dean Orrico, Middlefield He notes that Middlefield also looks to identify companies focused on specific areas and that the quality and the track record of managers goes a long way in determining where capital is allocated. When it comes to real estate’s position in portfolios, Orrico believes all investors should have exposure to it. “It makes sense as part of a core component because real estate does well in

various economic cycles,” he explains. “It does well when interest rates go down because there is more cash flow available to pay dividends or upgrade properties. However, if you look back over 30 to 40 years, it does well in inflationary environments because if you have lease renewals in the portfolio and the economy is doing well, you can renew leases at higher levels, so it has become a good hedge against inflation as well.”

TOP 10 HOLDINGS OF THE MIDDLEFIELD GLOBAL REAL ESTATE CLASS FUND Canadian Apartment Properties REIT Colliers International Group Duke Realty Corp. First Capital REIT First Service Corporation Granite REIT Prologis RioCan REIT SmartCentres REIT WPT Industrial REIT Source: Middlefield.com, as of March 31, 2021; holdings are listed alphabetically

A big thank you

To all our colleagues recognized in this year’s Wealth Professional Awards for their outstanding achievements and leadership over the past 12 months. We’re proud to be working with you to change the Canadian investment industry for the better. For winners and highlights of the event, please visit wpawards.ca

BMO Global Asset Management is a brand name that comprises BMO Asset Management Inc., BMO Investments Inc., BMO Asset Management Corp., BMO Asset Management Limited and BMO’s specialized investment management firms. ®/ ™Registered trade-marks/trade-mark of Bank of Montreal, used under licence.

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FEATURES

MUTUAL FUND SPOTLIGHT

Concentrating on emerging markets Fidelity Investments’ Emerging Markets Fund limits exposure to sectors, countries and individual stocks to give investors a diversified solution

SECTOR ALLOCATION OF THE FIDELITY EMERGING MARKETS FUND 100%

22.5% Financials 80%

60%

16.4% Information technology 14.5% Consumer discretionary 10.5% Communication services 9.7% Materials

BETWEEN THE pandemic and a strong US dollar, emerging markets have had a tough time lately, but it’s an area where Fidelity Investments sees opportunity on the horizon. “The EM opportunity is exciting today,” says portfolio manager Sam Polyak. “EMs have had a tough time in general relative to developed markets. When the dollar is strong, EM currencies are weak; it leads to inflation, and these countries raise interest rates, which hurts consumption and growth. Because of that, you have a lot of pent-up demand that I think will dissipate.”

blow up if one area significantly underperforms. It has, therefore, been able to deliver in up and down markets, growth and value cycles, and been consistent because the focus is the individual stocks.” Fidelity’s experience with emerging markets goes back more than a decade when it rebuilt its approach. Today, a seasoned team focuses on stock selection and returns, not just individual themes. Polyak notes that the team is looking for companies that will continue to grow for years to come. A few of Fidelity’s capabilities help add to

“The EM opportunity is exciting today. EMs have had a tough time in general relative to developed markets” Sam Polyak, Fidelity Investments Polyak is analyzing areas that will benefit and getting those exposures into the Fidelity Emerging Markets Fund. While many EM funds are index-focused, Polyak takes a concentrated approach, focusing on 40 to 50 stocks, then adding a layer of protection to ensure the fund isn’t overexposed to one area. “We have these guardrails in place that make it unique,” he says. “As such, the fund will not be more than 5% overweight or underweight a sector, 10% for a country and 5% of the benchmark weight for an individual stock. It keeps the volatility down. From a risk perspective, the fund will not

the fund’s uniqueness. The first is its corporate governance team, which looks at balance sheets and income statements for aggressive accounting, but also at the people behind the companies. The second is Fidelity’s geopolitical analyst, a former CIA agent who helps the team understand geopolitical relationships so they are not caught off guard by an event. When selecting stocks, Polyak says his philosophy is growth at a reasonable price, and he looks for companies that have a great product, consumer demand and are run by a management team with a good track record. “The other thing I do is not mess with cash

40%

9.3% Consumer staples 5.0% Industrials

20%

4.2% Healthcare 3.5% Energy

0% Source: Fidelity.ca, as of April 30, 2021

or developed market stocks,” he says. “I try to stay under 2% cash. As for developed market stocks, other funds may sometimes benefit by owning US tech stocks in an EM fund, for example, but I try to provide my investors pure EM exposure.” Right now, Polyak is focusing on a few themes in emerging markets, including automation, local brands taking market share, innovation, e-commerce and infrastructure. While he has historically liked China, he is now looking at areas that have been hit hardest by the pandemic, such as Latin America and India, as he believes they will begin to grow at a faster rate during the rest of 2021 and into 2022. “I think advisors who consider buying into EMs should look at active managers – they have outperformed through time because of two reasons,” Polyak says. “One, EMs have a big proportion of state-owned enterprises that often have the interests of the population and not minority investors in mind. The other area is corporate governance. An index buys a company because it is big, but they don’t care if the people running the company have other personal interests in mind. Those reasons are why I think active does well.”

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SPECIAL REPORT

2021

WHOLESALERS Wealth Professional highlights a sometimes forgotten role in wealth management by recognizing 29 wholesalers who consistently go above and beyond for advisors

CONTENTS

PAGE

Feature article .............................................. 18 Methodology ................................................ 19 5-Star Award winners .................................. 21 Profiles .......................................................... 22

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: WHOLESALERS

BUILDING A TRUE PARTNERSHIP THERE ARE many facets of the wealth management landscape, and wholesalers tend to be one of the more overlooked corners. Wholesalers often face a difficult balancing act of not only selling funds, but also providing service, support and education to advisors. The role has only gotten more difficult in recent years as record numbers of products have hit the market and advisors’ and investors’ access to information (and misinformation) has increased. With that in mind, Wealth Professional

“Communication has always been the cornerstone of the wholesaler role. I believe effective wholesalers will learn from their pandemic experience and look to adopt a blended approach” Jillian Kosolofski, AGF Investments

WHERE ADVISORS THINK WHOLESALERS ARE EXCELLING Product knowledge

95% Value contributed

Areas of strength 92%

Communication

92% Understanding advisors’ business

90% Response time

89% Accessibility

89% Educating advisors

82%

surveyed advisors to find out which wholesalers in Canada are providing the kind of top-notch service advisors can rely on to better serve their own clients.

Product knowledge is the category where wholesalers earned the highest ratings from advisors; 95% of wholesalers received top marks for their product expertise. This is a critical area: As of the end of 2020, there were 3,459 mutual funds and 846 ETFs available to Canadian investors, according to IFIC and the CETFA. With so many products available, it’s nearly impossible for advisors to know all of the intricacies. However, they need to have the facts before recommending a product to a client, so they must be able to trust that the wholesalers they’re dealing with have adequate product knowledge. “It is important [for wholesalers] to fully understand products without any predis-

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positions,” says Georges Aina of Manulife Investments, one of this year’s 5-Star Wholesalers. “It would be detrimental to your credibility if you do not fully understand a product. A key method is unbiased research, which is time-consuming, in addition to anecdotal information from advisors. Through conversations with your peers, you can learn the functionality, purpose and positioning of the product. You can also find out the intricacies through brute research from varied sources.” Another strong area for wholesalers – and an equally crucial aspect of the advisorwholesaler relationship – is communication. For advisors, the ability to ask questions and get answers about funds they’re considering can be a deciding factor in which products they recommend.

this year’s 5-Star Wholesalers were able to garner such high scores for their communication is a testament to their versatility. “Communication has always been the cornerstone of the wholesaler role,” says 5-Star Wholesaler Jillian Kosolofski of AGF Investments. “I believe effective wholesalers will learn from their pandemic experience and look to adopt a blended communications approach that includes in-person meetings, phone and video calls, and effective ongoing digital engagement.” Travis Jensen of Canoe Financial, another of this year’s 5-Star Wholesalers, adds that communication is “extremely important, and the key is consistency. Even with faceto-face interactions being very limited right now, it’s important to keep communication consistent with phone calls, emails and

“In today’s world of technology, you can’t respond to an advisor’s question two days after receiving it – you need to jump on it as fast as you can” Travis Jensen, Canoe Financial

Wholesalers received ‘excellent’ ratings from 92% of advisors for their communication. They also received ‘excellent’ scores from 89% of advisors for their response time and accessibility, both of which are key aspects of communication. This is an area that has evolved significantly over the past year due to the COVID-19 pandemic. According to Statistics Canada, as of January 2021, 32% of employees between the ages of 15 and 69 were still working most of their hours from home. As in-person meetings gave way to digital communication during the pandemic, wholesalers were forced to move with the times. The fact that

videoconferencing. In today’s world of technology, you can’t respond to an advisor’s question two days after receiving it – you need to jump on it as fast as you can.”

Adding value Another area where wholesalers scored well is in their understanding of advisors’ business – 89% of this year’s 5-Star Wholesalers received ‘excellent’ ratings from advisors in this category. As the wealth management industry has evolved over the past few years to become less product-centric and more focused on holistic financial planning, it’s heartening

METHODOLOGY To uncover the best wholesalers in the Canadian wealth management industry, the Wealth Professional team undertook a rigorous marketing and survey process, leveraging WP’s connections to thousands of advisors across the country. Advisors were asked to nominate their wholesalers for consideration and rate them on their product knowledge, communication, response time, accessibility, understanding of the advisor’s business, ability to educate the advisor and the value they contribute. From there, the WP team compiled a shortlist of top wholesalers and conducted one-on-one calls with nominators to add qualitative research to the quantitative results from survey. At the end of the research period, the top-scoring wholesalers were named 5-Star Award winners based on the service they provide to advisors.

44% of advisors said they communicate with their wholesalers monthly

34% said they communicate with their wholesalers every week

22% said they communicate with their wholesalers on a quarterly basis

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: WHOLESALERS

THE 5-STAR WHOLESALERS BY LOCATION

BC Prairies Ontario Quebec Atlantic Canada

1 1

3 14

“I think we can give [advisors] a broader perspective of what’s going on in the industry as a whole – trends, changes and what other advisors are doing” Harmeet Brar, CI Global Asset Management

to see wholesalers working to evolve, too, so they can fit into an advisor’s ecosystem. “This business requires a curious attitude and a joy of working with people,” says Bernd Silbermann of Manulife Investment Management, one of this year’s 5-Star Wholesalers. “On the face of it, it sometimes seems that all advisors are the same. It couldn’t be further from the truth. That is one of the key ingredients to successful

wholesaling. If all advisors were the same, you wouldn’t need wholesaling; mass marketing would work on its own.” Along those same lines, one of the most important areas in the advisor-wholesaler relationship is the value wholesalers can add to an advisor’s business. Wholesalers also received impressive marks here, earning ‘excellent’ ratings from 92% of advisors. The results suggest that advisors truly do respect the offerings wholesalers provide – from the products to the knowledge behind them – and see them as an integral part of their business. “I think we do play a big role,” says Harmeet Brar of CI Global Asset Management, another 5-Star Wholesaler. “I think we can give them a broader perspective of what’s going on in the industry as a whole – trends, changes and what other advisors are doing. Because we speak to the advisor community at large and in different areas, we get a better gauge of the overall industry. I often get advisors asking, ‘What are the other guys doing? What’s going on? What’s working? What’s not working? What are some of the biggest challenges?’ When they run their own practice, they don’t really see what’s happening outside of their practice.”

Room for improvement The one area where wholesalers could perhaps use a bit of work is in their efforts to educate advisors – 82% of advisors rated their wholesalers as ‘excellent’ in this area, making it the lowest-ranking category in the survey. It wasn’t all bad news – most wholesalers still received a ‘good’ ranking for education from advisors – but it is a critical aspect of the role that even the best wholesalers can improve upon. “Our industry is moving fast,” says 5-Star Wholesaler Michael Katugampola of Sun Life Financial, “and as a result, I believe it is important for us all to stay current and be open to potentially different but impactful ways we can provide financial advice for Canadians.”

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2021

WHOLESALERS Bernd Silbermann, EPC, CFP Manulife Investment Management

Georges Aina Manulife Investment Management

Kadeem Robinson Manulife Investment Management

Phone: 902-717-8594 Email: georges_aina@manulife.ca Website: manulifeim.com/retail/ca/en

Phone: 416-452-0658 Email: kadeem_robinson@manulife.ca Website: manulifeim.com/retail/ca/en

Blaise Bolland Canoe Financial

Harmeet Brar CI Global Asset Management

Neso Marjanac TD Asset Management

Phone: 902-237-2500 Email: bolland@canoefinancial.com Website: canoefinancial.com

Phone: 800-268-9374 Website: ci.com

Phone: 647-272-1374 Email: neso.marjanac@td.com Website: tdam.com

Eric Cameron Manulife Investment Management

Jillian Kosolofski AGF Investments Inc.

Travis Jensen Canoe Financial

Phone: 902-401-4057 Email: eric_cameron@manulife.ca Website: manulife.ca

Phone: 403-992-2032 Email: jillian.kosolofski@agf.com Website: agf.com

Phone: 204-930-0095 Email: jensen@canoefinancial.com Website: canoefinancial.com

Andrew Kerr Dynamic Funds

John Neale  Dynamic Funds

Patrick Graham Franklin Templeton Investments

Corey Taube Dynamic Funds

Jordan Kaczmarzyk Fidelity Investments

Craig Clarke CIBC Asset Management

Kirsten Woodhouse BMO Global Asset Management

David Bear Canoe Financial

Krystian Urbanski Forstrong Global Asset Management

Geoff Goss EdgePoint Wealth Management

Kyle MacDonald Mackenzie Investments

Ghislain Maillet Fidelity Investments

Michael Katugampola Sun Life Global Investments

Hutson Myles BMO Global Asset Management

Mike Nixon iA Clarington Investments

Phone: 519-242-8015 Email: bernd_silbermann@manulife.ca Website: manulife.ca

Robert New Fidelity Investments Todd Green Fidelity Investments Tom Wile NEI Investments Tyler Ness Fidelity Investments Zachary Sikorski Sun Life Financial

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: WHOLESALERS

BERND SILBERMANN

KADEEM ROBINSON

Manulife Investment Management

or Bernd Silbermann, the most important philosophy is the idea of sitting on the same side of the table as the advisor. “If you keep that in mind at all times, then all conversations and advice will be anchored in truly trying to help the advisor because you are trying to think like an advisor,” he says. Silbermann has 37 years of experience in the financial services industry, 35 of which have been with Manulife Financial, where he is currently a district vice-president for Manulife Investment Management in Kitchener and Waterloo, Ontario. With 21 years of experience as a wholesaler, Silbermann believes one of the most important aspects of his role is building long-term, valued business relationships, one advisor at a time. “If you want to know about an advisor’s approach and methods and you genuinely care, it shows through. That is one of the key ingredients to successful wholesaling,” he says, noting the importance of keeping up with the markets and their issues, opportunities, and trends. “This is the toughest part of the job – providing insights and education that are appreciated by experienced advisors on a consistent basis. You have to be confident in your perspectives to figure out how to truly provide valuable advice.”

adeem Robinson believes it’s the little things wholesalers do that can make a difference with advisors. “When you go the extra mile on the small things, advisors see that you’re reliable, and when they can depend on you, you become the kind of partner they want on their side,” Robinson says. “It’s a matter that I take extremely seriously.” Robinson is a district vice-president for Manulife Investment Management in the Greater Toronto Area. With eight years of experience in the industry, including five with Manulife, he is dedicated to being an integral partner to all of the financial advisors he works with by providing exceptional business support, value-added insights and exemplary service. He believes successful partnerships are rooted in trust and reliability – a commitment he makes to his advisor community. “Service is the key to any relationship,” says Robinson, who has a master of finance degree from Queen’s University, a bachelor’s degree in financial economics from Western University and is a CFA Level 3 candidate. “Being knowledgeable is an important element to being an impactful wholesaler. There’s so much information out there relating to our industry – having the ability to distill that information and provide valuable perspective to an advisor and their business is what makes your partnership truly consultative. This is where we truly add value.”

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NESO MARJANAC TD Asset Management

rawing on more than 14 years of industry experience across multiple areas of wealth services, Neso Marjanac has delivered exceptional results in various senior roles. “I view myself as a strategic coach,” he says. “I’m not limited to solely sharing product knowledge and market insights with my advisors, but rather, I’m in a position to educate advisors on various aspects of the investment landscape, including business development tactics, communication strategies and business optimization.” In his current role as regional vice-president at TD Asset Management in Toronto, Marjanac works with financial advisors to help them build and grow successful practices. By providing advisors with innovative and insightful information on TD’s financial products and solutions, market opportunities, and business-building strategies, Marjanac continuously strengthens his advisor relationships through all market conditions and is a vital resource for his clients. Marjanac was ranked by Environics Research in the first quartile against his peers based on feedback from advisors and was a TD Merit Award recipient in 2019, recognized for delivering outstanding sales results on a national level. “As a wholesaler,” Marjanac says, “our understanding of the competitive landscape and how our products compare to those of our peers is crucial and can help us determine where our solutions fit in to best align with the objectives of our advisors and the clients they serve.”

HARMEET BRAR CI Global Asset Management

or Harmeet Brar, success in the wealth management industry begins with listening and a customized approach. “Understand your client’s business, what their needs are and then figure out how you can add value – it’s not always just about product,” Brar advises, adding that he thinks of his clients as his partners. “I am an extension of their business – my success is dependent on their success, so anything I can do to help them grow, I will.” Brar brings nearly 13 years of experience as a VP in financial product sales to his current role as vice-president of sales with CI Global Asset Management. He has ranked consistently among the top of his peer group in sales growth, winning awards for top gross sales seven times. Brar prides himself on his ability to provide his clients with timely market insight, excellent product knowledge and a high level of service and professionalism from his team. Brar says the opportunity to meet with prospective clients isn’t something he takes for granted. “I recognize that there are plenty of my competitors who would like this same chance to speak with them, so if an advisor is giving me the opportunity and time, I really appreciate that and make sure after a meeting that they felt it was a great use of their time.”

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: WHOLESALERS

ERIC CAMERON Manulife Investment Management

ith 22 years of experience in the financial services industry, 20 of which have been with Manulife Investment Management, Eric Cameron believes his product and industry knowledge have been critical to his success. “This industry is everchanging, so you need to constantly be learning about new products, market and industry trends, best practices, and tax strategies,” he says. “Fortunately, Manulife has a broad product shelf, accessible portfolio managers, capital market strategists, and tax and retirement planning experts that I can access to help advisors with these challenges.” A district vice-president at Manulife Investment Management, Cameron has been covering Atlantic Canada for 15 years. He started his career at Manulife as an inside sales rep, where he learned the fundamentals of the business by working with experienced teams and wholesalers in the Ontario region. “I have been very lucky that I have had great business partners over my career,” he says. “A good wholesaler must have a great inside sales partner, territory coordinator and subject-matter experts.” A good wholesaler also needs to be able to put themselves in the advisor’s shoes, Cameron adds. “The role of the advisor is evolving and becoming more and more challenging. The wholesaler’s role is to add value by understanding these challenges and providing strategies to help advisors deal with the challenges they face.”

GEORGES AINA Manulife Investment Management

eorges Aina has more than a decade of experience and a unique approach that ensures he understands his clients’ needs. “We serve as an information bridge,” says Aina, who serves as a district vice-president for Manulife Investment Management, supporting exclusively IIROC advisors in Atlantic Canada. “We have the privilege of seeing countless business models and products throughout the industry – we can share key insights and provide a consultative partnership.” Aina holds an MBA from the John Molson School of Business at Concordia University in Montreal. He began his career in the pension division of Standard Life Aberdeen and gravitated toward the retail markets. After the acquisition of Standard Life’s Canadian operations by Manulife Financial, he joined Manulife Investment Management as a business development manager, eventually moving to Halifax, Nova Scotia, to take on his current role. Aina adds value by acting as an extension of his clients’ practices, focusing on investments, tax and estate planning, and capital markets. This approach is at the core of his and Manulife Investment Management’s philosophy. “We can provide feedback on ideas, concepts, strategies and barriers,” Aina says. “We are closer to the emerging trends in the industry. We also have wide-ranging resources at our disposal, from tax and estate planning to capital market strategists and economists.”

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JILLIAN KOSOLOFSKI

TRAVIS JENSEN

AGF Investments Inc.

Canoe Financial

ith a consultative approach that helps her understand the needs of advisors, Jillian Kosolofski assists in developing strategies that solve many of the unique challenges facing Canadian investors. “The investment business is a people business,” she says, “and building a personal relationship with an advisor helps me understand what’s important to them and how they make decisions.” With more than 10 years of experience in financial services and currently in her fourth year at AGF Investments, Kosolofski is a regional sales manager covering Calgary, Southern Alberta and parts of the BC Interior. Prior to joining AGF, she was a financial advisor and mutual fund investment specialist at an Alberta credit union. Critical to Kosolofski’s success at AGF is aligning what she does with an advisor’s business to create mutually beneficial outcomes that serve investors’ needs. “Of course, any success I’ve achieved is truly a success for the whole team and wouldn’t be possible without the efforts and support of the entire organization,” Kosolofski says. “At AGF, we’re committed to providing an exceptional client experience. I’m fortunate to work with a sales team that approaches every client interaction with integrity, knowledge and a desire to improve advisors’ businesses, and our sales leadership team at AGF has given us the tools and support to deliver.”

rying to be a consistent resource to advisors for all areas of the investment industry has been one of Travis Jensen’s keys to success. Earning his CFA designation early in his career helped build his knowledge to be able to add value to an advisor’s practice. To find out the best way to do so, he takes a simple approach: ask questions and listen. “Keep asking questions until you understand where you might be able to help,” Jensen advises. “Wholesalers who dominate conversations or don’t listen usually don’t find out much about the advisor and come off as product pushers.” Currently working with financial advisors in Manitoba and Saskatchewan, Jensen brings more than 30 years of experience in the financial services industry to his role at Canoe Financial. Prior to joining Canoe in 2011, his high-profile roles included vice-president of sales with CI Investments and vice-president at Rice Financial, where he guided mutual fund research and provided investment sales and product training to financial advisors. Outside of work, Jensen is an avid triathlete who has finished several full Ironman races and has hopes of doing more. He carries that dedication into his professional life. “My focus since joining Canoe has been to work with advisors who I feel run a great practice – ones who care about their clients, take pride in their work and also have a passion for what they do,” he says.

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SPECIAL REPORT BUSINESS STRATEGY

5-STAR AWARDS: WHOLESALERS What has been critical to your success? • Adding value with superior service standards, knowledge, conviction, honesty and transparency • Providing unique digestible content via emails, videos and events

How important is communication with advisors, and what are some ways wholesalers can do it successfully? • Communication is paramount. Wholesalers must be accessible, acknowledge all inquires ASAP and offer executive summaries that are thought-provoking and provide key answers • Wholesalers must own their narrative; as Albert Einstein said, “If you can’t explain it to a 6-year-old, you don’t understand it yourself ”

What role do wholesalers play in educating advisors?

BLAISE BOLLAND Canoe Financial

• Wholesalers are another lever to add value, from tax-efficient solutions to having an opinion on trends like Bitcoin • It’s extremely important to be able to succinctly explain the product and the big picture

Congratulations Dynamic Funds would like to congratulate Andrew Kerr, John Neale, and Corey Taube on their industry recognition.

Dynamic Funds® is a registered trademark of its owner, used under license, and a division of 1832 Asset Management L.P.

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25/06/2021 4:42:23 AM

FEATURES

INNOVATION

Four innovation leadership skills to master As automation continues to rewrite the future of work, Evette Cordy highlights four qualities all leaders must have if they want to keep up with the pace of change

TO THRIVE in an increasingly complex and unpredictable new world, leaders will require the skills of the future. To lead growth agendas, what matters most is not leaders’ intellectual intelligence or confidence in what they know, but how they deal with what they don’t know. It’s also about whether leaders are courageous and inspire their teams to seek creative ways of commercializing solutions. It is this innovation leadership that will give companies a competitive advantage in the face of continuous disruptive change. Innovation agendas often fail not because of a lack of process or tools, but because people lack the skills required for innovation leadership. Do your leaders have the necessary skills for the future? Here are four that will turbo-charge your organization’s innovation efforts.

The ability to handle ambiguity

Ambiguity is all around us. We don’t know what we don’t know, yet we like to know because it helps us to feel more comfortable and in control. Leaders’ need for

certainty can kill innovation. It reduces their ability to let go of the known and make space for new, unknown insights and ideas. Imagine you’re in a leadership team meeting and someone asks how the latest innovation project is going. All heads turn to the leader, waiting for their response. They don’t know yet – it’s too early; they haven’t

likely to create a pathway to breakthrough thinking. Sit with ambiguity and plan to ‘not know’ for a bit longer.

A curious mindset

Leaders should spend less time in the office and more time walking in their customers’ shoes to view the world through

Leaders who can hold space for ambiguity and continue to inspire their teams in the face of increasing complexity are those most likely to create a pathway to breakthrough thinking even defined the right problem to solve – yet they feel compelled to respond. Leaders need permission to say, “I don’t know yet, but we’re learning a lot.” Leaders who can hold space for ambiguity and continue to inspire their teams in the face of increasing complexity are those most

their eyes and discover their hopes, fears and values – noticing what delights them and observing their irritations, frustrations and pain points. Leaders who curiously observe what customers say and do and seek to understand what deeply matters to them will find

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FEATURES

INNOVATION

the most valuable problems to solve – and, in doing so, will create more meaningful solutions for customers. By creating such an environment of curiosity, leaders can inspire employees to ask questions, to learn and to seek problems and solutions. Employees are more open to discovering new things, leading to richer insights and platforms for problemfinding – and, ultimately, innovation. Here are five questions leaders can encourage their employees to ask regularly: • Why? • How might we? • What if? • Why not? • What did you learn?

Creative thinking

Creativity is critical for breakthrough thinking and innovation, and scientific

research has shown that creativity can be cultivated. The more leaders approach challenges flexibly and imaginatively, the easier it will become to generate original ideas. Research has suggested that people who are good at creative thinking are also good at seeing connections and generating more original ideas. By training our leaders’ abilities to see connections, we can boost their ability to think creatively. Thinking of alternative uses for an object is a simple activity to train leaders’ minds to make new connections and, in turn, boost their creative thinking. This exercises your mind by stretching beyond the obvious uses to imagine an object outside of its usual context. Pick a random object, such as a paper clip. Now take precisely three minutes to write down as many alternative uses as you can. Challenge yourself to come up with more than 20 ideas in three minutes.

The willingness to be brave

Most of us spend 99% of our workday playing it safe, following the rules, processes and protocols. Structure and order are there for a reason, but any deviation from the norm can be viewed as negative, risky or dangerous to the integrity of the organization. Imagine you’re in a leadership meeting and hold a strong view on which ideas should be prioritized based on the rigorous customer-led process your team has been through to develop and prioritize the ideas, completely disagreeing with what has been decided. Yet you sit there and nod your head in agreement. In most cases, conformity is the norm. Leaders don’t choose to agree with others because their perception has altered – they go along with it because they don’t want to stand out. Many leaders fear failure, being wrong, looking silly or feeling embarrassed at work. This happens often and is costly to innovation efforts. Leaders need to embrace risk-taking, challenge the status quo, and bravely speak up and dissent. Are you ready for innovation to thrive in your organization? These four leadership skills should be practiced and mastered alongside a robust innovation process to enhance your innovation efforts. Consider incorporating them into leaders’ job descriptions and KPIs to encourage and reward such behaviours. And keep in mind that these are not one-off activities – to get skilled, they require repeated effort and discipline. Evette Cordy is an innovation expert, registered psychologist and the chief investigator and co-founder of Agents of Spring. She uses curiosity and creativity to help organizations create human-centred products and services and facilitate new ways of thinking. She is also the author of Cultivating Curiosity: How to Unearth Your Most Valuable Problem to Inspire Growth. For more information, visit agentsofspring.com.

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JUNE 2-3, 2021 • ONLINE

CONGRATULATIONS TO THE 2021 WINNERS AND EXCELLENCE AWARDEES During another extraordinary year for the wealth management and financial planning industry, wealth professionals and organizations have continued to raise the bar in terms of service, innovation, professionalism and leadership. And nowhere is this more evident than among the Wealth Professional Awards 2021 Winners and Excellence Awardees. Wealth Professional, our publisher Key Media and our esteemed event sponsors extend warm congratulations to them all. Special thanks goes to the external judging panel who dedicated their time and expertise to review the hundreds of submissions and then vote — a process that was fully verified by the official ballot accountants PwC Canada. The virtual event was held on June 2 and 3, 2021 and the award recipients will be commemorated in WP Issue 9.06 out in August, which will take an in-depth look at their achievements.

For the full list of award recipients, visit

www.wpawards.ca #WPAwardsCA

SPECIAL THANKS TO OUR SPONSORS

SOCIAL MEDIA SPONSOR

OFFICIAL BALLOT ACCOUNTANTS

OFFICIAL MEDIA

CANADA

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A HOST OF INNOVATIVE VIRTUAL EVENTS – RECONNECTING THE INDUSTRY AFTER A CHALLENGING YEAR Wealth Professional is proud to have been the voice of a community that has refused to waver during challenging times. As we continue to recover from the pandemic, we’re keeping the focus on the future – an era of inclusivity, innovation and ingenuity. Our roster for the rest of the year covers some of the key topics of the post-pandemic era: environmental, social and corporate governance; retirement and tax planning; and gender diversity. Be sure to join us at: SEP

NOV

OCT

DEC

7 LEARN MORE

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@WealthProCA

Wealth Professional Canada

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