30 years in the business: Pan Finance speaks with V Thane Stenner of Stenner Wealth Partners+

BANKING & INVESTMENT PAN Finance Magazine Q3 2022

Stenner Wealth Partners+ of CG Wealth Management is committed to helping clients reach their financial goals. Its team is composed of exclusive, award-winning Wealth Advisors for investors with at least $10+ Million in investment capital, or $25+ Million net worth, across Canada and the USA. Stenner Wealth Partners+ has been named Pan Finance’s Boutique Wealth Advisory of the Year - North America 2022.

Thane Stenner is the senior wealth advisor and senior portfolio manager for Stenner Wealth Partners+ CG Wealth Management. In the following interview, he answers questions about the industry, his experience, his team and their approach to business.

Pan Finance speaks with V. Thane Stenner of Stenner Wealth Partners+

V. Thane Stenner of Stenner Wealth Partners+ Speaks on Wealth Management, His Team and His Journey of Over Three Decades in the Industry

THANE, YOU GREW IN THE FINANCIAL SERVICES INDUSTRY. YOU HAVE BEEN AT IT FOR MORE THAN 30 YEARS. WHAT ARE YOU STILL PASSIONATE ABOUT TODAY?

Well, first of all, I would say that I’m passionate about serving clients, because at the end of the day, if we don’t do well by them, then we all are not going to do as well for our teams and for our own families. So, I think at the end of the day, being passionate about the types of clients that we get to have the privilege of serving is something that I’m super passionate about today.

YOU HAVE AN AWARD-WINNING TEAM THAT FOCUSES ON INVESTORS WITH AT LEAST $25 MILLION NET WORTH AND $10 MILLION OF INVESTMENT CAPITAL. WHAT HAS BEEN THE SECRET OF YOUR PROFESSIONAL SUCCESS IN DEALING WITH THEM?

The first lesson I learnt in my career is that less is more. Over time, I’ve had to downsize the number of relationships that we deal with. This means we have had more time to build and to proactively service the ones we do keep.

In the first 15 years that I grew the practice to about 660 households, we had a big team of 22 people and we would normally do a couple of reviews per year. While we were doing great on revenues, assets and whatnot, we didn’t have as deep a relationship (client relationship) as I really strove for or wanted.

So, over the next decade, I methodically transitioned from dealing with 660 families down to nine, and then from there slowly built up to about 45 clients today across Canada – some multi-generational families across Canada – and a few in the US. Our team today is approaching 15 members and that means we can be extremely proactive in our service model with them. In fact, we connect proactively with our clients at least 50 times a year.

Aside from them reaching out to us, we’re very proactive in reaching out to them and I think that has been a big part of our success. Part of my learnings is that you have to constantly try to tweak and improve your business model, and secondly, you have to try to figure out what are the types of clients you really want to be servicing in the long term. In our case, our clients have ranges of net worths between $25 Million, typically, (as a low point) to upwards of $2 Billion. They’re very sophisticated for the most part and they require us to always be alert as a group and try to anticipate the types of things that they’re looking for. This seems to be working well. We have an extremely high retention rate, which we’re very proud of and I think we’re being recognized for that.

PHILANTHROPY HAS ALSO BEEN A KEY FOCUS FOR YOUR WORK AND YOUR HIGH-NET-WORTH CLIENTS. WHAT’S IMPORTANT FOR YOU TO ACHIEVE WITH THAT?

We utilise a number of different strategies around philanthropy, insurance, but also donor advised structure. We work with a group called Charitable Impact Foundation, which is

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an online charitable investment bank account for our clients. We’ve been doing that for over ten years now and last year we worked with our clients on giving away approximately $80 million of their capital to various charities of their choice.

What we found is that our clients are very successful people. They’ve done some amazing things in their career, entrepreneurial and family lives. And they tend to really care about a number of causes, whether their local community, their family causes or national or international causes. So, we’ve learned to make sure that we’re having conversations with them about what they’re doing, not just with their investment portfolios, not just with their businesses but also what their family wants to achieve from the point of view of giving back to the community.

I can say that we’ve been really blessed with some great, successful clients, but also clients that really want to make an impact in this world. Hence, we prioritise having some very interesting high-level conversations about maximising their philanthropic interests. I’ll give you one quick example. A lot of people just think that philanthropy is about writing a check when in fact, there’s a lot of strategies in which you can try to optimise your charitable impact – things like coming up with strategies around matching of gifts. So, we’ve had certain clients that have agreed to go for hospitals or foundations or other things in Canada and the United States that they’re passionate about. Say they want to give away a million or $3 million or $5 million towards something, what they’ll do is they’ll agree to do a matching program, 1 to 1 or 5 to 1. The foundation they’re giving to, through their own foundation, creates and sets these performance targets, to help amplify their giving overall. Things like that tend to really energise our conversations with them. And we’re pretty excited about what they’ve been able to accomplish.

THIS IS A CONSTANTLY CHANGING BUSINESS. AND I WAS HEARING ABOUT THE CHANGES YOU’VE MADE IN YOUR BUSINESS AS WELL. WHAT EXCITES OR CHALLENGES YOU ABOUT WHAT YOU’RE SEEING ON THE HORIZON NOW?

Well, I’d say we are in the wealth management and investment business, markets are always changing. And as we sit here today, I can tell you that markets have been very volatile in recent times. So, managing investments, managing the markets is always an intellectual pursuit that I find fascinating. Each market cycle is different, the conditions are different. I’ve been doing this for a long period of time and one of the things I learned from my father is you have to try to anticipate as much as you can, but still deal with the unknown as it comes. So fortunately, this year we’ve been managing those challenges extremely well for our clients and we’re very, very pleased with that. The other thing I’d say is mentoring. Mentoring my team and growing my team and developing a culture that is high performance for clients is constant. So that’s the area that I would say is our focus right now. We’ve engaged with two top performance coaches from the US in the last few months, for example, to help everybody take their performance to another level on behalf of clients. And that’s actually already bearing some really good fruit early on and people within our group seem to be energised by learning best practices and what’s going on on a global basis.

AND FINALLY, YOU WERE MENTIONING MENTORING AND I GATHER YOU LOVE TO MENTOR. SO WHAT SECRETS ARE YOU PASSING ON TO THE NEXT GENERATION TO HELP THEM PREPARE FOR THE FUTURE?

Great question. Well, I would say that historically, to be honest, I haven’t actually really enjoyed mentoring. I found that I’ve gotten so busy, focused on clients at times that I’ve actually neglected some of the mentoring. But over the last decade, I’ve learned that it’s not only something that needs to be done. If you really want to accomplish a lot as a team, you have to actually mentor your team. So, I’ve kind of learned to do that. I’m enjoying it far more now at this stage of my career. I have to admit that.

And I think bringing on some really seasoned performance coaches is actually helping me do that. So, I’m learning ideas from them as we go through this as well. Over the last few years of my career, I think I’ve finally come to the realisation as to how important that is because you’re only as strong as your weakest link on your team. Having the team energised by getting various mentors speaking into their lives is the winning formula from my point of view.

BANKING & INVESTMENT PAN Finance Magazine Q3 2022

Russia’s failure to pay US$100 million in US dollar- and euro-denominated interest payments on June 27 2022 shows the Kremlin is running out of options to respond to western sanctions. The default on foreign debt was not unexpected. The economic sanctions placed on Russia since it invaded Ukraine in February have limited the country’s financial capabilities. This debt default, therefore, is a result of western governments’ ban on all transactions with the National Central Bank of Russia and the freezing of its foreign reserves, worth more than US$600 billion.

In theory, the debt default on foreign creditors is surprising because Russia’s finances remain strong despite a protracted war in Ukraine. The country reportedly continues to receive revenues of about US$1 billion per day from the sale of oil to China, India and other Kremlin-friendly importers. This income means Russia did not default because of an inability to pay.

Russia’s default will have a relatively small impact on global financial institutions, including its own financial sector. There is always a risk of global contagion – when an event has an indirect or unexpected effect on another part of the market – but foreign investors have had less exposure to Russia since it annexed Crimea in 2014. The few investors that do have high exposure are already looking to sell, although they face difficulties due to the western sanctions.

European banks are the most exposed financial institutions to Russian debt. The most recent figures from the Bank for International Settlements, which cover up to the end of 2021, show French and Italian banks have the most exposure to Russia, with outstanding claims of more than US$20 billion, while Austrian banks have US$17.5 billion in outstanding claims on Russian debt.

The most worrying consequence of debt default for Russia will be the loss of access to global investors through the international capital markets. The default will tint Russia’s reputation, making its bonds less attractive in the future due to the risk of further defaults. The country will have to pay a higher cost of borrowing to attract new investors and to keep those it already has because of the increased credit risk resulting from this recent default.

Russia’s missed interest payments were on two of its sovereign bonds: the 2026 US dollar and 2036 euro bonds.

In addition to the actual currency of these bonds, both allow interest payments to be made in pounds or Swiss francs if, for reasons

Nasir Aminu

Senior Lecturer in Economics and Finance, Cardiff Metropolitan University

Rodrigo Olivares-Caminal

Professor of Banking and Finance Law, Queen Mary University of London

Russian debt default: Two experts explain what it means for Russia and for global financial markets

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beyond its control, Russia is unable to make payments in US dollars or euros. The 2036 euro bond goes even further by adding the Russian rouble as a possible alternative payment currency. These additional options may seem useful, but creditors might prefer to avoid a currency mismatch by having Russia make repayments in the original currency of the bond.

These bonds also include a currency indemnity clause, which would allow Russia to be discharged from its repayment obligations if the investor receives or recovers the entire amount due on the bond. Any payment in roubles must match the original amount owed when converted into US dollars or euros, however. In this case, roubles would probably be most useful to Russia since it has been largely cut off from the international financial markets.

In any event, the full impact of the default remains uncertain until the global financial market gets clarity on the following questions:

• Would a payment deposited to an account in Russia in the name of the creditor amount to “receiving” the payment and therefore discharge Russia from its obligations? A creditor might receive repayments in this way, but actually recovering the money from the account could be complicated by government plans to restrict access to or transfers of Russia-based assets at the moment. • Also, was Russia prevented from paying because of the western sanctions? If so, since this is outside of its control, Russia could argue it is not to blame for the default. If a court deems the situation is self-inflicted, however, Russia may not be excused.

These issues would be subject to interpretation by a court of law. But Russia has not waived its sovereign immunity and has not submitted to the jurisdiction of a court named in either of the two bond prospectuses. As such, creditors and the global markets must continue to wait for further clarity.