WWW.WEALTHPROFESSIONAL.CA ISSUE 2.3 | $6.95
l a i c an n fi an i d a n a t C f h o g i r e ur ng is b t CRM2DVISORS u f e i h OF A IN n t L E n N pla NAISSANCIGE A PA WEIGH Why RE EB S RENT OK A P P O A HEIR ITING’ A B S S R ’INHE F BUSINE O
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CONTENTS
4 | News/Analysis 6 | The New Neutral
16
8 | The future is bright for advisors, sort of
FEATURES
12 | The Next Generation ‘Inheriting’ a book of business 16 | Ethical Investing What advisors need to know about investing on the high road
54 | What Makes Us Tick? Understanding yourself and your employees can take your team to the next level
30 | Life Insurance Simplified non-medical insurance market: What advisors need to know
60 | The Client’s Take Veteran investor Bryan Kelly isn’t holding back in his advice for advisors looking to meet the challenge of investors just like him -- the self-directed ones that is
36 | The Changing Face of Energy Non-conventional forms of natural gas and oil are coming online. A new energy renaissance is in the wings. 42 | Making links on the links 44 | CRM Roundtable An expert group of advisors sound off on what is, and isn’t being done, to get ready for new Client Relationship Management tools
44
52 | How to Develop a Social Media Plan The world is digital: Everything advisors need to know about prospecting in the cloud
issue
2.3
20 COVER STORY Young Guns Our inaugural list featuring the up-andcoming advisors of tomorrow
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CONTENTS
REWRITING THE PUNCH LINE COPY & FEATURES SENIOR EDITOR Vernon Clement Jones SENIOR WRITER Sophie Nicholls, Jeff Sanford COPY EDITOR Tanya Enberg CONTRIBUTORS Maggie Crowley, Liz Brown, John Tenpenny, Vawn Himmelsbach, Jill Fraser, Muhammad Yasin
ART & PRODUCTION GRAPHIC DESIGNERS Joenel Salvador, Marla Morelos
SALES & MARKETING NATIONAL ACCOUNTS MANAGER Dane Taylor ASSOCIATE PUBLISHER Trevor Biggs GENERAL MANAGER SALES John MacKenzie MARKETING AND COMMUNICATIONS Claudine Ting PROJECT COORDINATOR Jessica Duce
CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker EVENTS AND CONFERENCE MANAGER Chris Davis
Editorial enquiries vernon.jones@kmimedia.ca Advertising enquiries dane.taylor@kmimedia.ca Subscriptions tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca
Defence attorneys, brain surgeons and wealth professionals. That’s the punch line. The riddle? Professions where youth, believe it or not, doesn’t necessarily impress the punters. But WP’s first-ever Young Guns list is set to rewrite that joke. At least for financial advisors under the age of 36. Those wealth professionals making it onto the inaugural list are wise beyond their years, growing books, reputations and expertise to rival that of 20- and 30-year veterans of Canada’s financial investment industry. WP’s aim is to showcase their success and so provide inspiration for the increasing number of young professionals looking to make their own mark. For those already well entrenched in the industry, the stories and the vision of these high-performers may recommend them as future associates or future buyers of a book of business. From whatever perspective you view it, the Young Guns feature, starting on page 20, is bound and determined to challenge any preconceived ideas about youth and its capabilities. So read on and drop me a line when you’re done. Cheers, Vernon Clement Jones Senior Editor
KMI Publishing 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 wealthprofessional.ca Copyright is reserved throughout. No part of this publication can be reproduced in whole or in part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as IB magazine can accept no responsibility for loss.
CONNECT
Contact the editorial team:
vernon.jones@kmimedia.ca
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CONTENTS
It’s good to know where the market has been, but even better to look where it’s going next. That’s why IA Clarington has built a culture that gives leading active portfolio managers the freedom to look ahead and pursue their very best ideas. After all, anyone can follow a benchmark. But if you believe that the skill, conviction, and opportunity from active management can outperform and manage risk, it’s time to tap into our bench strength. • • •
Broad range of investment objectives Deep roster of active managers The conviction to power your portfolios
For more information, please visit: iaclarington.com/benchstrength
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The IA Clarington Funds and IA Clarington Target Click Funds are managed | 3 by IA Clarington Investments Inc. IA Clarington and the IA Clarington logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are usedMARCH under 2014 license.
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NEWS /ANALYSIS
ADVISORS, MAN YOUR STATIONS THE NEW NORM? Advisors continue to struggle in a low-rate environment responsible for smaller-thanever bond portfolio returns. That only heightens concerns about conservatively invested clients. Commenting to WP this month, one advisor put it this way: “The clients who have gone to market have done OK. But those who didn’t take any risk, they’re falling behind...I worry about them.” The questions about how long this low-rate era will last front and centre for many other industry professionals. The assumption has been that rates will rise as soon as the economy begins to grow. But others are beginning to question that long-held chestnut. This past fall global economic super-elite Lawrence Summers, speaking at an IMF conference, said the U.S. could be in a period of “secular stagnation.” That is, the global economy could be entering a new era of permanently lower growth. Chiming in on Summers note this month was Pacific Investment Management Company (PIMCO), which released a controversial outlook document in May, purporting to describe a new era in which bond yields will remain low. According to PIMCO, global economies are converging toward an era of “lower, more stable speeds.” Interest rates will remain stuck below their pre-crisis equilibrium. When it comes to asset performance “nothing does really well.” A longer-term interest rate closer to 2 per cent, or zero per cent after inflation, will be the case for years to come. BMO Capital Markets issued a report predicting returns on assets over the next two decades will be lower than the historical average. According to the report, returns across all major asset classes will only deliver a 5.6 per cent average annual return, a decline from the 7.8 per cent posted over the last 20 years. Bond returns will be 4.0 per cent over the next 10 years, down from 7.0 per cent. Stock returns will average 7.0 per cent, down from their 8.8 per cent. The high growth rates of the 1960s, when GDP expanded nearly 6 per cent a year, was an anomaly. Growth rates have cooled to “the point where 2 per cent is now seen as nearly normal.”
ADVISORS PUSH BACK AND SPEAK OUT ON REGULATORY FLOOD The push and pull between professionals and regulators is, apparently, spinning to new levels. Advisors are pushing back against the Ombudsman for Banking Services and Investments (OBSI). The organization will soon receive new regulatory powers August 1. But OBSI demands for compensation in some disciplinary cases are being ignored by industry firms that consider the organization biased. There is no doubt, the industry feels put upon. Speaking to a crowd of independent financial advisors at the IFB Spring Summit, chairman John Dargie offered up a strong, forceful defence of the rights of advisors. In a presentation to the summit Dargie lauded the death of Bill 157 on the order paper in the wake of an Ontario elections call. The bill would have layered a new lot of regulations on advisors in Ontario. In an era where margins and returns are tighter than ever, many in the industry are dismayed by the barrage of new oversight. “It’s over, for now,” says Dargie about Bill 157. But he warned the issue has not gone away. He notes proposals similar to Bill 157 are popping up in other parts of Canada. “What we’ve seen here in Ontario has given us a glimpse of what our future as advisors might look like if we don’t work together and make our voice heard,” said Dargie.
BIG NUMBER: 5.3 TRILLION RMB. Thar is the value of principal-guaranteed wealth management products issued in China in 2012 and 2013 by the shadow banking market to retail investors. The investment products have been sold in great amounts since 2008 by local governments and corporate borrowers in industries already at capacity or over-leveraged. According to the ESG report the peak in sales of these instruments occurred through 2012 and 2013. Most have maturity dates of a year or so, with many coming due in 2014. The fear is they could represent a coming “sub-prime” meltdown.
READERS POLL: The message could not have been clearer. When answering our online poll querying advisors about their opinions on the proposal by the Ontario Liberals to create a brand-new, state-run Ontario Pension Plan, the results were, well, overwhelming. The vast majority of respondents — well over 80 per cent — thought the plan was a bad idea. This is how the numbers sorted out:
A
A step towards retirement security?
14%
B
Just another expense for taxpayers?
44%
C
A waste of time?
41%
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global players
make a stronger
portfolio
TIME TO TAKE STOCK OF GLOBAL OPPORTUNITIES The game of soccer is on everyone’s mind, providing a timely opportunity to educate your clients about the importance of global diversification. To help, we’ve developed an entertaining video illustrating how soccer and investing are similar with respect to home country bias and the benefits of choosing the best from around the world. To view the video and share it with your clients, visit www.franklintempleton.ca/globalplayers.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. © 2014 Franklin Templeton Investments. All rights reserved.
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NEWS / FORUM
THE WRITING IS ON THE WALL ... OF CANADIAN LABOUR STATS Comments from WealthProfessional.ca on the stories sending ripples through advisor ponds THE DIFFERENCES BETWEEN THE U.S. AND CANADIAN INVESTORS
Might the rising number of Canadians who have now stopped looking for work really be the first wave of retiring baby boomers reflected in monthly labour stats? It’s something WealthProfessional.ca asked its readers, with one advisor pointing to the opposite trend in the United States and speculating on what the diverging stats really mean.
Canada must be different from the U.S. where (from 1992 - 2012) Canada Force Labour must be Participation different from Rates theincreased U.S. wherefrom (from29.7 1992per - 2012) cent Labour to 40.5 per Force cent Participation for those 55Rates and older; increased but decreased from 29.7%from to 40.5% 83.6 for those per cent to5581.4 andper older; centbut fordecreased those between from 83.6% 25 andto 5481.4% yearsfor of those age and between decreased 25 and from 54 66.1 yearsper of cent age and to 54.9 decreased per cent from for those 66.1% to 54.9% for between 16 those and 24. between In the United 16 and States 24. In the anUnited increasing States (not an increasing (not decreasing) number decreasing) of boomers number are ofseeking Boomers employment, are seeking employment, hence the increasing hence theparticipation increasing participation rates. I guess rates. Canadian I guess Canadian Boomers boomers are just better are justatbetter saving at saving and investing and investing than their than American friends? their American friends? -George Christison A MADE-IN-ONTARIO CPP
When the Liberals floated a plan to create a state-run Ontario Pension Plan similar to the CPP, advisors both fast and furious in posting negative comments. The key concern: Those who had the foresight and discipline to save will be the ones who lose in the end.
There is no end to all levels of government attempting to buy votes and to kick the can down the road on serious issues such as their inability to fund the future pensions of government employees. Someone will ultimately have to pay for all of this ‘generosity’ and it will likely be the younger generations. At that point, the government will be looking for someone to blame and that someone will likely be the boomers and business people in general.”
Once again an Ontario government with a significantly diminished mandate concocts a plan to save its own skin while pretending to have superior financial acumen. Of course the politicians who propose to set this plan in motion have zero exposure to its consequences — intended or otherwise.” -Murray Schultz
The Ontario government’s plan will make life much more difficult for the younger people and will put Ontario’s finances in a worse position for many decades. If a baby boomer (55 or 67 years old) comes to me and says that he wants to start saving for retirement, he has to save a huge amount or settle for a minimal retirement income. The Ontario government is proposing to pay the bulk of the population an income without having the money to pay for the proposal. It will have to either charge huge premiums or pay for it with more debt.” -Mark Matsumoto MUTUAL FUND DEALER REVOLT
Some mutual fund dealers have gone on “strike” against the Ombudsmen for Banking Services and Investments (OBSI), refusing to fulfill requests concerning compensation paid to clients in disputes. OBSI has no real power to get firms to comply, only the ability to “name and shame” firms. But advisors were quick to draw attention to the grievances against OBSI.
‘Name and shame’ does not work because OBSI does not provide fair and balanced judgements. If a claim gets to them, they always come down in favour of the client. Do not forget OBSI appeals have been rejected at other levels already. No wonder firms are ignoring them; they’re biased. -DWK
-John Kok 6 | JUNE 2014
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NOVEMBER 2013 | 7
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MARKET MATTERS / TRENDING TROUBLES?
GROWING CHALLENGES, GROWING SUCCESSES PriceMetrix is offering a picture-perfect look at the current state of affairs for advisors grappling with CRM2, ageing, wealthy clients and the increasing challenge of winning more just like them. WP reports STEADY PROGRESS TOWARD A FEEBASED BUSINESS MODEL, BUT CONTINUING PRESSURE ON FEES
A GREATER NUMBER OF HIGH NET-WORTH HOUSEHOLDS IN ADVISOR BOOKS, AGAIN LARGELY DUE TO APPRECIATION IN THE MARKET
A client base aging faster than the general population
CONTINUATION OF THE TREND TOWARD FEWER BUT LARGER CLIENTS
CONTINUED GROWTH IN BOTH ADVISOR ASSETS AND ADVISOR REVENUE – THOUGH LARGELY DRIVEN BY MARKET APPRECIATION
INCREASE IN EQUITY TRANSACTIONAL VOLUMES AND PRICING IN 2013 COMPARED TO 2012
W
W
LOWER CLIENT RETENTION RATES IN 2013 THAN IN 2012
T in le c
S V
Co th
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WE’VE WRITTEN THE BOOK ON ACTIVE MANAGEMENT.
WE CALL IT THE DYNAMIC CODE. The Dynamic Code is a collection of maxims that aren’t just rules we live by. They are a unique expression of our investment philosophy and are embodied in our process and enacted by our people. At Dynamic Funds we are legitimately active portfolio managers. We began by challenging the status quo in investment management and continue to do so. We are more Dynamic than ever and excited by the opportunities this marketplace presents.
See how we put The Dynamic Code into action. Visit DynamicCode.ca
2014 | 9 Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds areJUNE not guaranteed, their values change frequently and past performance may not be repeated. 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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MARKET MATTERS / TRENDING TROUBLES?
AVERAGE ADVISOR REVENUE (000s)
AVERAGE ADVISOR ASSETS (M)
600 100
500
80
400 $537
300
$550
$578
60 $80.8
$74.0
$90.2
40
200
AVERAGE CLIENT AGE (YEARS)
20
100
0
0
2011
2012
2013
Change 2012 - 2013
5%
2011
2012
Change 2012 - 2013
2013
12%
CLIENT RETENTION
99.4%
Top-quartile advisors
92.5%
All advisors
2011
FEES FINEPRINT Number of Fee Accounts per Advisor
2012
92
2013
101
10% Change
60.0 Average Fee Account Assets ($000s) 2012
2013
$258 $293
2013
61.1
14% Change
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The number of high-net-worth households in advisor books has increased steadily over the past three years, but they’re not necessarily new clients. Existing clients with investible assets of $2MM+
19% 2012
IT MAY BE A CODE, BUT IT PRODUCES SOME GREAT NUMBERS.
2013
6.5
7.7
Cecilia Mo embodies the Dynamic Code applying active management to everything she does – her opinions, process and philosophy. Look no further than her impressive results for proof.
New clients with investible assets of $2MM+ 2012
1.0
2013
-10%
0.9
EXISITING ACCOUNTS LEAD ASSET GROWTH
12%
Asset Growth (2012-2013)
9% 6%
6%
3%
3%
See how Cecilia Mo puts The Dynamic Code into action. Visit Dynamic.ca/cecilia
5% 3%
0 -1%
-3%
-6%
-4% Existing Accounts
New Accounts New in Existing Accounts Households with Existing Advisors
New Advisors
Advisors who left
Departed Households
Source: PriceMetrix
08-11_Infographic.indd 11
* Assumed portfolio management as at October 2011. All information shown for Series A units to April 30, 2014. Dynamic Value Fund of Canada inception date: July 1957. Dynamic Value Balanced Fund inception date: February 1992. Dynamic Canadian Value Class inception date: February 2001. Dynamic Dividend Advantage Class inception date: December 2011. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Dynamic Funds® is a registered JUNE 2014 |L.P. 11 trademark of its owner, used under license, and a division of 1832 Asset Management
4/06/2014 7:31:19 PM
THE WP CLOSEUP / LAURENT MASSA
Heir Apparent: young advisors are buying big books and are determined to grow them Laurent Massa is just one of a growing number living the adage, To whom much is given, much is required. Vawn Himmelsbach takes a look
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The challenges, confesses Massa, financial security advisor and mutual funds representative with Investors Group Financial Services Inc. in Montreal, have really “opened my eyes to what the real world is and how to deal with it.” Indeed. At 22, Massa is buying a book worth just over $40 million. The real test, though, is that he’s buying it from his mother, Viviane Tremblay-Massa. “When you’re starting your own thing, it’s all on you,” he says. But when you’re buying a book with your family’s name, “it’s not only my reputation at stake, but a bunch of other people’s names at stake.” Massa is quick to point out that he’s not inheriting the book — he’s buying it. He’s not alone, with an unprecedented number of similar transactions now underway as boomer advisors opt for the most timetested succession plan going. “I may not have any gray hairs, but there are no shortcuts in life and buying a book certainly isn’t one,” he says. “There are very high standards that have been set, and I need to make sure my work meets those standards.” At the same time, he wants to find a way to make the business his own. When buying a book, there are two sides to the coin. On the one hand, Massa says, you don’t have to build that book yourself. “For me the challenge that comes with that is I’ve never experienced the hunger of building my own book. But if I can bring the same drive to an existing book, I really believe I can help grow this business considerably.” One way he’s doing this is by bringing insurance into the picture. “My mother and father’s generation of ‘buy term and invest the rest’ — things have changed,” he says. Instead, he’s using insurance strategies as part of the estate-planning process to ensure assets are passed down to the next generation in the most tax-efficient manner. “I think I’ve shed light onto a crucial element of a complete financial plan by exploring new ways of planning our clients’ estates,” he says. “This aspect of my work really allows me to get in touch with the next generation of clients.” Massa didn’t just wake up one morning and decide
THE DYNAMIC CODE: AN INTERSECTION OF IDEAS, CONVICTION AND PASSION. Dana Love brought a world of experience in active management when he joined Dynamic in October 2013. Access his global expertise through the recently launched Dynamic Global Balanced and Dynamic Global Equity Funds. See how Dana Love puts The Dynamic Code into action. Visit Dynamic.ca/dana
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Dynamic Funds® is a registered trademark of its owner, used under license, and a division of 1832 Asset Management L.P. JUNE 2014 | 13
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THE WP CLOSEUP / LAURENT MASSA
“From a young age, I would eat, sleep and breathe Investors Group ... I wanted to make sure if and when I decided to take this on as a career, that it was my choice” he wanted to be a financial advisor. Rather, the idea grew on him. It was something he had been exposed to his entire life. His father founded the Investors Group West Island office in 1995, which he now manages; his mother and brother-in-law are also in the advisory business. “From a young age I would eat, sleep and breathe Investors Group,” he tells WP. The opportunity to buy his mother’s book was always an option in the back of his mind, but he wasn’t sure about it at first. “I wanted to make sure if and when I decided to take this on as a career that it was my choice,” says Massa. What eventually swayed him was seeing how happy his parents made their clients. He, too, wanted to help people, while making a good living. At 19, after getting the necessary licences, he started working as an associate for his mother on a part-time basis while he went to university. His threeyear associate contract comes to term this summer, at which point the transition will take place and he will officially become the owner of the book. And, in the fall, he’ll also be finishing his degree in economics at Concordia University. This three-year process has helped to smooth the transition of buying a book. “It was a very gradual thing,” says Massa. He started out doing background work and meeting clients, but not taking full responsibility for accounts.
“Viviane taught me enormously when it comes to attention to detail,” says Massa. “I would see her servicing her clients late on weeknights, weekends, even on trips to Florida — on the phone making sure her clients were well taken care of. Her sense of duty is something I truly admire and it’s what I try to emulate.” She also taught him how to approach clients — what to say, what to do, how to be a professional. “It comforts her to know that I have that experience and I’m not just coming in fresh,” says Massa. “It was important for me to at least emulate (her) as closely as I could.” Over the past year, Massa has started taking on more of a leadership role and personally dealing with all new business. “He was the obvious choice, but I wanted to make sure he wanted it. I didn’t want to impose it on him,” says Tremblay-Massa, his mother. “I wanted him to convince me that’s what he wanted to do.” He’s a people person, she says, and he’s caring and likeable — qualities you can’t buy. But she also wanted to feel confident he had staying power before choosing him as the successor of her business. “It’s not easy, even if you inherit a book,” she says. “I took over my husband’s book when I was in my 30s and I had big shoes to fill — the expectations were high. Now (Laurent) finds himself in the same position. It’s commitment, it’s hard work, it’s dedication.” While it’s been hard to let go of the business she has spent so many years building (indeed, she is still working with some of her long-term clients until she feels 100 per cent ready to step away), she says Massa has been living up to her expectations. After the switch takes place, she’ll become his associate and slowly phase herself out of the business. Though she says she hasn’t mentioned the “R” word yet to clients, she’s 55 and wants to spend more time in Florida. She will continue to get an income directly related to the value of the book over the next three years, while Massa receives 10 per cent plus commission. “We still are ironing out our system,” she says,
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acknowledging that it will take time for her clients to trust Massa the way they trust her. “I have 19 years’ experience. That you can’t replace immediately. (It’s a) credibility issue — you gain that with experience.” But, she adds, so far she hasn’t lost any clients. She also acknowledges that he brings a fresh approach to the business. “He does much more insurance than I ever did,” she says. “He knows the new products … he’s using these concepts more than I do, so I’m learning from him in the insurance department.” In addition to learning the ropes, Massa says the past three years have helped him grow tremendously as a person and as a professional. “That’s hard to quantify,” he says. “But people around me see it.” But when the switch happens and he officially owns the book, he says it won’t really change how he approaches his clients. Whether he’s working with long-term customers or he’s meeting someone for the first time, he intends to emulate the high level of service that his parents have provided for their clients over the years.
IT MAY BE A CODE, BUT IT PRODUCES SOME GREAT NUMBERS. When it comes to a long history of prosperity and crisis, nobody understands Europe better than Ben Zhan. With his disciplined focus on creating and preserving wealth, combined with strength, stability and resilience returning to the region, the possibilities are boundless.
“I have 19 years experience that you can’t replace immediately” And when he’s not working or going to school? He’s just like any other 22-year-old — playing hockey and walking his dog. “I try to keep my work life and personal life separate,” he says. “I think it’s important not to get consumed by it. I see some people who are overly emotionally involved in their job.” He’s excited about the next decade, both the challenges ahead and where it will take him. “I’m young, but … things change in the blink of an eye,” he says. “That’s another element I’ve brought — I’m quick to respond to these changes. I bring that aspect of planning for the next generation to our clients.”
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See how Ben Zhan puts The Dynamic Code into action. Visit Dynamic.ca/ben
* Ben Zhan was appointed lead manager of the Fund in January 2014. Prior to that, he was co-manager of the Fund with Chuk Wong since 2009. All information shown for Series A units to April 30, 2014. Dynamic European Value Fund inception date: June 1989. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Dynamic Funds® is a registered trademark JUNE 2014 | 15 of its owner, used under license, and a division of 1832 Asset Management L.P.
4/06/2014 7:33:29 PM
FEATURE / ETHICAL INVESTING
THE INS AND OUTS OF
ETHICAL INVESTING Far from pie-in-the-sky thinking, a growing number of advisors are finding even a discussion about socially responsible equities engenders client trust Does ethical or socially responsible investing hurt investment returns? A common concern about socially responsible investing (SRI) is that there is a premium to be paid for being socially responsible that necessarily diminishes investment returns. Advocates of this type of investing, however, argue companies that embrace corporate social responsibility will deliver better financial performance than competitors that do not. “I spend a lot of time dispelling the myth that responsible investments underperform,” says Deb Abbey, CEO of the Toronto-based Responsible Investment Association. “In fact the opposite is true. Responsible investors have long known that the integration of environmental, social and governance (ESG) factors into the selection and management of investments can provide superior risk-adjusted returns and positive societal impact.”
Abbey says there is a growing realization among professional investors that holdings are affected by such issues as a company’s position on human rights, labour relations, consumer protection, worker safety, board diversity, executive compensation and the environmental impact of corporate practices. “We’re not talking about investing in wind turbines and solar panels,” says Kim Buitenhuis, senior vice-president of NEI Investments, which has offered its Ethical Funds family for more than 25 years to Canadian investors. “Those kinds of investments are narrowly focused on a sector and for mainstream investors they tend to go up in risk when you’re that focused. “Most investors are saving for their retirement and they want to have a number of funds that meet their risk profile and investment objectives and socially responsible investment funds can fit into
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people’s portfolios like that. They can also perform equally as well as other investments, she says. “Our NEI Ethical Canadian Equity Fund—our largest fund ($700 million)—is a five-star Morningstar fund over 10 years and it’s top ranked among the Canadian equity category. “There’s no reason you cannot have strongly performing funds in socially responsible investments.” Abbey points to further evidence that SRIs can produce superior returns, such as a 2009 United Nations-led report which looked at 36 academic studies and 10 related industry research reports about responsible investment performance and found that 20 showed a positive correlation between responsible investment and performance, while another 10 were neutral or neutral-positive. Closer to home, she says the Jantzi Social Index, since inception it has outperformed the TSX by about 25 basis points a year. “The gap isn’t in performance, it’s in perception,” says Abbey. “We’re working hard to educate advisors and other professionals but it’s tough slogging. Many investors are led to believe that they have to give up performance if they want to become responsible investors and that’s simply not true.” The misconception about SRIs and returns is something that advisors can turn into an advantage, says Buitenhuis, as it presents an opportunity for advisors to differentiate themselves, by understanding and talking about SRIs with their clients. It’s a subject that surprisingly, is top of mind for many investors. Clients will think better of you and be more likely to do business with you. “We did research just this past year that indicated eight out of ten (84%) clients would be interested in socially responsible investments if they understood the performance story,” says Buitenhuis. That is backed up by a recent Ipsos Reid survey conducted for Standard Life, which found that 55 per cent of Canadians indicated that they would consider SRI if the return was “as good or better” than other investments. That interest in SRI spikes to 91 per cent when a guarantee of some capital protection is offered. The study also showed that investors who have already purchased SRIs are satisfied with their returns, with 92 per cent reporting they are satisfied with the performance of these investments and 70 per cent saying they were equally satisfied with the performance of their SRIs compared to their other investments.
THE DYNAMIC CODE: AN INTERSECTION OF IDEAS, CONVICTION AND PASSION. When it comes to fixed income investing, award-winning portfolio manager Michael McHugh takes an unconstrained approach to actively managing risk and adding value to investment portfolios. With his mandates covering a diverse range of investment solutions, there are many ways to access Michael’s expertise. See how Michael McHugh puts The Dynamic Code into action. Visit Dynamic.ca/michael
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Dynamic Funds® is a registered trademark of its owner, used under license, and a division of 1832 Asset Management L.P. JUNE 2014 | 17
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FEATURE / ETHICAL INVESTING
“SRIs can become a much more important part of investing for both investors and advisors alike, but first investors must have more information and better accessibility to this type of investment,” according to Standard Life. “Advisors who take the time to understand their clients’ environmental and social values and provide investment opportunities that align with those beliefs may achieve sales and reputational gains.” The mere discussion can confer credibility. “If you ask about it, investors are interested and they think better of you. Whether or not they invest in it, they are more likely to do business with you, just for you bringing it up as an advisor,” says Buitenhuis. “Advisors need to educate themselves about socially responsible investments, in the same way they educate themselves about many other things in the investment world.” Professional financial speaker and blogger Jim Yih, however, says both investors and advisors must proceed with caution with discussing socially responsible investments. “There are two components to any decision: the logical and the emotional. When it comes to ethical investing, sometimes those components don’t align,” he says. “When we’re investing money our goal is to make money and sometimes investing ethically isn’t
If you ask about it, investors are interested and they think better of you. Whether or not they invest in it, they are more likely to do business with you, just for you bringing it up as an advisor always going to make you money. The advisor’s job is to make the client money and if these funds underperform then this issue can become contentious. “In the limited work I have done in this area, I have not found any proof that there is any correlation, either positive or negative, that socially responsible investing leads to better performance.” In the world of SRI, engaging with corporations to mitigate risk by encouraging them to adopt more
sustainable behaviour is how funds like NEI’s Ethical Funds produce long-term returns. “For us, socially responsible investing is about marrying traditional financial analysis with environmental, social and governance (ESG) analysis during investment decision-making. We believe companies that combine strong financial performance with sound ESG practices have the greatest potential to outperform over the long term.” To that end, NEI engages with companies that are held in its mutual funds on issues they think will help to reduce portfolio risk and help build long-term sustainable value. Recently, the company announced its 2014 Corporate Engagement Focus List, which included themes such as executive compensation, carbon emission reduction, industry revenue transparency and diversity. “One of the focus issues we had was executive compensation, so we identified the five major banks in Canada as being on our focus list and engaged with them by meeting with them and talking about incorporating some kind of measures into their analysis of compensation,” says Buitenhuis. “So that instead of just looking at what are other executives paid, we asked them to also consider looking at what the percentage of your executive compensation versus non-executive employees.” In terms of the “do-good’”client, much of the growth in responsible investments is a result of large institutional investors recognizing that, as part of their fiduciary duties, they have to consider environmental, social and governance issues, says Abbey. As a result, investment managers are incorporating ESG analysis as a means of reducing risk, recognizing opportunity and generating superior long-term financial returns. “It’s becoming more apparent that we can’t ignore the impact of climate change on weather events and food safety and the ability of the companies in our investment portfolios to carry on business as usual. And we can’t ignore the supply chain vulnerability and reputation risk exposed by events like the horrific factory collapse in Bangladesh. But this isn’t just about managing risk. There are opportunities too. “ She cites a recent Ceres (Coalition for Environmentally Responsible Economies) report that says in order to avoid the worst impacts of climate change, an additional $36 trillion will need to be invested in sustainable businesses by 2050. “That’s $1 trillion dollars a year in green business development. I think that’s an investment opportunity that all investors should be thinking about.”
18 | JUNE 2014
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FEATURE/ WHAT’S A BROKER
Different perspective meets superior returns meets lower volatility.
Sentry, Sentry Investments and the Sentry Investments logo are trademarks of Sentry Select Capital Corp.
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SPECIAL REPORT / YOUNG GUNS
WP identifies some of ‘the keeners’ in today’s wealth industry — specifically young Canadian advisors best positioned to lead tomorrow and, indeed, today
Better watch your back, these up-and-comers don’t need to kowtow to any industry veteran - though they may be interested in buying your book. Whether growing their own books by tens of millions a year or dedicating their free time to mentoring the next generation on financial health and stability, this rising group of wealth professionals is in a league of its own. These precocious players don’t have a choice. The industry demands their expertise and exuberance. Today, a new type of wealth professional is at work. Investors are savvy, clients’ expectations are soaring, and the number of regulatory boxes to check are growing. The status quo no longer cuts it. This exclusive list, compiled by WP, represents those on the cutting edge, with, what looks like, a long and prosperous future ahead of them. They’re young (under 35 years), hard at work, and ready for the next challenge ... and the one after that. Welcome to WP’s Young Guns 2014.
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WEALTHPROFESSIONAL.CA
JENNIFER BLACK
Financial Planner, Dedicated Financial Solutions & Manulife Securities Inc., Missisauga, Ont. Why a Young Gun?
AGE:
33
YEARS IN THE BUSINESS:
11
Go-getter doesn’t even begin to describe this 11-year veteran financial advisor, noted for customer service and, increasingly, her innovation. Five years ago, Black created Widowed.ca, which is now Canada’s largest free online resource for widows & widowers, and for couples planning for their financial future. The groundbreaking website, and its support resources, offers a centralized non-profit source for widows, widowers and their loved ones to find information they need during that difficult time. In 2013, Jennifer co-authored her first book, Managing Alone, a helpful guide with real-world case studies and user-friendly checklists to help people faced with managing their financial resources on their own, often for the first time in their lives. Black is a frequent speaker to business and community groups and is a highly quoted media authority, earning coverage in The Toronto Star, Rob Carrick’s Money columns, The Globe & Mail and
many others. Under her leadership, Dedicated Financial Solutions has emerged as a leader among Canadian Financial Advisors. Along with her colleague and teammate Janet Baccarani, Jennifer has been awarded ELITE status by an independent third party as one of only a few Elite Advisor teams in Canada.
Personal milestones: Aside from the book, already into its second printing, Black’s Dedicated Financial Solutions achieved 40 per cent growth last year. The goal for 2014 is to continue to grow the practice and hit over $100M in AUM by the end of 2015.
DEVIN ST. LOUIS
Vice-President, RBC Dominion Securities, Calgary, Alta.
Why a Young Gun?
AGE:
32
YEARS IN THE BUSINESS:
6
Devin St. Louis started with RBC Dominion Securities in January 2009 with not a client to his name. While it appeared as though he had very little, he realized he had an opportunity in front of him. Through hard work and making a strong effort to meet and work with his partners within the RBC organization, he has gone from zero clients to $180 million of assets under care by using a comprehensive wealth management approach and putting his clients first. Devin is focused on building one of the top wealth management practices within RBC and the country.
with RBC Dominion Securities less than four years. In addition, my goal was to improve my service offering to my clients through skill development and more effective service. Through personal development and keeping my clients at the forefront, I knew my team could continue to grow and expand our wealth management practice. My goals for 2014 are to continue to provide my clients with a comprehensive approach to wealth management to help them achieve their life goals, to continue to grow my practice and to further my involvement in the community.
Personal milestones from 2013 and goals for 2014
I’d encourage young advisors or portfolio managers to gain competency as soon as possible in technical aspects as well as relationship skills. You’re asking clients to place a lot of trust in you to put their interests first.
My personal milestones were to earn the distinction of being named President of the President’s Club, which is awarded to the top advisor who has been
What advice would you give to the young advisor just entering the industry?
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SPECIAL REPORT / YOUNG GUNS
CATHY DUVAL
Vice-President, National Bank Financial-Wealth
Management, Montreal, Que. Why a Young Gun?
AGE:
34
YEARS IN THE BUSINESS:
8
It may be hard to find a more fitting candidate for recognition as a young Wealth Professional than Cathy Duval. Her passion for this business was ignited at the tender age of 9 when she was given two stock certificates – which she still owns today, a quarter of a century later. Duval started her career in financial services at age 17 as a bank teller. While working full time, she devoted her evenings to passing her Canadian Securities course, then completing a BBA and a financial planning diploma, and ultimately earning her CFA designation. Duval joined NBF Wealth Management and became an Investment Advisor in 2006. In her first year, she won the Rookie of the Year award for her region and, in 2013, was awarded the ultimate honour: Investment Advisor of the Year. Over this eight-year period, she was nominated no less than three times for her region’s Best Asset Growth award, and has qualified for NBF’s President’s Club three times. Based on her qualifications and compliance record, Duval earned the accreditation of Portfolio Manager, and today more than 9 out of 10 of Duval’s clients have given her discretionary mandates to manage their financial assets. She is also well advanced in the process of transitioning her practice from pure investment management to a broader wealth management offering. Her passion, professionalism, integrity and dedication distinguish Duval as one of our industry’s Young Guns.
Personal milestones for 2013 and goals for 2014 Last year marked the second anniversary of Duval’s accreditation as portfolio manager, and she had set ambitious targets in terms of the percentage of her book she had managed to convert to discretionary asset management mandates. She estimates that by year-end, 92 per cent of her clients were dealing with her on a discretionary basis – so, we can say “Mission Accomplished.” Her goal for 2014 is to continue migrating from pure investment management to wealth management by broadening her offering to include financial and estate planning, cash management and risk protection. That business transition, she figures, will take another two years to fully complete, but her objective is to
take a major step forward during 2014.
The greatest challenges in the industry faces, and what needs to change Duval is pointing to the challenge on getting clients to understand how they pay for services, how much they actually pay and what they actually get in return. As an industry, we are not very transparent when it comes to costs and compensation, she says. And compounding the problem, many advisors do not do a very good job of communicating all of the value that clients derive from their advice-based relationships – leaving many clients with the impression of being under-serviced. Adopting a fee-based model helps (Duval’s book is virtually 100 per cent fee-based), but doesn’t fully solve the problem because of products with imbedded fees, new issue commissions, FX charges and inventory spreads. Providing clients with a written service-level agreement from the outset goes a long way towards managing client expectations and explaining all of the advice and services that their advisors deliver. Duval thinks that CRM 2 will provide the answer for these challenges by creating a level playing field with the ultimate beneficiaries being the investing public. Post CRM 2, in order to survive and thrive, advisors will have to deliver value commensurate with what their clients pay ... which, she says, is just the way it should be.
What advice would you give the young advisor just entering the industry? First, Duval would invite potential new entrants to think very carefully about whether they are making the right choice. One of the unfortunate realities of this business is its very high attrition rate in the early years. Success only comes to motivated self-starters who have good people skills and are prepared to work very, very hard (Duval started out working 90 hours a week, making a minimum of 100 cold calls a day...). Second, you have to be prepared to give – successful advisors are constantly giving something to their clients, even when there doesn’t seem to be much coming back in return. Third, don’t let yourself get discouraged by the roadblocks and setbacks. Initially, just as we encourage our clients to invest for the long term, advisors must constantly be sowing new fields.
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This c seek th in exc an ind data re Target but are http://M First A is a tra any in index tracks across perfor
NOT ALL INDEXES ARE CREATED EQUAL.
WEALTHPROFESSIONAL.CA
BEFORE YOU CAN EVALUATE AN ETF, YOU SHOULD EVALUATE THE INDEX IT IS BUILT ON. Index Performance (as at April 30, 2014) ETF Ticker
Underlying Index
1 Year
3 Year
5 Year
10 Year
29.11
15.83
24.92
15.51
23.71
15.08
20.99
15.44
CANADIAN EQUITY FXM
Morningstar® Canada Value IndexSM
WXM
Morningstar Canada Momentum Index
DXM
Morningstar Canada Dividend Target 30 Index
20.33
7.42
16.36
10.49
RWC
MSCI Canada Risk Weighted Index
18.64
9.65
15.89
9.78
S&P/TSX Composite TR Index
21.29
4.74
12.66
8.78
35.92
23.48
29.93
16.96
Benchmark
®
SM
®
SM
1
US EQUITY (CAD Hedged) XXM
Morningstar® US Value Target 50 IndexSM
YXM
Morningstar US Momentum Target 50 Index
25.57
14.81
22.91
11.64
UXM
Morningstar US Dividend Target 50 Index
17.93
12.80
20.26
10.72
RWU
MSCI USA Risk Weighted Top 150 Index
13.29
14.88
18.38
7.90
S&P 500 TR Index
20.44
13.83
19.14
7.67
MSCI Europe Risk Weighted Top 100 Index
12.20
11.19
14.49
9.48
MSCI Europe NR Index
16.29
8.92
13.97
6.21
MSCI World Risk Weighted Top 200 Index
7.75
13.32
14.66
8.41
MSCI World NR Index
16.62
9.08
16.03
7.17
Benchmark
®
SM
®
SM
2
EUROPEAN EQUITY (CAD Hedged) RWE Benchmark
3
GLOBAL EQUITY (CAD Hedged) RWW Benchmark
4
First Asset ETFs are also available in unhedged and advisor series
Source: Morningstar Direct
Created from some of the world’s leading index providers, First Asset’s factor-based ETFs aim to deliver better risk-adjusted returns than market capitalization weighted indexes by looking beyond traditional beta to proven factors that impact performance. CAPTURE BETTER RISK-ADJUSTED RETURNS. VISIT WWW.FIRSTASSET.COM CONNECT WITH US:
This communication is intended for informational purposes only and is not, and should not be construed as, investment and/or tax advice to any individual. Particular investments and/or trading strategies should be evaluated relative to each individual’s circumstances. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. There is no assurance that an exchange traded fund will achieve its investment objectives. Commissions, trailing commissions, management fees and expenses all may be associated with investments in exchange traded funds. Please read the prospectus before investing. Exchange traded funds are not guaranteed, their values change frequently and past performance may not be repeated. The exchange traded funds are managed by First Asset Investment Management Inc. Returns of an index do not represent a Fund’s returns and do not include any costs of investing. An investor cannot invest directly in an index. All performance data for all indices is shown in Total Return and assumes the reinvestment of all distributions. Morningstar and MSCI index performance data results prior to January 20, 2014 for the MSCI Europe RW Top 100 Index; and prior to December 26, 2013, for the MSCI USA RW Top 150 Index, MSCI Canada RW Index, MSCI World RW Top 100 Index; and prior to September 12, 2013 for the Morningstar US Momentum Target 50 Index and Morningstar US Value Target 50 Index; and prior to February 6, 2012, for the Morningstar Canada Value Index, Morningstar Canada Momentum Index, Morningstar Canada Dividend Target 30 Index, Morningstar US Dividend Target 50 Index are hypothetical but are calculated using the same methodology that has been in use by the index provider since the index was first published. Information regarding the Morningstar and MSCI indexes, including the applicable index methodology, is available at http://indexes.morningstar.com and http://MSCI.com/products/indices. As a result of the risks and limitations inherent in hypothetical performance data, hypothetical results may differ from actual index performance. Morningstar® is a trademark of Morningstar, Inc. and has been licensed for use for certain purposes by First Asset Investment Management Inc. First Asset ETFs are not sponsored, endorsed, sold or promoted by Morningstar or any of its affiliates (collectively, “Morningstar”), and Morningstar makes no representation regarding the advisability of investing in First Asset ETFs. MSCI is a trademark of MSCI Inc. The MSCI indexes have been licensed for use for certain purposes by First Asset. The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus of the funds contains a more detailed description of the limited relationship MSCI has with First Asset and any related funds. Use of benchmark: [1] The S&P/TSX Composite Index is a capitalization-weighted index designed to measure market activity of stocks listed on the Toronto Stock Exchange. This index is used as a benchmark to help you understand the Fund’s performance relative to the general performance of broader Canadian equity market. [2] The S&P 5002014 Total Return | 23 Index JUNE tracks 500 large-cap U.S. stocks representing all major industries. This index is used as a benchmark to help you understand the Fund’s performance relative to the general performance of the broader U.S. equity market. [3] The MSCI Europe Index captures large and mid-cap equities across 15 Developed Markets (DM) countries in Europe, covering approximately 85% of the free float-adjusted market capitalization across the DM equity universe. This index is used as a benchmark to help you understand the Index and/or Fund’s performance relative to the general performance of the broader European equity market. [4] The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries covering approximately 85% of the free float-adjusted market capitalization in each country.
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SPECIAL REPORT / YOUNG GUNS
MATT MONTEMURRO Associate Portfolio Manager, BMO Global
Asset Management, Toronto, Ont. Why a Young Gun?
AGE:
26
YEARS IN THE BUSINESS:
5
Montemurro deserves to be a WP Young Gun because of his discipline, positive attitude and work ethic. There are very few challenges he’s willing to pass up, whether it be trading a new asset class or researching an innovative investment strategy. Montemurro always goes into a situation with a great attitude and a desire for a positive outcome. The BMO Global Asset Management (BMO GAM) Exchange-Traded Fund (ETF) team is a closely knit group, one in which investment strategies and trading strategies are bounced back and forth on a daily basis. Montemurro’s commitment to the team and work ethic has been vital in the growth of BMO GAM’s ETF and systematic investment businesses. He never turns down an opportunity to challenge himself to learn something new and his positive attitude helps keep the team focused. This desire and work ethic really sets him apart and enables BMO GAM to continue to be at the forefront of innovation in the investment management industry.
Milestones: • Attaining Associate Portfolio Manager designation (Portfolio Manager designation is expected in July 2014) • Growth in ETF assets from $10B to $13.5B • Growth in Fixed Income assets from $3Bn to $10B (Institutional and ETF flows) • Won several institutional mandates – from passive fixed income strategies to systematic fixed income strategies • As BMO GAM team re-aligned, became the co-lead portfolio manager on all fixed income strategies • Launched two industry first ETFs (ZFH and ZDB) – innovative strategies that keep BMO GAM at the forefront of fixed income strategies and innovation in Canada Goals: • Pass Level 3 of the CFA – attain the CFA Charter • Attain Portfolio Manager designation (Expected July 2014) • Reach $15bln in ETF assets • Help build BMO GAM’s international presence in
both ETFs and systematic strategies, as BMO GAM continues to acquire like-minded investment management firms to build out international capabilities • Build out BMO GAM’s systematic and structured investment strategies and focus on SMA platforms as an area for growth. Use ETFs to build optimal portfolio solutions for the end investor
What are the greatest challenges in the industry and what needs to change? The greatest challenge that affects our industry is the separation between traditional mutual funds and ETFs. As the investment landscape changes, investors are looking for unique and result-specific outcomes from their investment products. The industry must realize that the divide between mutual funds and ETFs must be eliminated. True innovation is to combine the benefits of both vehicles and attain a greater outcome. Once we realize that they aren’t substitutes, but complements, we can build portfolios that provide a new level of diversification and return to the end investor.
Why did you pursue a career in this industry? Upon graduation in 2009, I had to make a decision about whether or not to join my family masonry contracting business. I would be the first of the third generation to enter the business and I needed to ensure that I was ready to positively contribute to the company’s growth. I weighed my options and decided that I needed to gain some external experience and exposure before I joined the business. In my mind, there was no more exciting place to learn and grow than a career in investment management. From the daily challenge of trading, to the focus on innovation in which BMO GAM prides itself, I was able to position myself in an optimal working environment.
24 | JUNE 2014
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WEALTHPROFESSIONAL.CA
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®Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read theJUNE 2014 | 25 prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
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SPECIAL REPORT / YOUNG GUNS
NICK BAKISH Financial Planner, Investor’s Group, Montreal, Que.
Why a Young Gun? Working at Investors Group, Bakish — one of the WP Top 50 financial advisors in Canada — has successfully based his practice on a philosophy of attentive client-service. The impressive growth of the business over so short a period of time is the result of Bakish having pulled together the right team to ensure client needs in every aspect and stage of life are met.
Milestones for 2013 and goals for 2014
AGE:
35
YEARS IN THE BUSINESS:
12
One of my milestones for 2013/2014 was being recognized as Wealth Professional’s Top 50 Financial Advisors in Canada. Another milestone, was qualifying as a court of the table for the million dollar round table in the world of insurance. In our company we finished in the top 90 per cent. Most importantly, in 2013 we strived successfully to obtain many testimonials from our clients from all professional fields and these kind words have helped my team and I grow while being recognized for the hard work we put in every day.
KEVIN KLEIN Wealth Advisor, ScotiaMcLeod Wealth Management, Edmonton, Alta.
AGE:
34
YEARS IN THE BUSINESS:
11
Why a Young Gun? Kevin Klein is proof that young advisors can grow their books from nothing, having added about $17 million in external assets in 2013, and about $11 million so far this year. Klein says it’s his relationships with his clients and COIs that haved helped to build his business as a wealth advisor at ScotiaMcLeod. He graduated from the University of Alberta with a Bachelor of Arts degree in economics in 2003. With a background in financial planning, Klein worked as a private wealth consultant at BMO Harris Private Banking until 2011, where he impressed clients with his transparent business model and attention to customer service. The result? Those clients have referred friends, partners and family members. Klein also won Rookie of the Year at ScotiaMcLeod two
In 2014, our goals are to continue on this trajectory.
What are the greatest challenges in the industry, and what needs to change? One of the greatest challenges in the industry is the reputation of advisors in the financial industry. When there is a dishonest advisor who gains national media attention there is a direct domino effect on all other advisors and the financial field in general. The small percentage of advisors who are dishonest create a bad name for the financial field where the majority of our business is based on trust and in turn damages relationships with prospects. This was all compounded by the financial crisis in 2008. Therein lies an opportunity to explain to clients the reality behind the headlines and keep them on track. Another challenge is the reality of different designations and licenses from province to province, which has an impact on costs, compliance measures and affects consultants and consumers alike. Instead we should be focusing on one uniform body of regulation to eliminate confusion and unnecessary additional costs.
years in a row, and will next tackle the role of President of Belgravia Community League, where he currently leads a major community fundraising program.
Certification is key Klein has also pursued an aggressive campaign to broaden his utility to clients through certification; most notably the acquisition of the Certified Financial Planner (CFP) designation, the Financial Management Advisor (FMA), the Canadian Investment Manager (CIM) designation as well as his Chartered Life Underwriter (CLU) designation. Klein is currently a candidate in the Chartered Financial Analyst (CFA) program and is also pursuing his Options License through the Canadian Securities Institute.
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WEALTHPROFESSIONAL.CA
MARCO ZAINO Vice-President, Dundee Goodman Private Wealth, Montreal, Que.
AGE:
34
YEARS IN THE BUSINESS:
13
Why a Young Gun? Marco Zaino is the real deal and the full package, according to his boss John Cucchiella, VP of Retail for Dundee Goodman Private Wealth. “He is arguably one of my best managers,” boasts Cucchiella. “Both in the way he comports himself, the way he builds his book, his mind set towards business. He has a great attitude about himself and others. That’s a quality you don’t find in too many people in this business.” Cucchiella describes Zaino as a true professional and exceptionally bright and articulate, who treats his clients with respect, and puts their needs first. “Marco is disciplined in his approach and he’s quite articulate. He’s serious, yet there’s a jocularity about him,” says Cucchiella. “He has a genuine benevolence about him. You can tell he has a vested interested that his clients do well.”
Milestones from 2013 and your goals for 2014? Grow branch revenues by 25 per cent, generate $10M
in new AUM for my book of business, recruit $200M in AUM for the branch, develop a true wealth management platform.
What are the greatest challenges in the industry, and what needs to change The aging demographic of advisors with very limited generational succession plans. Older advisors remain loyal to transactional-based business with little focus on value generation. With margin compression, advisors need to focus on value-generating services to justify fair and sustainable pricing with clients. Compliance and legal costs have put pressure on lower compensation grids, making it very difficult for young advisors to enter the industry as the milestones are very difficult to attain. Reform is needed, forcing advisors to be better educated and, of course, compensation structures need to change.
CHRISTOPHER JAGER Senior Investment Advisor, HollisWealth, Montreal, Que.
AGE:
33
YEARS IN THE BUSINESS:
13
Personal milestones for 2013 and goals for 2014 My main focus in 2013 was to integrate technology to a larger degree into the practice. Given that my clients are spread over Canada I need to be able to engage over 60 per cent of my clients through online meetings – nearly all aspects of the client process are paperless, and the staff has become more mobile. I also aimed to complete six client seminars for 2013 but actually hosted 10. For 2014, my main focus is to add six client-oriented events that will focus on subjects other than investment strategies to help further enrich client relationships and develop more referral opportunities. I’m also focused on developing a more structured media relations strategy to gain exposure in local papers and at events.
What are the greatest challenges in the industry, and what needs to change? The biggest challenge right now to my business
is balancing the requirements of head office with the needs of our clients. Markets are continuing to evolve much more quickly today and being able to keep advice timely and relevant to clients is a growing concern. HollisWealth has been a forerunner in helping advisors migrate towards the PM platform – I am very grateful to have the resources and the support to be able to upgrade my ability to service my clients’ investment needs. Clients are starting to become more knowledgeable about how the industry operates, however, I think the biggest thing that needs to change is the perception of what we do. Media coverage of a limited number of ‘bad apples’ has led to a misrepresentation of what the majority of advisors do for their clients, and that has led to a general sense of mistrust. I do not believe that general perception accurately reflects the industry’s true level of care. JUNE 2014 | 27
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SPECIAL REPORT / YOUNG GUNS
CAROLINE HANNA Investment Advisor,
National Bank Financial/ The Shewfelt McMillan Group, White Rock, BC Why a Young Gun?
AGE:
28
YEARS IN THE BUSINESS:
5
To say that financial markets course through Hanna’s blood is certainly no understatement. Proudly carrying on a tradition, she is the third generation of her family to opt for a career in the investment business. One of Hanna’s ambitions has been to build her book without ever having to make a cold call. Her personality really shines in face-to-face situations, and well-honed networking skills explain why the lion’s share of her new business comes from client referrals, networking events, centres of influence, philanthropic involvement and community work. Hanna has earned her Portfolio Manager
accreditation and adopts an actively-managed “core and explore” approach, favouring individual stocks and bonds for the Canadian component of her portfolios and managed products for international exposure. 95% of Hanna’s clients have entrusted her with discretionary portfolio management mandates, and she has reached the stage where new business is only accepted on a discretionary basis unless there are extenuating circumstances. Hanna’s professionalism, client-centricity and people skills make her richly deserving of recognition as an industry “Young Gun”.
Personal Details: What are your personal milestones from 2013 and your goals for 2014? Hanna cites building a Center of Influence team consisting of herself, an accountant and a wills/estate lawyer as a major personal milestone for 2013.
JAMES CHISHOLM Regional Director, Private Counsel at ATB, Alberta Why a Young Gun?
AGE:
34
YEARS IN THE BUSINESS:
8
In the words of colleagues, Chisholm, who recently left Fiduciary Trust, is an “old soul” and “stands out from the crowd.” Most notably, Chisholm grew his book by $30 million in high-net-worth business in 2013 and, at age 33, was the lead portfolio manager for 110 high-net-worth relationships. He also led a sales and marketing group at a boutique fund company at the age of 30. Beyond continuing to build on his skill set through ongoing professional development and continuing education, Chisholm volunteers his time sitting on the Calgary CFA Society Board of Directors, chairs the CFA Professional Development Committee and is a member of the Audit Committee. He is also serves as a peer-to-peer mentor through the Certified Management Accountants of Alberta’s Strategic Leadership Program.
Personal milestones for 2013 and goals for 2014 2013 was a great year for growth in many ways.
Looking forward, I see a lot of value in keeping a “beginner’s mind” when it comes to soft skills like emotional intelligence, self-awareness and mindfulness. Work in our industry can be intense and it’ll be a permanent goal to allocate time to activities that offset the emotions of markets. That could be reading something unrelated to the industry, time with family, vacation travel, simply getting outside and so on. In terms of technical aspects, I’ll be deepening my knowledge of estates and trusts. It’s an area not well understood, yet one that is tremendously useful for clients given the demographics of the boomer generation and the needs of millennial beneficiaries.
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UP-AND-COMERS VICTOR GODINHO
ALANA GUTHRO
Financial Planner, Owner VTAG Financial Group Inc., Toronto
Guthro Financial / Worldsource Financial Management Inc., Flamborough
If there is a poster boy for ambitious young millennials, Victor is it. His father taught him the importance of investing early. At 22 years of age Godinho has already purchased a twobedroom, townhouse in Toronto. He maintains a busy twitter account. His boutique feebased financial planning firm focusses on young professionals and the self-employed. In the industry since just December 2012 Godinho has already co-founded his own firm, VTAG Financial Group Inc. The company’s office is located in Liberty Village, a trendy west-end Toronto neighborhood that has come into existence in just the past few years. Formerly an abandoned industrial area the new neighborhood is teeming with condos chock-full of young and up-and-coming professionals. That is, Godinho has already placed himself exactly where the clients of the future are living and working.
Guthro is at the age when you would expect her to be the young advisor being added to a firm. Instead this aggressive young gun has added another advisor to her own business. An investment funds advisor, Alana recently set up Guthro Financial, in Flamborough, Ontario. Previously a financial advisor at YourCFO Advisory Group, Guthro graduated from McMaster University and is now focused on growing the Guthro Financial brand.
SCOTT McEACHERN
Insurance Advisor, McEachern Financial Strategies
McEachern embodies the young advisor’s return to a multi-facited approach in directing client funds, but by tweaking and enhancing the tried-and-true insurance product. Using all the financial tools, life insurance, segregated funds, GICs, RSPs and TFSAs, he’s focused on helping young people and families balance budgets, protect income and grow assets. A graduate of Laurentian University in 2011, Scott McEachern took a year off to get married. He travelled and spent time with family in British Columbia. But he says his true calling was working with his father in Barrie, Ont., at McEachern Financial Strategies.
JASON HOWES
CFP, HollisWealth
Jason Howes is actively leveraging social media to reach new clients and teach existing ones. Howes graduated from Queen’s University in 2009 with a degree in economics. Now a CFP with HollisWealth in Kingston, Ont., he religiously focuses on updating his Facebook page and Twitter feed with not only informative videos, articles and industry news but also persuasive video presentation. Howes is also the first vice president for the Bay of Quinte chapter of Advocis and was featured in the new advisor spotlight in FORUM Magazine.
LEWIS CHAN
Associate , Financial Literacy Counsel, Vancouver Whether as a financial advisor or as a volunteer chaplain, Lewis Chan is dedicated to helping others. As an associate at the Financial Literacy Counsel in Vancouver, he works to provide families and institutions with the life skills and discipline necessary to pay off debts and save money. Chan was previously a financial advisor at Sun Life Financial and worked as a communications officer during the 2010 Winter Olympics. He graduated from Langara College in 2006 with a Bachelor of Commerce degree, and earned a Bachelor of the Arts degree in communications from Simon Fraser University in 2010. In his spare time, Chan volunteers as a chaplain at the Ferndale and Mission Prison, and works as a mission co-ordinator with the Vancouver Chinese Baptist Church. JUNE 2014 | 29
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FEATURE / NEW TAKE ON INSURANCE
THIS IS NOT YOUR FATHER’S LIFE INSURANCE
A new generation of financial planners are using life insurance in equally new ways to benefit clients and turn awkward conversations around As the saying goes, the only two sure things in life are death and taxes—and neither are topics people like to talk about it. Throw money into a discussion about mortality and there’s bound to be a lot of seat shifting. It’s one of the reasons many financial advisors avoid bringing up life insurance options with their clients. “Most financial advisors are afraid of bringing up the topic,” admits Jim Ruta, a consultant and former head of a large life insurance agency. “We have this perfect storm because clients won’t bring up the idea on their own … people don’t want to talk about their own mortality and advisors are afraid to bring it up. So nobody wants to talk about it.” Ruta points to a Canadian Life and Health
Insurance Association study that found the number of life insurance policies sold per agent had dropped dramatically between 1990 and 2012. In fact, the average number of sales per agent dropped from 22.5 per year in 1990 to 7.2 per year in 2012. “People are not being asked the question, if they are interested, those options don’t really get to them very often. The first order of business for a CFP is to handle risk management and life insurance is a basic financial foundation for everything you do and it’s just not being done. It gets short shrift at best,” says Ruta. “Life insurance has been marginalized and minimized over the last 20 years. It’s the forgotten part of the financial plan.”
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While Ruta says life insurance is an absolute necessity for clients with dependents, it is also an important part of a well-rounded portfolio for those clients without dependents. And if financial advisors frame it in a tax-benefit context — as an increasing number are — the conversation becomes a little bit lighter. “It turns out that life insurance can be a reasonable investment in an unpredictable marketplace over the long haul,” says Ruta. “It’s a long-term forced savings plan.” Adam Gordon, a Toronto-based certified financial planner with one of Canada’s largest financial planning firms agrees that life insurance tends to get pushed aside, joking that when people think of life insurance they think of the movie Groundhog Day when Bill Murray is harassed by Ned Ryerson, the overzealous insurance salesmen. But if financial advisors approach the issue from a tax-savings perspective, it loses some of its stigma. “Life insurance is a great option for people who have done a good job saving in their RRSPs and TFSAs and are looking for another tax sheltered vehicle to grow their money,” says Gordon. He adds that many clients are unaware that they are able to shelter money within a life insurance policy whose cash values can grow tax deferred. “The interesting thing with life insurance is there is a way to access the money where you’re paying very little or no tax on it so it can be a really nice way to shelter money tax free,” says Gordon. Most clients think of term plans when they hear the words life insurance—these are the original plans that are intended to provide income replacement for beneficiaries. However, the two most popular permanent insurance plans in Canada, according to Gordon, are participating whole life insurance and universal life insurance, both of which offer more flexibility for clients. While universal life insurance was popular in the ‘90s because its growth was linked to the market, they have fallen out of favour since the market crash in 2008, according to Gordon. Instead, he says that participating whole life insurance plans have become popular because they average returns of 4-5 per cent with funds allocated 70-80 per cent in government and corporate bonds and the rest in blue chip equities. “For a fixed income vehicle in Canada, that’s pretty good right now,” says Gordon. These types of plans can be used as a medium to long-term investment strategy. “As long as clients are
For a fixed income vehicle in Canada, that’s pretty good right now using these with a long-term vision in mind (15 to 25 years), people will be fine. There are some people who buy them and think in three to five years they’ll have money to leverage, but that’s not really a great strategy,” Gordon adds. For a long-term investor who is in retirement, a permanent life insurance policy can be used against a line of credit to avoid paying tax. “Some people who have significant values in their life policies go to third- party lending institutions and get lines of credit that are worth 90 per cent of the cash value of their life insurance policies,” says Gordon. In this way, they can use the money in the line of credit in retirement, then have the policy pay their debts when they die and leave the rest to their estate. As well, because a death benefit is untaxed, it can be a tax shelter for any beneficiaries, who would be forced to pay tax on any leftover RRSPs the person might have. Another option for accessing the money in a permanent life insurance plan is to do what Gordon calls a “payday strategy,” where the person withdrawals a lump-sum amount each year. As long as the withdrawal doesn’t exceed the adjusted cost base, it won’t be taxed. Gordon says he advises clients to put no more than 3-5 per cent of their income into life insurance. “If they do this, it will be a really nice, stable vehicle. It isn’t correlated to the market, they’re managed more like pensions.” “When you get into the permanent insurance game and you’re using it as an investment vehicle, as long as people are understanding that it is supposed to be a portion of their portfolio and as long as their expectations are in line correctly with the understanding that it’s a 15-30 year fixed income plan, then there is no problem with life insurance.” Any product can be a great asset if it’s used the right way,” says Gordon. Ruta voices what more and more advisors are telling their own clients: life insurance is a great way “to invest some money without jeopardizing legacies.”
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SPECIAL PROMOTIONAL FEATURE / CANADA PROTECTION PLAN
EXPLORING INSURANCE OPTIONS WITH CANADA PROTECTION PLAN
When it comes to challenging, hard-to-solve insurance cases, there are alternatives
The vast majority of life insurance policies written today involve traditional fully-underwritten plans. But what about those challenging cases where a client may not qualify for traditional coverage? The best option is simplified non-medical life insurance. Often overlooked and misunderstood, it has a place in every advisor’s portfolio. Wealth Professional speaks with executives from Canada Protection Plan, one of the country’s leading simplified non-medical insurance providers, about the advantages of that coverage.
QUESTIONS AND ANSWERS ABOUT SIMPLIFIED MEDICAL INSURANCE FROM CANADA PROTECTION PLAN DIRECTORS: Q. Why should advisors be interested in non-medical insurance? A. The non-medical market has experienced strong growth as the traditional life insurance industry has become increasingly risk adverse. The result is a rise in declines, ratings and postponements. This impacts an advisor’s relationship with their clients and results in sales often being lost. When used strategically, nonmedical helps advisors to counter this trend. Q. What does the advisor need to know about the non-medical market that they may not be aware of? A. There is a lot of confusion about non-medical life insurance. Most advisors are fairly knowledgeable about fully underwritten life
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SPECIAL PROMOTIONAL FEATURE / CANADA PROTECTION PLAN
products, which is where they place up to 85 per cent of their business. Non-medical is the ‘other option’ they turn to for their challenging cases that need coverage quickly or would not qualify for fully underwritten coverage. Unfortunately they often lump all non-medical together. There is a spectrum of choices from simplified issue non-medical, like Canada Protection Plan, all the way to guaranteed issue. Both options generally do not require medical tests or doctor’s reports to qualify for coverage. However there are significant differences between these two types of nonmedical products that advisors need to be aware of. The biggest difference is underwriting. Underwriting is inescapable and happens either at time of issue or at time of claim. Simplified issue plans are a safer bet as they incorporate underwriting within health questions on the application. The health questions work as a qualifying process. The further you progress through the questions the higher the coverage amounts available and the lower the premium. Q. What differentiates Canada Protection Plan from other Canadian non-medical providers? A. Canada Protection Plan runs countercultural to other providers. We focus on partnering with advisors to bring more expertise and support for them than any other provider in the nonmedical market. We offer the most extensive suite of products in the non-medical market. There are term (T10, T20, T100) and permanent options available with a total of seven different plans and a current max of up to $300,000 in coverage. In addition, because of our partnership with Foresters we are able to offer the most free benefits to our clients, including competitive scholarships, terminal illness loans, orphan benefits and much more. Underwriting personnel work directly with advisors to ensure upfront their client’s specific
medical or lifestyle issues will be covered. Robust verification procedures mean that discrepancies are caught before a policy is issued.
Sales tips for advisors: Don’t wait for a decline a postponement or a rating to act— be proactive and identify potentially challenging cases up front.
This two-step process will save you and your client time and money and dramatically increase your odds of closing a sale. Step 1: Prequalification questions. Ask your client these questions to determine if they should consider simplified issue non-medical life insurance. Are there any health concerns with you or your immediate family? Are you in a rush for coverage? Have you been declined, rated or had a policy postponed? Do you participate in hazardous sports such as skydiving? In the past five years have you been convicted of impaired or reckless driving or a criminal offence? Step 2: Preliminary underwriting inquiry. Underwriters will strategize with you to guide you to the best options for your client. When it comes to pitching a product to a client it is important to think about how the advisors will work with the underwriters. This may include outlining issues to expect if your client applies for fully underwritten coverage. Clients that are a fit for simplified non-medical could include some of the following: past or existing medical conditions; those put off by medical exams or needles; those with a poor family health history; people involved in hazardous hobbies/occupation; people already dealing with health risks like cancer or diabetes; clients who have already been declined, rated or postponed by another plan; clients who don’t want to wait for a doctor’s report or have a criminal record; those who need quick-issue insurance or want insurance to cover a mortgage and debts.
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FEATURE / OIL AND GAS
THE CHANGING FACE OF ENERGY WP’s Sophie Nicholls sits down with investment gurus from fund manager Front Street Captal to discuss how energy has not only become, but will stay, an investor’s haven for decades to come - with Canada and the U.S. at the forefront
These days, if there is a market sector destined to hit the mother lode, energy is it. That is the take of fund manager Front Street Capital. And “they’re sticking to it.” It’s a no-brainer of sorts (or the ‘new normal,’ as the industry pegs it), according to Chairman Frank Mersch and Partner Norm Lamarche. The two veteran portfolio managers see a great future ahead for North American markets. Paralleling the present-day North American energy renaissance is the rise of the Internet in mid1990s. If it is the financial advisor’s job to keep an eye out for the next ‘big theme’ in the capital spending cycle, the coming boom in energy markets may represent thatnext big thing. “Every once in a while, something quite formidable takes place that can change the way we do business,” said Lamarche. “In this case here, what’s taking place in the energy sector is so powerful that it is not only reshaping North American energy and energy globally, but it’s going to have a tremendous impact on the North American economies, period.”
BEHIND THE NUMBERS What Lamarche is talking about is the new and expected flood of liquid hydrocarbons, both crude oil and natural gas, expected to come online in the decade ahead after several years of tight supply. New
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CANADIAN LNG: THE STARTING LINE OF A 10-YEAR GROWTH CYCLE hydro-fracking technologies are opening onceuntappable reservoirs. Rising production levels of so-called fracked shale reservoirs will land on the markets and drive value creation, just look at the stats. According to an ICF International midstream infrastructure study published in March, Alberta oilsands production is projected to triple by 2035. So-called unconventional crude oil from the Bakken formation underpinning Saskatchewan and North Dakota is expected to double in terms of production by 2020 to almost 1.8-million barrels per day (bpd), further increasing to 2.1-million bpd by 2035. Exports of fracked natural gas from Canada’s west coast are expected to rise by more than two-million bpd from 2020 through 2035. Throw in rising production from the Alberta oilsands, and the future is bright and energy-rich. The economic benefits from this development are extensive. Estmates are that 432,000 jobs will need to be created to accomplish the anticipated infrastructure development, yielding some US$885 billion to the U.S. and Canadian economies and a total of approximately US$300 million in federal, state/provincial and local taxes, according to the study. “Both of them (the U.S. and Canada) are winners because they have these substantial energy-rich shales that are being developed,” said Lamarche. Such are the benefits of a 100-year oil and gas exploration in North America. The industry has evolved to a level of sophistication that these new so-called “tight” oil and gas plays can be successfully harvested. The existence of important infrastructure, which is already in place in North America, will facilitate the development of these plays. “Canada, I think, is going to benefit on a relatively stronger basis because it is that much more important to its economy …,” says Lamarche. That is, energy is more important to this country that many other sectors, so a boom there has “the potential of seeing that much greater relative growth.”
BEYOND OUR BACKYARD Looking out beyond our borders, Lamarche notes that oil-rich shales may exist elsewhere in the world, but whether or not these shale beds will be as accessible as the North American ones is the big question. There are many deterrents in other regions, including volatile political climates, high taxation rates and an overall lack of infrastructure and logistics.
Chris Theal, CFA, CIM, president and CIO, Kootenay Capital Management Corp. The surge in production of natural gas has permanently altered traditional North American markets. The U.S. northeast has grown to be the largest continental gas supply basin, driven by the Marcellus shale. The play has experienced hockey-stick shaped additions to supply over the past four years. To Canada’s detriment, this has usurped its own historically dominant northeastern export market. The success of shale has been replicated in Canada, creating a resource base in need of a new market. A confluence of factors has catapulted Canada into the running to serve the largest growth gas market globally, heavyweight consumers in northern Asia reach abroad to diversify supply. Over the next 15 years we expect the global LNG market to double to 70 bcf/d, with two-thirds of growth happening in north Asia. We think of gas scarcity in the region as ‘Asia’s brutal reality,’ a reflection of the following market dynamics: 1) lack of domestic gas resources, making the top three industrialized consumers (Japan, South Korea and Taiwan) reliant on LNG imports to meet gas and power demand requirements; 2) uncertainty of the pace of restoration of nuclear power facilities in Japan and South Korea; 3) bias to cleaner power generation in coal-reliant China; 4) the four largest traditional LNG suppliers to Asian customers have effectively tapped out. Canada’s opportunity to capitalize on this reality is underpinned by its massive shale gas resource base in Western Canada. The competitive advantage is in the short sailing time of just eight days to major Asian markets. The political will to find a fiscal regime that makes Canadian exports competitive on a global scale is also important. At Kootenay Capital Management, we believe Canada is at the start line of a decade-long secular growth market for natural gas development culminating in the first LNG exports prior to the turn of the decade. With clarity on the LNG fiscal regime in 2014, we believe final investment decisions for terminal construction will follow, triggering three main investment themes for Canadian energy: 1) mergers and acquisitions of natural gas producers, as terminal developers acquire long-term gas supply; 2) unprecedented business cycle for oilfield service providers; 3) massive new investment in pipeline and midstream assets. In total, the investment over the coming decade is likely to exceed $150 billion and we believe the Kootenay energy fund is well suited to provide investors a risked-managed strategy to participate in this exciting and dynamic market.
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FEATURE / OIL AND GAS
Moving oil and natural gas by rail is expensive, it’s dirty, it’s dangerous … so the problem is you don’t have the infrastructure to move it, so now the next series is a period where the infrastructure required to move this excess capacity has to be built “We know they (other shales) exist but there’s more than just geology that matters,” he says. “They can be in parts of the world where no one wants to do business, where there’s a lot of corruption ... or where maybe the geology may not even work to get those molecules to market, so it would be very expensive.” All-in, these precipitating factors form the genesis behind the North American energy revolution, says Mersch. We have the innovation to do what others can’t – for a fraction of the cost. The drivers of the coming revolution, of course, are the new advances in technology. Horizontal drilling and multi-stage hydro fracking techniques are opening up tight oil and natural gas formations. These new technologies should allow North American producers to extract another 5 or 10 per cent of oil, an amount that will shift the conversation around energy from one of depletion to a story of abundance, especially in the area of natural gas. “We’ve all known that 80 per cent of all discovered oil is still in the ground,” he says.
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required to move this excess capacity has to be built.” Options for transportation include LNG facilities to ship to Asia or to Europe. But developing these transportation channels will be key to global security. The recent Russian crisis around the Ukraine demonstrates the importance of North American energy in tempering security issues, as higher production in North America will help curb Putin’s ambitions in Eastern Europe.
THE BENEFACTORS So, who benefits? Mersch notes that industries that utilize natural gas as a key feedstock, say chemical companies, are automatic winners. “They are a big beneficiary because all of a sudden North American chemical companies can beat the pants off any European or Asian producers because of feedstock,” he says. Consumers, struggling with high energy prices, will also realize benefits from low and stable natural gas prices.
HAULING SHIP
WHAT YOU DON’T KNOW, CAN’T HURT YOU
The big challenge around the coming boom will be transportation—how will the system deliver and ship all of this hydrocarbon energy? Traditional means, by rail, has been the short-term solution, but this is far from ideal. “Moving oil and natural gas by rail is expensive, it’s dirty, it’s dangerous … so the problem is you don’t have the infrastructure to move it,” Mersch says. “So now the next series is a period where the infrastructure
So where do Canadian investors stand on the energy front? Lamarche believes, overall, that investors are stuck in conventional modes of thought. “Investors are slow to pick up on how business has changed,” he says. “They have not been enticed by that part of the game.” Many investors, he suggests, believe that lagging demand will temper the prices charged for resources.
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The slow recovery from the credit crisis of 2008-2009 has investors assuming as much. “That’s the way it’s always been for energy and materials and on that basis we agree with most them,” he says. Front Street Capital, itself, explains Lamarche, underweights resource stocks as a result of trepidation about a lack of growth in the global economy. But energy, he argues, is a different story than the wider resource sector. The sector has reduced costs and is driving up profits. At the same time demand for cheap energy continues to grow, while global conflict drives up the price companies can charge for energy.
“Even if the commodity is not moving, companies are making a tremendous margin and they’re benefitting from these large-scale resources that are low cost to bring on stream in a world that is still challenged in the Middle East, North Africa, and places like Russia, in the traditional energy basins,” he says. “Investors just don’t understand what’s changed, and the significance of it and how different business is being done today. But they will and that’s the opportunity.” Advisors, Lamarche says, need to position clients and their portfolios to benefit from this
Energy doesn’t have to be so volatile Compound Returns YTD: +18.0% 1‐Year +35.5% 2‐Year +12.7%
Available on FundSERV: KCM100 (Class A units) KCM101 (Class F units)
Calgary Based Energy Specialists www.kootenaycapital.com The Kootenay Global Energy Absolute Return Fund LP and Kootenay Energy RSP Fund are accessible to accredited investors in registered jurisdictions and to eligible investors in applicable jurisdictions in Canada. The meanings of ‘accredited’ and ‘eligible’ investors are defined in National Instrument 45‐106. Investors should consult the Confidential Offering Memorandum. Returns reflect LP initial series as at April 30, 2014. 2‐Year return is annualized.
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FEATURE / OIL AND GAS
We are now in an unconventional world so we need to stop asking the same conventional questions about world demand, world supply, commodity prices and China, they are not unimportant, but they matter a heck of a lot less today because these new unconventional resources can be delivered very inexpensively
BEYOND SPECIALIZED Front Street Capital, strongly focused on energy, resists the label “speciality” manager. Rather, the firm regards itself as a fund manager a step ahead of the game - watching, waiting and poised to jump on the next innovation to drive the capital spending cycle. “We are a shop that is very much fanatic in its approach to managing money,” says Lamarche. “We are always looking for economic drivers, we are always looking for themes.” At the end of the day, Mersch adds, “We are a manager that tries to make money.” “Capital spending is the biggest driver because what makes it so interesting is that it generates attention, it generates revenue, it generates activity and where it generates the most activity is where you want to be in your portfolio, because there’s revenue growth, there’s opportunity, all those types of things.”
transformational change. To do so, the client must be taught to think differently about energy. Ask questions like why it is that production of natural gas and oil has boomed in North America over the last five years, while the rest of the economic world was in distress and commodities were going nowhere? “We are now in an unconventional world so we need to stop asking the same conventional questions about world demand, world supply, commodity prices and China,” he says. “They are not unimportant, but they matter a heck of a lot less today because these new unconventional resources can be delivered very inexpensively.” From a numbers perspective, Mersch recommends that clients hold a minimum of 10 per cent energy in their portfolios given the political climate and opportunity, while Front Street Capital portfolios typically hold 25 to 30 per cent. “An energy portfolio today can bridge both small cap growth and larger-cap dividend income,” he said, adding that ideally investors would hold 60 per cent in this overall group energy, oil, midstreams and industrials. “I think most people are very underweighted in this group.”
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5/06/2014 1:20:44 AM
FEATURE / TEE TIME
GET YOUR SWING ON THIS SEASON The ‘gentleman’s game’ may essential for making friends and influencing clients. But are advisors playing to win?
Golf may not be for every advisor, confesses Peter Churchill-Smith, managing director of Newport Private Wealth in Toronto, but he insists it remains one of the best ways to forge relationships with clients. Here are some counterintuitive tips on how to profit from your time on the greens:
DON’T FOCUS ON BUSINESS Churchill-Smith says he rarely talks business while golfing with clients. Moreover, money is almost never their top concern. “Golf lets you know what is really on the mind of your client. I think if you were to rank the severity of the issues people face it’s personal issues and family issues that rank higher than financial issues. If they have a 20-year-old son or daughter who is struggling, that’s going to be more on their mind than their money. Golf gives you a chance to talk about those things.”
IT’S NOT JUST FOR HIGH-NET-WORTH CLIENTS While Churchill-Smith focuses on high-net-worth clients, he believes it’s important for all advisors to bond with their A-list clients, whether they be HNW or merely among the mass affluent. “Everybody has their A-clients and it’s never a bad thing to be spending time with clients. That’s how some people get referrals. Too many of us in our business spend too much time in front of the computer and not enough with clients.”
IF FOCUSING ON ONE CLIENT, INVITE ONE CLIENT Bringing multiple clients may be purposeful, but if you want to give a client special attention, consider a two-person game. “You need to decide if you are going to invite a few clients out or just one. There isn’t the same level of intimate conversation if I have three guests out. If I invited three clients out and none of them knew each other, that could be beneficial. But
MAKING THE BUSINESS LINKS Deepening the client relationship is an important part of building a business for the long-term. Few places are more conducive to this than the golf course—annd the new Muskoka Bay Club takes client appreciation to fantastic new levels. The Bay club is the brainchild of Peter Freed, a dynamic, on-the-go 40-something who happens to run Freed Developments, the downtown Toronto property developer responsible for upscale, urban-chic properties like the Thompson hotel, Fashion House and 60 Colbourne. But it is his high-end Muskoka golf development that is really turning heads. Ranked ninth in Canada, the course has immediately become one of this country’s most impressive set of links. After a long winter the coming season looks set to be a good one. “We’ve had the best spring ever. We had one of the longest, coldest winters on record. We didn’t have an ice storm. It snowed in November and stayed, and we had a nice, deep blanket over the course all winter. It is in fantastic condition this spring. The greens came out really great,” says Chuck MacDougall an executive with the club. “We’ll have our busiest year ever.” Advisors looking to impress clients would be hard-pressed to find a better location. Located at the southern tip of Muskoka, the club is just 90 minutes from Bay Street. The impressive 17,000 sq. ft. clubhouse features two restaurants. An infinity pool built into massive outdoor deck will see clients enjoying asahi Tuna tacos on a terrace leveraged 100-feet above the course below. “If you have a high-value client there is nothing like it,” says MacDougall. The stunning scenery offers the perfect getaway for advisors hoping to take a client relationship to the next level. “I see a lot of advisors out here. They bring out a client. They get out on the course, do some fine dining, sit out on a beautiful deck under the stars and then come back for another round after breakfast,” says MacDougall. “Where else do you have to client attention for four hours? It’s a non-selling environment. There is no sales pitch. Where do you get that? It is a chance to develop a rapport and some camaraderie. You get to know the dog’s name, that the kids play hockey. It’s a unique environment.”
it is a different proposition than having one client out, where you get a chance to really know that client better.”
PLAY THE LONG GAME Golf is not just for existing clients. It can help you establish a relationship with prospective ones.
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Prizes, sizes and specifications subject to change without notice. E. & O.E. Illustrations are artist’s impression.
2014-05-28 1:51PM PM 4/06/2014 7:41:15
FEATURE / CRM2 CONVERSATION
CLIENT RELATIONSHIP MANAGEMENT ROUNDTABLE Advisors have been racing to revamp their practices in light of upcoming new client relationship management rules. WP gathered a group of industry veterans to sound off on the new regulations known as CRM2. The panel discussed the impact the new regulations will have on advisors, how firms will implement them and what these changes mean for advisors. As the industry gets set to move ahead, here is what the experts want you to know. WP: How do you, the advisor, feel about CRM2 and the second phase implemented in June? Arthur Charles Salzer: As a wealth management firm we welcome the enhanced transparency that CRM2 provides. Investors should know the full cost of their investment products and services. Many Canadians are invested in these products by their advisors, but don’t clearly understand their full cost. CRM2, once
THE PANEL: Arthur Charles Salzer, CEO, chief investment officer, Northland Wealth Management Inc. Years in the business: 25 Matthew J. Ardrey, consultant, manager, financial planning, T.E. Wealth Years in business: 15
William Britton, CFP, Marlin Financial Services Inc. / Quadrus Investment Services Ltd, Years in business: 7 Lisa Thompson, vice president and portfolio manager, RBC Wealth Management. Years in business: 18
fully implemented, will help investors better understand the trailing commissions and deferred sales charges associated with holding these products. This should lead to some frank discussions between clients and their advisors. Matthew J. Ardrey: Our platform is mostly through pooled fund solutions, ETFs, or by direct hire of money managers. We already disclose benchmark information through our investment policy statement. We fully disclose all costs to the client and report quarterly on performance against benchmarks. So if you ask how I feel about CRM2, I can say I feel happy that the industry will finally be required to provide the information necessary for our clients to make informed investment decisions. I welcome the transparency that this is bringing to our industry. WP: What is your firm’s position on CRM2? William Britton: The impact of the changes being implemented in June should be minimal. The required disclosures are, for the most part, already included in applications, forms, and point of sale documents, and there is already an expectation for advisors to be reviewing such details with their clients. Changes in 2015 and 2016 will be more significant and warrant a focus on fee discussions at present. There is no need to be unduly concerned. They plan on communicating regularly and providing the tools and information necessary to thrive in the new environment. For some investment representatives, this will be a great opportunity to articulate their value and win business. Lisa Thompson: I know that RBC Wealth Management is in full support of these rules, given that they will result in a more positive experience for the client. They are intended to improve disclosure and transparency for clients with respect to products, fees and rate of return reporting. Clients will have a
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better understanding of the value they are receiving for their fees. WP: How has your firm adapted to the regulatory changes? Salzer: We are still adapting as we prepare for the changes scheduled to occur in 2015 and 2016. So far, the only impact on our firm has been providing enhanced regulatory disclosure information to clients. The big changes are happening behind the scenes as we work with our portfolio management systems service provider to ensure that we have the technology in place to meet our enhanced client reporting obligations. Our business practices haven’t changed as a result of CRM2 yet. We still deal with clients as we always have. Our client onboarding and disclosure documents have become more robust, but only slightly. The only significant changes we foresee to our business practices is the way we will be presenting investment performance and client statement information to clients. However, these are more changes in back-office operations than in business practices. We will still evaluate potential investments for our clients’ portfolios, assess our clients’ risk tolerance and come to an understanding of our clients’ investment objectives the same way. These are our practices—this is where we add value to our clients. These practices won’t change. What will change because of CRM2 is how we account for what we have done for our clients, how we explain it to them in their client statements, how we performed in providing our services and what these services cost. Ardrey: We are implementing minor changes that need to be made to our reporting. For example, we provide returns on a time-weighted basis as a way of comparing to the relative index. We will now need to provide returns on a money-weighted basis as well. WP: What has been the reaction from clients? Salzer: We haven’t informed clients of the upcoming significant changes as they are still more than a year away from implementation. Generally, clients have become accustomed to increased regulatory requirements over the past decade and understand that we operate in a highly regulated environment. Thompson: I believe the greatest benefit with CRM2 is that it will facilitate a high level of transparency
for Canadian investors, helping them better understand products, fees and rate of return reporting. Common standards across the competitive landscape will create a more even playing field for advisors and firms. WP: What are the major challenges for your firm keeping in line with CRM2? Ardrey: The greatest challenge will be in administration and reporting. Change is never easy. Entire reporting structures will have to be shifted. This is a massive change in the industry and a cost that many advisors and firms will have to bear. With changes in the reports advisors will need to explain to their clients how to read and understand the new information. This can lead to confusion on behalf of the client, especially in the area of explaining money‑weighted returns. William Britton: Implementation in long-running practices may be a challenge. Although CRM2 represents new requirements, the need to disclose this information in the best interest of the client is JUNE 2014 | 45
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FEATURE / CRM2 CONVERSATION
The greatest challenge will be in administration and reporting. Change is never easy Matthew J. Ardrey nothing new at all. It may be very difficult to start discussing fees and benchmarks in the later stages of a relationship if these topics have not been broached before. Furthermore, introducing them in such a new and blatant format—even if they have been reviewed in a different manner in the past—may result in confusion or an unintended emotional response in the consumer that could have a negative impact on an otherwise healthy and productive client/advisor relationship. It is also worth considering that, given the fragmentation of regulatory requirements from one channel to another, and from one product to another, consumers may be unintentionally attracted to what they see as simpler solutions—not because they are better suited to the needs, but rather because they appear more straightforward simply because they do not have the same requirement. WP: What do you feel will be the greatest benefit to the industry, the advisor and the consumer with CRM2? Salzer: For the industry it will be empowered consumers who will demand lower-cost investment products and services. Increased cost transparency may see clients shift passive investments in mutual funds toward more tailored portfolio management solutions for part of the market, benefiting advisors, while driving fund managers to lower their costs, benefiting consumers. Ardrey: The greatest benefit is transparency. The average investor does not understand the costs they are paying and what benefit they are receiving for these payments. For our industry, this will help clean up a lot of the negative press surrounding fees. This will increase the professionalism of the industry. Many advisors may see this as a challenge, but I for one believe that the consumer is OK paying for something they feel they are receiving value for in return. Too many times the financial planning component of the job is devalued, as it is given away for free. This will help those advisors who are really giving their clients value for the fees they pay, as it
will differentiate them from those who may not be. Britton: Always put yourself in the shoes of the client. What sorts of things do you want to know when you are the customer—and how much more confident are you in your decisions and relationships when you trust that you have been given all of the relevant information? Your clients are no different, and deserve no less. The majority will appreciate it and reward your open and honest communication. I would also hazard a guess that those who do not appreciate the value you provide in exchange for the fees that you earn are not likely your ideal clients anyway. Thompson: The considerable investment required by firms as a result of these changes, combined with increasing administrative demands on an advisor’s time, are challenging. Coupled with demands from increasingly sophisticated clients, this means that the wealth management industry as a whole has never been under greater pressure to adapt to client needs and prove its value … while investing to ensure full compliance with regulatory requirements. WP: What do you feel are the greatest challenges to the industry, the advisor and the consumer with CRM2? Britton: Approached properly, the client relationship should improve. Greater transparency and rapport should be a benefit to all stakeholders. However, any compliance regime will prove ineffective if those involved go through the motions simply because they’re told they have to, or worse still, if they choose not to follow the new rules. Should an advisor choose to ignore regulations, no amount of regulatory reform will impact their practices. Salzer: The greatest challenge for the industry will be dealing with the operational system challenges of preparing for the different reporting requirements. Building and testing new reporting processes will be challenging for firms of all sizes. The greatest challenge for the advisor will be explaining the change in performance reporting to the client. Correspondingly, the greatest challenge for the client will be in understanding the new information on their client statements and understanding the new performance measurement into something that is meaningful to them. WP: What is the number one piece of advice you would offer to an advisor struggling to transition? Ardrey: Try to keep your focus on the end result for
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yourself and your client. CRM2 is an improvement in the client experience. Having provided my clients the kind of information CRM2 for years now, I can tell you that they appreciate the upfront clarity and transparency of the information. This opens up further conversations and questions. It also helps me understand my clients concerns better and in turn I can respond to those concerns. Salzer: Engage your portfolio management system service provider early on how to prepare your historical data for the new MWRR performance calculation and make sure to test accuracy of security position market values at account opening. Thompson: As with anything new, clients will undoubtedly have many questions, including inquiries about the fees they are paying and what that covers. Advisors need to ensure they are fully educated about the new requirements and are equipped to answer all client inquiries. This is a great opportunity to underscore the value of the comprehensive wealth management experience that my clients receive. WP: Do you feel CRM2 will prove to be as fruitful as it’s intended to be? Thompson: While it’s still early days, we’re confident that clients will benefit from the new rules and that the integrity and trust in the industry will be strengthened. I truly believe the client-advisor relationship will only strengthen because of this. Salzer: Eventually, once clients begin to see long-term historical performance and cost data in their client statements and annual disclosures. But this will take several years. Ardrey: I certainly hope it will be. CRM2 provides a lot of new information for investors. Much of its success will be based on advisors clearly communicating this information to their clients. For too long the average investor has not been provided the information to evaluate his or her portfolio. Armed with this new information, they will finally be able to make more informed choices about their investments. WP: What’s the missing link, in your opinion? Where does CRM2 lag behind? Britton: First, if the ultimate intent is to provide the client with an exact notion of the amount their advisor is being compensated, it doesn’t seem to make a lot of sense to bundle the firm fees with those received by the dealer. At best, it demands further clarification
on how those commissions trickle down to the individual advisor—which appears to be the only breakdown that is not required. In the end, it still leaves questions unanswered, and there is not true transparency. Second, as CRM2 applies to many investment products, but not all, the ability to compare apples to apples remains unavailable. Unfortunately, this is a function of the regulatory framework of the financial services industry as a whole and cannot be resolved at this level. That said, it does highlight the inconsistencies that the industry, the advisor and the consumer have to face. So long as we continue to regulate products instead of advice, questions and concerns will likely remain. Thompson: As mentioned earlier, the industry brought all stakeholders together on this initiative and there has been ample opportunity to share views, provide comments to regulators and participate in roundtable discussions leading up to implementation. We need to allow some time before determining if any changes are required, but we believe we’re starting from a good spot.
The major problem with CRM2 is that there is no consumer awareness program being conducted by the securities administrators to inform investors of the coming changes Arthur Charles Salzer Salzer: The major problem with CRM2 is that there is no consumer awareness program being conducted by the securities administrators to inform investors of the coming changes. There is no effective investor outreach program from the regulators to help consumers understand the changes that will occur and explain why advisors are moving to a MWRR. Ardrey: I would like to see this implemented immediately rather than over a number of years. The longer they wait to implement, the longer it is going to take to see the benefits of these new regulations. JUNE 2014 | 47
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FEATURE / ONLINE LEADS
GENERATING LEADS ONLINE More people are spending more time online today than ever before . It makes generating leads through the social media sphere all the more important
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Financial marketing experts talk a lot about generating leads online but we rarely see it in action. Today, advisors seem to think about digital marketing a bit like a mythical unicorn. Many speak of its powers, but few admit to seeing it up close. Let’s extinguish the myth: advisors can generate leads online more efficiently than using traditional marketing tactics like direct mail and cold calling. A strong website and strategy can transform your business, but here’s the thing: it’s not an overnight success story. I will tell you firsthand that generating leads online takes time, effort and a little guts. Instead of expanding on one of the many digital lead gen theories that have already been published, I’ll explain the three essential parts of generating leads online. We’ll also look at three ways advisors are generating leads online today. Quick note: First thing’s first! Before you can convert online, a website needs to draw in your ideal client. When visitors arrive on your website, what kind of impression do they form about your firm based on the site? If the website is outdated, hard to find or hard to use, don’t expect leads to pick up the phone. Your website is your only marketing tool that’s representing your firm 24/7. It’s vital that your advisor website is sending the right message.
3 PARTS TO GENERATING LEADS ONLINE 1. Identify the offer We’ve all heard the axiom that content is king. Today’s consumers are savvier than ever and they’re looking for value in all the places they spend time on the web, including your website. What can you offer prospects that will peak their interest and add value to their busy lives? Today, usually this offer comes in the form of a helpful piece of content like an blog article, white paper, podcast, etc. Website visitors generally don’t mind exchanging their contact information if they perceive that they’re getting something worthwhile in return. To figure out what kind of value-add offer your
A great call to action enhances your website in a couple of tremendous ways. First, it makes your website interactive for users. It can also reveal tons of information about who’s visiting your website and the types of content they’re interested in consumers are looking for, get inside the minds of your ideal client (your target audience). I suggest starting this process by building out your client personas. Developing a client persona allows you to take a look at who your idea client is and understanding where your services fit in. Expert tip: Instead of taking a guess at the type of content your website visitors are interested in, use real data. Change up your content offers each month for three months and record the data to identify the most popular content on your site.
2. Ask visitors to take action Calls to Action (CTA) are exactly what the name implies: These little digital buttons direct your audience towards taking the next logical step on your website. What is it you’d like your audience to do next? Common CTAs we find on financial advisor websites are “Download Ebook,” or “Subscribe to My Newsletter.” Whatever action you have in mind, users will go for it if they understand the benefit and if it’s really easy for them to do it. A great CTA enhances your website in a couple of tremendous ways. First, it makes your website interactive for users. CTAs can also reveal tons of information about who’s visiting your website and the types of content they’re interested in. JUNE 2014 | 49
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FEATURE / ONLINE LEADS
Creating a questionnaire and evaluation template can be a lot of work up front, but consider the payoff 3. Create the exchange Finally, leads are generated when a prospect exchanges their contact information for something valuable (ie your content offer). In essence, the website visitor expresses that they are interested in a piece of information that you have created. As a result, you’ve begun building a positive relationship with someone who may be your ideal client. Technically speaking, the exchange happens via a web-to-lead form. The best forms are simple – we don’t want our new lead to feel as if they’re signing their life away to download a piece of content. Unless it’s absolutely necessary, try keeping your form under five fields (name, email, phone, etc.)
3 IDEAS TO GENERATE LEADS ON YOUR WEBSITE White paper
Maggie Crowley (@crowleymaggie) is the Marketing Coordinator for Advisor Websites where she manages the company’s online presence and educates financial services professionals on how to maximize the potential of a strong web presence.
It’s impossible to overemphasize the importance of providing ‘value’ in your content exchange. Studies show that consumers are less interested in getting sold to than in being educated. One way to provide top notch content? Create an ebook or white paper to share your knowledge and expertise. Even a simple one-page resource guide or fact sheet can create a demand in your consumers. Place your white paper behind a form, your traffic will trade an important piece of their information, their phone number or email, in exchange for the information you offer. Expert tip: target your content to your ideal client. For instance, if you work with doctors, a great piece of content speaks to doctors. Example: “The Wealthy Doctor Guide: 10 financial planning tips for MDs”
Personalized Evaluation Here’s a trend that requires a little more investment but can be extremely lucrative: a personalized evaluation based on the results of a questionnaire completed by a web visitor. Digital marketing is all about creating an experience that your ideal client values and
appreciates. Personalized content like a wealth or risk evaluation is an experience that can provide a lot of insight to prospects, as well as help an advisor establish trust and credibility. Creating a questionnaire and evaluation template can be a lot of work up front, but consider the payoff. Don’t have the time? There are a number of software companies out there that can take away much of the workload. Try doing a quick search for “risk assessment software” or “wealth evaluation tools” to find a good fit for your practice.
Event management Many advisors already host events to reconnect with existing clients and meet prospects. Promoting and managing your event online is one more way to save time, money and tons of stress for you and your team. Managing an event online allows you to invite your audience and manage their RSVPs right from your website. Another trend we’re seeing more often is advisors who use their website to host virtual events, or webinars. As with blogging and other content marketing initiatives, one huge perk of hosting a webinar is the ability to establish yourself as an expert in financial services. Leading a discussion and providing your expertise to a live audience is one of the strongest ways to build credibility with your audience in a genuine and authentic environment. Leads are generated when your target audience registers for the event. Users will be required to complete a form that collects (at the very least) their full name and email address. The more narrow the topic of the presentation, the more qualified your participants will be. Hosting webinars is a great way to collect and grow email lists for future prospecting. Another perk: webinar attendees generally convert at a higher rate than other forms of content marketing. Expert tip: Don’t forget to promote your webinar or event! Utilize your newsletter, social media channels and website in order to get a great audience.
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FEATURE / SOCIAL MEDIA
HOW TO DEVELOP A SIMPLE
SOCIAL MEDIA PLAN
You might be daunted by the prospect of getting social media right for your practice. Muhammad Yasin presents a simple guide to get you on your way Feeling overwhelmed by the world of social media is easy, especially if you have yet to take part in it. Many businesses use it, have amassed hundreds of thousands of followers, built brand loyalists, and even generated sales leads. Yet without any prior experience with social media, it might get frustrating as you ask yourself the many questions necessary to start up your social media plan: Where do I start? Which social media platforms are right for me? What is the right balance? Social media is a cog in your marketing plan and should align with your other marketing goals, your branding, and with the way you engage your customers offline. You must have goals you want to reach before you actually begin the process.
Consistency is important through social media as a whole, but here particularly. If you use an anagram or a shortened spelling of your business on one account, you should use it on others as well. Use a handle that will allow people to find you when they go searching. When you start registering accounts, sign up for every social media site you know of. Start with well-known sites like Facebook or Twitter, but do not neglect the sites such as YouTube, Pinterest, LinkedIn, and others. You likely will not produce content for all of these accounts, but it is a good idea to secure your company/brand names to ensure that others do not register, and use, them for negative purposes.
FIRST STEPS
Monitor conversations Imagine yourself at a party. How likely are you to jump into a conversation between two people without knowing what the conversation is about? Hopefully, not very likely. The same should be true for social media conversations. Know what is being discussed through social media before jumping into conversations. Monitor what others are talking about. Use the search functions of the social networks to find out what people are saying about your industry keywords and your business and products.
Reserve your accounts An obvious but important first step, register the name of your business and the names of your products.
Create benchmarks Your marketing plan brings in customers, attracts
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5 TOP SOCIAL MEDIA TIPS
1
RESERVE YOUR SOCIAL MEDIA ACCOUNTS
Register your business name and any brands that you own. There is no need to produce content right away, but do not let a competitor snap up your accounts. Start with the well-known ones (Facebook, Twitter, and YouTube) and expand from there.
2
MONITOR SOCIAL MEDIA CONVERSATION
It is to your advantage to monitor what others are saying about your brand and industry. Search your company names, brand names, and industry keywords using search functions. This is what you will need to talk about.
3
SET GOALS
Planning is vital. Social media should be integrated into your marketing efforts. Make a plan that supports the existing marketing goals and set
people to work for you, and says a lot about your business. Social media is part of your marketing and public relations. Any goals that are set as part of a social media plan should be relevant to your marketing and PR, as well as your customer service and sales initiatives. Once you begin interacting, check your performance against the benchmarks you have created. Using analytics tools, measure the engagement of your content, your brand consistency, and return on investment (ROI). You can adjust your plan as necessary.
REACHING OUT Find your following Different people prefer to interact using different types of social media. If you know that your customers focus on specific sites, go to those first. Spending your time and content on Pinterest while all of your customers are on Twitter means you will lose valuable time in front of your audience. Search for the platforms with the most interaction, and go to that audience. Never completely neglect the smaller audience from the other sites, but spend your time where you stand to gain the best ROI. Valuable content Content is one of the most important parts of social media. While a large part of social media is interaction, another large part is learning. People take to social media and follow different people because of their expert status. As a business, you are the expert, and the content you share should
benchmarks. Your actions in social media should support those goals, and the goals of the marketing plan overall.
4
INTERACT!
5
MEASURE PERFORMANCE
Creating and sharing relevant and interesting content is very important, but it is also very important to interact with your followers. Social media is about building a community on a personal level and building relationships. Building relationships can help your business’ bottom line. As with any part of marketing, measuring your performance is vital to becoming more efficient and better overall. Set checkpoints to measure growth. Divide tools into four categories: Content, Diagnostic, Monitoring, and ROI. Each will help you improve and adapt your social media plan overall.
reflect that. Blog your expert ideas and share them via social media. Remember, though, that sharing information via social media is not for the purpose of making sales. Instead, you are sharing information to establish a relationship with your followers. If your followers value your insight and expert opinion, they will come back to see you as a customer. Response Again, social media is about building relationships, and your main goal when using social media should be growing those relationships. People reach out via social media because they want a response, so you should provide them some kind of response in return. Any reply from you will strengthen the tie between you and the customer. Once you have loyal customers and brand evangelists, reward them through promotions. Mention and thank anyone who blogs about you. Keep track of your followers and note who is and who is not a customer. Remember that every person who interacts with you is a potential customer. Generating leads Just like you use marketing to generate leads and help the sales team, social media should be used to drive revenue as well. Unless you are bringing in, or at least learning about, potential customers, then the time you spend on social media is wasted. However, when you generate leads, different tactics are required for different social media platforms.
Muhammad Yasin is a public speaker, e-book author, and director of Marketing for HCC Medical Insurance Services. In his role, Yasin is responsible for the brand building and lead generation strategy of several dozen social media accounts with over a quarter of a million followers
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BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
GETTING INSIDE OUR 54 | JUNE 2014
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LEADERSHIP: KEY QUALITIES
EMPATHY COMMUNICATION PROCESS & TACTICAL ORIENTATIONS LOGIC
EYE FOR DETAIL
INSPIRATION
EMOTIONAL INTELLIGENCE & SELF-AWARENESS
‘BIG PICTURE’ VISION AUTHENTICITY
Source: Deloitte Leadership Academy
Taking your team to the next level means understanding your employees and yourself. Jill Fraser reports “A good leader possesses two key attributes, the ability to set direction and the skill to drive people towards that direction, motivate and align them and ensure that the direction appeals to their hearts as well as their heads.” Their hearts? Twenty years ago, an article on leadership would have reflected the domination of boardrooms by alpha males who believed that emotions and feelings in an office environment were about as relevant as children’s storybooks and as welcome as T-shirts, and probably kicked off with something like: “A good leader recognizes that business strategy is a highly rational process of eliminating variables and maximizing opportunities”. Leadership in 2012 is a much more holistic concept: leadership training institutions such as Deloitte’s Leadership Academy use the analogy of children’s stories to encourage business leaders to tap into their own stories in order to become more
open, honest, transparent and real – whereas employees wearing T-shirts is now a universal sign in major corporations around the globe, showing that a relaxed dress code lifts staff morale, acknowledges individuality and potentially increases creativity and productivity. Today, as expressed in the opening quote by Deloitte’s Leadership Academy chief and founder, Tom Richardson, good leadership engages the heart as well as the intellect, and encompasses a number of key qualities. Richardson established the Deloitte Leadership Academy to expand the capabilities of leaders after recognizing that ‘people, not PowerPoint’ drove organizational performance. He has years of experience in the leadership stratosphere – working intimately with 15,000 top business leaders – and so is uniquely placed to explain why leadership is a people game. “The characteristics and capabilities of good JUNE 2014 | 55
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BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
TECHNOLOGY: PROS AND CONS Leading in the future One challenge leaders at all levels of business have to adapt to is the relentless march of technology. Tom Richardson, managing partner, Deloitte Leadership Academy, says there are benefits and challenges. “How do leaders engage with their people when they’re scattered around the world? Technology!” he says. “Technology is a powerful vehicle to carry messages and establish connection – intranet, email, videos, TV channels, webinars, live feeds. The biggest trap is a leader not understanding the purpose of each technology medium.” BENEFITS:
echnology is very powerful for listening and T asking questions – and staff can answer and respond. Technology can prioritize. It also enables communication between people to build up a sense of community, which helps develop a sense of belonging in what could otherwise be a very difficult environment because of geographic diversity and sheer
leadership are universal across almost all industries,” he says. “But it’s become more and more important in the finance industry because of the pressure around bonuses and remuneration.
“If you don’t understand yourself you’re never going to understand others – subsequently you’re never going to be able to motivate them” John Toohey “People will only stay in an organization if they feel connected and engaged. They’re not being paid to stay there with bonuses anymore. The need for leaders in the financial services industry to build up their people skills has become increasingly important.” Andrew Henderson, a veteran of leadership management introduces the term “leadership charisma”. “It’s to do with connection – a connection that makes me feel that my leader is charismatic and the only way that connection will be established is if my leader has the emotional intelligence to understand me – what motivates me, why I’m here, how I react. “Unless leaders understand and invest in
volume that prevents you from literally walking the floors and relating to people. More and more leaders’ messages are delivered via video or voicemail – you can hold emotion in voicemail. Email is not so engaging. More engaging uses of technology are evolving all the time. CHALLENGES:
he many options and choices, which means T added complexity. Whenever you have a message to deliver it’s essential to understand the right blend of technologies versus face-toface to ensure you’re not losing the personal touch. The complexity of all the available channels is the greatest challenge. It’s important not to rely on technology all the time. Physical face time is often key to effective communication. Source: Deloitte Leadership Academy
their people, they will not be able to influence them because when they want to rally their team to do something the reaction will be ‘you only want us to do this because of what you will gain,’” he adds. “But, if each individual knows from experience that their boss is invested in them, listens to them (consultative leadership) and honestly cares about them they will trust the leader’s decision on behalf of the team. That’s leadership charisma,” Henderson maintains.
NEUROSCIENCE IN ACTION A high trust factor is paramount in the leader/ employee equation in the insurance industry, says Professor John Toohey from the Business Psychology Discipline, Graduate School of Business and Law RMIT University, because of the nature of the business and the fact that a culture initiated and practiced at the top is mirrored down the line and will eventually shape customer relations. Toohey familiarizes his graduate MBA students with neuroscience to add weight and credibility to the argument that the most effective, charismatic leaders function from their emotions. “Through neuroscience, which looks at how the brain operates, we have come to realize that decision making is primarily emotion-based,” explains Toohey. “The emotional parts of our brain kicks in long before the rational parts. The rational parts follow
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IN THEORY: EMOTIONAL INTELLIGENCE The rules of the heart Emotional intelligence (EI): • • • •
the ability to perceive emotions in yourself and others the ability to use this information in decision-making understanding emotions and their consequences the ability to manage emotions in yourself and in others. According to research conducted by Daniel Goleman, one of the world’s leading proponents of emotional intelligence, “the higher up the organization you go the more important emotional intelligence becomes”. Goleman’s research suggests that emotional intelligence is twice as important as IQ and technical skills. He classifies EI as a framework of five elements: • HIGH SELF-AWARENESS – People with high emotional intelligence are usually very self-aware. They understand their emotions, and because of this, they don’t let their feelings rule them. They’re also willing to take an honest look at themselves. •
SELF-REGULATION – This is the ability to control one’s emotions and impulses. People who self-regulate typically don’t allow themselves to become too angry or jealous, and they don’t make impulsive, careless decisions.
•
MOTIVATION – People with a high degree of emotional intelligence are usually motivated. They’re willing to defer immediate results for long-term success.
•
•
EMPATHY – Goleman says this is perhaps the second-most important element of emotional intelligence. Empathy is the ability to identify with and understand the wants, needs, and viewpoints of those around you. SOCIAL SKILLS – It’s usually easy to talk to and like people who have good social skills – another sign of high emotional intelligence. Those with strong social skills are typically team players.
and try to make sense and contextualize.” “A lot of men in business are afraid of that component, and don’t want to know about it. The executive education I’ve done in this area is fascinating: people have quite bemused smiles when I first tell them this but as they dig into it and I show them the research they begin to look more bewildered than amused.” Toohey contends that an area of critical importance in business education is the nature of beliefs and biases. He teaches that the brain is highly plastic/durable. Beliefs belong to the irrational/emotional world, and a strongly-held belief can change the neural pathways of the brain
CAN YOU IMPROVE YOUR EMOTIONAL INTELLIGENCE? Researchers disagree over whether you can build your ‘innate’ level of EI. However, it’s generally acknowledged that you can train to be better at EI, like any other skills. Corporate psychology firm Mindtools suggests carrying out the following exercises: • OBSERVE HOW YOU REACT TO PEOPLE. Do you rush to judgment before you know all of the facts? Do you stereotype? Look honestly at how you think and interact with other people. •
LOOK AT YOUR WORK ENVIRONMENT. Do you seek attention for your accomplishments? Humility can be a wonderful quality, and it doesn’t mean that you’re shy or lack self-confidence. When you practise humility, you say that you know what you did, and you can be quietly confident about it. Give others a chance to shine.
•
DO A SELF-EVALUATION. What are your weaknesses? Are you willing to accept that you’re not perfect and that you could work on some areas to make yourself a better person? Have the courage to look at yourself honestly – it can change your life.
•
EXAMINE HOW YOU REACT TO STRESSFUL SITUATIONS. Do you become upset every time there is a delay or something doesn’t happen the way you want? Do you blame others or become angry at them, even when it’s not their fault? The ability to stay calm and in control in difficult situations is highly valued – in the business world and outside it. Keep your emotions under control when things go wrong.
•
TAKE RESPONSIBILITY FOR YOUR ACTIONS. If you hurt someone’s feelings, apologise directly – don’t ignore what you did or avoid the person. People are usually more willing to forgive and forget if you make an honest attempt to make things right.
•
EXAMINE HOW YOUR ACTIONS WILL AFFECT OTHERS - BEFORE YOU TAKE THOSE ACTIONS. If your decision will impact others, it is important to put yourself in their place. How will they feel if you do this? Would you want that experience to happen to you? If you must take the action, how can you help others deal with the effects?
(thus the plasticity). “Leaders usually don’t understand this and therefore don’t get the impact,” he says. The significance of all this, he says, is to highlight the relevance of self-awareness (what we believe, why and how we behave, and why) in what he refers to as “the psychology of strategy” for leaders to “inspire people to act in predictable ways”. “I challenge managers and executive MBA students because usually they are very good at identifying biases in others, and very poor at identifying them in themselves,” adds Toohey. “I tell them, ‘if you don’t understand yourself go and grow cabbages or do some other solo job.’ JUNE 2014 | 57
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BUSINESS STRATEGY / LEADERSHIP AND MANAGEMENT
LEADERS ON LEADING
Cameron Clyne
Leading in public
Leading in insurance
CAMERON CLYNE, CEO, NAB An important aspect of leadership is demonstrating the desire and ability to provide explanations and answer questions. Businesspeople give people a go – they appreciate people fronting an issue and making themselves available to explain decisions. NAB CEO Cameron Clyne has recently started regular spots on a local radio call-in. These programs give people an opportunity to hear directly from a bank CEO on what decisions have been made and why. There are people in the community who don’t understand how banks make decisions. Clyne believes that customers are at the heart of decision-making and whatever decisions are made, they must be explained to customers, potential customers and the general public. NAB also wants to show that it takes its responsibility – both as an employer of 45,000 people worldwide, and as a top five company with millions of customers – very seriously. Clyne believes it is important to have the leadership to show staff that the conversations bankers are having with customers are the same conversations he is having publicly. Customers are asking NAB bankers difficult questions about interest rates, cost of funds, policies and procedures. These are the same questions that Clyne is being asked on radio and is happy to provide the answers to explain the bank’s actions.
MATTHEW BOON, MANAGING DIRECTOR, WINSURE INSURANCE GROUP “Before you look at leadership you need the right people onboard, in the right roles, and ensure they are well trained,” says Boon. “I then look upon leadership as being from a macro-basis. You have to empower people – train them, educate them and, more importantly, you have to give them a support structure too. Whether that be via myself or via another mechanism within the business.” Boon says leading a business within insurance compared with other businesses is different as it is continually changing. “All businesses are affected by the economy, obviously, but in insurance we are highly regulated too,” says Boon. “That is not necessarily a bad thing, but it is something you have to keep on top of and make sure your staff are up-to-date with any changes too.” Boon says good leaders in insurance are consistently reviewing how they approach business, both in terms of distribution and underwriting, so all stakeholders achieve the desired result. “When it comes to dealing with staff, they need to feel they have access to management. It is easier in a company my size [Winsure have 13 staff], than it would be in a multinational company where there are many more tiers of management, which there obviously needs to be for a larger firm,” says Boon. “For us though, it is very much about everyone working together and developing the business together. You want your staff to raise issues as quickly as possible so we can address those aspects. Whether it is an opportunity or something negative, you need to be on top of it,” he adds.
Effective communication... it’s about understanding individuals, as opposed to seeing them through your own lens “Don’t pretend that you can go into a business and take a leadership role because you’ll only make a mess of it. If you don’t understand yourself you’re never going to understand others, you’re never going to be able to motivate them.”
LEADER, KNOW THYSELF Jason White and Juliet Bourke, human capital partners at Deloitte, who are in the business of creating “extraordinary leaders,” agree that selfawareness is a crucial element of leadership training. Post-GFC, due to external market forces and related circumstances that prompted change,
leaders with higher ‘emotional intelligence’ (selfawareness being a critical component of emotional intelligence) have emerged at the forefront, reveal White and Bourke. Successful leaders during the Global Financial Crisis (GFC) ensured that communication with staff was increased 10-fold, often spending at least 30 per cent of their time with their teams, says White. “Whenever we experience a crisis, it’s an opportunity to reflect and minimize certain notes and amplify others, one of which has been becoming more inclusive,” adds Bourke. A trend towards increased inclusivity and collaboration are by-products of a growing prominence in leadership prototypes on emotional intelligence and communication.
COMMUNICATION Lee Iacocca, former CEO, Chrysler Corporation, once said, “You can have brilliant ideas, but if you can’t get them across, your ideas won’t get you anywhere.” Nido Qubein – businessman,
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EXECUTIVE SUMMARY Leadership isn’t just about marshalling the
intellectual resources of your workforce: it’s about engaging their emotions too. logic, ability to inspire, authenticity, an eye for detail and a ‘big picture’ vision, process and tactical orientations and emotional intelligence.
Making a connection with your employees and
stakeholders and understanding them is key to being able to rally a team.
Neuroscience shows that harnessing emotions can be much stronger than the rational side of the brain, as this kicks in earlier and creates stronger neural pathways.
Knowing yourself is key to being able to
motivate others – and emotional intelligence is key to self-awareness.
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motivational speaker, President of High Point University in North Carolina since 2005 and master of communication skills – says that the most common mistake made by leaders is “confusing the art of communication with the science of connecting”. “Effective communication is not merely the transference of knowledge, data or information. The heart and soul of effective communication relates to the ability to build a bridge of understanding. That means to connect with them,” he says. “Something amazing happens when someone believes that the person communicating with them knows his or her fears, goals, aspirations and needs. Qubein adds that when leaders really connect they use language that their people relate to, speak from their perspective and address issues they find important. The moment they do that the value of what they’re saying is heard in a modality in which people can relate and recognize the benefit to them. “When this happens both the art and the science have been employed and communication has, as we say, clicked.” Deloitte’s Jason White and Juliet Bourke sum it up. “We all know the ability to drive performance, be financially astute and commercial and deal with operating issues,” says Richardson. “Possessing the emotional intellect to understand where your workforce’s mindset is at, what’s driving their motivation and be a real person with them and build engagement has been proven to be crucial in retaining top talent.” Bourke says that it’s about understanding individuals, as opposed to seeing them through your own lens. “The ASX’s focus on diversity skills is causing leaders to sit back and question whether they are actually seeing the person in front of them, or simply making assumptions based on stereotypes,” she says. “Seeing the person accurately is about seeing their strengths, how they sit with other team members, their career orientation, and creating an environment in which you can pull together the best of everyone in order to create a high performing group in which everyone can excel.”
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FEATURE/ CLIENT’S TAKE
THE CLIENT’S TAKE:
Bryan Kelly, proprietor, White Top investor Bryan Kelly learned the hard way how to invest properly. The experienced and sophisticated player talks with Jeff Sanford about the pros and cons of the modern investment advisory industry Bryan Kelly took his first sales job when he was just five years old. “I’m an old-time hustler,” he says. Over the years he has restructured companies around the world, working in Canada, Germany, the U.K., Japan, Switzerland and the Caribbean. That is to say, Kelly knows business — he can read a balance sheet and understands the ins and outs of corporate finance. He considers himself a sophisticated investor, though the journey to market enlightenment did not come without taking his lumps. Kelly began investing in the 1970s through mutual funds. At the time the cost of getting into the market was high, the spreads on product were wide. “I was playing an aggressive game,” Kelly says. “I made all the mistakes. I learned the hard way.” Passing on the lessons learned to his daughters he found his advice being passed along again to friends. When questions started coming back, one thing led to another and Kelly started White Top Investor, an investor-focused website -- not exactly an idea most advisors endorse. But today Kelly counts investment advisors among his friends, and he’s positive about the role advisors play in the life of the average investor. “There are a
lot of great investment advisors out there. Advisors are very important, they help the average person manage their financial future,” says Kelly. But he is critical of some industry practices. “The industry is structured around advisors who sell company product. Companies doing the corporate financing are shoving this stuff into client accounts, and that is not always right for the client,” says Kelly. He is also critical of high-fee mutual funds. “Any advisor who recommends a mutual fund to a client to be in portfolio, I would have to ask why? Advisors will put someone in a bunch of mutual funds but when you dig down into those different funds you find a lot of duplication in there.” Part of the problem is a lack of information and training among both investors and advisors. “I think the average client is naïve. Financial literacy has never been part of education in this country and that is a problem,” he says. Kelly thinks companies do not do enough to train advisors to construct a proper portfolio. “I am not sure the average investment advisor today is trained in what is necessary to pick individual stocks. Relatively few are capable of running a substantial
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portfolio, especially in Canada. Most are instructed on what to put their clients into and have no knowledge about how to pick assets,” he says. There are bright spots, however. “If an advisor accepts a fiduciary role and manages money in the best interest of the client … then there can be a real business here. The one-stop approach, it takes a huge effort. But the guys that are fee-only are going to be there long-term,” says Kelly. “The CFP is a good designation. It has the breadth and is the designation providing value. The fee-based model is the only viable business model long term. That’s the certification that has value.” Kelly uses a driving analogy to sum up the state of the industry: “A lot of advisors work on creating fear. They tell the client, ‘You don’t’ know how to drive, you need someone to steer.’ But the fee-based advisor helps the client understand, ‘There are always some crazies out there. This is how we are going to drive, if we stick to these rules we are going to get home.’” Conveying the real risk in markets is key to maintaining the client relationship. “Advisors need to communicate with their clients. You have to tell them, there are risks, there are crazies out there. You have to tell that story. It’s not all sweet.” Kelly recognizes being an advisor is a tough job: “I think you need a substantial book today. The guys with a small book, that’s rough. I don’t know how you do that now without buying a substantial book. Starting from zero, that’s really tough.” Nevertheless, he thinks the industry is at a critical point in terms of what its clients understand. “Advisors are going to be under pressure. The industry is at a critical junction. People have information today, and that is changing the industry. I didn’t have that when I started. I learned the lessons the hard way. But the Internet has changed things today. Eventually, the client is going to learn this stuff.” At the end of the day, the smart advisor will realize wealth management is a vocation. “I think it is important that you are a thinker. You have to be in markets, you have to understand that things change, that the only constant in markets is change. You have to embrace this and manage that change. Client after client, you have to tell them that.” JUNE 2014 | 61
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LIFESTYLE / DAY IN THE LIFE
Day in the life of... Rhonda Sherwood, Wealth Advisor, ScotiaMcLeod
6:00 a.m. or earlier Depending when the sun rises, my two cats eagerly wake me up at the first sight of light shining through the blinds. After giving them a cuddle and feeding them breakfast, I make myself a cup of tea, switch on the business news, my Blackberry and put my head down to work. 7:30 a.m. Attend networking breakfast to talk ‘the industry’, build upon and make new business connections. 10:00-11:00 a.m. - Get down to the nitty-gritty of the day perusing reports, processing trades and responding to pressing emails and phone calls. 11:30 a.m. - 1:30 p.m. It’s back to the schmoozing via a networking lunch talking semantics with other industry professionals. 1:30 p.m. - 2:30 p.m. Kick back for an hour. It’s time for a breather to clear the mind and focus on my clients. 2:30 p.m. Road trip. Drive out to Burnaby, B.C. – a 20-minute trip, if traffic cooperates – for a one-on-one home visit with a client. 4:00-5:00 p.m. – Second “home visit” client meeting – a speciality of mine adding that personal touch. 6 - 9 p.m. Attend a board or council meeting. Topics vary as I am a member of various boards, councils and groups, including the Vancouver Board of Trade’s Leaders of Tomorrow & Women’s Leadership Committee (WLC); Advisor Group Editorial Advisory
Board; Douglas College Financial Services Advisory Council; Simon Fraser University’s Mentors in Business (MIB) Program; the City of Vancouver’s Women’s Advisory Committee Member; ambassador for the Vancouver Board of Trade; Educator with the Junior Achievement of British Columbia; Mentor for the Minerva Foundation For B.C. Women; and Board Member for Lower Mainland Grief Recovery Society. 9:30 p.m. Finally, home sweet home. Dinner time, which typically consists of some Whole Foods vegetarian, prepared meal. 9:30 p.m. - 11 p.m. Catch up on household duties, feeding and relaxing outside with my two cats, overlooking the strata garden – a hobby of mine. 11 p.m. Bedtime. Settle down with a good Netflix series to let go of the day that has past, for a fresh outlook tomorrow.
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IMAGE CONSULTANT
Forget your heart
The smart advisor wears these on his sleeves With ready-made shirts, the temptation is to go with ready-made buttons, but for advisor looking to stand out at the same time assert their professional dominance, cuff links remain a prerequisite. Still, striking the right balance between flashy and fussy is just as important Your image is everything in a business dependent on building client trust and what you wear, even on your sleeves, can cement those relationships or weaken them. But what statement do you want to make when you show a little cuff? Glad you asked. Here is WP’s expert take on that most masculine of jewelry items.
Now here’s a look fit for any occasion: The classic, goldknotted model is equivalent to the traditional Oxford or loafer. Simple, elegant and geometric – with little to no bling – it is the staple every suit-sporting man should own.
If a story is what yo u wish to share, try your hand at a vintage pair. These elegant fox heads are timeless and bound to elicit a comment or two.
Meanwhile, these designer Tom Ford mother- of-pearl beauties – featured in James Bond SkyFall (2012) with Daniel Craig – are sure to give you the upper hand.
Bad move? Here’s what Breaking Bad star Brian Cranston (Walter White) sports: the infamous Heisenberg cuff links. Here’s President and CEO of JPMorgan Chase CEO Jamie Dimon donning cuff links he received as a gift from the Whitehouse.
If a hit is what you’re seeking, try these bullet-inspired silver cylinders – another SkyFall feature.
Whatever the choice, use your cuff links as the vehicle to showcase your personality. But be careful what you showcase. These sets perhaps take one’s passions a little too far.
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What if your investment fees were 89% lower? You could be a lot further ahead. Vanguard ETF fees are 89% lower than the average Canadian mutual fund. And that difference could add $237,560 in value to the typical Canadian RRSP over the next 20 years. TM
Compare your mutual funds to Vanguard ETFs vanguardcanada.ca/costcompare
TM
Winner - Canada Vanguard Investments Canada Inc. 2013 Morningstar ETF Provider of the Year 2013 Morningstar Best Equity ETF
Morningstar Awards 2013 Š. Morningstar, Inc. All Rights Reserved. Awarded to Vanguard Investments Canada Inc. for Morningstar ETF Provider of the Year and Best Equity ETF, Canada. For further information about the Morningstar Awards, including information relating to the criteria upon which the awards are based, please visit www.investmentawards.com. Source: MERs are asset-weighted as of December 31, 2013. Vanguard MERs were sourced from the Management Report of Fund Performance. Mutual Fund industry MERs were sourced from Investor Economics. The hypothetical example does not represent any particular investment. Cost comparisons are based on a 6% annual return, an initial investment of $250,000, an average 2.01% MER the Mutual Funds and 0.22% for Vanguard ETFs. Without waivers and absorptions, Vanguard ETF MERs would have been higher. Vanguard Investments Canada Inc. expects to continue absorbing or waiving certain fees indefinitely, but may, in its discretion, discontinue this practice at any time. For more detailed information visit, vanguardcanada.ca. Inflation and other potential costs are also not considered. Investments in the Vanguard ETFs can be made through a financial advisor or on-line brokerage account. Š 2014 Vanguard Investments Canada Inc. All rights reserved.
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