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CONTENTS
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UPFRONT 04 Editorial
Crowdfunding gathers steam
CERTIFICATION
SURVEY 2015
24 COVER STORY
CERTIFICATION SURVEY 2015 Having trouble wading through the sea of professional certifications? WP surveyed advisors to find out where the real value lies
PEOPLE
INDUSTRY ICON
20
64 FEATURES
IS CFA THE NEW MBA?
The CFA designation is becoming a must-have – and not just for those already in the industry
Following the money around the globe
08 Head to head
How many designations is too many?
10 News analysis
Finding a safe haven in US equities
12 Intelligence
This month’s big movers and shakers
14 Alternative investment update A closer look at the rise of crowdfunding investments
16 ETF update
The rise of smart beta ETFs
23 Opinion
70
Why now is the time to embrace CRM2
ETF PORTFOLIO CONSTRUCTION
How to design charitable initiatives that really make a difference
FEATURES
WP’s regular ETF workshop builds a portfolio for a Vancouver woman approaching retirement
FEATURES 76 Does corporate volunteering really work?
PEOPLE 68 Advisor profile
The Horwood Team’s Nancy Nicol is an integral part of succession
Canaccord Genuity founder Peter Brown reflects on the importance of company culture
72 Portfolio manager
74
FEATURES
WHY FEARLESSNESS LEADS TO FAILURE The best leaders have a healthy dose of fear
2 www.wealthprofessional.ca
06 Statistics
Gaelen Morphet of Empire Life Investments reveals how she’s managing economic uncertainty
79 Career path
Alain Desbiens’ wide-ranging journey through the financial industry
80 Other life
Lyle Konner’s buzz-worthy hobby
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UPFRONT
EDITORIAL
Joining the in-crowd
I
t might have seemed ludicrous a few years ago for advisors to take crowdfunding seriously. But today, equity crowdfunding is a new asset class advisors can no longer ignore. In contrast to regular crowdfunding, where individuals contribute money to help start a project, equity crowdfunding aims to allow investors to see some profit by buying a stake in the venture. Between 2013 and 2014, global crowdfunding grew by 167% to reach $16.2 billion raised, up from $6.1 billion in 2013. It’s expected to reach $34.4 billion this year.
It might have seemed ludicrous a few years ago for advisors to take crowdfunding seriously. But equity crowdfunding is a new asset class advisors can no longer ignore If it hasn’t caught the attention of advisors, it’s certainly getting the attention of regulators in Canada. In May, securities commissions in Saskatchewan, Quebec, Manitoba, Nova Scotia and New Brunswick announced they are or soon will be allowing exemptions permitting early-stage companies and start-ups to raise capital through equity crowdfunding, subject to certain conditions. The maximum investment for individuals is just $1,500, suggesting any move by clients to take advantage of these new investments will matter little to an advisor’s book. But the elephant in the room is the crowdfunding exemption Ontario has on the table, which allows for a maximum of $10,000 per annum. These rules are opening the door to all investors. Until recently, only accredited investors such as high-net-worth individuals and institutions could get a piece of the action available through these private deals. “It’s proof that there is a thirst for alternative finance out there, and that people are sick and tired of the fat cats controlling everyone’s money,” said James Watt, co-founder of Scotland’s BrewDog Brewery, which recently passed on a stock exchange listing, instead raising $9.4 million through crowdfunding. If more investors choose to bypass traditional investment models in favour of equity crowdfunding, it could have a major impact on advisors. The practice hasn’t caught on in Canada yet because of the inherent conservatism in the country, but it seems it’s only a matter of time before investors here jump on the bandwagon. Advisors would do well to be a part of the in-crowd, helping direct clients through this new investment landscape.
wealthprofessional.ca ISSUE 3.07 EDITORIAL Editorial Director Vernon Clement Jones Senior Writer Nicolas Heffernan Writers Will Ashworth Justin da Rosa Olivia D’Orazio Donald Horne Executive Editor – Special Features Ryan Smith Copy Editor Clare Alexander
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UPFRONT
STATISTICS
The rich get richer
North America 2013: $48.2 trillion 2014: $50.8 trillion 5.6%
Despite tough economic times, global wealth markets continue to grow – just ask your wealthiest clients THE HEADLINES might lament tough economic times around the world, but global wealth is continuing to grow at a strong rate and shows little sign, in the long-term, of slowing down. However, Boston Consulting Group’s recent Global Wealth Report does highlight the growing gap between the haves and the have-nots. Last year, the number of millionaires in the world increased from 15 to 17 million. They control 41% of the $164 trillion in
$51 trillion Private wealth in North America in 2014
global private wealth. In four years, million aires are expected to control 46% of the world’s private wealth. That trend shows no sign of slowing down, as the majority of growth is based on existing wealth, due in large part to rising asset prices and stock markets (excepting a few blips) around the world. In fact, 73% of the gains in global private wealth last year came from existing asset performance instead of newly created wealth or businesses.
$5 trillion Private wealth in Canada
12%
FASTEST-GROWING REGIONS Global financial wealth was up 12% in 2014, but it was Asia Pacific that saw the biggest spike at nearly 30%. Existing assets were the main drivers of market expansion, but new wealth is projected to make a deeper and deeper impression Global 2013: $146.8 trillion 2014: $164.3 trillion 11.9%
11%
Growth in Canadian equities in 2014
Growth in Canadian bonds in 2014
Source: Boston Consulting Group Global Wealth Report 2015; all amounts in US dollars
OLD MONEY STILL RULES
ASIA ON THE RISE
While new money is making inroads, old money still accounts for the majority of global wealth. In fact, Latin America is the only region in the world where new money accounts for more than old
North America might rule the roost now in terms of wealth, but that is unlikely to last – Asia Pacific (excluding Japan) is expected to be the dominant region in four years
Eastern Europe
34% 66%
Japan Latin America
4% 96% 54% 46%
Middle East and Africa Asia Pacific
44% 56% 24% 76%
Global
27% 73%
Existing
Source: Boston Consulting Group Global Wealth Report 2015
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60 50 40
2014
62.5 50.8
2019
49
47.3
39.6
30 20 14.3 15.5
10 0
New
6
75.1
70 Share of private wealth ($ trillion)
Western Europe
22% 78% 40% 60%
North America
2.9
4.6
North Western Eastern America Europe Europe
3.7
Japan
6.6
5.7
8.8
Latin Middle America East and Africa
Asia Pacific
Source: Boston Consulting Group Global Wealth Report 2015
Eastern Europe 2013: $2.4 trillion 2014: $2.9 trillion 18.8%
Japan 2013: $14 trillion 2014: $14.3 trillion 2.5%
Western Europe 2013: $37.2 trillion 2014: $39.6 trillion 6.6%
Asia Pacific 2013: $36.5 trillion 2014: $47.3 trillion 29.4%
Latin America 2013: $3.4 trillion 2014: $3.7 trillion 10.5%
Middle East and Africa 2013: $5.2 trillion 2014: $5.7 trillion 9.4% Source: Boston Consulting Group Global Wealth Report 2015; all amounts in US dollars
LIFE IS GOOD FOR THE ULTRA-RICH
WHERE ARE THE MILLIONAIRES?
Those considered ‘ultra high net worth’ (with at least $100 million in assets) continue to see the most growth in almost every region of the world. Globally, private wealth held by ultra-high-net-worth individuals grew by 11% in 2014
The number of millionaire households climbed to 17 million worldwide in 2014, up from 15 million the previous year. Although the US and China claimed the largest numbers of millionaire households overall, these countries had the highest numbers of millionaires per capita:
ultra high net worth
upper high net worth
20
lower high net worth
19.1
18.7
Switzerland
135
Bahrain
123
Qatar
116
Singapore
107
Kuwait
99
Hong Kong
94
Percentage growth
17.6 16.3
15
15.8 12.2
10 9
8.7
5
9.9
9.1 7.9
11.3 11
10.6 8.8
6.7
6.1 4.7
2.2
0 North Western America Europe
Eastern Europe
2.7 2.5
Japan
Latin Middle America East and Africa
Asia Pacific
Source: Boston Consulting Group Global Wealth Report 2015
Number of millionaire households out of every 1,000 Source: Boston Consulting Group Global Wealth Report 2015
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UPFRONT
HEAD TO HEAD
Are there too many professional designations? There are more than 50 specialized designations available to financial advisors – but is there value in all that diversity?
Christopher Dewdney
Kathy Waite
Robert Roby
Certified Financial Planner DWL Financial Services
Founder/owner Your Net Worth Manager
Senior wealth advisor The Roby Retirement and Wealth Team
“Absolutely. There are a lot of associations and organizations that have various designations. The issue with a lot of these organizations is that we don’t know the background or the credibility of the designations; I think some of them are even just cash grabs. The gold bar would be the CFP, and everyone’s familiar with that. But what’s the true value of some of those other designations? For example, we have an aging demographic in North America. There are designations that specialize with elders, such as EPC or CPCA, and I’m sure there are other ones as well. Do we need three or four or five within that one field? There should be some standardization process across the country.”
“I don’t think so. If you have less of something, it seems simpler, but sometimes simpler is the lesser choice. If we have fewer designations, we could enter a monopoly, and when you have a monopoly, you often get apathy by the provider, either through the quality of the courses or the designation not keeping up-to-date. And, if you do the extra designation, it sends a message to your clients that you take their issues seriously. I grew up in the city, but I work in the country, so I did my farming designation. It was my way of saying, ‘I’m trying to understand you and the issues you face.’ As long as the designations have a standard and they’re genuine, then they’re worthwhile.”
“The short answer is yes, there are. But is that really an issue? Does having a designation provide consumers with more protection, better services and enhanced market returns? At the end of the day, clients want a well-rounded advisor, based on a set of core competencies, which I call R.U.L.E.: having the Relevant education, providing clients with an Ultimate service rendering, and having the appropriate Licensing and ample life Experience. It’s not the designation; it’s all the other things added to the designation that create importance. Designations are great, but they’re great only if you can be a meaningful advisor. That’s where, in my opinion, great success is for the client.”
ONE DESIGNATION TO RULE THEM ALL? Some advisors argue that Canada’s plethora of designations is beneficial for a number of reasons, including promoting ongoing education and helping consumers to better distinguish between advisors. Others, however, say the sheer volume of certifications has created an ‘alphabet soup’ that makes it more difficult for investors to evaluate advisor competence. Increasingly, the CFP designation is viewed as the industry standard for frontline advisors, especially for an industry headed into the final phase of CRM2 implementation. But with another 50 (or so) designations available to advisors, more continues to be viewed as better.
8
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UPFRONT
NEWS ANALYSIS
Equities: where to next? The shine is starting to wear off Canadian equities, but some offerings in the US and elsewhere are buffing up the financial plans of nervous clients
IT APPEARS the thrill is gone as far as Canadian equities go. Perhaps it’s no surprise, given the economic volatility around oil prices, the Canadian dollar and exports. Contributing to that uncertainty are the financial difficulties in China and, to a lesser extent, Greece. But while Canada might be struggling, the US is increasingly seen as a safe haven for advisors helping clients ride out the storm. “I still think the US numbers are great,
an option for advisors looking to diversify client holdings. “There is more bullish sentiment for the US because of its sound economic fundamentals, unlike Europe and Asia, which saw their markets rise on the heels of quantitative easing,” says Howard Atkinson, president of Horizons ETFs. Still, the survey found advisor and investor concerns in both the US and Canada.
“They’re talking about increasing the US rates ... I think the US and internationally will be buoyed, but Canada will still lag” Jeff Ber, ScotiaMcleod Financial Services and there are really no huge indications saying, ‘Hey, we’re going into a crash or recession soon,’” says Jeff Ber, an advisor with ScotiaMcLeod Financial Services. “They’re talking about increasing the rates, which is a good thing, and the economic numbers are good. I think the US and internationally will be buoyed, but Canada will still lag.” A recent Horizons ETFs Management survey reinforces the concerns advisors and investors have about equity performance in Canada, and why the US might represent
10
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Overall, bullish sentiment among both advisors and investors declined for more than half of the 13 asset classes and indices within the survey’s focus. Advisors were only slightly bullish on three of the categories, while investors were bearish on every asset class and index. The largest drops in bullish sentiment, for both advisors and investors, were observed for key indices such as the S&P/TSX 60 Index, the S&P 500 and the NASDAQ-100. Only 39% of advisors said they were
bullish on S&P/TSX 60 Index, compared to 54% in the second quarter of 2015, a drop of 15 percentage points. “Instability in China and Greece have dampened the optimism for the Canadian market we would normally see; the Canadian economy is heavily reliant on Chinese demand for oil, and without that rising, investors will remain overly cautious,” Atkinson says. “Advisors, as usual, are more bullish than investors due to their ability to tune out negative news headlines and stay focused on longer-term trends.” For Alberta-based Ber, the concerns about oil prices are hitting particularly close to home. “Especially living in Calgary, that has been the concern for a while,” he says. “Who knows if oil prices are at a bottom? They’re probably pretty close to a bottom, but it’s how long
THE DARKNESS BEFORE THE STORM Technical recession or no technical recession, many economists remain hopeful about national and global growth. BMO chief economist Douglas Porter offers five reasons for optimism: • Non-resource exports should receive a helping hand from the combination of improving US growth and a weaker Canadian dollar • Two short-term drags will reverse – extended auto plant retoolings and Alberta wildfires • Fiscal stimulus in the lead-up to October’s federal election • Financial conditions remain extraordinarily supportive • The biggest negative – energy sector capital spending – should become less negative
this trough is going to last. Is it going to be another month, or two or three years? That’s anybody’s guess, and there are so many external factors that play a part in it.” It’s led him to be much more selective about the investments he facilitates.
have to be on top of that sector right now.” Aside from commodities, low interest rates in Canada are also having an effect. Bullish sentiment for advisors on the S&P/TSX Capped Financial Index fell slightly to 37%, down from 40%. Similarly,
“Investors and advisors continue to be skeptical of financial stocks, as there are hints of another interest rate cut” Howard Atkinson, Horizons ETFs “You can’t just throw money at any company now,” he says. “You have to look at what companies are going to be around. If these oil prices persist, you’re going to see some companies going out of business or getting bought out by other companies. You
the number of bullish investors remained flat at 36%. “Investors and advisors continue to be skeptical of financial stocks, as there are hints of another interest rate cut,” Atkinson says. “The index delivered flat returns,
which suggests that revenues have been muted by poor interest margin spreads.” Expectations for crude and natural gas played into sentiment about the Canadian dollar versus the greenback. Both advisors and investors displayed more bearishness and less bullishness for domestic currency compared to last quarter. “The US dollar has benefited from global uncertainty, as many investors view the greenback as a flight to safety,” Atkinson says. “After a rout in oil prices, there is skepticism that the Canadian dollar will trend above 80 cents this year.” All of these factors are forcing advisors to reshape their investment plans. “For a lot of my clients, we take a full, balanced approach to their plan, but maybe going forward, we’d look for rebounds in the client’s portfolio,” Ber says. “Their Canadian equity portion might be a bit underweighted compared to their US and international counterparts for right now. It’s a very volatile time, so I think having an overweight position in cash is also a positive.”
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11
UPFRONT
INTELLIGENCE CORPORATE
FUNDS
ACQUIRER
TARGET
COMMENTS
Crowe BGK
Connolly & McNamara Chartered Accountants
The Montreal-based accounting firm has doubled the size of its Ottawa operations with the merger of its Kanata office with Connolly & McNamara
CFF Bank
In an effort to achieve greater funding diversification, the Toronto-based lender has agreed to acquire CFF Bank – and its $235 million in assets and $1.4 billion in loans under administration – for $15 million
Incapital Holdings
The Toronto-based boutique advisory firm has acquired the Canadian operations of a US underwriting services provider, making INFOR a registered investment dealer and full-service underwriter in the Canadian market
John Hancock
Guide Financial
The US retirement arm of Manulife has acquired a San Franciscobased software provider for financial advisors, which uses artificial intelligence and behavioural finance to help advisors build wealth for clients
Metroland Media Group
Nest Wealth Management
Another Canadian robo-advisor gets an injection of capital to help it grow – Metroland has invested $1.5 million in the Torontobased Fintech company, using Metroland’s media properties to get the word out about its automated service
OneAmerica
BMO Financial Group
The Indianapolis-based financial services company will acquire the bank’s US retirement services business, allowing BMO to focus on its more lucrative asset management business
Citigroup
The bank will buy Citigroup’s retail and commercial banking operations in Panama and Costa Rica, tripling the size of its operations in these two countries
Prime Advisors
In a move to broaden its asset management business, Sun Life has acquired an investment management firm with approximately US$13 billion in assets under management, specializing in customized fixed-income portfolios, primarily for US insurance companies
Home Capital Group
INFOR Financial Group
Scotiabank
Sun Life Financial
TD Asset Management changes fund’s portfolio advisor
Epoch Investment Partners will join TDAM to serve as a portfolio advisor managing the TD Private International Stock Fund’s EAFE exposure. Bill Booth, CFA, managing director and portfolio manager for Epoch, will carry out these duties on behalf of Epoch. TDAM, in its capacity as portfolio advisor, will manage the fund’s exposure to emerging market equities. Jean Masson, Ph.D., managing director of TDAM’s quantitative investment team, will handle these duties in conjunction with TDAM managing director Geoff Wilson, who will oversee the fund’s strategic asset allocation. There will be no change to the fund’s investment objectives.
MD Financial Management chops fund fees
Element Financial makes transformational deal
In a deal worth $8.6 billion, Element Financial has acquired GE Capital’s North American fleet management business. The acquisition gives Element Financial more than one million vehicles currently under contract with net-earning fleet assets of more than $13 billion. Learning from his previous foray in the nonbank lending business, CEO Steve Hudson said he refuses to make the same mistakes he did with Newcourt Credit Group back in the late 1990s, when the Russian debt crisis sent its funding costs higher, producing significant losses that ultimately led to its sale for a fraction of its one-time value.
12
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The financial management arm of the Canadian Medical Association announced that the MD International Growth Fund management fee of 1.65% has been reduced to 1.60%, and the MD International Value Fund management fee of 1.80% has been reduced to 1.60%. As a result, all MD funds now have MERs of less than 2%. The investment objectives and strategies of the funds or pools remain unchanged. MD Financial Management has more than $41 billion in assets under administration.
PEOPLE Aston Hill unitholders approve fund merger
The asset manager has gotten the green light from its unitholders to de-list the Aston Hill Oil & Gas Income Fund, a closed-end fund that traded on the TSX, convert it to an open-end mutual fund, and merge it with Aston Hill’s Global Resource & Infrastructure Fund. The merger is designed to broaden the types of securities that qualify for inclusion in the fund’s portfolio.
CI shuffles Cambridge portfolio management responsibilities
CI Investments has made several management changes to its Cambridge Global Asset Management team. Co-chief investment officer Brandon Snow will manage the Cambridge Global Equity Corporate Class, while Stephen Groff, CFA, will become the lead portfolio manager of the Cambridge Canadian Dividend Fund, Cambridge Global Dividend Fund and Cambridge Global Dividend Corporate Class. CI also named Gregory Dean, CFA, as lead portfolio manager of the Cambridge Canadian Growth Companies Fund. The Cambridge team manages more than $15 billion in assets, oversees a diverse lineup of funds and operates from offices in Boston and Toronto.
Scotia Funds changes portfolio advisor
1832 Asset Management, which manages the entire lineup of Scotia Funds, has announced a portfolio advisor change to the Scotia US Low Volatility Equity Fund as a result of the previous advisor withdrawing its services on the fund. LSV Asset Management, a quantitative value equity manager providing active management for institutional investors through the application of proprietary investment models, will be the fund’s new portfolio advisor. LSV manages approximately $90 billion in value equity portfolios for approximately 350 clients as of March 31, 2015.
NAME
COMPANY
COMMENTS
William Black
Capital Markets Regulatory Authority
The former CEO of Maritime Life has been appointed as the first chairman of the proposed new cooperative capital markets regulator
Ben Chim
Sentry Investments
The company has added to its award-winning portfolio management team, appointing Chim to manage Sentry’s credit portfolios across all of its mutual funds, with a focus on global high-yield corporate bonds
Glenn Fox
Central Fund of Canada
The economist has agreed to become the lead director of the Central Fund of Canada, replacing Ian McAvity, who will remain on the board
Doug Guzman
RBC Wealth Management
The appointment of Guzman, who headed up RBC’s investment banking business for eight years, to RBC Wealth Management’s top job completes the bank’s restructuring of its wealth management division
Peter Mann and Peter Waltz
Gluskin Sheff + Associates
The soon-to-be co-CIOs are currently in charge of equities and fixed income, respectively, for Gluskin Sheff; they’re replacing outgoing CIO Bill Webb, who’s retiring after 20 years at the firm
Gordon M. Nixon
BlackRock
After 13 years of helping one of the world’s leading financial institutions, the former Bank of Canada CEO will bring his experience and perspective to BlackRock’s global business in his new role on the company’s board of directors
Jason Schwandt
Silver Bullion Trust
An engineer by training, Schwandt has been appointed as lead trustee and chair of Silver Bullion Trust’s corporate governance and nominating committee of the board of trustees
Thierry Vandal
Royal Bank of Canada
Looking to Quebec for further leadership on the bank’s board of directors, RBC has appointed the former CEO of Hydro Quebec, who retired in May after 10 years at the helm
BlackRock Canada gets new leader
Toronto lawyer and management consultant Marcia Moffatt has been appointed the head of asset manager BlackRock’s Canadian division. Moffatt brings to the role a diverse set of skills, as well as considerable experience in the financial services industry. Immediately prior to accepting the top job with BlackRock, Moffatt founded and headed up Compasar Solutions, a Toronto-based management consultant specializing in the financial services industry. Before that, the corporate lawyer spent 12 years in senior positions with the Royal Bank of Canada.
The OBSI finally fills CEO role
After a five-month search to replace former head Doug Melville, the Ombudsman for Banking Services and Investments has named Sarah Bradley to take over as ombudsman and CEO. Bradley comes to the OBSI after serving as the CEO and chairwoman of the Nova Scotia Securities Commission. A former lawyer, Bradley has been well-received by industry groups such as IFIC and IIAC, which see her appointment as an indication that the dispute resolution service is serious about addressing its weaknesses as an organization. With major regulatory change ongoing through 2016, Bradley’s appointment ensures the OBSI has an important role to play in the future of financial services in Canada.
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13
UPFRONT
ALTERNATIVE INVESTMENT UPDATE
Crowdfunding: advisor’s friend or foe? Regulators have started to take crowdfunding seriously – and it’s time for advisors to do likewise
exemption Ontario has on the table, which allows for a maximum of $10,000 per year. Currently, advisors working in the trenches are often cut out of the deal when clients opt for certain types of private investments, including crowdfunding. However, a move to a retainer-type model would allow them to put their clients into alternative investments.
“There’s a lot of untapped capital in the hands of the average upwardly mobile Canadian”
Crowdfunding looks ready to put a dent in assets under management for advisors – and, as a result, their compensation. But forwardlooking industry professionals continue to parse all possible outcomes. “The guy who makes $150,000 a year or has $800,000 in assets who isn’t deemed accredited yet might want to take a small part of his portfolio – 10% or 15% – and put it into a [riskier] investment,” says Seedups Canada founder Sandi Gilbert. “There’s a
NEWS BRIEFS
lot of untapped capital in the hands of the average upwardly mobile Canadian.” Still, embedded commission advisors are reading the fine print of crowdfunding guidelines for investors – specifically, the new rules introduced by six provinces in May that cap the maximum investment for individuals in any one company at $1,500. That suggests any move by clients toward crowdfunding will matter little to an advisor’s overall AUM. But that could all change with the
Crowdfunding platform goes nationwide
FrontFundr, the Vancouverbased financial technology platform that allows regular Canadians to invest in private companies, is now nationwide. It’s currently approved in seven provinces, and investors can expect it to be in every province and territory soon. FrontFundr’s investment opportunities are typically early-stage, mission-driven ventures seeking up to $3 million in capital investment. FrontFundr has already registered three businesses to raise capital through its platform: RentMoola, InterLock and Guusto.
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Many in the industry believe the current fee-based model of charging 1% of assets under management could be on the way out, replaced by a retainer model that is based on a client’s total investable assets, excluding their principal residence. The major benefit for the client is that the advisor is able to recommend investments other than stocks, mutual funds and ETFs – including up-andcoming investments like crowdfunding – while still being paid for providing advice, eliminating any conflicts of interest. “We actually quite like the [retainer model based on total investable assets],” says Northland Wealth CEO Arthur Salzer, a leader in the growing family office segment. “I think it’s a good idea. [Otherwise], you’re somewhat biased to liquid financial solutions.”
CPPIB delves deeper into direct lending
With its $12 billion acquisition of GE’s Antares Lending business, the CPPIB is poised to compete in the private lending business by providing private equity firms with the funding necessary to acquire middle-market companies in the US and elsewhere. Antares’ management brings years of experience in this area to complement CPPIB’s long-term investing horizon and will be critical to the future growth of the business. Over the past five years, Antares has provided more than $120 billion in financing.
Q&A
Craig Skauge Executive vice president and director OLYMPIA CAPITAL
Years in the industry 12 Fast fact: Skauge is also the founder, president and chairman of the National Exempt Market Association, as well as a member of the Ontario Securities Commission Exempt Market Advisory Committee
Exempt markets in Ontario: come one, come all What effect do you think the changes to Ontario’s exempt-market rules will have on advisors? I think until this came through, advisors in Ontario haven’t had a particular need to be informed about alternative investments – exempt-market securities, in particular – because they haven’t been able to offer them to their clients, and nobody else has either. But that’s soon to change. Advisors are going to need to get educated on them – if nothing else, to get informed, because somebody else is going to be having this conversation with their clients. How much of a boost does this broad investor access give to EMDs in Ontario and in other provinces rolling out the same rules? It’s massive. What’s happened is you’re taking the largest province in the country, and all of a sudden, you’re allowing 100% of the population to invest in the very products they offer. It’s increasing their potential client base, I would say probably forty-fold. For the firms that are registered in other provinces, it gives them a real opportunity to expand and spread their wings out East because advisors are going to look seriously at selling these products. You have to understand that to date, under the current regime in Ontario, effectively only 1.5% of the population has been able to invest in the exempt market because they’ve had to be
Brookfield raising capital to fund spending spree
Canada’s largest alternative asset manager has upped the amount of money it wants to raise as a result of its continued spending spree. In the first six months of 2015, Brookfield attracted $10 billion in committed capital and looks to raise another $15 billion in the second half of the year. Brookfield’s overall spending in the past 12 months was $16 billion; new assets include the Canary Wharf business center in London, European telecom towers and its expanding South American rail network.
accredited investors. Now that’s going to change to 100%. This becomes a much more palatable marketplace for advisors to be in, dealerships to look at – even for investors, it will become mainstream as it has out West. How attractive does it become to run an EMD rather than an MFD? When was the last time a client was excited to hear about a new mutual fund? A mutual fund advisor hasn’t been able to make a call they’ve been excited about for years, whereas if they’re an EMD rep, they’re going to be able to make a call and say, ‘I’ve got a really exciting alternative product.’ I think you’re going to see a natural migration of advisors, and the dealerships that can’t survive as they are right now are going to have no choice but to move or die. The MFDA has been shrinking for years, and this just adds another viable competitor. In terms of alternatives, which investments will be most sought-after under the new rules? We’ve seen real estate as the most common sector that’s serviced through this space. Retail investors typically understand real estate better than any other asset class. The thing about the exempt market is it allows for unique small offerings of a couple million dollars, which … really could be anything under the sun, good or bad.
Northern Property REIT creates national platform
With its purchase of True North Apartment REIT, the Northern Property REIT will be renamed Northview Apartment REIT, will own 25,000 residential suites coast-to-coast, have an enterprise value of more than $3 billion and will be the third-largest publicly traded multifamily REIT in Canada. Diversification is the key to this combination. Eastern and Central Canada will generate 50% of its pro forma net operating income, while Western Canada will deliver 30% and Northern Canada the remaining 20%.
Kensington closes $237 million venture fund
Alternative investor Kensington Capital Partners announced the third closing of the Kensington Venture Fund, increasing total investor commitments to the fund to $237 million. The closing includes new commitments from institutional, family office and individual investors. The fund invests directly in tech companies as well as through other venture funds. Since the fund began investing in November 2014, it’s invested indirectly through seven other venture funds and directly in four investments.
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UPFRONT
ETF UPDATE NEWS BRIEFS iShares announces expansion of its US ETF lineup
iShares has announced the launch of two new funds that provide investors with low-cost exposure to the midcap sector of the US equity market. The S&P US Mid-Cap Index ETF trades under the symbol XMC and is unhedged to the Canadian dollar; the hedged version of the S&P US MidCap Index ETF trades under symbol XMH. The management fee for both ETFs is 0.15%. US mid-cap stocks historically have outperformed small- and large-cap stocks over the long-term.
First Trust Canada rolls out fixed-income ETF
First Trust has announced the launch of the First Trust Tactical Bond Index ETF, which trades under the symbol FTB. The fund tracks the performance of the NASDAQ IBIS Canadian Preservation Index CAD TRSM. This fixed-income solution provides investors with a vehicle to invest in some of the largest and most liquid domestic and international fixed-income ETFs currently trading on the TSX. The fund follows a dynamic momentum model, capable of adjusting to developing macroeconomic trends, providing investors with an income solution in good and bad markets.
First Asset conversion complete The First Asset Canadian REIT Income Fund has successfully converted from a closed-end fund to an ETF. The fund trades under the symbol RIT and has been actively managed by Lee Goldman since 2007. Operating as an ETF, it provides
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unitholders with a lower-cost, more transparent solution for investing in Canadian REITs, real estate operating companies and entities involved in real-estate-related services. Since its inception in November 2014, the fund has achieved an annualized return of 10.56%. Advisor units are available under the symbol RIT.A.
Manulife delivers a bundle For those advisors big on a 60/40 asset allocation profile, Manulife is now offering the Manulife Strategic Dividend Bundle, a fund that invests 60% in the Manulife Dividend Income Fund and the remaining 40% in the Manulife Strategic Income Fund. The MER for the advisor is 2.3%. Many will be attracted by the quality managers running the two funds and by the diversification between Canadian equities, US equities and global multi-sector fixed income. The bundle comes with a slightly higher cost, but it’s not a significant premium.
Caldwell launches US closed-end fund Caldwell has launched the Caldwell US Dividend Advantage Fund, which trades on the TSX under the symbol UDA.UN. Managed by a team of five investment professionals, including Brendan Caldwell, the firm’s CEO, its objective is to provide investors with a portfolio of dividend-paying equity securities that exhibit a combination of low current volatility and high profitability. Many of the fund’s largest holdings are business development companies, which typically provide juicy yields but come with above-average risk. Investors in the fund pay an annual management fee of 1.75%.
Get smart about ETFs Smart beta ETFs are gaining attention – and the kind of popularity needed to keep them on an upward trajectory Data shows that smart beta ETFs are growing in popularity south of the border, but their value isn’t lost on Canadian advisors. “I’m a big fan, actually,” says Brent Vandermeer, an advisor with HollisWealth in Ottawa. “I use First Asset Canada Value and US Value [FXM and XXM]. I also use Purpose Investments PDF [Dividend Rules], PHE [US Equity Rules and Short-Hedge] and the PDA [Real Asset].” New data from Invesco shows that one in three institutional decision-makers is currently using smart beta ETFs, and 64% of institutions indicated they are likely to increase their use of ETFs over the next three years. Six in 10 institutional investors surveyed are now familiar with smart beta ETFs, up from 54% last year. Nearly two-thirds of institutional decision-makers expect to increase their use of smart beta ETFs over the next three years. No matter the investment vehicle, the concept of smart beta continues to gain traction on an increasingly crowded playing field. “Smart beta combines the best feature of active management (ability to outperform the market) with the best aspects of passive indexing (transparency and low costs),” says Aysha Mawani, vice president of corporate affairs at Invesco Canada. “By regularly rebalancing to target weights, smart beta portfolios automate the process of trimming winners and adding to underperformers –
buying low and selling high.” Over at Desjardins, thoughts on the subject aren’t much different. “Strategic beta or smart beta management is based on a methodology designed to generate substantial additional value over a
“Smart beta combines the best feature of active management with the best aspects of passive indexing” three- to five-year investment horizon,” says Nicolas Richard, vice president of investment strategies with Desjardins Global Asset Management. He points to smart beta’s success over a longer period of time, an argument with appeal for many advisors. “The factor-based types of investing, which try to introduce the value-investing tilts and the low-volatility tilts to just bend a portfolio to the value criteria, I think work over the long run,” adds Vandermeer. He uses an active and tactical asset allocation strategy with investments typically seen as ‘passive’ and ‘low cost’ as the core, complementing them with ‘active’ strategies. “I love how we’re using academic research to make passive investing better,” he says. “It helps bring together my value investor roots and way of thinking with the academic research pointing toward passive and index investing with low costs.”
Q&A
John Youn Executive managing director of ETFs and structured global products QUESTRADE WEALTH MANAGEMENT
Emerging opportunities in ETFs
Years in the industry: 18
Every retail investor seems to have an affinity for single-stock investing in mega-names such as Apple. Can you speak to that interest and the pitfalls?
Fast fact: Questrade launched its offering of six smart ETFs on the TSX in March 2015
Apple is a great company, but that hasn’t always been the case. From 1995 to 2005, it was an underperforming stock compared to the Russell Technology Index. We’ve had singlestock risk in Canada in the past, with names like Nortel and RIM. I am not saying Apple is RIM, but if an investor is looking for Apple and is positive in the technology sector, they should look at a broad, diversified basket, perhaps equal weighted.
As sectors, healthcare and REITs continue to attract investor interest. Beyond returns, what should advisors be looking for when placing clients? Healthcare and REITs have been very popular sectors. Healthcare hasn’t seen these levels since the 2000 boom days, and there are lots of positives for healthcare. As for REITs, investors have struggled with low interest rates, and REITs have provided higher yields. In a diversified portfolio, investors often miss mid-cap companies. It would be a completion index to add mid-caps to investors’ portfolios. Investors get companies like Chipotle, Intuit, McGraw Hill and Southwest Airlines.
In relation to its peers, what is Questrade’s biggest opportunity in ETFs? We are still early in the active ETF market in Canada and in the middle stage in terms of index-based ETFs. Partnering with one of the largest money managers in Canada will give investors access to bond and international markets.
There’s some concern in the US that any investor rush to sell ETFs could prompt significant value declines. How much of a concern is that here in Canada? Liquidity is different from volume in ETFs. If you look at our QMV [Mid-Cap Value] and QMG [Mid-Cap Growth] funds, the market capitalization of the companies ranges from $250 million to $36 billion per company. Those markets have depth and breadth to support liquidity of the ETFs.
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UPFRONT
ETF UPDATE
The active versus passive debate
of if, but when: September or December. In the face of rising interest rates, it’s difficult to justify the core of your bond portfolio in US corporates and treasuries. Perhaps the position should be inverted, whereby your core is an active manager who has mitigated duration risk while seeking yield enhancement or an inflation-protected (TIPs) ETF.
“When reviewing portfolios, consider low-cost alpha strategies as the core with smart beta overlays”
Obscuring the lines between core and satellite
THE ACTIVE versus passive portfolio debate concludes with a traditional portfolio model composed of core and satellite components. In this approach, the inexpensive beta fulfills the core portion, while the active (or satellite) investment is an overlay. The conventional wisdom is that excess returns are captured by non-index strategies, whether through managers who attempt to outperform specific indices or non-traditional asset exposure and targeted strategies. The rationale is clear: Less than 20% of large-cap fund managers outperformed their bogeys in 2014, according to the SPIVA 2015 Report Card. In addition, high fees for closet indexers and the lack of inexpensive alternatives to specific themes also contribute to this challenge.
Times are changing In the decade leading up to 2014, there was an eight-fold increase in the number of ETFs. More recently, this includes a proliferation of innovative, cost-effective products that make it feasible to express niche investment themes that were previously too expensive or complicated for the average investor. The advent of these solutions makes it possible to express short- to mid-term investment theses that cover a broad spectrum of investments, specific market segments, or styles and strategies.
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Given the tremendous run-up over the past six years (since the S&P 500 reached 666 in March of 2009), the halcyon days of double-digit returns are over. Most pundits state it’s a stock picker’s market. I would add it is also sector/country/style market, and alternative market choice is crucial. To mix metaphors, you can no longer rely on the overall market to lift all boats. The US bond market underscores this.
Today’s financial landscape Today, the financial landscape is drastically different, as we are now seeing a shift in thinking about core and satellite. The anemic economic recovery has nevertheless produced 5.3% unemployment rate with a preliminary 96.1 figure from the University of Michigan Consumer Confidence Index as of July; this is up 16.5% from a year ago. Tighter monetary policy is not a question
Traditionally difficult markets, such as new bond issues, are now available in actively managed ETFs. Likewise, an active market thesis is available in global equities ETFs. In this new model, core investments consist of cost-effective alpha (excess positive returns) strategies and beta exposure. To put it another way, this is an active cost-effective core with targeted strategies, using smart beta as the overlay. Through price compression, ETFs have democratized the investment landscape. Sophisticated and average investors alike can employ similar strategies and use the same instruments to express those views. When reviewing portfolios, consider low-cost alpha strategies as the core with smart beta overlays. James Youn, CFA, is a senior portfolio manager with Questrade Wealth Management.
According to research from ETFGI, the ETF sector in Canada has brought in US$7 billion in net new assets so far this year. That means Canadian exchange-traded funds and exchange-traded products have now reached more than C$85.8 billion in assets through about 368 ETFs. ETFs are doing so well at the moment that the global ETF/ETP industry has surpassed the hedge-fund industry. According to an estimate from Hedge Fund Research, the ETF/ETP industry stands at US$2.971 trillion in assets under management – $2 billion more than the hedge fund industry. There are now 11 ETF provides in Canada; Questrade Wealth Management became one of the most recent companies to join the roster in March 2015.
PEOPLE
INDUSTRY ICON
CREATING A WINNING CULTURE The deck was stacked against Canaccord when Peter Brown founded the company, but a winning culture turned the tables
AFTER NEARLY 50 years in the industry, Peter Brown has many stories to tell. As he drifts off down memory lane, the founder and former chairman of Canaccord Financial remembers one of his favourites. Throughout his time at Canaccord, he loved to congratulate the people he worked with and recognize their efforts. It could be someone having their biggest day, month or year. Maybe someone was getting married or pregnant – basically any excuse. One call in particular stands out, though. His branch manager told him about an employee who had doubled his business during a great year. So Brown calls and says, “Congratulations, Ed. This is Peter Brown. You’ve had a great year.” “Don’t give me that BS,” Ed replied. “Tell Bill I’ve bitten once already.” “Hold on, it’s Peter Brown.” “Oh, come on ...” “It suddenly occurred to me it’s April Fools’ Day,” Brown recalls. “So I said, ‘OK, I get it. I’ll tell you what. I’m going to hang up, and you call the head office and ask for Peter Brown and see who answers.’” Two minutes later, the phone rings. “Hello,” says Brown. “Holy cow! It is you!” Comical though it was, the interaction had a profound effect on Brown.
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“That story gave him, his manager and me something to laugh at and bound us together as friends for life,” Brown says. “I cared enough to call him. It’s the little things like that that make a big difference. Recognition is important.”
But despite all the financial success he’s had, Brown insists it pales in comparison to the office mentality he’s instilled. “I’m probably prouder of the culture we shared than the financial success we had,” he says. “It was important to me. I enjoyed
“I’m probably prouder of the culture we shared than the financial success we had. It was important to me. I enjoyed it immensely. The friendships are there for life, and they’re more important to me than the money” Culture club In fact, Brown credits the company’s culture with turning the firm he bought for $23,000 in 1968 into the largest independent firm by the time he handed it off as a publicly traded company, one with $750 million in revenue, a market capitalization of $1.1 billion, $550 million in cash, no debt and no preferreds. His accomplishments are recognized by the industry to no less a degree – he’ll be heading into the IIAC Hall of Fame this October as a member of the 2015 class. He’ll also be receiving his fourth honorary degree on the same day from Wilfred Laurier University.
it immensely. The friendships are there for life, and they’re more important to me than the money.”
Western roots At the beginning, Canaccord’s financial success was far from a done deal. Starting a company with a head office in Vancouver hadn’t even been successful up to then. “Initially it was difficult and challenging in the investment business to build a company from Western Canada,” Brown says. “It was very much a head-office-in-Toronto business.”
PROFILE Name: Peter Brown Company: Canaccord Genuity Title: Founder and chairman Years in the industry: 46 Career highlight: Creating a great company culture
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PEOPLE
INDUSTRY ICON
That made recruitment very difficult. “If I wanted to hire someone from a bank or a competitor, they didn’t want to work in a branch of a Vancouver firm. They wanted to work in the main office in Toronto.” It also didn’t help that the majority of the financial industry was expecting Canaccord to fail. There’s a reason why they say necessity is the mother of invention, though. The only solution Brown could see was to make sure Canaccord developed a winning
over-regulated today. For most of my career, I found the business and interaction with the clients both challenging and exciting, but today, in this increasingly bank-dominated, over-regulated environment, I found the business was becoming a grind, and I wasn’t enjoying it anymore. I loved building it. I just didn’t really like running it very much at the size it got to.” Some might find it hard to let their baby go, but for Brown, it was just like ripping off
CANACCORD’S EVOLUTION
1950 1968 Brown and his partners acquire Hemsworth, Turton & Co., naming the new firm Canarim Investment Corporation
1993
“I believe that business is small steps, not big steps – some forward, some back. But if you have a passion for what you do you, keep putting one foot ahead of the other. Passion infects the people around you and brings on a team spirit” workplace culture to compensate for the factors working against the company. After a while, he realized the importance of the culture he was creating. “The funny part of it is, when we got the culture right, that was a big part of our financial success,” Brown says. “I didn’t know it at the time, but if you get people coming together who have mutual respect for their partners and like the environment they work in, they work harder and are more successful. Also, we were winning when nobody said we could, which added to that feeling of culture and camaraderie.”
Transfer of power Brown rode that wave of camaraderie for nearly 38 years as chairman, taking the company to the top. But after almost 50 years in the business, he noticed a changing industry – plenty of which he didn’t like. “It’s not the fun it was,” he says. “I think I enjoyed the best times of the industry. But I’d had enough. In my life, I watched the industry go from under-regulated in the 1960s to
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a Band-Aid. When some of the shareholders approached him to start thinking about succession, it was a quick decision. “It was time to give it to another guy,” he says. “I was in my late 60s, and I just decided one day. I was thinking about succession, and one minute it came to me that I don’t want to run the firm anymore. That’s when I stepped down and handed the task to Paul Reynolds.” Since handing the reins over to Reynolds, a partner in the firm for more than 24 years, Brown has taken on roles in both the public and private sector. But it seems some of the most enduring memories take him back to the company and culture he created at Canaccord. “I believe that business is small steps, not big steps – some forward, some back,” he says. “But if you have a passion for what you do you, keep putting one foot ahead of the other. Passion makes you want to get a little better every year, raise the bar. Passion infects the people around you and brings on a team spirit.”
Canaccord begins an aggressive growth strategy to evolve from a transactionalbased business to an integrated, full-service financial services firm
2004 Canaccord becomes a public company listed on the TSX. The firm’s IPO raises C$70 million and trades under the ticker symbol CCI
2006 After completing the acquisition of Adams, Harkness & Hill Financial Group, the company is rebranded as Canaccord Adams
2011 Canaccord completes the acquisition of The Balloch Group and rebrands its capital markets operations in Asia as Canaccord Genuity Asia
Hemsworth, Turton & Co., a Western Canadian venture capital firm and the predecessor to Canaccord, opens its doors
1992
Canarim is incorporated as Canaccord Capital
2000 Canaccord completes a series of significant mergers and acquisitions, including six independent brokerage firms in Canada, as well as one the UK and one in France
2005 Canaccord completes a listing on the Alternative Investment Market of the London Stock Exchange
2009 Canaccord Capital becomes Canaccord Financial
2010
Canaccord Financial acquires Genuity Capital Markets; the company’s capital markets division is rebranded as Canaccord Genuity
2013 Canaccord Financial is renamed Canaccord Genuity Group, unifying the global franchise
UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email wealthprofessional@kmimedia.ca
Levelling the playing field You can’t stop CRM2 – to the contrary, you should be embracing it to improve your business and your book, writes industry vet Keith Pangretitsch THE FOUNDATION of any investment relationship is trust. Yet trust has eroded in recent years with increasing revelations of misdeeds by industry participants in Canada and abroad, including LIBOR fixing, highfrequency trading front-running and the currency scandals that greatly impacted investors and pension plans. The move by Canadian regulators to require greater transparency is a positive development to restore market credibility and investor confidence. For financial advisors and dealers in Canada, it is an opportunity to position yourself and your practice on the right side of reform and assert your value to your clients. Lead with your front foot The best way to benefit from change is to embrace it without delay. CRM2 will bring important changes to fee disclosure and performance reporting for advisors, unless they already have these disclosure mechanisms clearly in place. Advisors who are predominately fee-based will experience little to no change in their relationships with clients. Across the industry, asset managers are seeing the greatest growth in advisor-managed and F-class (fee-based) mutual funds. Similarly, those advisors moving toward a goals-based approach to performance reporting are less worried about CRM2 changes than about engaging their clients in a more valuable conversation, pursuing answers to fundamental questions such as, “Am I on track?” If you view these changes as a client benefit
and not a burden, the value to your clients and your practice will become obvious. Reinforce your value to the client CRM2 represents an excellent opportunity
increase after-tax returns. Overall, CRM2 presents an opportunity to communicate your value to the client in a broader and more transparent context. There is a strong possibility that your client will appreciate the additional level of portfolio detail and services provided for the fees paid. Work with a trusted partner In the new world of CRM2, I believe it’s impossible to do it all by yourself. Much like a CEO, your role as an advisor is to understand the big picture, have access to specialists and equip your practice with the tools to effectively achieve the outcome your clients require. You’ll need more support. You’ll need access to practice management experts who can help you revamp your client service and reporting to stay in step with your client conversations. And you will benefit from hearing about best practices in this area, from within your own
“The move by Canadian regulators to require greater transparency is a positive development to restore market credibility and investor confidence” to reinforce the value of financial advice. To do this, you will need to clearly articulate the services you provide to your client by outlining your specific fees. One advisor team I know has a motto: “Do great work for clients, and make sure they know it.” The industry often achieves the first part of that statement, but it could do a better job of articulating and communicating the value of advice. Increasingly for financial advisors, this goes much further than simply providing a financial product. You need to think about how you add value to the client relationship in terms of overall wealth management. This might include broader consultation with your client about retirement and tax planning, asset allocation, investment diversification and estate planning. For example, you might consider (in consultation with any of your client’s other tax advisors) setting up a spousal loan within the current interest-rate environment as a potential way to significantly
firm or the broader industry. Resources and guidance for successful implementation of CRM2 are available. For example, the Investment Funds Institute of Canada has produced a new checklist aimed at helping dealers prepare for CRM2 rules coming into effect this year. CRM2 is an important step in the right direction for Canadian investors and their advisors, and the changes can create positive dividends for you and your practice. Face the changes head on, approach them as an opportunity to communicate and reinforce the value you bring to your clients, and most importantly, seek trusted partners to help educate and prepare yourself along the way. Keith Pangretitsch is the managing director of Canada private clients for Russell Investments Canada. He has more than 20 years of financial industry experience and is a member of the Toronto Society of Financial Analysts.
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FEATURES
COVER STORY: CERTIFICATION SURVEY
CERTIFICATION
SURVEY
2015 THE DESIGNATIONS arms race is escalating for wealth professionals. As the fight for clients heats up with the implementation of CRM2, advisors are trying to get a leg up on the competition. That edge is primarily found in acquiring specialist knowledge in the form of designations. But with more designations than ever on the market, it can be difficult for advisors to choose the right ones to propel their careers to the next level. Pulling three letters out of the alphabet soup and printing them on a business card is no guarantee of success. Indeed, that practice has probably done more harm than good. The few advisors who look for the easy way out and simply get the designation that’s easiest have added to consumers’ overall confusion. While the vast majority of designations
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In the second year of WP’s Certification Survey, advisors flooded our inbox with responses to the state of designations in Canada.
on the market offer real value to an advisor looking to broaden his or her knowledge or serve a specific client niche, there are some that have little to no value. The average client has no clue what a TEP is, let alone a CLU, CHS or CFC. And these are the designations that have value. There are many out there that don’t, and they are eroding the value of designations further. The goal for advisors is to cut through the clutter and figuring out which letters are the most important. Enter our second annual Certification Survey. After the amazing response to our inaugural survey last year, we revised and expanded the set of questions to help advisors wade through the muck and learn the value of a particular designation, as well as get a picture of the broader designation landscape. Who better to give you that advice than
the people who are on the frontlines and have seen the value (or lack thereof ) of a particular designation? This survey goes further than last year, in that we also asked respondents to rank each designation they hold. We sent the survey out in June, and the responses came flooding in. Hundreds of advisors chimed in on the state of designations in the country – and the vast majority of advisors named one designation that held more value than almost all the others combined. Last year’s survey found many issues with the certification landscape in Canada, and this year’s version finds that much hasn’t changed. The problems are very real, and as the industry evolves, good advice is of paramount importance. Advisors, ignore this feedback from your peers at your own peril.
WHAT DESIGNATIONS DO YOU CURRENTLY HOLD? What a difference a year makes: While the CFP was still the runaway leader as the designation most advisors hold, its dominance in the industry might be slipping a little. Last year, a whopping 87.4% of advisors held the designation, compared to this year’s 73.09%. Charging up the ranks in popularity was the PFP, up to 18% from 13%. 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% Certified Fellow of International CSI Wealth Manager
Certified Financial Planner
Personal Financial Planner
Chartered General Accountant
Certified Management Accountant
Chartered Accountant
Chartered Financial Analyst
Chartered Financial Consultant
Chartered Investment Manager
Chartered Life Underwriter
Registered Financial Planner
Trust and Estate Practitioner
These designations didn’t quite make our top 13 certifications, but were still mentioned by advisors: • • • • • • • • • • •
Elder Planning Counsellor Certified Health Specialist Certified Professional Consultant on Aging Certified Cash Flow Specialist Fellow of the Credit Union Institute of Canada Registered Retirement Consultant Derivatives Market Specialist Financial Management Advisor Register Professional Accountant Certified Executor Advisor Certified Public Accountant
• • • • • • • • • • •
Registered Employee Benefits Consultant FPSC Level 1 Canadian Association of Farm Advisors Chartered Financial Services Broker Wealth Management Essentials Fellow Life Management Institute Associate Insurance Agency Administration Associate in Regulation and Compliance Registered Life Underwriter Financial Divorce Specialist Registered Deposit Agent
• • • • • • • • • • •
Life License Qualification Program Family Enterprise Advisor Master Financial Advisor Retirement Income Specialist Certificate in Investment Dealer Compliance Certificate in Equity Trading and Sales Certificate in Fixed Income Trading and Sales Certificate in Derivatives Market Strategies Chartered Strategic Wealth Professional Certified Investment Management Analyst Portfolio Management Techniques.
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FEATURES
COVER STORY: CERTIFICATION SURVEY WHAT CERTIFICATION GIVES THE MOST VALUE FOR MONEY? Chartered Life Underwriter (CLU)
“If [you’re judging on] perception of value to the client, the CFP, as it is promoted the most. But I prefer ChFC, as you have to be a CLU to get it, and to get a CLU, you have to achieve the CFP. The ChFC has the greater diversified level of skill and knowledge in dealing with financial planning, touching on all aspects, including tax and law” “My licences currently give the most value for money, but my CFP gives me the most credibility”
7.00%
Chartered Investment Manager (CIM)
Registered Financial Planner (RFP)
1.09%
Trust and Estate Practitioner (TEP)
1.97%
3.72%
Fellow of CSI (FCSI)
Chartered Financial Consultant (ChFC)
1.53%
1.31%
Chartered Financial Analyst (CFA)
7.88%
Chartered Accountant (CA)
6.56%
Certified Financial Planner (CFP)
Certified Management Accountant (CMA)
62.14%
0.88%
Chartered General Accountant (CGA)
1.53%
Personal Financial Planner (PFP)
4.38%
WHAT CERTIFICATION HAS BEEN MOST USEFUL IN YOUR CAREER? Chartered Life Underwriter (CLU) Chartered Investment Manager (CIM)
8.60%
6.88%
“If any client has been influenced by my designation, I have not been informed”
Chartered Financial Consultant (ChFC)
Registered Financial Planner (RFP)
1.47%
Trust and Estate Practitioner (TEP)
1.47%
Fellow of CSI (FCSI)
0.98%
1.47%
Chartered Financial Analyst (CFA)
2.70%
Chartered Accountant (CA)
4.67%
Certified Financial Planner (CFP)
Certified Management Accountant (CMA)
60.93%
0.98%
Chartered General Accountant (CGA)
0.98%
Personal Financial Planner (PFP)
8.85%
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IS THE CURRENT CERTIFICATION REGIME IN CANADA ADEQUATE IN TERMS OF TRAINING AND EDUCATION?
HOW LONG DID IT TAKE TO ACHIEVE YOUR CURRENT LEVEL OF CERTIFICATION? 1 year
13.35%
It seems the certification bodies in Canada upped their game over the past year. The number of advisors giving the thumbs-up to the current certification regime jumped up to 72.65% from 63.1%.
2 years
22.10%
3 years
22.54%
4 years
10.50%
Yes
5 years
31.51%
72.65%
0
5
10
15
20
25
30
35
DO THE COSTS OF MAINTAINING MULTIPLE CERTIFICATIONS OUTWEIGH THE BENEFITS?
Yes
49.02% No
No
27.35% “Too many hoops to challenge exams. CSI comes out with a new designation every week, so it’s hard to find value” “The CSC is too easy. I would not entrust my health to a doctor who had taken a sixmonth course; why would I entrust my financial health to someone who has managed to get 60% on a six-month course?” “The public has no idea which designations are more comprehensive than others”
50.98% HOW MUCH TIME AND/ OR MONEY ARE YOU CURRENTLY SPENDING TO MAINTAIN YOUR CERTIFICATIONS? As one respondent put it: LOTS! Course registration and materials aren’t cheap, but the costs don’t end after you pass the exams – yearly dues are a recurring expense for advisors.
“30+ hours and $1,000 per year” “$1,018 annually, plus personal and corporate insurance license at $240 annually. 40-50 hours with continuing education per year” “50 hours + study time and approximately $2,000 “About $4,000 and about six days”
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FEATURES
COVER STORY: CERTIFICATION SURVEY WHICH DESIGNATION WAS IT YOUR FIRST PRIORITY TO ACHIEVE? Fellow of CSI (FCSI)
Certified Management Accountant (CMA)
1.09%
Registered Financial Planner (RFP)
1.31%
Chartered Accountant (CA)
3.06%
1.09%
Personal Financial Planner (PFP)
Chartered General Accountant (CGA)
3.72%
0.66%
Chartered Financial Analyst (CFA)
4.38%
Chartered International Wealth Manager (CIWM)
0.22%
Chartered Financial Consultant (ChFC)
Chartered Investment Manager (CIM)
1.31%
7.66%
Trust and Estate Practitioner (TEP)
8.53%
Certified Financial Planner (CFP)
58.86%
Chartered Life Underwriter (CLU)
8.97%
WHICH DESIGNATIONS DO YOU PLAN TO GET IN THE FUTURE?
Chartered Accountant (CA)
1.75%
Chartered Financial Consultant (ChFC)
2.84%
Fellow of CSI (FCSI)
3.50%
Chartered International Wealth Manager (CIWM)
1.52%
Personal Financial Planner (PFP)
Chartered General Accountant (CGA)
4.38%
1.31%
Certified Management Accountant (CMA)
Registered Financial Planner (RFP)
1.09%
5.91%
Trust and Estate Practitioner (TEP)
Chartered Financial Analyst (CFA)
35.23%
10.07%
Certified Financial Planner (CFP)
21.88%
Chartered Life Underwriter
19.69%
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Chartered Investment Manager (CIM)
12.69%
HAVE YOU EVER FAILED A CERTIFICATION EXAM?
Yes
EXAM HORROR STORIES
22.98%
“When I wrote the certification exam (at the Convention Centre in Toronto), there was a rock band doing a sound check in the next room for over two hours”
No
77.02%
“The person next to me would huff and puff on every single question, making noises like relief and fear after the question was answered or not” “The first time I wrote the exam, the proctor was answering phone calls and having visitors come and chat – within 8 feet of me writing the exam”
THE MOST DECORATED ADVISOR? Given all the designations Stan Tepner has completed in his career, he doesn’t need to paint the walls of his office Stan Tepner anymore. “Most of them come with some sort of paper that I could totally cover my wall with,” jokes the portfolio manager and first vice president of CIBC Wood Gundy. While Tepner has quantity, he also has quality. He started off with a CA before getting a CFP, CPA, TEP and finally the CIM. He also has an MBA. “The toughest one to acquire was the CA designation because that was a complete devotion of study at night and work through the day,” he says. “It certainly was the most challenging and highest level of all the designations that I have.” He spent the first 10 years of his career as an accountant before becoming an advisor, recognizing the opportunity to combine investment management, financial
planning and tax planning. “I’m a rather rare breed – I’m a tax specialist in the investment industry,” he says. “I made that my brand and used that to attract a clientele, and it worked. We never think about what you make from your investment; we think about what you keep from your investments.” His accounting background not only gave him a head start in the industry, it also made acquiring designations easier. “Because I had a CA, I was able to take a shorter route to get the CFP,” he says. “I really just had to write a qualification exam, which only took a couple of weeks. The TEP was also not a challenge to get. I qualified for that based on my experience.” Despite the ease in getting his designations, their value isn’t lost on Tepner. “The key things about those two designations is they keep me in a circle of upper-end, sophisticated knowledge about these practices,” he says. “Between the ongoing
educational facilities they provide, the lectures, the annual meetings, the outstanding publications and websites, what they do is keep me on top of my game and my knowledge sharp.” He acquired the CIM last year and has an eye on acquiring another designation down the line. “My industry is moving,” he says. “There’s a trend toward discretionary financial management, and although I haven’t chosen to go that route yet, I wanted to make sure that if I explore it and if it’s something I’d like to do, it’s good to know it’s already something I’ve prequalified for.” While some in the industry scoff at a string of designations after an advisor’s name, Tepner says all that knowledge is useful. “My advice is learn, learn, learn – and show off what you know,” he says. “Let your clients know you know it, and let the public know that you know more than other people, because that should attract business and keep business.”
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FEATURES
COVER STORY: CERTIFICATION SURVEY IS AN MBA WORTH IT? The debate over the value of an MBA to an advisor has been raging in the industry for a while, and judging by the responses to our survey, it’s not going to be settled any time soon. Advisor Joe Riche of Riche Joe Riche Investments/FundEX says his MBA hasn’t added much value to his practice as an advisor. However, he points out that he wasn’t in the advisory world yet when he earned the degree, so it initially held more value for him. “The main reason I got the MBA was because I went to work in corporate banking,” he says. “It was what I needed to get my foot in the door. I don’t think any clients have ever commented or noticed that I have an MBA.” Given the time and money needed to complete
FPSC CONTINUES BATTLE FOR STANDARDS BY CARY LIST, PRESIDENT AND CEO, FINANCIAL PLANNING STANDARDS COUNCIL
By September 21, the Ontario government’s Expert Committee reviewing financial advisors and planners will have collected submissions from a variety of stakeholders. For the Financial Planning Standards Council, it is the culmination of the important work we’ve been doing for years. It’s significant that we have been preparing our submission at the same time we’re celebrating the FPSC’s 20th anniversary. It has given us a chance to look back and see how far the profession has come since its early days, and to look ahead to the future. We’ve travelled a long road to get here, and the next few years will see more significant changes. Over the past two decades, FPSC has worked diligently to strengthen and unify professional standards for financial planning, and there have been many milestones along the way. It’s been more than 10 years since FPSC launched the Financial Planning Practice Standards, the first set of comprehensive standards of practice for financial planning in Canada. This was soon followed by the launch of the CFP Professional Competency Profile, which has been adopted as a global framework for standards of competence as a financial planner. Along the way, FPSC also introduced a number of governance changes to enhance our ability to oversee the profession, including the elimination of organizational membership, the addition of public directors and
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an MBA, Riche says other educational paths will put advisors in a better position. “When you want to be in this side of the business, I think you’re far better off getting an undergrad degree and putting your time into the CFP and the CLU,” he says. “It all depends – if you want to be on the analytical side of the business, then the CFA is the way to go. The MBA is a boot camp for someone with another discipline. It’s not a bad degree to have, but I don’t know there’s any correlation with clients in this industry.” But Riche isn’t bashing the MBA by any means. “I don’t want to sound negative on the MBA. I have zero regrets about getting it, and I still encourage people to have it, but I certainly don’t think it’s a precursor to getting into this side of the business or any implied success in terms of the designation or the degree.”
SPECIAL PROMOTIONAL FEATURE
representation from Quebec on our board. We also implemented enhanced requirements to the Certified Financial Planner certification program, including a two-stage exam process, and significantly enhanced our Disciplinary Rules and Procedures to be more rigorous and consistent with other professions. This year, we celebrated another milestone: the publication of Canadian Financial Planning Definitions, Standards & Competencies, the first unified set of definitions, standards and competencies in Canada. Through all of this, we’ve been guided by a clear purpose – to instill confidence in the financial planning profession – because consumers have the right to expect that anyone holding themselves out as a financial planner is qualified, competent, ethical and accountable. Today’s unregulated environment leaves consumers vulnerable; almost half erroneously believe financial planning is already a regulated profession. Our ability to reconcile industry expectations with consumer demands has been very important, and it’s part of the reason why we’ve been successful in building collaborative relationships. As we prepared our submission for the Expert Committee, we were reminded of just what we’ve been advocating for all along: formal recognition of financial planning as a profession, which will impose in law the unified standards, title restrictions and professional oversight of all financial planners, in order to effectively protect consumers. To see our complete submission, visit www.fpsc.ca/public-policy.
HOW DO ACCREDITATION-GRANTING ORGANIZATIONS RATE IN TERMS OF THEIR ABILITY TO EFFECTIVELY POLICE AND CENSURE ADVISORS? While the vast majority of advisors were muted in their opinion when it came to this matter, there were a few clear winners – and a few organizations that need to better address advisor concerns. The CFP was the big winner – 41% of advisors gave it the thumbs-up in terms of regulation, and only 1.69% said it’s not well-regulated. The CA also came out looking good: 26.55% said it’s very well-regulated, and only 4.22% said it’s not. Only 6.06% of advisors think the Certified International Wealth Manager is being regulated very well, compared to 21.21% who say it’s not wellregulated. Similarly, the Fellow of CSI has some work to do. Only 8% say it’s very well-regulated, compared to 18% who say it’s not well-regulated.
WHAT ARE THE TOP THREE DESIGNATIONS IN TERMS OF SERVING THE CLIENT?
WHAT ARE THE TOP THREE DESIGNATIONS IN TERMS OF PUBLIC NAME RECOGNITION AND MARKETING?
1ST
1ST
CERTIFIED FINANCIAL PLANNER
2ND
CFP 76.9%
CHARTERED ACCOUNTANT
CA 40%
CERTIFIED FINANCIAL PLANNER
CFP 45.75%
CHARTERED LIFE UNDERWRITER
3RD
TEP 67.48%
CHARTERED INVESTMENT MANAGER
CIM 44.76%
CFA
34.55%
2ND
CGA
3RD
51.65%
CHARTERED FINANCIAL ANALYST
CA 66.27% CHARTERED GENERAL ACCOUNTANT
CLU
TRUST AND ESTATE PRACTITIONER
CHARTERED ACCOUNTANT
42.94%
CHARTERED LIFE UNDERWRITER
CLU 60.67%
CHARTERED FINANCIAL ANALYST
CFA 46.62% www.wealthprofessional.ca
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COVER STORY: CERTIFICATION SURVEY DOES AN MBA HAVE VALUE FOR A FINANCIAL PLANNER? This has been a lightning road topic, and unsurprisingly, advisors were split on the issue No
Yes “No greater than a professional acting designation”
“Has become the minimum bar for some employers”
“Everything is helpful, but an MBA is not overly relevant”
“A high value, in particular when advising business clients”
“No continuing education; where’s the long-term value for a client? Every year, the MBA becomes more outdated”
“Prestige and confidence”
“Not a very practical application, but looks impressive” “Very little, as there is not much focus on tax issues for an MBA” “The MBA may impress a client when sitting down – they will feel more confident with the advisor – but I do not believe the actual program will add value for the client”
DO DESIGNATION ASSOCIATIONS MARKET ENOUGH TO THE PUBLIC ABOUT WHAT THEIR CERTIFICATION MEANS?
20.79% Yes
No
79.21% 32
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“Creates a great basis for knowledge of business planning and succession planning” “Little in actual ability to do particular job. May hold more value for further management-type positions if not working independently” “It supports a great foundation for entering the business environment” “I believe it enhances the perception that the planner is very knowledgeable in business and finance”
THE UP-AND-COMING DESIGNATION Justin Bender couldn’t ignore his clients’ questions anymore. He had to get the TEP. “I was finding that you don’t really have the expertise with the CFP or the CFA,” says Bender, a portfolio manager at PWL Capital. “It doesn’t really dig into trusts or estate planning as much as say this course would. I decided to take it.” Trust and estate planning is becoming a huge market Justin Bender for advisors, and has the potential to grow even more over the coming years. Over the next 30 or 40 years, an estimated $30 trillion in wealth will pass to the next generation, making tax planning a massive part of the process. “Anywhere where there’s money changing hands between family members with different generations,” Bender says, “you really have to have a good sense of what the discussions are, to be able to understand what’s going on and to be able to relay that back to the clients.” He says the designation’s benefits are more about broadening the advisor’s knowledge than attracting clients. “I could see it becoming more and more recognized, but right now I don’t know too many people who would actually recognize it, unlike the CFP or the CFA,” Bender says. “I think it’s more for yourself and your own knowledge than to market to clients.”
HOW DO DESIGNATIONS PERFORM ON SPECIFIC CRITERIA? We asked advisors to rank each designation they hold on a scale from 0 (very poor) to 5 (excellent), overall and based on nine criteria:
CLIENT VALUE-ADD Average score
3.5
Client recognition
Not only are advisors not getting their money’s worth, it also seems the benefits to clients are negligible. While the average score of 3.5 isn’t terrible, there’s still plenty of room for improvement.
Value for money
RECERTIFICATION SYSTEM
Client value-add
Average score
Recertification system
Recertification was another area where advisors seemed disappointed, as demonstrated by the score of 3.04.
Course content quality Global recognition
Ease and cost of maintenance Marketing/promotion Potential for career advancement
COURSE CONTENT QUALITY Average score
3.87
Most advisors felt course providers are providing quality course content, as demonstrated by a score of 3.87. GLOBAL RECOGNITION Average score
3.09
The results slipped a little for global recognition of designations, as evidenced by a score of 3.09. CLIENT RECOGNITION Average score
2.75
Survey respondents were under whelmed with clients’ knowledge of designations they hold; client recognition got a dismal score of 2.75. VALUE FOR MONEY Average score
3.30
Advisors clearly feel they aren’t getting their money’s worth; this category received a rather disappointing score of 3.30.
HIGH-SCORING DESIGNATIONS
3.04
EASE AND COST OF MAINTENANCE Average score
3.16
It seems the cost of designations and the ease of maintaining them is a bit rich for most advisors.
COURSE CONTENT QUALITY CFA EPC CIWM
4.73 4.4 4.4
GLOBAL RECOGNITION CPA/CA CFA TEP
4.81 4.8 4.09
CLIENT RECOGNITION CPA/CA CFA CFP
4.95 3.9 3.72
VALUE FOR MONEY CFA CFP CLU
4.4 3.75 3.42
CLIENT VALUE-ADD CFA CLU CFP
4.07 3.63 3.36
MARKETING/PROMOTION
RECERTIFICATION SYSTEM
Average score
CFA CFP RFP
2.42
Advisors were most disappointed with efforts to market to the public, giving them a failing grade of 2.42.
4.07 3.36 3.29
EASE AND COST OF MAINTENANCE 4.27
POTENTIAL FOR CAREER ADVANCEMENT
CFA EPC RRC
Average score
MARKETING/PROMOTION
2.91
Acquiring designations should help propel advisors forward. but our survey respondents felt they’re not living up to that promise, as evidenced by an average score of 2.91. OVERALL Average score
3.25
Unsurprisingly, survey respondents weren’t impressed overall with designations. With an average score of 3.25, advisors are making it clear there is much work to do.
CPA/CA CFA CFP
3.9 3.37
4 3.8 3.02
POTENTIAL FOR CAREER ADVANCEMENT CFA CFP TEP
4.53 3.77 3.27
OVERALL CFA CFP TEP
4.5 3.77 3.45
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COVER STORY: CERTIFICATION SURVEY PORTFOLIO MANAGER DESIGNATION: FLYING AT A HIGHER ALTITUDE Being an advisor is sometimes akin to being a pilot, as an advisor is tasked with making sure his clients get to their financial destination safely. During a flight, a storm can hit, throwing off the best-laid plans – and similarly, market disruptions can derail a client’s portfolio. Good pilots quickly identify the problems and manoeuvre around them. But if a crisis hits, advisors’ hands are tied unless they get permission from each client. For an advisor with 500 accounts, that can mean thousands of calls before making a simple change. “Think of the pilot on a 767 coming back and getting permission from every Gary Renaud Michael Holden single passenger on the plane to make a manoeuvre around some bad weather,” says Gary Renaud, portfolio manager and executive director of the private client group at HollisWealth. “It’s just silly.” A portfolio manager designation allows advisors to alter course mid-flight. “With the PM designation, the discretionary approach, if I decide tomorrow that’s not the investment I want, I can sell all 500 in 20 minutes, and I can buy 500 different accounts in what we believe is the better choice,” says Michael Holden, portfolio manager and investment advisor at HollisWealth. But only a select few can get the designation. To qualify, an advisor needs have a CIM or CFA to get industry recognition. Then each firm will have its own standards before it bestows the title on an advisor. “At Hollis, there’s a committee that reviews your educational background, your investment philosophy,” Holden says. “There’s also a much greater fiduciary duty if I’m going to be making the decisions without running them past the client, so the committee doesn’t want you just winging it with portfolios. You have to have a clean compliance background.” With information coming out at warp speed, the real skill is the advisor’s ability to dissect and then react to changing circumstances. “Having this type of license, when you know what you need to do, you just do it. You’re able to instantly make a course correction without consulting,” Renaud says. “It’s based on an investment mandate, but you can take those steps instantly when you think it’s time. That sets everybody with that licence head and shoulders above the crowd.” But with that power comes a greater responsibility for portfolio managers.“The flipside is you can’t point fingers at somebody else anymore,” Renaud says. “When you’re the portfolio manager, you’re responsible. You’re the pilot. You’re making all the minute-by-minute decisions to ensure the safe arrival of your passengers, the clients.” The designation is also a perfect fit with upcoming CRM2 regulations since portfolio managers aren’t paid off commissions and show clients their fees and track their performance. “To me, it’s a game-changer,” Holden says. “It just makes much more sense.”
HAS THE VALUE OF DESIGNATIONS BEEN DIMINISHED BY THE PROLIFERATION OF NUMEROUS TITLES?
Yes
81.84% No
18.16% 34
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When does the learning end? In an increasingly competitive environment, continuing education is prerequisite for advisors looking to differentiate themselves from the growing crowd of competitors WHEN FINANCIAL and investment advisors sit down with their clients, one of the first things they do is discuss the options available based on the client’s needs. They take into consideration the client’s risk aversion, as well as what kind of return they would like to see. That same thinking applies to advisors themselves, who are seeking a way to build their book of business in an increasingly crowded industry. As the industry becomes more regulated and specialized, advisors are turning to professional development and the Canadian Securities Institute [CSI] as a way to further their career goals. “To survive in this business, advisors really have to up their game, and it starts with education and building your expertise,” says Marshall Beyer, director of credentials development for CSI. “In the past, advisors’ value-add was in executing orders. Now advisors really have to provide high-value personalized advice to clients, and the way the investment dealer business is going, the focus really is evolving toward the high-networth client.” “In this day and age, I think most advisors are striving to position themselves as the CFO of their client’s financial lives,” says Grant Ackerman, a portfolio manager and investment advisor with Ackerman Private Wealth. “In addition to having great organizational and interpersonal skills, that role requires broad, situationally relevant wealth planning expertise and, in most cases, the ability to deliver discretionary portfolio
management. For those advisors looking to further their professional development, rounding out those two areas of your repertoire may not only give your practice broad appeal, but also the ability to differentiate yourself from your peers.”
that overlap with that strength, as well as compensation and possible credentials required. This can save time and money differentiating the ‘nice-to-know’ courses from the ‘need-to-know’ courses that will help achieve career goals.”
Finding the right course
Education and CRM2
When looking at professional development options, advisors can be served by assessing
According to Beyer, any discussion of standards and designations now includes
“To survive in this business, advisors really have to up their game, and it starts with education and building your expertise. In the past, advisors’ value-add was in executing orders. Now advisors really have to provide high-value personalized advice to clients ...” Marshall Beyer, CSI their strengths and weaknesses. “One of the tools I like using to help assess strengths and weaknesses is a simple SWOT analysis,” says Richard W. Pope, associate vice president of CC&L Private Capital. “Once you have laid out your unique SWOT, my advice is to use the CSI’s Financial Services Career Map to help assess possible career paths based on your strengths. For example, if one of your [strengths] is research, you then go to the CSI website and see the possible careers
CRM. “Inherent in that is the need for high proficiency standards for advisors.” In a post-CRM2 environment, clients will more easily be able to ascertain value differentiation in the advisor community, says James G. Bilcox, an advisor with Sun Life Financial. “The stakes have been raised,” he says. “I guess the question one must ask is: ‘What kind of advisor do I want to be when I grow up?’ We assist our clients in manifesting their vision. We must have one as well.
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COVER STORY: CERTIFICATION SURVEY One of the exciting things about the wealth management business is that there is not one single path to success. Find your niche. Support your message with suitable underlying education. “Regardless, I have an immense amount of respect for advisors and the tireless work they do to help others,” he continues. “The truth is that we have to stay continuously educated in this fast-paced world so we can remain attractive and effective. The advisor who has a value system of continuous education will never become bored or stale as they serve the community.” Ackerman agrees that there are similarities between the investment advice advisors give to their clients and how they should approach investing in their own professional development. “Just as we would encourage a high-networth client to employ professional money managers to safeguard their future and financial stability, advisors should also turn to the recognized industry professionals, like CSI, when investing time and money into their own careers,” he says. “With so many different types of licenced individuals, all with varying levels of industry experience, operating under titles such as ‘advisor,’ ‘wealth manager’ and ‘financial planner,’ it is extremely important to work toward, achieve and display the industry’s gold standard credentials. Clients are not only asking for them, they are factoring those credentials – or lack thereof – into their decision-making when consciously selecting an advisor for the long-term.”
Setting a path Ultimately, the path an advisor chooses is personal, Bilcox says. “Looking back, I have no regrets with the base I’ve been fortunate enough to build. The investment of my human and financial capital in continuous education has been returned to me countless times over – not simply in financial ROI, but also through intangible career fulfillment and witnessing the impact on the lives of my clients. I would encourage advisors to look at ROI through this type of lens.” In Ackerman’s case, continuing education
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“The stakes have been raised. I guess the question one must ask is: ‘What kind of advisor do I want to be when I grow up?’ We assist our clients in manifesting their vision. We must have one as well. Support your message with suitable underlying education” James G. Bilcox, Sun Life Financial has been pivotal, especially in a fast-paced environment like financial planning. “I believe that our designations say a lot about our commitment to our craft and our own personal brand. When I first started in the industry, my FCSI and CIWM designations gave me the much-needed confidence and credibility to pitch – and sometimes even win – the large accounts that otherwise would have been out of my league. Now, those same credentials help to deliver the peace of mind to current and prospective clientele that I am firmly committed to their well-being and I will take the appropriate steps to ensure my advice is timely, relevant
and on point.” According to Beyer, the demand for education is going to continue to grow; he cites an upcoming CSI report that concludes that “the practice of wealth management requires a distinct set of broad and specialized knowledge and skills in order to deal with the complex issues faced by high-net-worth clients.” “More advisors will come to the realization that if they want to be successful,” Beyer says, “they’re going to have to differentiate themselves in the marketplace, and one way to do that is to develop greater expertise in one area or another.”
THANK YOU FOR THE VOTE OF CONFIDENCE. As proud as we are to be chosen Wealth Professional’s Fund Provider of the Year 2015, the true measure of our success is your success. That’s why we take pride in delivering truly active solutions with high conviction and believe that investors are best served when they invest with advice.
WINNER 2015 FUND PROVIDER OF THE YEAR AWARD
SEE WHAT MAKES US DYNAMIC. advisor.dynamic.ca
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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BROUGHT TO YOU BY:
LIBERTY GRAND | TORONTO JUNE 5, 2015 www.wpawards.ca
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COMMEMORATIVE GUIDE WP AWARDS 2015
BROUGHT TO YOU BY:
MICHAEL LEE-CHIN is not short of praise and admirers, but taking home a lifetime achievement honour at the inaugural Wealth Professional Awards by no means escaped his attention – nor his heart. “I’ve received many accolades and awards throughout my career, but this one means a lot,” said Lee-Chin, the chairman of Mandeville Holdings. “To be recognized by your peers is the greatest recognition because they are also your competition. It’s always humbling to pursue your passion and be recognized for it – a blessed feeling.” The industry vet was among 400 industry professionals gathered for the first annual WP Awards gala at Toronto’s Liberty Grand, with Invesco as title sponsor. A Saskatchewan veteran, Rod Tyler, was honoured with The Invesco Canada Award for Advisor, Lifetime Achievement. Overall, the awards cut a wide swath across the advisor channel; winners in 21 categories were drawn from across the country. The night was produced by KMI Publishing and Events, the organization behind Wealth Professional magazine. The celebration also speaks to the industry’s perseverance and victory over increas-
COMMEMORATIVE GUIDE WP AWARDS 2015
ingly difficult regulatory and economic challenges. Advisors have been quick to adapt in order to compete in the new environment. In times like this, customer service has never been more important. “In this environment of robo-advisors, CRM2 and regulations, we think that’s important, but what really matters are client relationships and making a difference for them,” said Bev Evans from Evans Wealth Management/Richardson GMP, who scooped up the Questrade Smart ETF Award for First Class Customer Service. But arguably the biggest winner of the evening was Stephen Jones from Assante Wealth Management, who took home the Mandeville Private Client Award for Advisor of the Year. “I’m honoured to be part of this great event,” Jones said. “It’s tremendous. We’ve really worked hard revising our processes to help clients look forward five years and 10 years.” The judges of the awards were Greg Pollock, president of Advocis; Chris Polson, vice president of global advisory firm Duff &
Phelps; Sean Cleary, BMO professor of finance at Queens University; Robbie Wildman, a retired advisor and past president of Advocis; and Ellen Bessner, a partner with Babin Bessner Spry. And the winners are …
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The BlackRock Award for
BROUGHT TO YOU BY:
Portfolio/Discretionary Manager of the Year “It’s a remarkable feeling. I’m going to get very emotional. I’m from a small town with 150 people who are mostly farmers. My parents preached hard work, and to be here today is homage to my parents” ROB TÉTRAULT Rob Tétrault Wealth Management Group, National Bank Financial
THE FIRST award winner of the night couldn’t help think back to where it all started. “It’s a remarkable feeling,” said Rob Tétrault from Rob Tétrault Wealth Management Group at National Bank Financial. “I’m going to get very emotional. I’m from a small town with 150 people who are mostly farmers. My parents preached hard work, and to be here today is homage to my parents.” Tétrault scooped up the BlackRock Award for Portfolio/Discretionary Manager of the Year for being the portfolio manager who
delivered unparalleled performance to his clients. The award also sought to recognize the portfolio/discretionary manager who demonstrates commitment to clients with exemplary customer service while building and cementing client relationships. The award was open to portfolio or discretionary managers in the advisor channel or the private discretionary division only, who were compensated by their clients rather than the fund. Managers were assessed on revenue contributions, book growth, client retention and client testimonials.
FINALISTS Rob Tétrault, Wealth Management Group, National Bank Financial Carrie Lyle-Voce, ScotiaMcLeod/Verus Wealth Management John J. DeGoey, Burgeonvest Bick Securities Limited Brian S. Jones, TD Wealth Private Investment Advice Marco Zaino, Dundee Goodman Private Wealth Wolfgang Klein, Canaccord Genuity Wealth Management
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“This is an advisor category. We want to help them grow their business with the best ETF product in Canada” WARREN COLLIER Managing director, iShares Canada
AWARD SPONSOR BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. As of March 31, 2015, BlackRock’s AUM was US$4.774 trillion. BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies and products like iShares exchange-traded funds. iShares by BlackRock is a global leader in exchange-traded funds [ETFs] with more than 700 funds managed globally across equities, fixed income and commodities, which trade on 20 exchanges worldwide and more than $1 trillion in assets under management as of March 31, 2015. iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Advocis Award for
BROUGHT TO YOU BY:
New House on the Block
“It feels great. Hard work pays off. Be honest, be professional and always have your clients’ best interests at heart” ELIE NOUR Elie Nour Group, Manulife Securities Incorporated
ELIE NOUR had to beat out some stiff competition to win the Advocis Award for New House on the Block. “It feels great,” said Nour, who leads the Elie Nour Group at Manulife Securities Incorporated. “Hard work pays off.” Nour, who credits his success to a disciplined and conservative approach to investing, had simple words of advice for other professionals. “Be honest, be professional and always have your clients’ best interests at heart,” he said. To qualify for the award, the new office
“We think events like this, recognizing these really outstanding financial advisors and their companies, are really important ...” GREG POLLOCK
had to have been established for three years or less. The judges reviewed business conversion rates, repeat and referral business strategy and success, growth strategy, advertising, training, volume and customer satisfaction. For award partner Advocis, this night was something the industry really needs and dovetails well with their strategy for more professionalism. “We’ve been speaking for some time on the importance of raising the professional bar in the industry,” said Greg Pollock, CEO of Advocis. “We think events like this, recog-
nizing these really outstanding financial advisors and their companies ... are really important, and we’re just delighted to be a part of it.”
FINALISTS Elie Nour Group, Manulife Securities Incorporated Northland Wealth Management Calgary North Region - Investors Group Financial Services SPEIR Wealth Management Kemp Financial Group
AWARD PARTNER The Advocis Protective Association [APA] protects members by offering comprehensive errors and omissions insurance coverage. The Institute for Advanced Financial Education, the designation-granting and standards-setting body of Advocis, administers and promotes the CLU® [Chartered Life Underwriter] and CHS™ [Certified Health Insurance Specialist] designations. The Institute is the leading designation body in Canada for financial services practitioners in the areas of advanced estate planning, wealth transfer and living benefits. Advocis is a valued stakeholder to governments and regulators at all levels, and the APA aggressively pursues its members’ interests in the public square through a variety of advocacy initiatives. The Conference of Advanced Life Underwriters [CALU] safeguards advisors’ interests at the federal level. Through comprehensive professional support and advocacy, Advocis is the home and voice of Canada’s financial advisors.
CEO, Advocis
COMMEMORATIVE GUIDE WP AWARDS 2015
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The TSX Private Markets Award for
BROUGHT TO YOU BY:
Outstanding Internet Presence “I’ve been in the industry for 20 years but became an advisor last year. It’s really nice to get recognition from the industry itself. I feel like I’m providing useful context for investors, but it’s nice to know people in the industry read it” DAN BORTOLOTTI PWL Capital
FOR THE past two decades, Dan Bortolotti has trained his investment site on the client, not the advisor, but recognition from those peers is especially gratifying nonetheless. “This award is really great. I started as a journalist,” Bortolotti said. “I’ve been in the industry for 20 years but became an advisor last year. It’s really nice to get recognition from the industry itself. I feel like I’m providing useful context for investors, but it’s nice to know people in the industry read it.” This category recognized the advisor or brokerage who best harnessed the power of the Internet to provide useful tools to clients or industry stakeholders. The judges looked at overall excellence, depth of content, user friendliness, innovation and use of multimedia platforms. For award sponsor TMX Group, a technology
FINALISTS Dan Bortolotti, PWL Capital Avraham Byers, Breakthrough Personal Financial Trainers Ryan Colwell, IPC Investment Corporation Rob McClelland, The McClelland Financial Group Kevin Cahill, Canadian Legacy Builder George Christison, Investing For Me service provider for financial capital markets, there was no chance of missing the event. “It’s very important for us to be here for the first annual Wealth Professional Awards,” said Peter Conroy, president of Shorcan Brokers Limited & TMX/TSX Private Markets. “Any time the financial industry gives itself a welldeserved pat on the back, we want to be there.”
“It’s very important for us to be here for the first annual Wealth Professional Awards. Any time the financial industry gives itself a well-deserved pat on the back, we want to be there” PETER CONROY
AWARD SPONSOR TSX Private Markets is a dealer-to-dealer voice-brokered service, complemented by an informational website that facilitates the raising of capital and secondary trading in the Canadian exempt market. TSX Private Markets is operated by Shorcan Brokers Limited, a wholly owned subsidiary of TMX Group and a registered exempt market dealer with more than 35 years of experience as an inter-dealer broker.
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President, Shorcan Brokers Limited & TMX/TSX Private Markets
COMMEMORATIVE GUIDE WP AWARDS 2015
The Titan Equity Group Award for
Multi-Service Advisor of the Year
BROUGHT TO YOU BY:
“It’s an absolute honour to be recognized in Canada as a multi-family office providing investment services to families” ARTHUR C. SALZER Northland Wealth Management
FAMILY OFFICES may be relatively new in Canada, but Northland Wealth Management CEO Arthur Salzer is quickly making a name for himself. After winning awards south of the border, the Salzer picked up the Multi-Service Advisor of the Year Award at the WP Awards. “It’s an absolute honour to be recognized in Canada as a multi-family office providing investment services to families,” he said. The award recognizes the standout business of an advisor who demonstrates commitment to clients with full suite of services beyond traditional
FINALISTS Arthur C. Salzer, Northland Wealth Management Bob Roby, IPC Investment Corporation Colin Dixon, Granville West Group, Manulife Securities Incorporated Jason Nagel, Three60 Wealth & Estate Solutions Jason Polsinelli, Polsinelli Financial Advisory Group, Scotia McLeod Lyle Rouleau, Rouleau Investment Group, CIBC Wood Gundy Brad Mol, TriDelta Financial
COMMEMORATIVE GUIDE WP AWARDS 2015
financial advice, offering a varied platform of products like insurance, succession consulting, investments, tax and estate planning, mortgages and retirement. Judges were looking for innovative products offered, as well as a variety of products and service. Titan Equity was especially happy to sponsor this award.
“The multi-service category encompasses pretty much every financial aspect of a firm in a family’s life,” said Chuck Long, national sales manager of Titan Equity. “To me, that’s very important because that’s what my background is, and Titan is happy to offer products to assist people like that in offering that well-rounded investment portfolio.”
“The multi-service category encompasses pretty much every financial aspect of a firm in a family’s life. To me, that’s very important because that’s what my background is ...” CHUCK LONG National sales manager, Titan Equity
AWARD SPONSOR Titan Equity Group Ltd. is a Vaughan, Ont.-based real estate development and investment firm paving the way for both novice and experienced investors interested in alternative investing. From the outset, Titan has operated with a focus on trust, tenacity and transparency. We take the lead in all of the projects in which we participate, giving us autonomy and full control. Clients can therefore trust that Titan has the power and flexibility to structure investment opportunities to maximize capital growth.
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The NEI Investments Award for
BROUGHT TO YOU BY:
Socially Responsible/ Impact Investing
“It’s very exciting. I know a couple of the other nominees very well, and they should have won. I hope clients appreciate what I do” RYAN COLWELL IPC Investment Corporation
THE SOCIALLY responsible/impact investing community is a tight-knit group, as Ryan Colwell demonstrated after picking up his WP Award. “It’s very exciting,” said Colwell, an investment advisor at IPC Investment Corporation. “I know a couple of the other nominees very well, and they should have won. I hope clients appreciate what I do.” The award sought to recognize an advisor, office or practice dedicated to providing outstanding socially responsible investment strategies for clients. Socially responsible or impact investments were defined as offerings that seek to generate financial return while also proactively creating environmental or social benefit.
The judges were looking for evidence of a variety of impact investment offerings, new and innovative offerings, and strong financial performance of portfolios that include sustainable investments. The award’s sponsor, NEI Investments, is home to Canada’s largest team of in-house socially responsible investment specialists who provide environmental, social and governance [ESG] analysis to portfolio managers of socially responsible investments, including NEI’s own Ethical Funds. “We’re the leaders in this space, and it’s really important for us to be here to recognize all advisors who invest in a socially responsible way,” says Chris Nickerson of NEI Investments. “We couldn’t be happier with the nominees.”
“We’re the leaders in this space, and it’s really important for us to be here to recognize all advisors who invest in a socially responsible way” CHRIS NICKERSON SVP of sales and distribution, NEI Investments
FINALISTS Ryan Colwell, IPC Investment Corporation Brian Barsness, Mennonite Savings and Credit Union Sterling Rempel, Future Values Estate & Financial Planning Sucheta Rajagopal, Jacob Securities
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AWARD SPONSOR NEI Investments is a national investment firm with more than $6 billion in assets under management. It offers Canadian retail investors unique access to top independent money managers through high-quality investment solutions in two fund families, Northwest Funds and Ethical Funds. Its products provide investors with a full range of investment management styles, as well as conventional and socially responsible investment choices.
COMMEMORATIVE GUIDE WP AWARDS 2015
WE’VE ALL HEARD ABOUT THESE KEY ISSUES IN THE NEWS.
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HAVE YOU THOUGHT ABOUT HOW THEY IMPACT YOUR INVESTMENTS?
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Ethical Funds has been Canada’s leader in SRI for over 25 years.†
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We offer a number of 4 and 5-star funds* We have the largest team of ESG analysts in Canada
Discover how we can produce stronger investments by watching our “Demand More” video at ethicalfunds.com or speak to your financial advisor. @ethicalfunds
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Overall MOrningstar ratingtM as Of septeMber 30, 2014 (subject tO change MOnthly). MOrningstar star ratings are an Objective, quantitative Measure Of a fund's histOrical risk-adjusted perfOrMance relative tO Other funds in its categOry, and are calculated frOM a fund's 3, 5, and 10-year returns Measured against 91-day treasury bill and peer grOup returns. the tOp 10% Of the funds in a categOry earn five stars; the next 22.5% fOur stars; the fOllOwing 35% three stars; the next 22.5% twO stars, and the bOttOM 10% One star. the Overall rating is a weighted cOMbinatiOn Of the 3, 5, and 10-year ratings. Only funds with at least a three-year track recOrd are cOnsidered, and ratings are calculated Only fOr categOries with at least 20 funds. fOr MOre details On the calculatiOn Of MOrningstar star ratings, please visit www.MOrningstar.ca. @ MOrningstar inc. all rights reserved. the infOrMatiOn cOntained herein is prOprietary tO MOrningstar and/Or its cOntent prOviders; May nOt be cOpied Or distributed; and is nOt warranted tO be accurate, cOMplete Or tiMely. neither MOrningstar nOr its cOntent prOviders are respOnsible fOr any daMages Or lOsses arising frOM any use Of this infOrMatiOn. †based On 2014 investOr ecOnOMics Market share data fOr canadian retail Mutual funds. 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. nei investMents, ethical funds, nOrthwest funds and Make MOney. Make a difference. are registered Marks and tradeMarks Owned by nOrthwest and ethical investMents l.p. *
The Ext Marketing Inc. Award for
BROUGHT TO YOU BY:
Advertising Campaign of the Year
“We’re really proud of our campaign. The campaign is really a response to the needs of investors first. We are trying to create better conversations between investors and advisors” Mackenzie Investments
IN THEIR bid to create a dialogue between advisors and investors, Mackenzie Invest ments took home the award for Advertising Campaign of the Year. “It feels outstanding. We’re really proud of our campaign,” Mackenzie Investments said in a statement. “The campaign is really a response to the needs of investors first. We are trying to create better conversations between investors and advisors.” The award sought to recognize an
“It’s our favourite category, and we gave it to one of our clients. We want our clients to win, and we’re happy when they win” JILLIAN BANNISTER Executive director, Ext. Marketing
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individual campaign directed at wealth professionals in terms of its effectiveness, reach, currency and creativity. Judges were looking for the success of the campaign’s key objectives and strategy, its marketing mix and both the quantitative and qualitative evidence of its success; the judges also took into account the impact relative to advertising spend. For the award sponsor, Ext. Marketing, the award had special meaning, as they were able to present it to one of their clients. “It’s our favourite category, and we gave it to one of our clients,” said Jillian Bannister, executive director of Ext. Marketing. “All of
our clients are here, and we’re so happy to sponsor this award. We want our clients to win, and we’re happy when they win.”
FINALISTS Mackenzie Investments Dynamic Funds Canadian Securities Institute Sun Life Financial Empire Life Invesco Canada RBC Global Asset Management
AWARD SPONSOR Ext. Marketing Inc. helps financial services firms achieve their marketing strategy, communications and regulatory objectives - on time and on budget. Our clients include tier-one banks and insurers, mutual fund companies, private equity firms, hedge funds and credit unions. We help our clients with strategic planning and project management, copy design, digital execution and their regulatory deliverables. Make us an extension of your team: www.ext-marketing.com.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Humanitarian Coalition Award for
BDM/Wholesaler of the Year
BROUGHT TO YOU BY:
“I’ve got a great team. I’m working with the best team on the planet. It’s been a wild ride. I’m really lucky I strongly believe in what I sell” ALAIN DESBIENS BMO Global Asset Management
FOR ALAIN DESBIENS, winning the WP Award was for BDM/Wholesaler of the Year was a story of recovery. “I had an operation on my back, and I couldn’t walk five years ago,” said Desbiens, VP of sales for ETFs in Quebec and Atlantic Canada at BMO Global Asset Management. “I’d like to thank my wife. I wouldn’t be here if it wasn’t for her.” Desbiens beat out finalists Mike Boyd of Capital Group Canada, Craig Koenig of CI Investments, Mike Tycoles of Dynamic Mutual Funds, Will Fayed of NEI Investments, Caroline Yi of Sprott Asset Management and
Jeff Gibbons of IA Clarington Investments. He gave the credit for his victory to the people he works with as well. “I’ve got a great team,” he said. “I’m working with the best team on the planet. It’s been a wild wide. I’m really lucky I strongly believe in what I sell.” The award sought to recognize the BDM wholesaler who offers superb service to advisors and is consistently proactive in educating advisors on products while maintaining in-depth knowledge of financial markets and the competitive landscape of all investment offerings.
FINALISTS Alain Desbiens, BMO Global Asset Management Mike Boyd, Capital Group Canada Craig Koenig, CI Investments Mike Tycoles, Dynamic Mutual Funds Will Fayed, NEI Investments Caroline Yi, Sprott Asset Management Jeff Gibbons, IA Clarington Investments
COMMEMORATIVE GUIDE WP AWARDS 2015
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The De Thomas Financial Award for
Young Gun Advisor of the Year
BROUGHT TO YOU BY:
“In a very competitive industry, it really means a lot to win this award and receive the recognition and acknowledgment from top industry professionals. I’m sure every other nominee was as capable, if not more, of getting this award” JEFF BER ScotiaMcleod Financial Services
GIVEN THE competition in the industry, Jeff Ber is only too well aware how big winning the Young Gun of the Year Award is. “In a very competitive industry, it really means a lot to win this award and receive the recognition and acknowledgement from top industry professionals,” said Ber, an advisor at ScotiaMcleod Financial Services. “I’m sure every other nominee was as capable, if not more, of getting this award.” Ber beat out stiff competition from Adam Schacter at Mandeville Private Client, Elie Nour at Elie Nour Group/Manulife Securities Incorporated, Julia Chung at JYC Financial, Marcello Varano at Laurentian Bank Securities and Steve Tate at Tate Financial/Investia. For any young advisor, the main goal is growing their book and acquiring assets, a task that Ber has really focused on – with perhaps an unorthodox approach. “You don’t know where the next client or the next prospect is going to come from,” Ber said. “I don’t just focus on one thing. I think a top-down approach to marketing and building relationships is the key to my success because I’ll meet someone that I don’t see any business opportunity with, but just by
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networking with that person, you meet someone else, and then you find someone else who has a need.”
FINALISTS Jeff Ber, ScotiaMcleod Financial Services Adam Schacter, Mandeville Private Client Elie Nour, Elie Nour Group, Manulife Securities Incorporated Julia Chung, JYC Financial Marcello Varano, Laurentian Bank Securities Steve Tate, Tate Financial, Investia
AWARD SPONSOR Founded in 1987, De Thomas Financial has always been an independent dealership, which allows us to provide objective and unbiased advice that is personalized to each of our clients’ unique investment goals and objectives. And by promoting a culture of independence, we are able to ensure our clients that their best interests are always our number-one priority. Our confidence in our ability to provide the highest calibre of investment service allows us to think differently about investing, and our independence allows us the freedom to offer truly independent advice to our clients. We currently have offices across Canada and manage more than $1 billion of client assets.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Award for
Lifetime Achievement in the Financial Planning Industry
BROUGHT TO YOU BY:
“I’ve received many accolades and awards throughout my career, but this one means a lot. To be recognized by your peers is the greatest recognition because they are also your competition. It’s always humbling to pursue your passion and be recognized for it – a blessed feeling” MICHAEL LEE-CHIN Mandeville Holdings
MICHAEL LEE-CHIN is no stranger to awards, but it was still a big deal for the industry legend to take home a lifetime achievement honour at the inaugural Wealth Professional Awards. “I’ve received many accolades and awards throughout my career, but this one means a lot,” said Lee-Chin, the chairman of Mandeville Holdings. “To be recognized by your peers is the greatest recognition because they are also your competition. It’s always humbling to pursue your passion and be recognized for it – a blessed feeling.” The award was given out in honour of outstanding achievement by an individual within the financial planning community. The editorial team at Wealth Professional magazine made the final selection based on editorial research and industry feedback. While accepting the award, Lee-Chin highlighted the importance of passion and the need for excellence for advisors to survive in trying economic and regulatory times. “The industry is facing strong headwinds,” Lee-Chin said. “If we are average, we will become irrelevant.”
COMMEMORATIVE GUIDE WP AWARDS 2015
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The Dundee Goodman Private Wealth Award for
Best Community Service Effort of the Year
BROUGHT TO YOU BY:
“It’s the ultimate honour” KIRK BRUGGER Brugger Wealth Management, Fundex
FINALISTS Kirk Brugger, Brugger Wealth Management, Fundex Baljit Rana, Sun Life Financial Frederick Montilla, Montilla Wealth Management, Investors Group Jason Polsinelli, Polsinelli Financial Advisory Group, Scotia McLeod Jonathan Lewis, Eastport Financial Group Ray Lessard, BMO Nesbitt Burns Rose Cammareri, AGF Investments
THE AWARD for Best Community Service Effort of the Year sought to recognize a business, group, office or individual advisor who has made a significant contribution to community service during the past year and has enhanced the business’s reputation by engaging the region and communities it serves. Sponsoring the award was a natural fit for Dundee Goodman. “The Goodman family is very philanthropic, so just being associated with this award really ties into the DNA of not only the family itself, but of our organization,” said John Cucchiella, then-SVP and head of retail
AWARD SPONSOR Dundee Goodman Private Wealth, a division of Dundee Securities Ltd., is one of the few remaining independent investment dealers in Canada. Dundee Goodman Private Wealth is home to portfolio managers and investment advisors who deliver expert advice to clients who have accumulated enough savings and investments to appreciate and value the help of an expert. When the Bank of Nova Scotia purchased DundeeWealth Inc. in 2011, our corporate retail advisory business remained independent. Today, this 20-year-old retail advisory business is Dundee Goodman Private Wealth.
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at Dundee Goodman Private Wealth. “Having the privilege to offer an award like this ... to recognize a team that gives back to the community – we can’t beat that.”
“The Goodman family is very philanthropic, so just being associated with this award really ties into the DNA of not only the family itself, but of our organization. Having the privilege to offer an award like this ... we can’t beat that” COMMEMORATIVE GUIDE WP AWARDS 2015
The Home Trust Company Award for
BROUGHT TO YOU BY:
New Advisor on the Block – Newcomer of the Year
“I’m trying to make an impact. I think this will really help my business” LUDOVIC SIOUFFI Canaccord Genuity Wealth Management
AFTER WINNING the award for New Advisor on the Block, Ludovic Siouffi didn’t want to bask in the glow of victory. Instead he was firmly focused on the future. “I’m trying to make an impact,” said Siouffi, an investment advisor with Canaccord Genuity Wealth Management. “I think this will really help my business.” Siouffi beat out Ben Eby of Eby Financial Group, Chris Gaudet of Gaudet Tougas Wealth Management/Raymond James, Jessica Kemp of Kemp Financial Group and Kelvin Byce of BMO Nesbitt Burns to claim the award. The award sought to recognize an outstanding advisor who has been in the Canadian financial
FINALISTS Ludovic Siouffi, Canaccord Genuity Wealth Management Ben Eby, Eby Financial Group Chris Gaudet, Gaudet Tougas Wealth Management, Raymond James Jessica Kemp, Kemp Financial Group, Freedom 55 Financial Kelvin Byce, BMO Nesbitt Burns
COMMEMORATIVE GUIDE WP AWARDS 2015
planning industry for less than five years. The judges’ criteria included volume, revenue contributions, book growth, client retention and client testimonials. Recognizing fresh, ambitious advisors sends a powerful message that their contributions are important to the industry. With the average age of advisors hovering just below 60, this award is more relevant than ever, as the award sponsor, Home Trust, was quick to acknowledge. “It’s important to constantly rejuvenate the industry by bringing young talent in, and that’s why we’re proud to sponsor the Newcomer of the Year Award,” said Benjy Katchen, SVP of deposits at Home Trust.
“It’s important to constantly rejuvenate the industry by bringing young talent in” BENJY KATCHEN SVP of deposits, Home Trust
AWARD SPONSOR For nearly 30 years, Home Trust has been proudly helping Canadians achieve their financial goals. Originally incorporated in 1977 as Home Savings and Loan Corporation, the company later reformed as Home Trust and has steadily grown to become Canada’s largest independent trust company. Home Trust’s product offering includes commercial and residential mortgages, consumer lending, and credit card services. Home Trust is a federally regulated trust company and is a member of the CDIC, with offices from coast to coast. Home Trust is a subsidiary of Home Capital Group Inc., a public company traded on the TSX under ticker symbol HCG.
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The Questrade Smart ETF Award for
BROUGHT TO YOU BY:
First Class Customer Service
“In this environment of robo-advisors, CRM2 and regulations, we think that’s important, but what really matters are client relationships and making a difference for them” BEV EVANS Evans Wealth Management, Richardson GMP
AS ADVISORS seek to persevere over increasingly difficult regulatory and economic challenges, customer service has never been more important, as Bev Evans, the winner of the Questrade Smart ETF Award for First Class Customer Service Award, was quick to point out. “In this environment of robo-advisors, CRM2 and regulations, we think that’s important, but what really matters are client relationships and making a difference for them,” said Evans, director of wealth management and portfolio manager at Evans Wealth Management/Richardson GMP.
FINALISTS Bev Evans, Evans Wealth Management, Richardson GMP Gillian Stovel Rivers, Assante Capital Management Chris Lennox, Lennox Financial Group Duane Francis, Mandeville Private Client Laurie Bonten, National Bank Financial Monica Weissmann, Manulife Securities Rob McClelland, The McClelland Financial Group
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The finalists were as asked to provide details on how they go the extra mile to give customers outstanding service. The judges chose the winner based on product knowledge, product offerings and communication strategies. Telephone and face-to-face service were also taken into consideration. For award sponsor Questrade, customer
service is what the advice business is built on. “I think service is everything,” said John Youn, executive managing director of ETFs and global structured products. “You stay with a company because of service – it keeps you around longer. It’s about personal contact and what you offer the client, so service is the main component of our financial business.”
“I think service is everything. It’s about personal contact and what you offer the client, so service is the main component of our financial business” JOHN YOUN Executive managing director, ETFs and global structured products, Questrade C=62, M=1, Y=100, K=0
AWARD SPONSOR
C=18, M=10, Y=10, K=100
Questrade Financial Group and its affiliated companies provide financial products and services to Canadians, including securities, foreign currency, investment and wealth management. In 2014, Questrade’s CEO was named EY Entrepreneur of the Year (Ontario) in the services category, and since 2011, Questrade has been ranked one of Canada’s Best Managed Companies. Questrade Financial Group is headquartered in Toronto.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Life / Health Professional Award for
BROUGHT TO YOU BY:
Young Gun BDM / Wholesaler of the Year
“It feels great. A lot of hard work paid off. It’s nice to be recognized by your peers. It’s an honour, but it’s a team achievement” ANTHONY CHOUINARD Invesco Canada
THE YOUNG Gun BDM/Wholesaler of the Year honour was a team award as far Anthony Chouinard is concerned. “It feels great. A lot of hard work paid off,” said Chouinard. “It’s nice to be recognized by your peers. It’s an honour, but it’s a team achievement.” The award sought to recognize the BDM/ wholesaler under the age of 40 (as of January 1, 2015) who offers superb service to advisors while maintaining in-depth knowledge of financial markets, products and services, and the competitive landscape of investment products. The judges were looking at the BDM’s ability to build and manage relationships, understand their business and the value they add to the brand they represent.
Chouinard beat out a talented field to win the award, including Adam Elliot of Dynamic Funds, Stephen Bebber of Fidelity Investments Canada, Matthew Pavey of Invesco Canada, Elisabeth Préfontaine of iShares by BlackRock and Rameez Husseini of RBCGAM/Perron & Partners Wealth Management.
FINALISTS Anthony Chouinard, Invesco Canada Adam Elliot, Dynamic Funds Stephen Bebber, Fidelity Investments Canada Matthew Pavey, Invesco Canada Elisabeth Préfontaine , iShares by BlackRock Rameez Husseini, RBCGAM, Perron & Partners Wealth Management
AWARD SPONSOR Life / Health Professional is a publication for today’s sophisticated life and group health advisors. It focuses on providing practical and accessible advice tailored to the needs of Canada’s insurance professionals. The insurance industry is constantly changing due to regulation and significant macro events, and it’s important that professionals are kept up to speed with industry developments and the latest business techniques to handle these changes.
COMMEMORATIVE GUIDE WP AWARDS 2015
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The Award for
BROUGHT TO YOU BY:
Outstanding Advisor – Alternative Investments PRESENTED BY THE CFA SOCIETY TORONTO
“I think being recognized by my clients who have stood by me through 29 years of financial planning and investment professionalism is a testament to what I love doing” MICHAEL PRITTIE Adam Capital Wealth Architects, Mandeville Private Client
FOR MICHAEL PRITTIE, the award for Outstanding Advisor – Alternative Investments was recognition of a life’s work. “Being recognized by peers in the industry is of great importance,” said Prittie, the branch manager of Adam Capital Wealth Architects at Mandeville Private Client. “I think being recognized by my clients who have stood by me through 29 years of financial planning and investment professionalism is a testament to what I love doing. I’m grateful for the nomination and grateful to everyone who thought I was worthy of this award.” The award sought to recognize the standout performer in alternative investments, which our judges defined as non-equity-based assets and also equity-based investments such as structured products, hedge funds and private equity. The CFA Society Toronto served as the award partner, which was apt given their focus on this particular area. “I honestly think it’s one of the more important categories,” said Chris Polson, president of the CFA Society Toronto. “We’ve been spending a lot of time in the last four or five years focusing on people who add a real
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net benefit to society. This award is really representative of that. It’s our pleasure to bring some recognition to the work that Mike is doing.”
FINALISTS Michael Prittie, Adam Capital Wealth Architects, Mandeville Private Client Arthur C. Salzer, Northland Wealth Management Wenbo Zhang, Pinnacle Wealth Brokers John R. Ardill, Ardill Financial
“We’ve been spending a lot of time in the last four or five years focusing on people who add a real net benefit to society” CHRIS POLSON President, CFA Society Toronto
AWARD PARTNER Founded in 1936, CFA Society Toronto is a not-for-profit organization supporting the professional development and advancement of CFA charterholders. The society provides member services, including educational programs, sponsored events, employment postings and networking opportunities. The Toronto Society membership is composed of portfolio managers, investment analysts, corporate finance executives, academics and other investment professionals who practice in various fields. CFA Society Toronto is a member society of the CFA Institute, the global body that administers the Chartered Financial Analyst curriculum and sets voluntary, ethics-based performance reporting standards for the investment industry. This professional association has more than 110,000 investment practitioners and educators globally.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Award For
Fund Provider of the Year
BROUGHT TO YOU BY:
“Our mission statement is that advice matters, and everything is encompassed around that. Our approach around actively managed mutual funds is something that drives us every day” Dynamic Funds
DYNAMIC FUNDS scooped up the highly coveted Fund Provider of the Year Award, offering the company a strong endorsement of its work. “It’s an honour to be recognized,” Dynamic Funds said in a statement. “It’s a validation of what we do in terms of working hard for our investors and our advisors.” Judges were looking for standout achievement in terms of growth, amount of business written during the year, overall customer service and stakeholder engagement. Dynamic beat out strong competition from CI Investments, Fidelity Investments Canada,
Invesco Canada, RBC Global Asset Management, Sentry Investments and TD Asset Management. “Our mission statement is that advice matters, and everything is encompassed around that,” said the Dynamic Funds statement. “Our approach around actively managed mutual funds is something that drives us every day. We recognize that in terms of being an innovator of product and service to providers, providing something that can help to achieve financial security for investors is what matters most at the end of the day.”
FINALISTS Dynamic Funds CI Investments Fidelity Investments Canada Invesco Canada RBC Global Asset Management Sentry Investments TD Asset Management
COMMEMORATIVE GUIDE WP AWARDS 2015
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The Financial Planning Standards Council Award for
BROUGHT TO YOU BY:
Best Practice Individual Advisor Office 25 Staff or Less
“It’s not just what we do. There are 10 other people who surround us and support what we do” KEVIN HAAKENSEN Prairie Wealth Management, HollisWealth, a division of Scotia Capital
KEVIN HEGEDUS and Kevin Haakensen from Prairie Wealth Management didn’t expect to win the WP Award for Best Practice Individual Advisor Office – 25 Staff or Less. “It feels amazing,” Hegedus said. “We really didn’t expect it.” That said, they had a lot of help along the way. “It’s not just what we do,” Haakensen said. “There are 10 other people who surround us and support what we do.” They beat out finalists Rona Birenbaum
FINALISTS Kevin Hegedus & Kevin Haakensen, Prairie Wealth Management of HollisWealth, a division of Scotia Capital Rona Birenbaum, Caring for Clients Tony De Thomasis, De Thomas Financial Corp. Michael Prittie, Adam Capital Wealth Architects, Mandeville Private Client Thane Stenner and Youssef Zohny, StennerZohny Investment Partners+, Richardson GMP
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of Caring for Clients, Tony De Thomasis of De Thomas Financial Corp., Michael Prittie of Adam Capital Wealth Architects, and Thane Stenner and Youssef Zohny of StennerZohny Investment Partners+. The award was judged based on category, volume/book size, client service, reputation and client retention. “Partnering on this award presents an opportunity for FPSC to recognize excellence in the financial planning profession,” said Susan Priest, technical content expert at the Financial Planning Standards Council. “We are pleased to be part of the Wealth Professional Awards to honour financial planners who are supporting and helping to enhance the financial well-being of Canadians.”
“We are pleased to be part of the Wealth Professional Awards to honour financial planners who are supporting and helping to enhance the financial well-being of Canadians” SUSAN PRIEST Technical content expert, FPSC
AWARD PARTNER Financial Planning Standards Council [FPSC], incorporated in 1995, is a not-for-profit standards-setting and certification body that develops, promotes and enforces professional standards in financial planning through Certified Financial Planner certification. FPSC’s purpose is to instill confidence in the financial planning profession.
COMMEMORATIVE GUIDE WP AWARDS 2015
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The Univeris Award for
BROUGHT TO YOU BY:
Outstanding Advisor – Insurance Channel
“I’ve been in the industry a number of years, and giving back to the industry helped me be a stronger advisor and helped me with my clients. Keep working hard and taking care of clients and making sure they come first year after year” WADE BALDWIN Baldwin & Associates Financial Services, Sun Life Financial
A CAREER’S worth of giving back put Wade Baldwin in the position to win the Outstanding Advisor – Insurance Channel Award. “It’s a shock. I’m quite excited,” Baldwin said. “It’s really recognition of all the hard
“We’re really proud to sponsor this category and be able to recognize the fact that a lot of these guys do really good work with their clients” RICHARD BINNENDYK EVP, enterprise wealth management, Univeris
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work. I’ve been in the industry a number of years, and giving back to the industry helped me be a stronger advisor and helped me with my clients. Keep working hard and taking care of clients and making sure they come first year after year.” The award sought to recognize the standout financial planner involved in insurance planning, business succession planning and investment/retirement planning that is centred on an insurance product offering. The judges looked for an advisor who was in good standing with regulators and industry peers, who had proven growth of a book of clients and who offered innovative products.
FINALISTS Wade Baldwin, Baldwin & Associates Financial Services, Sun Life Financial Sterling Rempel, Future Values Estate & Financial Planning Pierre Lacasse, Assante Financial Management Jason Pereira, Woodgate Financial, IPC Investment Corp. & Securities Corp. Michael Martella, Raymond James James Britton, Western Canadian Brokerage Group Kevin Cahill, Canadian Legacy Builder Pedro Maia, Maia and Associates Leony deGraaf, deGraaf Financial Strategies
AWARD SPONSOR Univeris, headquartered in Toronto, is a privately held company and is the leader in enterprise wealth management for the Canadian market. Founded in 1991 by Carmine Tullio, president and CEO, Univeris has more than 100 staff and 15 leading financial services clients, representing over 22,000 financial advisors on the platform. It offers the most comprehensive wealth management solution for financial advisors in the credit union, banking, insurance and investment dealer sectors.
COMMEMORATIVE GUIDE WP AWARDS 2015
The Wealth Professional Magazine Award for
Outstanding Industry Service Provider of the Year
BROUGHT TO YOU BY:
“It feels amazing. It’s a surprise. We really pride ourselves on good customer service. We educate people” Advisor Websites
ADVISOR WEBSITES didn’t expect to win the award for Outstanding Industry Service Provider of the Year. “It feels amazing,” said the team from Advisor Websites. “It’s a surprise. We really pride ourselves on good customer service. We educate people.” Advisor Websites beat out FundSERV, Blue ID, Vision Systems Corp. and Univeris to win the award. This award recognizes a company that has mastered that service to the advisor on one of a number of fronts. Whether it is managing orders efficiently or reducing turnaround times, that support is increasingly key for advisors looking to better satisfy investor clients. The judges were looking for the extra value the service brings to an advisor’s business and how it demonstrates a sustained effort and commitment to advisors. They were also looking for success through client retention and growth, including development of repeat and referral business strategies.
COMMEMORATIVE GUIDE WP AWARDS 2015
FINALISTS Advisor Websites FundSERV Blue ID Vision Systems Corp. Univeris
AWARD SPONSOR WP Online is Canada’s definitive source of news, opinion and analysis for today’s sophisticated financial planning and advice professionals. Delivered exclusively online to Canada’s financial planners and advice community, WP Online provides a real-time web service that keeps time-poor advisors up to date with the latest breaking news, cutting-edge opinion and expert analysis affecting both their businesses and their industry.
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The Invesco Canada Award for
BROUGHT TO YOU BY:
Advisor, Lifetime Achievement
“The essence is to be useful to other people” ROD TYLER Tyler Group, Peak Investment Services
ROD TYLER boiled down his career to one simple mantra. “The essence is to be useful to other people,” said the Saskatchewan-based advisor, who leads the Tyler Group at Peak Investment Services. It’s this philosophy that helped propel Tyler to a successful career – and to win the Invesco Canada Advisor Lifetime Achievement award. The award recognizes the lifetime achievement or outstanding contribution of an individual to the Canadian financial planning industry as a whole. Tyler has been providing clients with financial planning, investment and insurance advice for more than 30 years. He is a
member of the Conference of Advanced Life Underwriting, and also has served on the local board of Advocis. Invesco was happy to sponsor the award. “Invesco is absolutely thrilled to participate in this evening – not only to recognize Rod Tyler tonight, but also to recognize all the financial advisors in Canada,” said Scott McLean, SVP and head of retail distribution at Invesco Canada. “We believe that Canadian investors are best dealt with by a financial professional. It’s unequivocal the value they bring in helping Canadians achieve their goals. We’re a strong, strong believers in the advisor network, and we believe there’s tremendous opportunity for them to help Canadians on a continued basis.”
AWARD SPONSOR Invesco Canada Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ.
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“We believe that Canadian investors are best dealt with by a financial professional. It’s unequivocal the value they bring in helping Canadians achieve their goals. We’re a strong, strong believers in the advisor network ...” SCOTT MCLEAN SVP and head of retail distribution, Invesco Canada
COMMEMORATIVE GUIDE WP AWARDS 2015
The FundSERV Award for
BROUGHT TO YOU BY:
Advisor Network/ Brokerage of the Year
“The award has everything to do, first and foremost, with the people on this team. They’re relentless in their quest to make sure clients are well looked after” Dundee Goodman Private Wealth
THE MOMENT was almost too much to take for the Dundee Goodman Private Wealth team as they picked up the FundSERV Award for Advisor Network/ Brokerage of the Year. “We are very honoured,” Dundee Goodman Private Wealth said in a statement. “The award has everything to do, first and foremost, with the people on this team. They’re relentless in their quest to make sure clients are well looked after.” Dundee Goodman beat out competition from Assante Wealth Management, HollisWealth and Manulife Securities Incorporatedmto win the award. The award sought to recognize an outstanding national advisor network for its commitment to its clients, advisors and support to the financial planning industry
FINALISTS Dundee Goodman Private Wealth Assante Wealth Management HollisWealth Manulife Securities
COMMEMORATIVE GUIDE WP AWARDS 2015
as a whole. “We’re proud and honoured to be a part of this event and sponsor this award,” said Peter Lacasse, director of relationship management at FundSERV. “We are the
network provider in the industry, so we service both the investment dealer business as well as the manufacturers. Without firms like Goodman, we would not be successful like we are today.”
“We service both the investment dealer business as well as the manufacturers. Without firms like Goodman, we would not be successful like we are today” PETER LACASSE, Director of relationship management, FundSERV
AWARD SPONSOR FundSERV is a business-to-business electronic network with world-class transactions processing applications, servicing the Canadian investment industry. Established in 1993, we are an online hub that electronically connects fund companies, distributors and intermediaries, enabling them to buy, sell and transfer investment funds amongst each other. We service hundreds of organizations – representing approximately 150,000 daily network transactions – and provide online access to more than 35,000 investment fund products. FundSERV is a private, for-profit company that operates on a cost-recovery business model, meaning our customers receive an annual rebate.
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BROUGHT TO YOU BY:
The Mandeville Private Client Award for
Advisor of the Year
“I’m honoured to be part of this great event. It’s tremendous. We’ve really worked hard revising our processes to help clients look forward five years and 10 years” STEPHEN JONES Assante Wealth Management
STEPHEN JONES took home the biggest prize of the evening as the Advisor of the Year. “I’m honoured to be part of this great event,” said Jones, a senior financial advisor at Assante Wealth Management. “It’s tremendous. We’ve really worked hard revising our processes to help clients look forward five years and 10 years.” He beat out competition from Donald K. Emond of Assante Wealth Management, Jason Polsinelli of ScotiaMcLeod, John De Goey of Burgeonvest Bick Securities Limited, Lyle Rouleau of CIBC Wood Gundy, Martin-Charles Plouffe of National Bank Financial, Susan Andrighetti of CIBC Wood Gundy, Thane Stenner of Richardson GMP and Kim Inglis of the Reynolds Inglis Group. Jones won the award for pushing the envelope with innovation and growth, garnering both industry and investor attention, and for demonstrating exemplary customer service while building and cementing client relationships. “We always have to single out role models – people who have set high standards for themselves and live up to the standards – so it is our pleasure to be supportive of standard-setting, excellence and passion,” said Michael Lee-Chin of award sponsor Mandeville Private Client.
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Martin-Charles Plouffe, National Bank Financial
“We always have to single out role models – people who have set high standards for themselves and live up to the standards”
Susan Andrighetti, CIBC Wood Gundy
MICHAEL LEE CHIN
FINALISTS Stephen Jones, Assante Wealth Management Donald K. Emond, Assante Wealth Management Jason Polsinelli, , Polsinelli Financial Advisory Group, Scotia McLeod John De Goey, Burgeonvest Bick Securities Limited Lyle Rouleau, CIBC Wood Gundy
Thane Stenner, Richardson GMP Kim Inglis, Reynolds Inglis Group, Canaccord Genuity Wealth Management
Chairman and CEO, Mandeville Private Client
AWARD SPONSOR At Mandeville Private Client Inc., we search for investment opportunities within both the public and private realms. We provide you with access to such opportunities that are usually reserved for the affluent and institutional investors. Our goal is to democratize these private investment opportunities for wealth creation and, where appropriate, provide you the same investment techniques used by ultra-high-networth and institutional investors.
COMMEMORATIVE GUIDE WP AWARDS 2015
BROUGHT TO YOU BY:
COMMEMORATIVE GUIDE WP AWARDS 2015
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FEATURES
EDUCATION
Is CFA the new MBA? There are a lot of professional designations out there – but there is one that will certainly improve your chances of getting a job that puts you on track for the C-suite DESIGNATIONS IN the financial world are the standard everyone is held to – the silent testimony on an email signature or business card that the client is dealing with a recognized and accredited expert. While an MBA is the baseline for anyone in business, a Chartered Financial Analyst accreditation carries a lot of weight – especially for those looking to not only rise in the ranks of their profession, but also to open doors to new opportunities. “The CFA designation is widely seen as the gold standard,” says Darren Degraaf, adjunct professor at the University of British Columbia’s Sauder School of Business, who explains that there are three main categories of people who take the designation. “One is people who are working for firms that need that accreditation to meet the requirements of the Ontario Securities Commission or the Alberta or BC securities commissions due to the nature of their jobs – such as a discretionary portfolio manager,” Degraaf says. A lot of money managers like the luxury and flexibility of being a discretionary portfolio manager, he adds, which makes the CFA designation valuable. The other category is made up of students who are working in the back office, doing accounting, risk management, evaluation management or private client portfolio management, and are looking to move to the front office where the big bonuses are. “They tend to have a bigger bonus pool there,” Degraaf says, “so they are trying to make that move to the front office.” The third category of candidates is made up of engineers, IT and software students who are looking at the CFA as the new MBA.
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CFA PROGRAM CANDIDATE BODY OF KNOWLEDGE (CBOK)
Knowledge / Comprehension Application / Analysis Synthesis / Evaluation Level 1
Level 2
ETHICS
Level 3
ETHICS
ETHICS Investment tools Quantitative methods Economics Financial reporting and analysis Corporate finance
“Those engineers who have an MBA look at the CFA as a nice alternative, as a way to differentiate themselves,” Degraaf says. “And within that same category, you have people who see the CFA as a promise of something better.” That “something better” is a designation that sends a signal to their peers and the industry that they have the knowledge and skill set to move up the ladder of success. “They don’t know exactly where it might lead them, those who are in that category, who think that maybe it will improve their career without knowing exactly how,” he says. “So it is the promise of something better – and just simply, it is a good risk management strategy … a good Plan B.” But the CFA isn’t a cakewalk, Degraaf cautions. “The exams are so difficult – they are on par with any actuarial or accounting exam,” he says. “The program essentially teaches people to become very effect problem solvers and analysts.”
Asset classes Equity investments Fixed income Derivatives Alternative investments
How things have changed Twenty years ago, the majority of candidates were portfolio managers or equity analysts, says Degraaf. “Nowadays, you have CFOs coming to take it, and engineers and the like,” he says. “The typical CFA candidate is different from
Portfolio management and wealth planning
option,’” he says. “Now it is well-known, it is popular, and people understand that it is a tough designation.” Currently only 100,000 people have the CFA designation worldwide, Degraaf estimates, and around 250,000 people take the exam each year.
“It is the promise of something better – and just simply, it is a good risk management strategy … a good Plan B” Darren Degraaf, Sauder School of Business, UBC a couple decades ago.” Years ago, when Degraaf was giving a presentation at a university, he had to explain to students what a CFA was and why it was important for their future success. “Now if you go to a Ryerson or a York University and you ask them, they would say, ‘Yes, I know what a CFA is. I will be taking that when I graduate from the finance
What it takes “I find the CAs and the engineers tend to do quite well, to be honest,” Degraaf says. “Students who have recently graduated from a BComm or a BBA program, they tend to do quite well, because the Level One exam is like a capstone course for students.” Those who are looking to the designation as a Plan B are the ones who really need to
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FEATURES
EDUCATION THE CFA PROGRAM PROCESS Education Advisory Committee
GLOBAL PRACTICE ANALYSIS
CANDIDATE BODY OF KNOWLEDGE
CURRICULUM
follow the 300-hour rule, he says. “All students who are looking to move to Level Two and Level Three need to have that minimum 300 hours,” Degraaf says. “Those who don’t have the background coming into it, they need to have that not only the 300 hours for the Level One, but more.”
Where is the designation headed? Although he doesn’t have access to a crystal ball to predict the future shape of the CFA designation, Degraaf does see a trend of new materials being introduced at Level Three, eventually filtering their way down to Levels Two and One. “A good example right now is risk management,” he says. “It makes up 3% to 5% of Level Three, but it is an area that will expand. You just have to look at the headlines surrounding HSBC, who just had their hands caught in the cookie jar, and you know they aren’t the only ones.” Degraaf is referring to the recent successful criminal prosecutions in the UK of scores of people who have money in HSBC’s private banking arm in Switzerland. “The others are compliance, money laundering, internal control, risk management, fraud,” he says. “What the CFA could be doing is evolving specializations to ‘CFA. riskmanagement’ or ‘CFA.compliance’ with CFA being the main dish. But that isn’t the CFA policy – which is why the CAIA has the
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Council of Examiners
CFA Institute and member volunteers
CFA Institute, member volunteers and consultants
Board of Governors
EXAMINATIONS
GRADING
STANDARDSETTING
MINIMUM PASSING SCORE
space to grow.” However, the question of ethics is one that is near and dear to Degraaf ’s heart. “There are some big pension funds out there that have made it clear that they are going to divest from oil and gas over three to five years,” he says. “These are some of the trends that we are seeing in corporate governance. And real estate is another big one – look what happened to our friends south of the border in the real estate market in 2008.” What does leave Degraaf hopeful for the future is the attitude that millennials are bringing to the workplace. “I was speaking to one young man who was in venture capital and investment banking, but was now out of it. When I pressed him on why he left, he told me, ‘I was tired of making rich people richer.’”
A single designation Degraaf has seen a number of designations come and go, as well as a few competing designations that can be confusing for those looking to upgrade their skills. “You have the CAIA [Chartered Alternative Investment Analyst Association], you have SRM, you have PRM [Professional Risk Manager] – you have all these competing designations,” he says. “And others that have just come up and fallen apart, like LIFA.” A better route for the financial community
BODIES OF KNOWLEDGE CIPM body of knowledge
Candidate body of invesment knowledge
Private wealth management body of knowledge
Global body of investment knowledge
would be to follow what accountants have done, Degraaf suggests. “Look at Canada – in the case of accounting, they’ve gone to one designation,” he says. “Then you look at the CFA and this sea of confusion. There needs to be one designation.” A step in that direction is the move to Claritis. The Claritis Program offers anyone working in the financial services a clear understanding of the investment industry and their role and responsibilities within it. The program bridges current practice, investment theory, and ethical and professional standards to provide investment analysis and portfolio management skills.
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PEOPLE
ADVISOR PROFILE
Circle of life After being taken under the wing of a senior advisor almost 15 years ago, Nancy Nicol is now preparing to take the reins
THINGS HAVE come full circle for Nancy Nicol at Richardson GMP. She joined the company as an assistant to John Horwood on a temporary basis, covering for someone who was on maternity leave. Fourteen years later, after being mentored by Horwood, she has an assistant of her own. “I hope that I can really encourage her the way that I’ve been encouraged and motivated, and mentor her as well,” she says. Success to succession In the years since Nicol started at Richardson GMP, she’s found a lot of success. She’s part of Horwood’s succession plan and has already accumulated $130 million in AUM. “From zero to $130 million is phenomenal, and more than I ever would have hoped for,” Nicol says. “I feel really grateful that I’ve been given this opportunity, but I’ve worked really hard for it too. I’ve tried to take in every opportunity that was given to me.” Nicol didn’t come into the job expecting to one day take over for Horwood, but she quickly realized she had found the right fit. “I started working, and I fell in love with the business,” she says. “It was so much more than what I’d seen on TV at the time and what was going on in the news and business publications. I just fell in love with it and realized I’d found my dream job, and I hoped and prayed I could stay.” There’s no question about that now – Horwood recently turned 65, and his succession plan has gathered speed, giving Nicol more responsibility.
“Over the last couple of years or so I started sitting in on more of the face-to-face client meetings,” she says. “John deferred clients’ questions to me – whether it be by email or phone – so I was the one taking care of any of their issues or requests, and now they call me and I meet with them.” Having already worked closely with their clients, Nicol found it a fairly easy transition. “I know our clients very well,” she says. “They know me. They trust me. They know that I had started to become the go-to person. Clients recognized I was knowledgeable and could help them. As part of John’s succession, it’s only natural that I continue to work with them as he starts to slow down.” Unsurprisingly, Nicol’s strategies mirror a lot of what Horwood taught her. She places great emphasis on getting to know not only her clients, but also their families. It’s allowed her to create trusting relationships and come up with personalized solutions. “Every strategy that we imple ment is personalized to their needs and to them achieving their goals and objectives,” Nicol says. “I’m also in touch with their tax accountants and lawyers to make sure that what we’re doing is right for them in the big picture.”
“I just fell in love with it and realized I’d found my dream job, and I hoped and prayed I could stay”
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Ongoing education To bolster her credentials, Nicol has been taking courses and acquiring designations throughout her career. A few years ago, she completed the Wealth Management Essentials course and is currently working toward her life insurance license. Her ultimate goal is to become a portfolio manager.
NANCY NICOL’S CAREER TIMELINE
February 2001 Completed Canadian Securities Course and CPH
July 2001 Hired as an assistant on the Horwood Team to cover a maternity leave
November 2003 Transitioned with the Horwood Team to Richardson Partners Financial and helped to open the Toronto branch; was promoted to senior associate
December 2012 Became an associate investment advisor and began having more and more contact with clients, becoming the first point of contact. To bolster her skills, completed the Wealth Management Essentials course
Early 2014 Became an investment advisor with the Horwood Team
April 2014 Began opening own client accounts and officially becoming the primary advisor for many of the Horwood Team clients
Fall 2015 Set to earn insurance license
“We really see that that’s the way clients are heading now,” she says. “They want a hands-off approach, and they don’t want to worry about the day-to-day. Not all clients – it’s not right for everyone – but we’re seeing a bit more of that now. I think it’s a broader thing in the industry.” Though she’s starting gain more responsibility with clients, she’s still able to rely on Horwood. It’s part of the mentorship process that she hopes to pass on to her own assistant. “He’s been someone that I’ve looked up to,” she says. “He’s been able to guide me in my career and give me encouragement, and it’s been invaluable. He’s the one who really helped me see that I could be an investment advisor – that I didn’t need to be in the background all the time, that I could come to the forefront and thrive.”
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FEATURES
ETF PORTFOLIO CONSTRUCTION
ETF PORTFOLIO CONSTRUCTION WORKSHOP Wealth Professional’s regular look at building a better ETF portfolio INVESTOR PROFILE
WELCOME TO Wealth Professional’s ETF portfolio construction workshop, a regular feature that taps the plans and thoughts of Canada’s biggest ETF providers and most successful advisors. This month’s feature combines the chartered financial planning experience of Karin Mizgala, CEO of Money Coaches Canada, a national network of advice-only professionals, with the insights of Brent Vandermeer, portfolio manager and executive director of the private client group
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at Vandermeer Wealth Management at HollisWealth. Mizgala brings to the workshop a real client case study: Gina Martin (not her real name), a communications manager for a Vancouverbased college who is 61, single, mortgage-free and plans to retire from her ‘day job’ in the next one to three years. Using Martin’s profile, Mizgala has provided the appropriate overall asset allocation based on her current goals and desires for the future. Vandermeer, meanwhile, provided the detailed
“Gina Martin” is a communications manager for a Vancouver-based college. She is 61, single, mortgagefree and plans to retire within three years. She is expecting an indexed defined benefit pension of $3,200 a month and has $260,000 in RRSPs. She has no TFSA savings, as any spare cash went toward her mortgage repayment or RRSPs. She also has a small RRSP homebuyers plan that will be paid out within the year. She will be entitled to maximum Canada Pension and Old Age Security. When Martin came to Karin Mizgala as a client, her investments were spread across five financial institutions; most were in mutual funds, but she was adamant about keeping some of her RRSP portfolio in GIC investments. Martin would like to retire as soon as possible to help her daughter open a chocolate shop in a small town outside Vancouver. She doesn’t expect to earn much money from this undertaking, so she knows that she has to make the most of the money she has. That said, she doesn’t want to leave her investment comfort zone and would prefer to adjust her spending in retirement rather than take on too much risk. Martin’s current asset mix is 20% cash, 20% fixed income and 60% equities. Although she rates her risk tolerance as medium-low, given that she has a pension and an understanding that she needs to take some risk to achieve her goals, she was comfortable with a 60% equity weighting.
PORTFOLIO BREAKDOWN
60%
equities
15% cash
25% fixed income
ETF recommendations to fill the equity and fixed-income sections of Martin’s portfolio.
EQUITIES 60%
CASH 15%
FIXED-INCOME 25%
Thematic (real assets – real estate, gold, commodities, etc.)
Canadian cash Pure cash for easy access and liquidity for short-term needs (a high-interest savings account – at 1.25% interest currently – would better suit the client)
7.5% iShares Canadian Short-Term Bond Index ETF (XSB) Short-duration (< 5 years) high-quality government bonds
2% Royal Canadian Mint Physical Gold Bullion ETF (MNT) A good diversifier and alternative asset class – low-cost access to real, physical gold stored at the Mint in an easily tradeable ETF structure 2.5% Purpose Diversified Real Asset ETF (PRA) Great access to real estate and commodities with a unique process to reallocate those showing strength
10% Vanguard Canadian Aggregate Bond Index ETF (VAB) Low-cost exposure to full basket of Canadian investment-grade bonds 7.5% Horizons Floating Rate Bond ETF (HFR) To protect bond valuations in a rising rate
Overall asset allocation Martin’s total investment assets are $260,000. Mizgala’s asset mix recommendation is 15% cash (it was not negotiable for Martin to hold this amount in cash-equivalent investments), 25% fixed income and 60% equities.
Portfolio construction Brent Vandermeer has more than 17 years of experience in the industry. He began as a value investor at heart before moving over to the mutual fund world, but he slowly became disenfranchised about costs and cost indexers, and drifted over to passive investing. Over his career, he’s tried to marry the two approaches, bringing his value-investing roots together with low-cost, passive approaches. For the most part, a lot of his portfolios (roughly 65% to 70%) are ETFs, but for this particular model, it’s all ETFs. He does use one or two actively managed funds because he doesn’t want to throw the baby out with the bathwater. Vandermeer’s strategy is to mimic an institutional approach. He has ranges for every position, and he says his job is to play with the dials because he thinks asset allocation work is really what drives returns over the long run.
Conclusion The balanced portfolio shown at right should give Martin the portfolio she needs to achieve her goals – both now and in the future.
US & International Equity
10.1% Purpose Tactical Hedged Equity ETF (PHE) Innovative downside protection via defined process to add hedging (short exposure to index) when it passes down through various moving averages 8.1% BMO Low Volatility US Equity Index ETF (ZLU) Exposure to low-volatility US companies to keep risk down and protect on downside 10.1% First Asset MSCI Europe Low Risk Weighted Index ETF (RWE) A great way to play Europe right now by holding companies with lower standard deviations 8.1% Vanguard FTSE Developed Asia Pacific Index ETF (VA) Low-cost exposure to all of Asia 4.1% Vanguard FTSE Emerging Markets Index ETF (VEE) Low-cost exposure to emerging markets and the growth stories therein
Canadian Equity
6% Purpose Core Dividend ETF (PDF) Really good ‘filter’ (factorbased) applied to Canadian equities 9% BMO Low Volatility Canadian Equity ETF (ZLB) Exposure to low-volatility Canadian companies to keep risk down and protect on downside
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Running of the bulls Despite fears of recession in Canada, Empire Life Investments’ Gaelen Morphet still sees many reasons to be optimistic about the market
AFTER RIDING the bull market for the last seven years, Canadian advisors might have to fight off a bear in the short term. “I’d say the bull market is long in the tooth for sure,” says Gaelen Morphet, senior vice president and chief investment officer at Empire Life Investments. “We’re going through a tough period right now, and whether this is the end or a short, small pullback, I don’t know. But definitely we’re closer to the end than we are the beginning, given the duration and valuation of the bull market. It is getting much more challenging to find inexpensive stocks, and that’s usually a sign that we’re going to see a re-evaluation.” Statistics Canada reported that real GDP fell 0.2% in May, signalling the fifth straight month it’s dropped, and many economists fear the country is already mired in recession. “If, in fact, we are in a recession, then there is cause for concern because I think, while we’ve seen the energy and materials sectors come off, we haven’t seen that happen across all sectors, but it more than likely will,” Morphet says. “It will be felt across the entire market if we are in an entrenched recession.” Many factors are contributing to the worrying state of the Canadian economy, including concerns that the increasingly big economic engine that could – China – now can’t.
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“Global growth will be threatened if China has a hard landing,” says Morphet, a 30-year industry veteran. “A hard landing is anything material below 7% GDP [growth], and it’s cause for concern for Canada, for Europe, for Japan and some of the emerging markets – and it’s being felt.” While global events are a big part of the equation, Canadian market events are
having a greater effect. Low interest rates are a thorn in financial equities’ side. The real estate market is also a concern. But the price of oil has been receiving the most flak. However, in an interview in early August, Morphet argued that could be misplaced. “Oil is certainly a component of the picture – and it’s a large one – but we have many other industries and sectors that make
CHINA’S IMPACT ON OIL Oil is a huge concern for Canadian markets, and the problem has been exacerbated by China. As the Asian superpower tries to transition from a manufacturing-based economy to a services-based economy, its demand for commodities will continue to wane. This has occurred as the US energy boom has changed the global supply picture for oil. “With Europe and the US just coming out of slower growth phases, the demand side of the equation is just not as strong, and there’s excess supply,” Morphet says. “This has all had an impact on Canada and the demand for our resources. And that’s being reflected in where our dollar hits.” A sustainable improvement in Europe and the US will somewhat offset the supply issue. “However, it will be materially felt if China’s growth continues to contract,” she adds.
WHO IS GAELEN MORPHET? A financial industry veteran with three decades of experience under her belt, Gaelen Morphet is Empire Life Investments’ senior vice president and chief investment officer. She joined Empire Life in November 2009 and leads the Empire Life Investments Team in providing investment management for segregated funds and mutual funds.
up the market that are doing well,” she says. “It’s not just about oil. There are a lot of other considerations when you forecast for the market in Canada.”
Canada, perhaps it’s no surprise Morphet is looking outside the country. “In my 30-year career, I’ve never been more exposed to non-domestic securities
“It’s not just about oil. There are a lot of other considerations when you forecast for the market in Canada” Gaelen Morphet, Empire Life Investments Six or seven years ago, when oil was around its peak at $150 a barrel, the energy sector made up more than 30% of the TSX. But it now only represents roughly 20% of the Canadian economy as other parts have appreciated, lessening the potential damage it can do. “The market has much less exposure to oil than there was in the global growth scenario,” Morphet says. “That’s one of the reasons why I say some of the pessimism has been discounted because, as a component of our market, the energy stocks, when you strip out the pipelines, have a much smaller impact.” With all the concern swirling around
than we have been in the last four years,” she says. Given the US dollar appreciation and the performance of the American market, this has been a pretty straightforward choice. However, US market valuation is not what it used to be, and the American stock market has had quite a move. “So it’s not quite as clear today,” Morphet says. “It’s not always just about the market; it’s about the stocks we own within the market. It’s a much tougher call today than it was four years ago. At this point in time, at the end of July, we still favour the risk return profile of the US market.”
While the market situation is uncertain at the moment, fears of a protracted recession seem to be overblown, given job growth and a stable employment rate, Morphet says. And while storm clouds are threatening now, the future isn’t all bleak. “The market is efficient,” she says. “That’s the wonderful thing about the market – it’s unpredictable, and it actually discounts further out, so there’s always an opportunity for things to improve. It’s not always obvious, but that’s why it’s important to be diversified and be invested and know where your risks are.” Regardless of market conditions, as a stock picker, Morphet tries to stand back and focus on high-quality stocks that will withstand fluctuations over the long term. One way she recommends keeping ahead of the variances in the market is through dollar cost averaging. “As things go up, we take money out and reinvest it in stocks that have limited downsides,” Morphet explains. “I think that’s a good practice at all times to employ.” After all, charting the course of the TSX or the Dow over 100 years points to an upward trajectory. “Short term, we go through volatility, but over the long term, the stock market has delivered a solid annualized return,” Morphet says. “So it’s hard to bet against that. There have been many significant things that have happened, and the markets have always recovered and gone higher.”
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LEADERSHIP
Why fearlessness often leads to failure In this extract from their book Selfish, Scared & Stupid, Dan Gregory and Kieran Flanagan reveal how being fearless – while idealized to a great extent – can lead to sloppy mistakes and poor decisions
to settle within a short drive from where we grew up. Also, we are mostly inclined to base our judgment on past experience instead of speculating with the new, however compelling. In truth, we love to look at the adventurous road, but mostly from the comfort of the safe path. But is that such a bad thing? Can fear be a factor in achievement? And is the favouring of heroism and persistence over contrary data and good judgment actually a formula for success or simply a way to have stories told about you in the past tense? As is the case with many such questions, it kind of depends.
Fear is one of the reasons we have survived THROUGHOUT HISTORY, the headlines and accolades have always belonged to the fearless. We celebrate the heroic souls who dismiss personal safety and stride forth into the fray against odds that seem insurmountable. St. George and the dragon, Jason and the Argonauts, Odd and the Frost Giants – almost every culture has its myths and legends lionizing bravery and self-sacrifice. So, what is it that we find so enticing about bravery and fearlessness when most of us, in reality, prefer lives of relative safety and comfort?
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Certainly, part of it has its origins in our evolutionary history: Adrenaline in correct doses is a highly addictive substance, hence our obsession with horror films and roller coasters. However, one of the more significant reasons the fearless are so admired is that they very much represent the outliers in the human experience. Few of us regularly seek out truly risky situations. For instance, most of us prefer job security to the unknown of the entrepreneurial lifestyle, and though many of us do travel, most of us prefer
Fear, it turns out, is actually quite a useful emotion when it is appropriately applied. An overly curious nature mixed with naivety and overconfidence can be a recipe for disaster. Sending a canary into a mine to test for the presence of gas, while cruel, is actually a pretty savvy thing to do. In this case, fear not only ensures the survival of many miners, it also increases the chances of eventual success while reducing costs – miners are rather more expensive than songbirds. What’s more, many of our latent fears – spiders, heights, water – are based on our survival; all have their origins in some pretty
rational concerns. Where fear can undermine leadership is when it becomes paralyzing, when judgment is replaced by constant evaluation and data-seeking. The truth is, in any decision we make, we never have the complete picture or enough information. This, it turns out, is why good judgment is so critical to good leadership.
order to generate the behavioural change we so desire? How can we generate an opposite fear, one that is linked to not changing? TEDx speaker Kelly McGonigal and other health psychologists assert that, contrary to popular belief, not all stress (which is essentially a fear of possible outcomes) is necessarily bad. They further state that stressful experiences can be used to promote adaptive responses, and that individuals can be
Rebalance the fear This is perhaps the most important point. We are not advocating that you ignore your fears or throw yourself at them as part of a midlife extreme-sport crisis, nor are we suggesting they are all irrational and imaginary. What we are suggesting is that they can be useful for driving change and shifting behaviour, and this relies on shifting the balance of the fear equation from one side to the other.
Fear can be an aid to judgment One of the things that particularly defines leadership is a willingness and ability to make decisions and back them up. What this really means is embracing ownership of the results. One of the burdens of leadership is that when you do achieve success, it’s your team who won, but should failure be the outcome, only you lost. This makes good judgment one of a leader’s key accountabilities, and fear must necessarily be a part of this equation. It has us identify and weigh risks, and consider more than just the possibility of success and account for it. One of the criticisms we often make of strategic business plans is that the margins allowed for error are so slim. In other words, success is only guaranteed if everything goes exactly according to plan. Of course, this is statistically unlikely, and a far better approach is to stack the odds of success in your favour by implementing systems and processes that allow for success, even on those days when not everything goes as it should. Failure is often cited as being critical to success. But this is far more than a twee catchphrase of the eternally optimistic; it is a recognition that failure, rather than being a result, is a constant feature of the results we produce daily, and should therefore be accounted for.
See fear as a lever for positive change If we accept that fear has a lot of downsides, how can we turn this around and use fear as an asset in achieving positive change, in
One of the burdens of leadership is that when you do achieve success, it’s your team who won, but should failure be the outcome, only you lost trained to think of stress arousal as a way of maximizing performance. The long and short of it is that reframing fear as an asset can not only remove impediments to performance, but can actually serve to heighten and lift it. Fear (and its close cousin, stress) is suffering from some bad PR and really needs some rebranding. We all need reminding that sometimes fear has been the good guy, and it has certainly been a considerable asset in the armoury of social change. Rory Sutherland, vice chairman of Ogilvy Group UK, famously tells the story of Atatürk, a military leader in the then Ottoman Empire and later the first president of Turkey, who, in an effort to stabilize the food supply, added an additional carbohydrate to the mix – in this case, potatoes – flipping the fear of eating potatoes into a fear of not eating them. In fact, by decreeing them a ‘royal’ vegetable that no commoner was to eat, he ensured that not only was the fear flipped, but a desire to eat them was achieved. Rather than seeing fear as one-sided, these examples show that, by seeking to defeat or decrease the fear that was limiting them, people found that a better, or more compelling, strategy was to increase the fear on the other side of the equation.
For instance, if you are afraid to go for a jog because you’re looking a little soft around the middle and are scared that people might laugh at ‘the fat guy in tight-fitting exercise gear,’ that’s one side of the fear ledger. But if a chainsaw-wielding madman were storming through your house, you would not only jog, but hurdle, parkour, long-jump and sprint, all while dialling for the emergency services. (And if anyone did choose to criticize you at this juncture, you would happily use them as an obstacle to slow down the chainsaw-wielding maniac.) Next time you’re quaking in your boots and wishing you had picked up that ‘clinical strength’ antiperspirant, stop to consider fear not as a barrier to success but possibly as one of the most overlooked and underutilized motivators we have for driving us to success. Then set about reframing your fear. The trick is to see fear – when appropriate – as a useful tool of leadership rather than as something to avoid. Kieran Flanagan and Dan Gregory are behavioural researchers and strategists. Flanagan is chief creative officer at The Impossible Institute, while Gregory is president and CEO of The Impossible Institute.
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VOLUNTEERING
Does corporate volunteering really work? Does letting staff go out and volunteer one day a year really create value for the charity? Peter Baines outlines a different approach to corporate volunteering – one that all parties can truly benefit from
I OFTEN get asked the question: Does corporate volunteering really work? To put it simply, it can, but it often doesn’t – and even if it is working, it’s very unlikely to be reaching its full potential. As a senior executive, partner or director of a business, setting the strategy for the organization is part of your duty. Maximizing returns for the partners or shareholders is also part of your fiduciary responsibility. Getting your corporate social responsibility strategy right can and should be a profit centre back to your company, and how you deploy your resources in this area is very much part of that strategy. Corporate volunteering, in the traditional sense, is when businesses give their staff one work day to volunteer with their charity of choice – a tactic that is probably wasting both the company’s time and that of the charity partner. You may ask, “How can this be a waste of time for the charity? We are skilled professionals working for free to make a difference.” Put yourself in the charity’s shoes, and consider that you have a well-meaning, highly qualified individual turn up for the day to help. Just for one day. Once a year. After you get the introductions out of the way, have shared a coffee and arranged a
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security pass, the charity has approximately six hours worth of productive time left before you leave their office and return again, perhaps, in a year’s time. No one stands to get much value out of this type of relationship because, really, how can they? One of two things is likely to happen when staff members participate in corporate volun teering. Those who take the day off and work productively with a charity have most likely been doing some sort of volunteering for
several years, and it is already part of their life. The business giving them the day off just allows them to go on company time. The other likely scenario is that the employee’s volunteering day is spent at the beach, where they’ll be working hard on catching waves or getting a tan.
So, can it work? The answer is yes, it can work. Just like any other initiative the company takes, if there
is a considered strategy behind the program, there is a greater chance of success and a meaningful value exchange between both parties. In Doing Good by Doing Good, I share a number of examples as to how corporate volunteering can work, from large firms down to small businesses and even sole practitioners. Often the most effective resource you can offer a charity or nonprofit is those skills you use on a daily basis and get financially rewarded for. If you are an accountant, lawyer
volunteering really for?” If the honest answer is the charity partner, then the provision of professional services they are in need of will achieve that outcome. If it is more akin to a team-building exercise, and the charity is the vehicle for that program, then the direction of the program is different. The latter is not wrong, just a different approach with a different outcome. It’s about getting the strategy right, and this is where the opportunity to create a meaningful experience really exists.
Often the most effective resource you can offer a charity or nonprofit is those skills that you utilize on a daily basis and get financially rewarded for or provider of professional services, there is a strong chance that you are better at providing those services than you are at building houses or mending leaking roofs. Sashi Veale of Sashi Veale and Associates is an accountant who, for years, has been supporting charity by preparing the financial accounts for a select number of charities on a voluntary basis. She does this above and beyond her commercial work, and, although I haven’t seen Sashi on the end of a hammer, I have a strong suspicion that the value she brings to the charities she supports is far greater through her provision of ‘voluntary’ professional services. After all, this is what the charities she supports need. Part of the argument around corporate volunteering is, if the firm that I’m a partner of only offers our professional services on a pro bono basis, do we miss out on the engagement and the shared experience of actually ‘getting our hands dirty?’ After all, isn’t part of a good corporate social responsibility program the shared experience that leads to higher levels of staff engagement, improved morale and increased staff retention, and if so, how is doing more of what they do, but for no fee, achieving that outcome? This is where a strategic approach is required. Ask those internally who are par ticipating in the program: “Who is this
Is one day per year helpful? Let’s return to the concept of volunteering one day per year. You might be the senior executive or director of an organization with 400 people. You offer each of them one day off a year to volunteer with their charity of choice, or perhaps with the charity your business supports. The first question to ask is how many of those 400 staff actually avail them selves of the day and use it for the intended purpose? Of those, how many are providing meaningful assistance to the charity they are working with? And finally, how many of those who don’t take it would be happy to see it used by someone who was interested and did have the relationship? This is where we can leverage some real value. If two-thirds of the staff donated their day back to the organization, and those days were taken consecutively by one person to work at one organization, this would give the charity a dedicated full-time worker for the entire year. Now we start to see real value to the charity. What flows back to your business? A story of meaningful change – one person working full-time leading a project within a charity can bring about real change. So, does this mean there is no place for the group volunteering days when we all put
on overalls and insert a paint brush into our right hand? No, it does not. One of the most memorable days I have had working with a corporate team was when I led 103 members of AIA Insurance into the Khlong Toei slums of Bangkok in Thailand. For close to eight hours, they toiled away in a place they had never been and were unlikely to ever return, for people they had never met nor were likely to meet again, but they had one of the richest shared experiences you can imagine.
KEY QUESTIONS If you have volunteering as part of your CSR platform or you are looking to introduce it, ask yourself a number of questions: Is there a strategy behind our corporate volunteering? Is it aligned to our values? Who is it really designed to benefit, and are those who are meant to benefit from the program in fact doing so? Can we re-engineer our volunteering to create a multiplier effect or shared experience? What is the return to our business, and how are we measuring it? If you can answer the last of the questions above in the affirmative and clearly articulate the program’s positive return to your business, then you are well ahead of 90% of organizations who are engaged in corporate volunteering. If your answer to the final question is in the negative, then you are missing opportunities and are failing to capitalize on the returns you could be bringing in. It’s not only in the communities’ interests for you to get this right – it is in your interests as well. Peter Baines, OAM, became passionate about sustainable leadership after he was part of the natural disaster response team for the 2004 Boxing Day Tsunami. Today, he helps businesses build effective sustainable leadership. He is the author of Doing Good by Doing Good. Find out more at www.peterbaines.com.au.
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CAREER PATH
COVERING EVERY CORNER From trusts to funds to ETFs, Alain Desbiens has been involved in every sector of the financial industry – and this is just the beginning 2015 EARNS THE WP BDM/WHOLESALER OF THE YEAR AWARD Earlier this year, Desbiens was pleasantly surprised to learn he had won the Wealth Professional Award for BDM/Wholesaler of the Year “It’s really great to be working with an outstanding team and to be a winner in the field. The WP award, for me, was a big thing. It’s rare to receive that acknowledgement in your career, so it’s been a great year, but I really believe it’s just the beginning!”
2010 ENTERS THE ETF MARKET AT BMO GLOBAL ASSET MANAGEMENT Soon enough, a rare opportunity found its way to Desbiens – he was offered the chance to specialize in ETFs at BMO Global Asset Management “This was totally different, but I really believed that segment of the industry would have a big lift on the Canadian marketplace, and I was really excited about working with the people who basically invented the market in Canada. For me, it’s always working with highly knowledgeable people”
1999 JOINS CIBC FINANCIAL PLANNING AS AN ADVISOR Within a few years, Desbiens moved to the frontlines, applying everything he’d learned to his new role as advisor. Later, when the company became a brokerage, Desbiens was promoted to branch manager, and ultimately assumed responsibility for the entire Quebec region “That was different because … now you have to manage your colleagues, which was a first for me. That was really interesting” Desbiens studied labour relations at Université Laval in Quebec, a program he says helped him see the financial industry from a broader perspective “It allowed me to look at a situation from multiple angles, and the financial sector is exactly that. When I give advice, when I speak about products or solutions, or at a seminar, I bring with me that different set of views because of what I studied in, but also because of my diversity of experience”
2010 HELPS BMO CROSS INTO $1 BILLION AUM Just a few short months after joining BMO, Desbiens helped the company achieve a key milestone: its first billion in assets under management. But it hasn’t stopped there. The company is now at $22.5 billion under management, enjoys 26% market share, and has been number one in net sales for the last four years “I still remember vividly [crossing the $1 billion threshold] – it was something that was big for us. For a firm that didn’t exist five years ago, this was a big accomplishment”
2008 BEGINS SELLING FUNDS AT FIERA CAPITAL After many years of advising at different firms, Desbiens embarked on a new journey “I was distributing mutual funds and segregated funds, but I wanted to do something different. I wanted to distribute structured products that were different to the Canadian marketplace. The team went to Fiera Capital, and I had a lot of fun there, beginning to distribute hedge funds on the retail side”
1985
GRADUATES FROM UNIVERSITÉ LAVAL
1992 STARTS AT ROYAL TRUST Desbiens got his start in the trust sector of the financial industry, working as a specialist at Royal Trust
“That was a great school. I think what I learned there will follow me all my life” www.wealthprofessional.ca
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BUZZ WORTHY
Financial advising isn’t the only thing that keeps Lyle Konner busy as a bee FOR LYLE KONNER, the owner of Konner & Associates Financial Services, beekeeping is a fascinating and relaxing hobby – if you don’t mind the odd sting, of course. Konner fell into beekeeping four years ago, following the lead of a South African friend who missed the hobby he left behind when he emigrated. Together they founded two hives and have since grown their colony to 30 hives, each of which can house between 50,000 and 60,000 bees at maturity. “They’re fascinating to watch,” says Konner, who is a member of the BC Honey Producers Association, and the Langley and Richmond beekeeping clubs. “[The hive] is like a mini airport – they’re coming and going, and some are so laden with pollen that they can’t even make it to the entrance.” Those bees are also incredibly productive. Konner estimates they’ll produce some 2,000 pounds of honey this year alone. That’s a lot – but Konner faces no shortage of demand for his homemade goods. “Any client interview we have, they walk away with a jar of honey,” he says. “It’s a little different, a little novelty.”
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Number of hives Konner currently keeps
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2,000
Amount of honey, in pounds, Konner expects to bottle this year
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Life expectancy, in weeks, of the average bee during the summer
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* Smart beta exchange-traded funds (ETFs) may underperform cap-weighted benchmarks and/or increase the portfolio risk. † PowerShares Canada has partnered with Invesco PowerShares Capital Management LLC to offer a diverse lineup of smart beta strategies in Canada through ETFs listed and traded on TSX or through mutual funds. Commissions, management fees and expenses may all be associated with investments in mutual funds and ETFs. Trailing commissions may be associated with investments in mutual funds. Mutual funds and ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks. Copies are available from Invesco Canada Ltd. at www.powershares.ca. Ordinary brokerage commissions apply to purchases and sales of ETF units. PowerShares Canada is a registered business name of Invesco Canada Ltd. This piece was produced by Invesco Canada Ltd. Invesco® and all associated trademarks are trademarks of Invesco Holding Company Limited, used under licence. PowerShares®, Leading the Intelligent ETF Revolution® and all associated trademarks are trademarks of Invesco PowerShares Capital Management LLC (Invesco PowerShares), used under licence. © Invesco Canada Ltd., 2015