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UPFRONT
EDITORIAL
The outlook at home and abroad
G
lobalization. It’s undeniably a fact of life – or, as former UN Secretary General Kofi Annan famously put it: “Arguing against globalization is like arguing against the laws of gravity.” The fact that the world’s nations are now interconnected in so many ways, particularly financially, means there are many opportunities out there for investors willing to look outside their own borders. This month, we analyze some of those opportunities provided by emerging markets, looking specifically at the giants of India and China. Canada continues to be a troubled landscape: An increase in exports and consumer spending in the first quarter of 2016 wasn’t enough to offset the oil shock that has devastated the West. The price of crude has edged back toward sustainable levels for Canada’s producers, but before anyone could get too cheery about that, the fire in Fort McMurray struck. The resulting loss of
The fact that the world’s nations are now interconnected in so many ways means there are many opportunities out there for investors willing to look outside their own borders production meant a further rise in price, which producers hope will hold whenever the big cleanup is completed and normalcy returns to the area. One of our experts in this issue’s emerging markets feature, Sergei Strigo of Amundi Asset Management, outlined his expectations for the oil & gas industry. “We expect the US to cut production in the second half of the year,” he says. “We think it’s feasible that oil prices will be around $50 by the end of the year. We think a collapse in price towards $20 or $10 a barrel is unlikely, considering the current environment.” Canada’s producers will no doubt be hoping for a level significantly higher than that, but $50 a barrel is a lot better than the $27 it plunged to in January. As John McCoach, president of the TSX Venture Exchange, concedes in this month’s News Analysis, energy’s overbearing influence on the wider economy won’t be changing anytime in the near future.
wealthprofessional.ca ISSUE 4.06 EDITORIAL
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ISSUE 4.06
CONTENTS UPFRONT
PEOPLE
INDUSTRY ICON
04 Editorial
Greystone’s Jeff Tiefenbach reveals the firm’s strategy for vetting emerging markets for investment
The prospects for returns, both near and far
06 Head to head
Experts weigh in on what’s next for the oil industry
08 Statistics
LEADING
PORTFOLIO
A closer look at Brazil’s fall from economic grace
10 News analysis
The comeback has begun for Canada’s stock exchanges
MANAGERS
20
12 Intelligence
This month’s big movers and shakers
14 ETF update
How the Bank of Japan is driving the ETF market
16 Alternative investment update Despite the headlines, one advisor is bullish on Brazil
23 Opinion
Why mentoring is the true test of success
PEOPLE 42 Advisor profile
Ronald Chui’s Calgary-based practice is still thriving, even in the midst of oil industry tumult
24 COVER STORY
LEADING PORTFOLIO MANAGERS
ALWAYS
The country’s 30 most esteemed portfolio managers offer their expert opinions on where investors should be putting their money in 2016
95 Career path
Darcy Hulston has gotten his industry education through the school of hard knocks
96 Other life
WE ARE
Facing the music with Zac Murphy
COMMEMORATIVE GUIDE 2016
48
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FEATURE
38 44
FEATURE
LANDS OF ACTIVELY OPPORTUNITY MANAGED Three global asset managers PORTFOLIOS discuss the potential for A look at how managed portfolios can offer a new level of diversification
outsize returns in China, India and other emerging markets PEOPLE
PORTFOLIO MANAGER
PASSIVE.
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Two managers of the AGF Elements portfolios outline the importance of collaboration in determining asset allocation
ACTIVE, At Dynamic Funds, we firmly believe that legitimately active asset management matters. We consider it to be the cornerstone of exceptional portfolio construction. Leave conventional thinking to the rest of the pack and see the difference true active management can make.
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UPFRONT
HEAD TO HEAD
Where do you think the oil industry is headed? Oil prices have gained ground recently, up from the sub-$30per-barrel levels of February. Where to now for black gold?
Tim Pickering
Martin King
Founder and CIO Auspice Capital Advisors
Vice president of institutional research FirstEnergy Capital Corp.
“Could oil keep going higher? Yes. Rig counts are down 80% since peaking in October 2014, and the supply/demand imbalance is only 1.5 to 2 million barrels per day. The right things are happening to support prices long-term. Could it go lower? Yes. As oil rallied significantly this spring, we have witnessed producers hedging, which has a capping effect on oil. Moreover, those same rig counts that are down in North America show increased activity in the Middle East – and Saudi Arabia has declared they do not intend to slow down production. There is still lots of oil in storage in the US and Canada. The reality is that the best cure for low oil prices is low prices.”
“We expect the Canadian E&P industry will treat the recent uptick in crude oil prices as a transitory event and wait to see if the price improvement is lasting before increasing spending and activity. Any increase in earnings and cash flow resulting from the current price recovery will be used to further finance existing operations, reduce debt or keep cash on the books as dividends or for potential acquisitions. If the price increase is lasting, we expect the industry to begin a very careful period of assessing capital project spending in 2017. Lowest-cost and -risk projects would be selected first.”
Anthony Petrucci Director, oil & gas analyst Canaccord Genuity
“The price of oil is in the midst of a recovery, one we expect to continue through 2016 and beyond, given the clear and consistent drop in US shale production, the rise of which was the culprit of the glut in oil supply. The increase in price should bring together bid/ask spreads, as lower levels hampered bid prices. The protracted downturn will see management teams in Canada err on the side of caution, using excess funds to strengthen the balance sheet ahead of expanding capex programs or increasing dividend levels. The extreme reduction in capital investment in oil production worldwide is likely to lead to a continued rise in oil prices over the near and medium term.”
OIL UPSWING ON BACK OF DIMINISHED PRODUCTION Oil prices, steadily making their way up from decade-low doldrums earlier in the year, broke $50 per barrel in late May – for the first time since November – on the back of sinking North American inventories. The uptick came on the heels of the release of US Department of Energy inventory data that revealed a decrease in oil stocks to the tune of 4.2 million barrels, thanks to disrupted production. Much of the slump in production, however, is owed to temporary causes (including the recent wildfire in Fort McMurray), and analysts fear a reinvigorated market could unlock further supply.
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* Corporate class versions of these funds are also available. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Dynamic Funds® is a registered trademark of its owner, used under license, and a division of 1832 Asset Management L.P.
UPFRONT
STATISTICS
Brazil takes a dive
TROUBLE ACROSS THE BOARD
Dropping commodity prices and an unprecedented corruption scandal have plunged the South American nation deep into recession MAY BROUGHT watchers of this once-hot emerging market the news that President Dilma Rousseff would face trial later this summer. It’s the latest instalment in the gripping political soap opera that has held the nation spellbound for months, and another step closer to a formal impeachment of the beleaguered president. The unpopular Rousseff, widely blamed for
3
Number of agencies that have recently downgraded Brazil’s credit rating to junk
3.7%
Estimated contraction in the country’s economy during 2016
Brazil’s biggest recession in recent history has taken its toll on almost every key economic indicator – nose-diving prices for the South American nation’s crucial export commodities, subsequent plummeting production and rocketing inflation are high among the nation’s list of woes.
the deep recession besetting the country, saw her presidential powers and duties suspended, and it now falls to interim president Michel Temer and his newly appointed cabinet to try to set Brazil’s troubled economy on the right course. The political ructions have been a key driver of the longest recession the country has seen in living memory, shaking confidence in both government and business.
8.5%
13.3%
Overall drop of Brazil’s stock market between 2014 and 2015
Unemployment rate in 2015, up from 6.8% the previous year
Sources: The Guardian, Bank of America, Focus Economics
LOVE LOST
POLITICAL TURMOIL DRIVES DOWN GDP
According to Bank of America’s ‘risk-love sentiment’ barometer, Brazil has fallen far from its 2011 peak at 1.5 on the ‘euphoria’ end of the scale to -2.5 on the ‘panic’ end of the scale, only to rebound more recently.
Between 2014 and 2015, Brazil’s GDP fell by 3.8%, and experts believe that the ongoing political chaos is setting the country up for additional deep economic contraction.
1.5
0.0 -0.5
-2.5
-1.5 -2.0 -2.5 January 2011
September 2015
January 2016
Source: Bank of America Merrill Lynch Global Research, Factset
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2.459
2013
2.461 2.416
2014
PANIC
-1.5
-1.0
2012
$ TRILLION
0.5
EUPHORIA
1.5 1.0
2.613
2011
1.769
2015
0.5
1.0
1.5
2.0
2.5
3.0 Source: Focus Economics
$ BILLION 300
% ANNUAL VARIATION IN INDUSTRIAL PRODUCTION
4
ANNUAL EXPORTS
% 12
2 250
ANNUAL VARIATION IN INFLATION
10
0 8 -2 -4
200
6
-6 4
-8 150 2011
2012
2013
2014
2011
2015
2012
2013
2014
2015
2011
2012
2013
2014
2015 Source: Focus Economics
INFLATION STARTING TO EASE In a bit of a silver lining, the measures taken by Brazil’s central bank to ease inflation appear to be working – as of March, inflation is down to 9.3% from a peak of more than 10% in mid-2015. The LatinFocus Consensus Forecast panel expects it to fall even further during the waning months of 2016. 12%
10.7%
10%
As a member of the vaunted BRIC countries, Brazil has seen increased interest from foreign investors in recent years – but that appears to be tapering off in light of the country’s recent woes. 120 100
6.5%
5.8%
$ BILLION
8%
FOREIGN INVESTMENT RETREATS
5.9%
6%
7.1%
6.4% 2011
2012
2013
2014
2015
60 40
5.5%
4%
80
2016
2017 projected Source: Focus Economics
101
97
87 69
75 55
20 0 2011 2012 2013 2014 2015 2016* *projected Source: Deloitte
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UPFRONT
NEWS ANALYSIS
Coming out of the abyss After a nightmare few years, Canadian securities had a solid start to 2016, but is the recovery part of a longer-term trend?
“THE MARKETS can make you feel like a genius; then when they turn, they can make you very humble.” John McCoach, president of the TSX Venture Exchange, realizes that sentiment better than most. The index has had a rough time of it in recent years; in fact, as of the beginning of 2016, it had lost more than 70% of its value over the preceding five years. Last year was particularly gruesome for the resource-heavy index as oil took its big plunge, but this year has proven much healthier for the TSXV, and indeed the TMX Group as a whole. After reaching a nadir in January, when trading across all the TMX indices slumped
this year, the reversal is a sign that Canada’s main exchanges are headed in the right direction going forward. “My crystal ball isn’t any better than anyone else’s, but I am confident that our market has turned,” he says. “I’m looking forward to continued growth in the Venture market in 2016. That’s why I feel very comfortable stepping back at this time. I didn’t want to leave here without knowing I had done everything I could to help the market.” For Paul Green, portfolio manager with Holliswealth’s Green Private Wealth Counsel, a more Canada-centric investment strategy
“My crystal ball isn’t any better than anyone else’s but I am confident that our market has turned” John McCoach, TSX Venture Exchange by 20% year-over-year, both the TSXV and its senior partner, the S&P/TSX, have rebounded strongly, matching the upswing of both oil and the loonie. For McCoach, who announced in April his intention to step down from his position later
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has definitely emerged over the spring. “Canadian equities are definitely more attractive than at the start of the year,” he says. “We were completely out of the market until the end of March, but since then we have gone for Canadian stocks coupled with
a diversified basket of US ETFs and some Canadian ETFs.” That’s not to say he advises jumping headfirst into Canadian securities. Given the volatility of both the S&P/TSX and the TSXV over the past year and a half, some caution is still advised. “We still like US equities more than Canadian, but only slightly,” Green says. “Canadian equities should do better than bonds and cash over the next six to 18 months.” The inclination among the investment community toward the US has been a constant over the past five years, but signs point to a changing tide. In May, RBC’s head of Canadian equity strategy, Matthew Barasch, stated that inferior Canadian equity returns had likely come to an end, predicting that the S&P/TSX would likely outperform the S&P 500 and
TSX VENTURE FAST FACTS
2001
Year the Canadian Venture Exchange was bought by TMX and adopted its current name
88%
Increase in TSXV trading volume year-todate at the end of April
25%
Increase in the S&P/ TSX Venture Composite Index in 2016, as of May 10
20
Number of new listings on the TSXV in the first three months of the year other global equity benchmarks until 2017. The precipitous decline in commodity prices, which began in mid-2014 when the price of crude fell to 13-year lows, meant the Canadian exchanges realized they needed
The timing was no coincidence – new competitors in the form of Aequitas Innovations’ Neo Exchange and Nasdaq’s acquisition of Chi-X Canada meant the status quo was prime for a shakeup.
“We were completely out of the market until the end of March, but since then we have gone for Canadian stocks” Paul Green, Green Private Wealth Counsel to adapt or die. The TMX duly kickstarted a program late last year called ‘Revitalizing the TSX Venture.’ In achieving that goal, it hoped to reduce costs, expand its investor base and increase liquidity, while also diversifying listings and limiting its overexposure to energy.
The results have been impressive: From January 20 through May 10, the S&P/TSX Venture Composite Index is up 39.6%; from the end of January to the end of April, volume traded on the TSXV is up 130%, while value traded is up 170% and the number of trans-
actions is up 132%. Obviously, this didn’t go unnoticed by TSXV’s outgoing president. “I feel what we have done to revitalize the Venture exchange has made a big difference, McCoach says. “Of course, the firming up of metal prices and the stabilization in the price of oil have done more than I could ever possibly do, but I do feel there is more hope in the market, and this turn is part of a longer trend.” While it’s obvious that the fortunes of the Canadian exchanges are solidly tied to that of oil, moves are being made to lessen that dependence. “There is a lot of innovation in Canada,” McCoach says. “It is a leader in many sectors. Of course, natural resources, particularly oil, attract a lot of headlines. Right now we are about 70% natural resources, but we would like to see that be about 50%.”
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UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
Echelon Wealth Partners
Dundee Securities
The Toronto-based firm has completed its deal to acquire certain assets of the Dundee Goodman Private Wealth division
Foresters
Aegon Capital Management and Aegon Fund Management
Toronto-based life insurer solidifies its expansion into asset management with 100% acquisitions
National Bank
ABA Bank
The Montreal-based bank has increased its ownership of the Cambodian bank from 42% to 90%
PARTNER ONE
PARTNER TWO
COMMENTS
Integris Credit Union
Qtrade Financial Group
Integris has chosen Vancouver-based Qtrade to provide its members with wealth management services via its platforms
WealthBar Financial Services
Nicola Wealth Management
Nicola Wealth Management led a round of funding into the Vancouver-based robo-advisor, which has raised $5.5 million
Seg funds enter Industrial Alliance lineup
Industrial Alliance Insurance and Financial Services [IA] has announced the introduction of three new segregated funds. The Quebec City-based firm will add the Global Diversified Fund, the US Equity Currency Neutral Fund and the Canadian Corporate Bond Fund to its IAG Savings and Retirement Plan fund lineup. In a statement, Manon Gauthier, IA’s vice president of individual savings and retirement, expressed his satisfaction with the introduction of the new funds, commenting that “[they will] enable us to better meet the specific needs of our wide client base.”
Foresters seals Aegon acquisition
Toronto-based life insurance firm Foresters has finalized its acquisition of Aegon Capital Management and Aegon Fund Management. The deal includes the acquisition of ACM’s Imaxx mutual funds; Foresters will also manage the investments backing the segregated products, general account and assets of Ivari. “This is an exciting time for Foresters Financial and an important move to strengthen not only our Canadian product offerings but also the overall growth of our investment business,” Bill Lipkus, president and CEO of Foresters Financial Holdings Co., said in a statement. “This acquisition strengthens our market position in Canada, providing immediate access to a comprehensive retail distribution network and the ability to significantly expand the financial solutions and products we offer in Canada.”
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RBC introduces currencyneutral funds
RBC Global Asset Management has introduced three new currency-neutral mutual funds designed specifically for investors who want to shield their investments from volatility. The lineup includes the RBC QUBE Low Volatility US Equity Currency Neutral Fund, the RBC US Dividend Currency Neutral Fund and the RBC Global Dividend Growth Currency Neutral Fund. RBC hopes the new funds will provide long-term capital growth without the usual exposure that comes with the typical fluctuations of the Canadian dollar.
PEOPLE Invesco PTFs available on trading platform
Invesco’s new platform-traded funds have now been made available for trading via the Aequitas PTF Connect platform. The idea behind the new trading platform is that it will allow dealers to settle and trade mutual funds, including ETFs. “We celebrate another important milestone in our efforts to meet the needs of Canada’s capital markets,” said Karl Ottywill, COO at Aequitas Technology Services, in a company statement. “PTFs are a real game-changer for the Canadian mutual fund industry, providing an agile solution to adapt to industry trends.”
Manulife updates seg fund series
Manulife Financial Corporation has launched the Manulife Ideal Signature Select lineup of segregated funds, replacing the Standard Life Ideal Segregated Funds Signature 2.0 product. The new product will maintain a guaranteed income payout throughout the client’s retirement years and will add three different levels of protection. Bernard Letendre, president of Manulife Investments, said that the firm has been speaking with distribution partners and advisors over the last year, and “the numberone request was to keep key features of the former Standard Life product.”
Dynamic looks to terminate fund
Dynamic Funds is seeking unitholder approval to terminate its Dynamic Protected Dividend Value Fund. The company announced that it will send a management information circular about the proposed termination. There will then be a special meeting for unitholders in August; if approval is given, the fund will be officially terminated on September 9. As part of the termination, unitholders will have the right to redeem securities up to the effective date of the termination, and will not be subject to any redemption fees or sales charges.
NAME
LEAVING
JOINING
NEW POSITION
Ashley Alder
N/A
International Organization of Securities Commissions
Chairman
Paul Bourque
BC Securities Commission
Investment Funds Institute of Canada
President and CEO
Bobby Eng
First Trust Portfolios Canada
State Street Global Advisors
Head of SPDR ETF business development
Luc Fortin
HSBC Bank Canada
Montreal Exchange
Managing director, derivatives trading
Stefan Kristjanson
N/A
Great-West Lifeco
President and COO
Peter Lee
N/A
CIBC
Head of private wealth management and brokerage
Carolyn Rogers
Financial Institutions Commission
Office of the Superintendent of Financial Institutions
Assistant superintendent, regulation sector
IFIC names new president As outgoing president Joanne De Laurentiis nears her retirement date, the Investment Funds Institute of Canada [IFIC] has announced that Paul C. Bourque will take over her responsibilities. He will join the institute on June 27 before officially becoming president on July 18. Most recently, Bourque held the position of executive director at the British Columbia Securities Commission; he’s also held jobs as a provincial deputy minister and in the private sector with Deloitte. In his new role, Bourque will be responsible for leading the organization and giving a voice to the retail investment funds industry.
Alder takes chairman role At its annual conference in Lima, the International Organization of Securities Commissions [IOSCO] announced that Ashley Alder had been selected as the organization’s chairman. Alder previously served as vice chairman of the board, as well as CEO of Hong Kong’s Securities and Futures Commission. A company announcement highlighted Alder’s successes to date: “Mr. Alder has long been active in IOSCO’s policy and other committee work. He was instrumental in ensuring APRC’s voice was heard outside Asia, particularly regarding the impact of post-crisis regulation on Asia Pacific markets.”
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13
UPFRONT
ETF UPDATE NEWS BRIEFS State Street names new leaders One of the giants of the asset management sector is looking to gain ground on the likes of BlackRock and Vanguard with two key appointments. State Street Corp. has announced the arrival of Nick Good and Rory Tobin as the new leaders of its ETF business. According to a Bloomberg report, Good, who is chief operating officer of the North American Intermediary Business Group, and Tobin, head of European distribution, will become co-heads of the business. They will take over from Jim Ross, who will become chairman.
New ETF designed to target millennials What are millennial investors looking for? Dangle the carrot of huge modern names like Facebook and Amazon in front of them, and you might just get them interested – and now it can be done via one ETF. According to a CNN Money report, the Global X Millennials Thematic ETF has been designed specifically to appeal to this younger group of investors. Its holdings are based on an index that is periodically updated; it includes two real estatefocused firms that are responsible for investment trusts, as well as companies such as PayPal, LinkedIn and Expedia.
WisdomTree branches out with corporate bond ETFs
WisdomTree has launched four corporate bond ETFs as it looks to give investors the chance to capitalize on the performance of selected issuers in the US corporate bond market. The four ETFs in question are the WisdomTree Fundamental US Corporate Bond Fund, the WisdomTree
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Fundamental US Short-Term Corpo rate Bond Fund, the WisdomTree Fundamental US High Yield Corporate Bond Fund and the WisdomTree Fundamental US Short-Term High Yield Corporate Bond Fund. The suite will use fundamental indicators to isolate and remove weaker and potentially troubled creditors, followed by a liquidity screen and risk-adjusted income score to tilt market value.
TSX hits a milestone for number of ETFs The Toronto Stock Exchange has passed another milestone for the number of ETFs listed on the exchange, now boasting more than 400. Since the beginning of 2011, the number of ETFs listed on the TSX has more than doubled, bringing total market capitalization to approximately $106 billion as of April 30. “The ETF segment continues to be a phenomenal growth story domestically, fuelled by Canadian ETF providers’ continuous innovation in product offerings,” said Nick Thadaney, president and CEO of global equity capital markets for TMX Group. “TMX remains committed to supporting its clients and the continuing evolution of the ETF.”
Apple takes a bite out of ETF assets There aren’t many companies that have an impact on ETF investors quite like Apple. At the end of April and into early May, the company wiped out in excess of $4 billion in ETF assets following a disappointing earnings report that led to a 16.3% decline. According to a Bloomberg report, the impact of the announcement saw the SPDR S&P 500 ETF Trust take a $1 billion hit in just a few days, while millions of dollars also disappeared from several other popular ETFs.
Keep an eye on Japan The Bank of Japan is in deep with ETFs, and its monetary policies could have a significant impact on the market this year Every month, investors and advisors alike keep an eager eye on interest rate announcements from the likes of the Bank of Canada and the US Federal Reserve. However, while the central banks in North America have offered nothing of great surprise in recent months, the Bank of Japan [BOJ] has had the markets flustered – primarily as it wades knee-deep into ETF investments. Back in April, the bulk of industry analysts expected the BOJ to add to its record stimulus. However, it chose instead to keep its existing monetary policy, notably maintaining its existing bond-buying and ETF purchases. The central bank actually introduced a negative rate of -0.1% on a portion of lenders’ reserves, despite outlining late last year that it would buy an additional ¥300 billion in ETFs in an effort to offset its plans to sell shares in financial institutions. Speaking to Bloomberg about the announcement, Nader Naeimi of AMP Capital Market Investors described the decision as a “total shock.” “From currencies to equities to everything – you can see the reaction in the markets,” he said. “I can’t believe this. It’s very disappointing.” Meanwhile, Andrew Clarke of Mirabaud Asia told the newswire that “investors are disappointed” and that many had been “wrong-footed” by the move. In May, the situation took another twist when former vice finance minister Tsutomu
Q&A
Okubo, a former derivatives trader and opposition lawmaker, said that the central bank needed to significantly lower its presence in the nation’s stock market if it wanted to retain the ability to eventually unravel its massive position.
“With any investment, you must always think about the exit – but there’s no exit when you own half the market” He posited that if the country wanted to avoid significant price distortions and keep liquidity under control, it needed to stop its ¥3.3 trillion annual ETF buying in order to eventually reduce its current level of fund ownership by 20% to 30%. In an interview with Bloomberg on May 12, Okubo said that “with any investment, you must always think about the exit – but there’s no exit when you own half the market.” Okubo doesn’t believe the BOJ should reduce its existing ETF ownership, but he does think the bank should stop buying, which will reduce its presence as the rest of the market expands. However, economists believe the BOJ is likely to increase ETF purchases by November of this year – possibly much sooner – now that BOJ Governor Haruhiko Kuroda is seemingly running out of options after receiving mixed results for his policy of negative interest rates and having made a wealth of bond purchases already. While the future is hazy, what’s clear is that, thanks to Japan, the coming weeks and months are likely to contain many twists and turns – and those policy announcements will be a little bit more interesting.
Warren Collier Managing director and head of iShares BLACKROCK CANADA
Career highlight “Having the opportunity to lead the iShares business in Canada. Along with many others, I invested a lot of time in the early days with the business, and to have the opportunity to come back and lead it has been incredible”
Stage set for dramatic growth What are your overall perceptions of the ETF market so far in 2016? The Canadian ETF industry has had tremendous momentum in 2016. Almost halfway through the year, we’re on track to cross $100 billion in AUM as an industry – that’s a notable milestone. We continue to see strong flows into fixed-income ETFs and smart-beta products as investors look to navigate challenging markets and look for yield. From an industry perspective, we welcomed a number of new entrants to the space this year. Investors continue to embrace ETFs as effective investment vehicles, which will only serve to help propel this growth further.
Has anything surprised you about the direction of the market this year? Two things that really stand out are the continued outperformance of the Canadian equity markets, and how fixed-income ETF flows globally have been surpassing the very high expectations I had.
What have you made of the rise of smart-beta products? We’ve seen tremendous growth in smart-beta ETFs, and we’ve just scratched the surface. While factor strategies have been staples of active management for some time, recent advances in technology and data analytics have helped to democratize these strategies, and smart-beta products have helped make them more accessible to the masses. Smart-beta products are allowing investors to hone in on achieving specific outcomes, whether it’s outperformance or reducing their risk profile. ETFs deliver these to them in a costeffective, accessible way.
What do you expect over the next six months? Do you have any predictions? There is an energy and excitement within the industry that is palpable. And as investors become more familiar with ETFs, they are increasingly evolving how they are using them. Retail and institutional investors across the country want to speak with us more than ever about how to build better portfolios using ETFs. The next six months will be an important time for Canadian investors as the third phase of CRM2 is introduced. Given the increased focus on fee transparency, we believe there will be a natural opportunity for ETFs. We think CRM2 has the opportunity to evolve the advisory space and potentially drive more advisors into fee-based compensation models. We think that’s good for ETFs, and for investors broadly. With regulatory shifts, new entrants and an evolution in how we’re using ETFs, I think the next six months will be a watershed and set the stage for dramatic growth in our industry over the next five years.
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UPFRONT
ALTERNATIVE INVESTMENT UPDATE
From turmoil comes opportunity Many investors are turning away from Brazil, but one advisor believes they’re missing huge opportunities
have been there for a while, and philosophies haven’t changed – but better prices have arrived,” Sauerbronn says. “Now is the time to take advantage of inefficiencies in the market.” So what are Brazil’s strengths? Sauerbronn believes they are plentiful. “In my opinion, Brazil is ahead of India in terms of the emerging markets that are worth investing in because even though
“The reality is that the negative issues have been there for a while – but better prices have arrived”
The media has been awash with stories about the impending doom of Brazil, once considered one of the world’s hottest emerging markets. However, Luiz Sauerbronn of Brandes Investment Partners believes that advisors and investors who only read the headlines and don’t dig deeper are missing out on massive opportunities. According to Brazilian-born Sauerbronn, the emotive headlines are missing the point
NEWS BRIEFS
about the possibilities that await savvy investors. He believes the current recession in Brazil could offer serious returns for patient investors, particularly as down periods in the country have historically been followed by significant annual returns. For example, after the Latin American crisis in 2002, a 31% calendar year slump was followed by subsequent annualized three-year returns of 66%. “The reality is that the negative issues
AIG seeks to redeem $4.1 billion
AIG, which has offices in Toronto, Vancouver and Montreal, has submitted redemption notices with a value of $4.1 billion. The company stated in a conference call that, as of May 3, it had received $1.2 billion in proceeds from those redemptions. According to Bloomberg statistics, hedge funds were a key driver in the company suffering a $183 million net loss during the first quarter of the year. As such, the firm is looking to scale back on those holdings and turn its investments toward property lending and highly rated bonds.
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people really like India at the moment, the prices are high,” he says. “Look at Brazil, and you’ll see a relatively young population, an increasingly high level of education and unbelievable natural resources – even more so if the government is able to put rational policies in place.” Sauerbronn also believes that opportunities in Brazil are particularly relevant for Canadians. “Honestly, Brazil and Canada have more in common than people might think – both are powerhouses in commodities, minerals and oil,” he says. “So smart advisors and investors should be able to use their knowledge of the local market and apply it to Brazil, too.”
Luxury real estate gets pricier
An influx of foreign capital appears to have had a significant impact on Canada’s luxury real estate market. According to the 2016 Royal LePage Carriage Trade Luxury Properties report, there has been a leap in activity from buyers overseas during the last 10 years – some Realtors report that 25% of luxury properties are picked up by foreigners. The report highlighted major price increases in four key markets over 10 years – Greater Montreal (58%), Calgary (61%), Greater Vancouver (125%) and the GTA (69%).
Q&A
Greg Romundt
Advisors can’t afford to ignore exempt markets
President CENTURION ASSET MANAGEMENT
Years in the industry 25 Biggest career challenge “Going from a corporate environment with various business resources to being an entrepreneur with a counsel of one”
The private capital markets have recently been opened up in Ontario. What does this mean for advisors? Being an advisor is getting increasingly difficult because there is a fee squeeze, and clients are in a low-return world. Clients are looking for ways to cut fees and push their returns up. It’s almost a requirement for advisors to become educated in the exempt space and show their clients that they are bringing value and helping them to do new things. There are going to be a lot of investors asking about the private markets, and if advisors ignore those questions, they’re ignoring a potentially great business opportunity.
How can advisors make the most of the new opportunities in the exempt markets? The vast majority of investors have never experienced the private markets space before, so education is really important. Investors need to be educated so that they can understand the different types of investments and appreciate the value of advice. There is opportunity for advisors to first assist people in getting this education, and secondarily build a client base that is aware of the advisor’s value, because the products are so different from public markets. The first thing you have to decide is whether you want to invest in fund-type products, like hedge funds or diversified REITs or MICs, or a single strategy type, like single property limited partnerships. Also, the due diligence requirements are different. Brokers’ market
Canada is venture capital hotspot
There’s a new hotspot for venture capital, and it’s all around us. Canada is now the talk of the venture capital world; the Financial Post reports that a host of new funds have launched in the country over the last 12 months. Data from Pitchbrook reveals that private companies in Canada have reeled in a record level of investment during the first quarter of 2016 – some $881 million across 103 funding rounds. However, Canada boasts only two private startups with a value in excess of $1 billion: Kik Interactive and Hootsuite.
knowledge of each product has to be higher, so they have to do a lot of work. It is not just about learning the products and strategies available, but also researching the fund managers.
What advice would you give to an advisor with little or no experience in the private capital markets? Once you have passed the qualification requirements, figure out how much capacity you need. If you need the capacity to deploy a large amount of money, you need to figure out which strategies and asset managers can help you meet those goals. Advisors are going to find that the exempt industry is capacity-constrained; you are not going to be buying stocks. If I was running a mutual fund and you said, “Here’s $1 billion,” I could just tap a button, and out your investment goes. With an exempt offering, you have to actually go out and buy an investment. The private markets are much more like a real business, and most advisors will not be used to that.
Will we see more advisors enter the exempt markets? I have no doubt that more advisors will get licensed. This is the largest shift in the capital markets in Canada in years, and advisors would be hard pressed to ignore this; getting licensed is a good move. Advisors who do not have access to the exempt markets are at a competitive disadvantage.
Chinese investors surpass Canadians
A report from the Asia Society has added to concerns among Canadians about the extent of Chinese investment within the housing market. The nonprofit group reports that direct foreign investment from China in the US reached US$22.2 billion during 2015. That makes China the number-one foreign investor in residential real estate in the US, outpacing Canada, which had previously always held the number-one spot. Chinese investment in the country is now expanding into other areas of real estate, according to the report.
Where hedge funds still thrive
Hedge fund closures across Europe and North America are running close to their 2014 peak – but there is still one area that embraces hedge funds. According to data from Fitch Ratings, the Asian region’s share of global industry assets has leapt from 9% to 11% as of the end of 2015. In addition, a report from RBC and Capgemini revealed that there were around 4.7 million high-net-worth individuals in the region, boasting around $16 trillion – illustrating that the deepest pools of money appear to lie in Asia.
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UPFRONT
ALTERNATIVE INVESTMENT UPDATE
Revealing the secrets of the private markets Updated regulations in Ontario’s private capital markets are allowing investors in the province to access private real estate investment vehicles that offer lucrative returns
UNTIL RECENTLY only accessible to high-net-worth and accredited individuals, Ontario’s exempt markets have been subject to a policy change that enables advisors and exempt market dealers to offer their clients a whole host of new investment opportunities. Prior to the policy adjustment, investors had to either have $1 million of net financial assets, earn a gross income of $200,000 a year ($300,000 with a spouse) or have a net worth of more than $5 million. Now, individual retail investors can invest up to $100,000 a year into exempt markets ($200,000 with a spouse). “The old regulations were a real restriction of choice – I look at this as a great opening up,” says Greg Romundt, president of Centurion Asset Management. “This represents an opportunity for investors of
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modest means to get involved in a broader range of investment choices that were previously restricted. That’s having a big impact.” The opening up of the exempt markets is also proving to be a significant positive for Canadian entrepreneurs, who now have better access to capital. An entrepreneur who once would have had to relocate to Silicon Valley now has a much greater chance of raising capital here in Canada. Not only is this a boost for small business owners, but it’s also a positive for the overall economy, which will benefit from increased job creation and tax revenues. “For advisors, the changes to the exempt markets rules provide new ways to add value to client portfolios,” Romundt says. “Giving investors access to products they clearly want, but don’t have experience with,
creates opportunities for advisors to cultivate relationships and differentiate themselves from the crowd. If you are an advisor who is only selling mutual funds or standard funds, it is going to get much harder to justify your existence.” The updated regulations have also given advisors and investors in Ontario the ability to invest in some private real estate investment funds and real estate investment trusts [REITs] that offer attractive yields. For an investor who wants diversification away from the stock market, but does not want go it alone in property investing or development, investing in a real estate fund is an attractive proposition. But without access to the private markets, investors searching for diversification were previously forced to buy publicly traded REITs. “The problem with buying publicly traded REITs is that you are getting an investment that has the same volatility and correlations as the stock market,” Romundt says. “Investing in a private, professionally managed fund gives you the opportunity to get large-scale diversification, stability and hands-free professional management. For an investor looking for diversification away from the stock market, a private REIT is a great option.” Private real estate investing can play an integral role in enabling advisors to guide clients toward their primary goal: building low-volatility portfolios that provide reasonable returns. According to Romundt, the modern investor doesn’t want a 20% return followed by a 30% loss the next year. They simply want a reasonable distribution and sustainable long-term capital growth. “That’s one of the things that private real estate market investments can bring to an investor – the ability to sleep at night,” he says. “Often, when people talk about volatility, they say it gives you the opportunity to buy cheap, but that is never the way it works. Retail money almost always buys at the top and sells at the bottom. With the Centurion Apartment REIT and Centurion Real Estate Opportunities Trust, we are targeting annual distributive yields of around 7% and capital growth of 2% to 5% per year.”
INVESTING FOR INCOME AND GROWTH Centurion Asset Management Inc. is a Canadian company that offers a growing portfolio of private investment products, mortgage financing, apartment and student housing property management. We own and operate quality residential rental properties in communities across Canada and are continuously expanding.
We offer two private investment products, Centurion Apartment REIT (“REIT”) and Centurion Real Estate Opportunities Trust (“REOT”). Both provide investors with stable cash distributions, growth potential and focus on capital preservation through diversified portfolios; the REIT in multi-unit residential apartments and student housing, and the REOT in mortgages and real estate developments.
excellence sImplIcIty IntegRIty Respect
Visit us online or call us toll-free to learn more today.
1.888.992.5736 centurionreit.com IMPORTANT INFORMATION: This communication is for information purposes only and is not, and under no circumstances is to be construed as, an invitation to make an investment in Centurion Apartment REIT or Centurion REOT. PAST PERFORMANCE MAY NOT BE REPEATED. Investing in Centurion Apartment REIT or Centurion REOT Units can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of performance. The risks involved in this type of investment may be greater than those normally associated with other types of investments. For full disclaimer, please visit us online at www.centurionreit.com or call us at 1.888.992.5736.
PEOPLE
INDUSTRY ICON
GLOBAL GOALS IN INVESTING As point man for Greystone’s international equities, Jeff Tiefenbach reveals his strategy when dealing with markets a long way from home
WE LIVE in the age of globalization, a time when a great deal of the world’s population has the ability to contact people across time zones and oceans in a matter of seconds. But while nations are indeed interconnected in 2016, it still holds true that each country has its own unique culture and history – and that must never be disregarded when doing business. Looking abroad can often bring huge returns for investors, but it’s not without considerable risk. How things are done in Toronto or New York may not necessarily be the same in Shanghai, Mumbai or Mexico City. As such, individuals like Jeff Tiefenbach are there to direct investors to companies, countries or regions that offer safe returns for their money. Now in his eighth year as senior vice president of international equities at Greystone Managed Investments, Tiefenbach has developed a keen sense for the vagaries of the world economy.
Risk and reward in China Tiefenbach first touches on the world’s most populous country, which has been driving global growth (and volatility) for decades now. “China needs to reform – and the sooner
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the better,” he says. “The biggest risk is its financial sector. There are non-performing loans and bad debts throughout the system, but levers are being used to work those loans through the system currently.”
tier one city – have had house prices increase by 65%. Beijing and Shanghai are about 20% growth year-over-year. More broadly, there is a 70-city index, and prices are up 5% on that. It looks relatively good overall, but
“As China becomes more expensive to export from, Mexico looks more interesting. For energy, it also has a long-term, low-cost supply of natural gas, which will feed into its resource base” China’s average growth rate of around 10% throughout the 1990s and 2000s has now slowed (to 6.7% in Q1 of 2016), but there has always been a degree of cynicism when it comes to the veracity of China’s reporting. One such area has been real estate, but Tiefenbach reveals that it has largely stabilized. This supports pronouncements from Beijing that it is making stringent efforts to stabilize the economy and promote more sustainable growth moving forward. “In certain housing markets, it is getting into overheated territory,” Tiefenbach says. “The main markets, places like Shenzhen – a
with some pockets of excess.” In changing the face of Chinese growth, the government of President Xi Jinping is attempting to move the economy away from the manufacturing that created a new superpower and toward services. Given the sheer scale of China, the move is akin to turning around an oil tanker. The shift will therefore take time, but signs are there that change is taking root. “There has been a reliance on manufacturing and heavy-industry spending – overinvestment,” Tiefenbach says. “Generally the quickest, easiest way to get growth
PROFILE Name: Jeff Tiefenbach Company: Greystone Managed Investments Title: Senior vice president of international equities Years in the industry: 23 Words of wisdom: “The global growth rate won’t accelerate until you get capital spending in the economy. Services aren’t as capital-intensive.”
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PEOPLE
INDUSTRY ICON
is through building a new steel mill or a factory. What needs to replace that is an increase in consumer spending. It will take a rebalancing of the economy, and we are seeing that with services growing. Things like healthcare and online retailing are doing quite well and paying rewards to investors.”
Other targets for investment A fixture with Greystone for 11 years now, Tiefenbach moved into foreign equities in
gold remains firm, that will help buoy the economy. It is similar to a lot of the emerging economies, where growth is slow because of commodities and China, but they are coming out the other side.” Emerging markets have to meet certain standards to fulfill Greystone’s investment criteria. A nation with plenty of natural resources or a well-educated and cheap workforce is all well and good, but Tiefenbach says the political environment
“The main thing we look for is some sense of macro stability. There has to be good corporate governance. We have to know our investors will be rewarded for holding securities in these countries” 2008. He reveals the firm’s strategy when searching for new markets. “From a growth point of view, India does look interesting,” he says. “We don’t have any direct investments there right now, but we are actively looking. The way we look at the world is from a top-down macro view, but finding the right stock is the always the most important factor.” Aside from the two giants of China and India, Tiefenbach sees plenty of other developing nations out there that are ripe for investment. “Mexico looks quite interesting due to its proximity to the US,” he says. “Consumers in the United States continue to be a good source of demand globally. As China becomes more expensive to export from, Mexico looks more interesting. For energy, it also has a long-term, low-cost supply of natural gas, which will feed into its resource base.” Greystone also has its eye on South Africa. “It’s still developing, but South Africa has a lot of potential,” Tiefenbach says. “If
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must be right, too. “The main thing [we look for] is some sense of macro stability,” he says. “There has to be good corporate governance. We have to know our investors will be rewarded for holding securities in these countries. Russia has been a very good market, but there are a lot of governance issues there.” Capricious leaders notwithstanding, there are many other factors that dictate where to invest or not – and Tiefenbach is definitely keeping his eye on one issue in particular. “I saw a recent stat that sovereign debt trading at negative interest rates globally was close to US$7 trillion, and that is concerning,” he says. “How banking systems can function with negative interest rates is a worry. A big area of risk is the European banks and, to a lesser extent, in Japan, which have yield curves that make it very challenging to make profits in those markets. We are underexposed to the banking sectors in those regions, but it’s something we are monitoring very closely.”
FAST FACTS ON CHINA
DEMOGRAPHICS China’s population is 1.4 billion
GROWTH Average annual GDP growth of 7.8% over past five years
ECONOMIC SHIFT Service sector growth of 7.6% in Q1, 1.8 percentage points higher than traditional manufacturing
PAIN China’s premier, Li Keqiang, compared the pain of moving from a manufacturing to a service-based economy to “slashing your own wrists”
UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? E-mail wealthprofessional@kmimedia.ca
The business of mentorship The true measure of success isn’t in building your own book, writes Jason Nakhoul, but in helping young advisors learn to build theirs
YOU TOOK the risk to become an advisor. You built your book through relentless prospecting and enjoyed the fruits of your labour. Now you have all this success, but it’s fading with time. Regardless of your track record or what you have done for your clients, you can only claim success when you have taught someone else how great this business can be. It is time you go out there and find a team to inspire and be inspired by. Get out of your comfort zone, look for the eager and build an arc. The key to a great business is the people behind it. You can very well become the captain of that ship – or sink. Look for personalities, attract the mouldable ones, and show them the way. There’s great talent in our country, young people who are yearning for success. Find them, present them with the language of prospecting, and let them build. New advisors must be taught to actively search and present their eagerness to serve – something that most millennials have somehow forgotten. Remind them that nothing works from the first few tries and that you have to fall first to get back up. Without trying, you will never learn. No business exists without its clients, and a strong advisor knows that waiting for business is never an option. Lazy advisors are working on a referral basis with an emphasis on marketing to a network of friends and family. Their careers seem to
me like a balancing act, putting one foot in front of the other and trying not to fall off the thin line that holds it all together. Explain to the new advisors that it is unsustainable to go after a limited resource. A proper business model is focused on generating leads consistently and marketing to a wide variety of people.
will find their building blocks to their own business. Every client they earn will reinforce the base of confidence they need to succeed. You will see yourself in their efforts, and you can help them by relating your experience to theirs. There is nothing more satisfying than being able to help someone who will eventually help others find their own path. Our institutions have brainwashed graduates into thinking they will need years before they can make it. Corporations have been consistent in spreading the idea of promotion through the ranks, and tradition has backed the idea that this will take years. The young who are looking to succeed can no longer afford real estate, a family or savings through such traditional means – income levels have simply not kept up with the increase in the cost of life. Millennials must now use their human capital to initiate cold conversations with strangers. They must use all that is available to them, from their technological skills to every
“There’s great talent in our country, young people yearning for success. Find them, present them with the language of prospecting, and let them build” When friends and family have been coerced into giving them their life savings, losing sight of their career would also mean they would have betrayed everyone they know – this is not the way. Your job is to show them how to prospect and generate leads. If they can hunt, they will never starve. A proper business model depends on the number of people you can reach and not the ones you already know. Channel their energy through the highs and lows of prospecting. Help them minimize the noise of inconsistent income and remind them that if you did it, they can too. Let them aspire to greatness, never forgetting that its always within their reach. One conversation at a time, they
ounce of courage they have, to find leads to grow their book. As they solidify themselves, you will find that you have created a money-making machine – a group of young professionals who are working consistently toward the same goal of achieving greatness. The office atmosphere will be charged, and you will be the catalyst behind the operation. Only then can you take credit for your success.
Jason Nakhoul has been an investment advisor with Manulife Securities for the past five years.
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PMAC GETS TEETH INTO REGULATORY CHALLENGES As president of the Portfolio Management Association of Canada, Katie Walmsley believes the organization plays a vital role for its extensive membership across the country. “Our focus is on advocacy, both federally and at the provincial level,” she says. “We have a full-time government relations consultant in Ottawa who gives us a sense of what the priorities of the government of the day are. Through that, we can meet with the right people in the Department of Finance to work through any technical issues there may be.” The PMAC dates back to 1952, albeit under a different name – the Investment Counsel Association of Canada. The Portfolio Management Association of Canada was born in 2010, and since then, it has continued to expand its membership. Alongside KATIE WALMSLEY the increase in numbers has come Portfolio Management Association of Canada greater influence over the industry – not surprising, given the fact that its members account for more than $1 trillion in assets. “We have about 230 firms from across Canada that are registered portfolio managers,” Walmsley says. “PMAC has been growing steadily by about 15% in new members each year, so we thought the new name better reflected who were are. We felt that because the membership was really a mix between private client and institutional asset managers.” The unique regulatory framework of Canada’s securities system is an area that the PMAC has been striving to change. In this case, progress has been glacier-like, but Walmsley believes a shift away from the current provincial-based format is warranted. “We have been in existence for more than 60 years, and from the start, we have supported a national securities regulator,” she says. “The fragmented provincial system is completely inefficient and not good for investor protection. I think we are closer than we have ever been to making a change, but it will take time. It will require a merger of completely separate legal entities, so it won’t happen overnight.” Of course, securities isn’t the only area experiencing regulatory upheaval. CRM2 will take full effect next month, meaning those involved with financial planning will have a lot more paperwork ahead of them. For the PMAC, however, this development is entirely welcome. “Everyone is very focused on improving their client reporting,” Walmsley says. “I think CRM2 will harmonize the information being given to clients across the industry, so reports to clients will be the same whether you go to a broker dealer or a portfolio manager. The reports will be fairly similar, but more detailed and more transparent.”
NAME
PAGE
COMPANY
Abramson, Randall
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Trapeze Asset Management
Andrighetti, Susan
36
CIBC Wood Gundy
Bender, Justin
26
PWL Capital
Burt, Timothy
34
Cardinal Capital Management
Crofts, Michael
31
Mawer Investment Management
Dansereau, Darren
31
QV Investors
De Goey, John
34
Industrial Alliance Securities
de Place Filippini, Anne-Mette
34
Burgundy Asset Management
Gagné, Hélène
32
Peak Private Wealth
Gauthier, Bernard
34
Jarislowsky Fisher
Gendron, Christian
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Gendron Team, BMO Nesbitt Burns
Gendron, Isabelle
35
Gendron Team, BMO Nesbitt Burns
Green, Paul
31
Green Private Wealth Counsel
Jang, Ben
29
Nicola Wealth Management
Jones, Brian
26
TD Wealth
Kumar, Pravin
30
CIBC Wood Gundy
Lalonde, Guy
28
National Bank Financial
Larson, Chad
28
MLD Wealth Group, National Bank Financial
Leblanc, Jean-Benoit
30
Hexavest
Lonsdale, Brian
26
CIBC Wood Gundy
Lussier, Rodrigue
30
Fiera Capital
Pashootan, Kash
32
Raymond James
Plouffe, MartinCharles
30
National Bank Financial
Prodanovic, Alex
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ScotiaMcLeod
Stenner, Thane
29
StennerZohny Investment Partners
Tétrault, Rob
29
National Bank Financial
Tiefenbach, Jeff
29
Greystone Managed Investments
Wagner, Susyn
26
Wagner Investment Management Team, CIBC Wood Gundy
Zohny, Youssef
36
StennerZohny Investment Partners
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FEATURES
COVER STORY: LEADING PORTFOLIO MANAGERS SUSYN WAGNER
JUSTIN BENDER
Wagner Investment Management Team, CIBC Wood Gundy
PWL Capital
For Susyn Wagner, unlike many of her peers, 2015 didn’t turn out so bad after all. An aversion to energy stocks was a major reason her portfolio ended the year in good health, and it’s part of an investment strategy that has led her team to almost $200 million in AUM. “I haven’t had a large energy exposure for at least two years, so I haven’t been hurt like many over the past couple of years,” Wagner says. “Most of my portfolios are based on earnings momentum, so we haven’t had much exposure to energy. In 2015, my average account ended being up between 2% and 7%, but in 2016 we have been pretty flat.” The loonie’s gain against the greenback has contributed largely to that flatness, but a diversified portfolio means the performance of currencies – or, indeed, any one industry – needn’t have catastrophic consequences. “We were on the right side of currency in 2015, but the Canadian dollar has rallied somewhat this year,” she says. “That has offset some of our gains. I think we will be range-bound, though. I’m certainly not changing my asset allocation right now.” As far as those assets go, balance is key: “I work with approximately 100 families, and the vast majority of my clients are retired,” Wagner says. “My average client ranges between $750,000 and $2 million. I have a balanced investment policy and adhere to a policy where I have about 25% fixed income and 5% cash. Right now I also have about 50% in US equities and 25% foreign content.” Approaching her 30th anniversary in the business, Wagner has witnessed the great changes in the industry firsthand, but she says the information revolution brought on by the internet was likely the most significant development. “I’m a discretionary portfolio manager, so I concentrate a lot on asset allocation and a very disciplined trading strategy,” she says. “In the ’90s, it was a lot different – definitely not as disciplined. It was also a lot more difficult to do analysis back then. Now I use Morningstar CPMS, VectorVest; I remember I would have to send people down to the library for research.”
BRIAN LONSDALE CIBC Wood Gundy
A vice-president and portfolio manager at CIBC Wood Gundy, Brian Lonsdale is now in his 20th year with the firm. As the head of his own team, he brings a wealth of experience to the table in financial planning and discretionary portfolio management. Targeting higher-end investors, his team designs specially tailored portfolios to fit the exclusive goals of their clients. Holding CFP, CIM and FSCI designations, Lonsdale uses Wood Gundy’s Advisor Manager Account program to assist his clients with all their wealth management needs.
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Aside from his day job as portfolio manager at PWL Capital, Justin Bender keeps busy with his blog, Canadian Portfolio Manager, where he dispenses words of wisdom to his peers. His musings focus on market-based or passive investing and most recently saw him highlighting a series of short-term ETFs and calculating which were the most tax-efficient for investors. With PWL Capital since 2007, Bender makes his clients’ tax liabilities a key concern when it comes to managing their finances. Having already obtained his CFA and CFP, he is now working toward achieving the Trust and Estate Practitioner designation.
BRIAN JONES TD Wealth
A vice-president at TD Wealth, Brian Jones’ connection to his hometown of Fredericton, New Brunswick, is clear. He returned to the city where he was born to raise his own young family and start his TD Wealth Private Investment Advice office, which he opened in 2005. It was a solid foundation, and the branch was named runner-up in the bank’s Branch of the Year competition. Jones later went on to become a portfolio manager, which is far from his only professional designation. In fact, he has completed the ChP strategic wealth course, in addition to receiving PFP, CWIM, CIM and FMA designations.
ALEX PRODANOVIC ScotiaMcLeod
Approaching his 10-year anniversary at ScotiaMcLeod, Alex Prodanovic continues to offer his clients the best in wealth management advice and investment counselling. The past year has witnessed some stormy seas on the markets, particularly in Canada. Having the right guidance from the experts is all the more critical in such circumstances, and Prodanovic’s background in insurance and tax and estate planning means his clients have all bases covered when they walk into his office.
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COVER STORY: LEADING PORTFOLIO MANAGERS CHAD LARSON MLD Wealth Group, National Bank Financial
The travails of Calgary since oil’s decline have been well documented, and the pain is far from over. This makes the work Chad Larson and his colleagues at Calgary-based MLD Wealth Group do all the more important. “Last year was bittersweet,” Larson says. “We ended the year with a positive return net of fees in our core strategy because we were underweight on energy. We were able to squeak out mid- to high returns, which for Calgary was amazing. But it’s tough to take out a billboard and celebrate that because we have empathy for our clients. That net-wealth effect throughout the city right now is hard to ignore.” Calgary is a city built on Albertan oil, which, in times of US$120 a barrel, made for rapid development and plenty of new millionaires and billionaires. Despite crude’s recent upturn, it is still at a level below what Canadian producers would deem economically viable. Larson explains how this has affected his business.
“We have a big focus on infrastructure globally, and real assets also” “It is a little bit Wild West, but it is a good time for us as a firm,” he says. “The worst time is when we have a raging energy bull market and you are trying to convince clients of the need for diversification or risk management. I have had clients who, in between setting a meeting and arriving at my office, their net wealth increased by 15%, so trying to convince them to diversify was tough.” The ability to convince clients to think long-term is always a struggle, especially with the kinds of returns energy was presenting for years. “People are inherently built to make bad decisions when it comes to their finances,” Larson says. “Calgarians are overweight on energy; they invest in what they know. They are more comfortable with the risk they know than a lesser risk they don’t understand. We have to educate our clients.” With an AUM of just over $500 million, the firm’s approach is clearly bearing fruit, even as the financial climate locally, nationally and internationally creates plenty of obstacles to success. “We made a large bet on the US a number of years ago, both in currency and asset classes,” Larson says. “Lately we have sold that down on equity exposure. One of the largest plays was US multi-family real estate, which has done incredibly well, so we’re looking at where to reposition. We have a big focus on infrastructure globally, and real assets also.”
GUY LALONDE National Bank Financial
The explosive growth of ETFs has been the major trend in the investment industry in recent times. That isn’t news to Guy Lalonde – his team at National Bank Financial trades only in ETFs, which has proven to be a lucrative course. His investment philosophy has served his clients well by allowing portfolios to have much more variety and never be too overweight in one particular area. “We have an indexbased approach, and for managed money, we use ETFs exclusively,” he says. “Our core portfolios are low-cost, multiple-asset-class portfolios that are tailored to different investment profiles, from more conservative to balanced growth. Our core portfolios are made to be extremely diversified and not have extreme exposure to any one industry. They are composed of 17 different indexes, so they are
“The most popular new arrival is the smart-beta, mobile utility indexes. That’s where most new products are coming from” very varied. We also have an asset-class rotation portfolio, and it permits us to avoid the weak parts of the markets.” Now a decade old, Lamarre-Lalonde Group has been ahead of the curve with regard to many of the changes the industry has seen over the past 10 years. “I started out being fee-based then moved into discretionary,” Lalonde says. “I think the industry has caught up to where we have been for a while. The industry requires more discipline and being able to scale your business properly.” As for the team’s bread and butter of ETFs, Lalonde identifies some areas for expansion. “Being ETF-based, there was big growth in the diversity of asset classes between 2007 and 2010. Since 2014 in our little world of ETFs, the most popular new arrival is the smartbeta, mobile utility indexes. That’s where most new products are coming from.”
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JEFF TIEFENBACH
THANE STENNER
Greystone Managed Investments
StennerZohny Investment Partners
Addressing the media following the announcement of Greystone’s new global equity growth portfolio in partnership with Bridgehouse, Jeff Tiefenbach, the company’s senior vice-president for international equities, revealed his lofty goals for the fund: “to outperform the market over three to five years with a more consistent pattern of returns compared to other growth-style options.” Tiefenbach’s success will hinge on his ability to find the right companies that have positive earnings growth but aren’t overpriced.
For Thane Stenner of StennerZohny Investment Partners, the decision to go into partnership with Youssef Zohny in 2011 has brought great success. Together they operate one of Richardson GMP’s top multifamily offices, with more than $500 million AUM. Of course, numbers like that don’t just fall into your lap – rather, such results require plenty of longterm thinking and an ability to stay one step ahead. “We run a multi-family office practice across Canada, with some offshore clients as well,” Stenner says. “We have 59 key relationships that we manage money for, and all have a net worth of above $10 million, and some are billionaires. Most of our discretionary PM money runs a core strategy that is a balanced, hedged portfolio.” Dealing almost exclusively with high-net-worth clients brings with it plenty of pressure. The families StennerZohny serve are likely to have expectations that reflect their standing. As such, it’s essential to stay ahead of the vagaries of the markets.
ROB TÉTRAULT National Bank Financial
In his own team at National Bank Financial, Rob Tétrault has built a thriving practice catering to high-networth individuals. Unlike many of his peers highlighted on this list, Tétrault had a somewhat unconventional journey into the world of wealth management. He began his career as a lawyer, working at Aikins MacAulay Thorvalds in Winnipeg. An MBA at the Asper School of Business followed, leading him to his current career at National Bank Financial, where he has raised the bar for financial planning within the institution.
BEN JANG Nicola Wealth Management
Since its formation in 1994, Nicola Wealth Management has seen its revenue increase by approximately 1,300%. The firm currently manages $3.5 billion in assets, so clearly their people are producing results. One of those top managers is Ben Jang, who joined in 2012, having built a stellar reputation after stints with a number of prestigious investment management firms, where he focused on global equity, GTAA and market-neutral funds. Quantitative strategies and the optimization of portfolios are other areas of expertise for Jang, who holds CAIA, CIM and DMS designations.
“There is a significant need for portfolio managers and investors to have hedging tools at their beckoning to manage the volatility going forward” “Two years ago, we almost completely eliminated our energy exposure,” Stenner says. “Last year, our portfolio was up 8.43% (net of fees), which was very good given the fact the Toronto market was down 8% in dividends. This year we are up about 7% year-todate. We have been actively managing currency exposures, both Canadian and US, so we are shifting more money into US dollars as we speak.” While the recent recovery of oil and the loonie has buoyed many in the industry, Stenner believes another drop is likely, citing the entirely too-close relationship between the energy market and the Canadian dollar. “The Canadian dollar has rallied from 65.5 cents to just under 80 cents, so that’s about a 22% move,” he says. “That rally has been because of oil, which is up about 65% from its low point of $26. We are a petro-currency, whether we want to admit that or not. We happen to believe that oil will probably head south here for a while, so we wouldn’t be surprised if the Canadian dollar ended up in the 60s sometime in the next 18 months.” As for areas that may garner returns heading forward, Stenner recommends that savvy investors play both sides of the fence. “Most markets, in our view, are on the high side of fair,” he says, “so there is a significant need for portfolio managers and investors to have hedging tools at their beckoning to manage the volatility going forward. That’s something we do very actively.”
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COVER STORY: LEADING PORTFOLIO MANAGERS MARTIN-CHARLES PLOUFFE National Bank Financial
For Martin-Charles Plouffe, the volatility of the markets over the past year means a cautious approach is the best plan of action.
“I’m still bearish on the oil situation and energy” “I do a lot of ETFs, low-volatility and smart-beta, and tend to stick with that,” he says. “I was underweight in Canada last year. I did come back to target, but I’m still bearish on the oil situation and energy. A lot of that is based on China, and with its sales slowing down, we have to be cautious.” The Montreal-based portfolio manager/wealth advisor began his career as an investment advisor with Peak Securities before spending a year in the US as a real estate consultant in Palm Harbor, Florida. He returned to Quebec in 2011 to work for National Bank Financial, where he has remained ever since, amassing an AUM of $72 million by catering primarily to individual clients with assets over $500,000.
RODRIGUE LUSSIER Fiera Capital
Fiera Capital is a firm that’s clearly going from strength to strength. Its latest firstquarter results are proof enough of that – it announced an AUM increase of 8% year-over-year to $98 billion. As vice-president of the private wealth team, Rodrigue Lussier is responsible for client portfolios, which he combines with a place on Fiera’s Private Wealth Investment Committee and its Private Wealth Management Committee. The firm has stepped up its expansion plans through a series of strategic acquisitions, most recently with Apex Capital Management in the US, so without a doubt, Lussier will soon have many more clients seeking the investment counsel that Fiera has built its reputation upon.
JEAN-BENOIT LEBLANC Hexavest
Jean-Benoit Leblanc, portfolio manager for emerging markets at Montreal-based Hexavest, stated in the firm’s recent newsletter that the world’s developed nations will lag behind emerging economies as a global ‘corporate recession’ takes hold. In the report, the firm highlighted the fact that, after some rough turbulence, China is stabilizing, and the significant depreciation of currencies since 2012 is helping to stimulate exports for Beijing in the medium term. For emerging markets in general, Hexavest believes the discount is as high as 25% to 30% compared to developed nations. Leblanc’s role will be to make sure the investment management group stays ahead of the curve and that investors looking to India or China make Hexavest their first point of call.
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PRAVIN KUMAR CIBC Wood Gundy
Like most of the individuals on this list, Pravin Kumar’s practice has been significantly impacted by recent volatility, in ways both positive and negative. “The Canadian dollar’s recent rise has impacted me negatively, but it has moderated a bit recently,” he says. “I think in the short term, the dollar will weaken to around the 75cent level, and then in the second half of the year, as oil supply/demand becomes more balanced, the dollar will come back to 80 cents and perhaps even higher.” Kumar, whose team at Wood Gundy has an AUM of $145 million, has thrived since moving into discretionary management in 2011. Currently a first vice-president at the firm, he has developed an investment strategy that has benefited both his clients and him personally.
“The dollar will come back to 80 cents and perhaps even higher” “Currently I have three different models that I manage – two are balanced with a bond component and an equity component,” he says. “One just has Canadian stocks, and the second can go up to 10% in US equities, but other than that, it is still balanced. The last one is an all-equity portfolio, which is primarily USfocused – 85% US and 15% Canadian.” Because Kumar’s business is split between the US and Canada, it allowed him to weather to storm of 2015 quite well. He credits this success to a portfolio that is fluid in its makeup. “We have a really good research team here, so I did not have exposure to either oil or the Canadian banks last year,” he says. “My portfolio turnover is quite high. At the moment, my portfolio is a little overweight on energy at the expense of technology. I have mostly healthcare, energy and some value stocks in the banking space. My portfolio has migrated from growth to value from 2015 to 2016.” As far as specifics go, Kumar identifies one company in particular that has received plenty of negative media attention over the past year, but which allowed him to make a healthy return. “I did very well with healthcare and tech last year,” he says. “I owned Valeant stocks and sold last July, so I made 30% on that. I didn’t catch it at the bottom, but I did at the top.”
PAUL GREEN Green Private Wealth Counsel
For Paul Green of Holliswealth’s Green Private Wealth Counsel, making a living as a portfolio manager came indirectly. “I started in ’92 in this business with absolutely no intention of being a portfolio manager,” he says. “I wanted to be a financial planner who delivered holistic advice in all areas of people’s finances but delegate the portfolio management. By the 2000s, I was getting fairly miserable results from the money managers, and that forced me to decide I needed to do it on my own.” Making the decision to switch to portfolio management was only step one. Such decisions are not made lightly, and it would take years of careful planning and hard work before Green Private Wealth Counsel was where he wanted it.
“There still is a lot of strength in US equities and bonds” “I needed to be more tactical and have the ability to make trades quickly on my clients’ behalf,” Green says. “It took me a little while because I was MFDA in 2009, so I had to figure out how to accomplish the portfolio management piece for my clients. Toward the end of 2011, we decided on Dundee, which is now Hollis. By October of 2012, we had the investment piece the way we wanted it, but we needed to satisfy three years as an IIROC advisor before becoming a portfolio manager.” The move into portfolio management has proven a great success so far, as the US economy’s resurgence in recent years has provided plenty of opportunities for growth. “Since 2012, it has gone very well for the firm,” Green says. “Our call was US-centric – US dollar, US stocks and US bonds and T-bills. We also have a concentrated Canadian stock portfolio, and that has done very well, certainly compared to the TSX.” The US-centric approach has not been as beneficial in 2016, but Green is still confident that things will turn around before too long. “What worked very well for us from 2012 to 2015, the US dollar, has turned around on us a bit,” he says. “We are experiencing some short-term pain, but we don’t see that continuing long-term. There still is a lot of strength in US equities and bonds, so we are feeling fairly comfortable.” As a relative newcomer to portfolio management who started in the job during a period of regulatory and technological upheaval, Green says adaptation is key to success in this industry. “It’s constant change. We try to keep it fairly simple. The main thing we look at is the ability to make tactical shifts quickly. If you have a client base of 300 or more households and you don’t have discretion, it’s almost impossible to make changes. So our main focus is the ability to make change and do it efficiently.”
MICHAEL CROFTS
DARREN DANSEREAU
RANDALL ABRAMSON
Mawer Investment Management
QV Investors
Trapeze Asset Management
As director of fixed management at Mawer Investment Management, Michael Crofts oversees Canadian fixed-income securities for the firm, serving as portfolio manager for the Mawer Canadian Money Market Fund and the Mawer Canadian Bond Fund, as well as co-manager for the Mawer Global Bond Fund. With experience in the investment industry dating back to 1997, Crofts is also part of Mawer’s asset allocation team. Founded in 1974, Mawer manages more than $30 billion in assets for individual and institutional investors, and continues to expand, now employing more than 100 people with bases in Calgary, Toronto and Singapore.
In a recent newsletter to his clients at QV Investors, Darren Dansereau outlined the fortunes of two companies that have prospered during a tough economic climate: oil & gas drilling services firm Ensign Energy Services and iconic retailer Canadian Tire. Dansereau explained that good governance and the ability to adapt to challenging conditions were the main reasons for this. As a vice-president and portfolio manager with QV Investors, Dansereau imparts similar advice to his clients on a daily basis in his management of the QV Canadian Equity Pooled Fund.
May was a busy month for Randall Abramson, CEO of Trapeze Asset Management, as the firm and its parent company, Trapeze Capital Corp., acquired beneficial ownership of $1.77 million worth of convertible debentures issued by Jackpot Digital. Jackpot develops software for online interactive games – clearly a growth industry – and Trapeze is using the purchase for its ambitious investment purposes. For Abramson, who co-founded Trapeze in 1999 to offer discretionary portfolio management for institutions and high-net-worth individuals, it’s another sign of progress for the growing firm.
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COVER STORY: LEADING PORTFOLIO MANAGERS HÉLÈNE GAGNÉ Peak Private Wealth
A two-time author and a portfolio manager at Peak Private Wealth since 2013, Hélène Gagné’s first taste of the investment business came back in 1985. The industry has changed greatly in that period, and continues to do so – particularly in regard to the number of women investors. “About 50% of my clients are retired, and it’s an equal amount of men and women,” she says. “The approach is a bit different with a female or male client. Women are more interested in the
“Before, people thought that they might need money for 10 to 15 years for retirement, but often it’s much longer than that” education part of what we do. Very often people think that women are less willing to take risks with their portfolio. But that’s when you educate them on how the markets work. Then they tend to have the same asset allocation as men.” Another big change has been the growth of ETFs, which now dominate her portfolio. “My first book was in 2002, Maximisez votre Capital Retraite, and I had just made the transition from working with mutual funds to exchange-traded funds,” she says. “At that time, there were only a few ETFs, but that number has increased tremendously since then. About 75% of my assets are exchangetraded funds.” An expert in her field when it comes to retirement and pension planning, Gagné is quick to point out that because people are living much later in life, the nest eggs they build need to be much larger. “Over the past 15 years, people have been through the 2008–09 financial crisis, declining interest rates and higher volatility in the markets. Also, longevity has increased. Before, people thought that they might need money for 10 to 15 years for retirement, but often it’s much longer than that.”
KASH PASHOOTAN Raymond James
The founder of First National Advisory at Raymond James, Kash Pashootan has followed the recent rise of both oil and the loonie with a close eye, but don’t expect him to jump on the recovery bandwagon just yet. “There are early signs of a recovery, but we need oil prices to be much higher,” he says. “My team has a little bit of exposure there, but we run a conservative model, so we’re not interested in getting in at the bottom of energy prices. I’m comfortable missing early gains and buying in later with conviction and not risk jumping the gun for our clients.”
“I would not take false comfort in the stability in oil companies’ shares” Catering to executives, professionals and high-net-worth families, his team’s number-one prerogative is to safeguard the money they have been entrusted with. As such, Pashootan exercises great caution, but is ready to move when the time is right. “We are bottom-up investors, so we really look at the underlying business itself,” he says. “One area we have started to move more capital into is the utilities space. With the volatility with the global economy in early 2016, it became clear the US would be in no rush to increase rates, so we started to add more interest-sensitive equities, especially utilities. I believe it is the best-performing sector in the S&P 500 so far this year.” Another area that has performed better as of late is, of course, energy – better, but still not good enough, Pashootan says. “I’ve been very bearish on commodities; in fact, I have been negative on commodities since 2012. I believe that we have reached a bottom for the price of oil. However, I would not take false comfort in the stability in oil companies’ shares. Even at $40 to $45 a barrel, most of the Canadian names are still losing money hand over fist.” The loonie has also experienced a recent increase, but in Pashootan’s view, that ascent has made the Canadian dollar overvalued, and he predicts the remainder of the year will see it slip back to more historical norms. “A healthier point [for the Canadian dollar] is in the low to mid-70s,” he says. “Late last year we had a double whammy for the loonie with the collapse of oil and the US giving indication it would raise interest rates. This was interesting because the Bank of Canada was cutting interest rates. So it was the perfect storm for a weaker loonie.” That storm has since subsided, albeit temporarily, creating the conditions necessary for the currency to bounce back. As is always the case in these matters, however, a high-valued loonie is but one US rate hike away from a dramatic fall. “In the second half of the year, if we see the Canadian economy has slowed and there’s reasonable economic data out of the US, you may see a divergence of monetary policy by Canada and the US, where Canada cuts rates and the US raises,” Pashootan says. “If we have an event of that magnitude, then the loonie will return to the 60s very quickly. When it comes to currency, things can change very quickly.”
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COVER STORY: LEADING PORTFOLIO MANAGERS JOHN DE GOEY Industrial Alliance Securities
The changeover period for Industrial Alliance Securities’ acquisition of Burgeonvest Bick Corporation reached its conclusion on May 1, so it’s been a busy couple of months for John De Goey. A frequent presence in the financial media (Wealth Professional included), the author/advisor/portfolio manager has developed a reputation across Canada as an authority on holistic advice. With 23 years of experience in wealth management under his belt, De Goey explains how he made the transition from advising to specializing principally in
“A lot depends on oil, so if you think it will rise above $40, then the Canadian dollar should be above 80 cents” portfolio management. “I made the decision that I wanted to be a fiduciary, so the only way to do that is to be a portfolio manager,” he says. “I went from being about 90% fee-based and 10% discretionary to the opposite over the course of about three and a half years.” That change has been welcomed by his clients, allowing him to build an AUM of $82 million. As De Goey explains, however, the transition was drawn-out and more than just a matter of changing his business card. “I tried to volunteer to be a fiduciary, but my firm wouldn’t allow it,” he says. “The only way I could become one was to have my clients give me discretion. I wanted to be able to unambiguously say I was working in their best interests.” Since then, he has built his business with a clear investment strategy that has a global outlook. “I have a two-step process for a typical client portfolio,” he says. “First I determine a risk profile, and that determines their income exposure. Once that is set, I tend to equally rate five different asset classes geographically – Canada, US, international equity and emerging markets equity. The fifth is an international asset class called tangibles; traditionally these are inflation hedges – oil, gas, agriculture, real estate.” Of course, even the best plans can come undone by outside factors – currency and the volatile commodity markets key among them. In that respect, De Goey has limited his vulnerability to oil, but is edging toward the loonie gaining in value. “I had a relatively small exposure to oil,” he says. “I think the Canadian dollar has been unduly beaten up, and long-term, I see it at somewhere in the mid-80s. A lot depends on oil, so if you think it will rise above $40, then the Canadian dollar should be above 80 cents.”
ANNE-METTE DE PLACE FILIPPINI Burgundy Asset Management
Having joined Burgundy Asset Management in 2008 as a vicepresident and portfolio manager for emerging market equities, Anne-Mette de Place Filippini excelled in the role and was promoted to senior vice-president in 2012. Burgundy’s investment reach is truly global, and emerging markets are becoming more and more important to those seeking new investment opportunities. Previously with AIC Investment Services, de Place Filippini has expertise in emerging markets – and as such, will be at the forefront of Burgundy’s continued expansion in the years to come.
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TIMOTHY E. BURT
BERNARD GAUTHIER
Cardinal Capital Management
Jarislowsky Fraser
As CEO of Winnipeg-based Cardinal Capital Management, Timothy Burt brings almost four decades of knowhow to the firm, which, under his stewardship, has grown into one of Canada’s top independent portfolio management firms. Offering clients a raft of choice for their investment needs, Cardinal has built its name on identifying large-cap stocks with below-average valuations. Its key models include the Canadian Equity Composite, Global Composite, US Equity Composite and Canadian Bond Composite. With an AUM of more than $1.5 billion, Cardinal is quite clearly headed in the right direction as it continues to serve highnet-worth private clients, pension funds, trusts, mutual funds, foundations and other institutional investors.
Co-managing Jarislowsky Fraser’s Canadian equity strategies, Bernard Gauthier has had plenty to ponder in 2016, especially after such a turbulent 2015. In its most recent investment outlook, the independent investment firm stated that while risks remain for the economy, they don’t foresee either a North American recession or the markets going into a tailspin. Gauthier joined the firm in 2008 as the North American financial services analyst, and became a partner two years later. Most recently he managed equity strategies for the US before concentrating his efforts on Canada’s stocks in 2014. As such, he is no doubt hoping that momentum from the country’s spring recovery continues throughout the rest of the year.
CHRISTIAN GENDRON Gendron Team, BMO Nesbitt Burns
It’s a family affair at the Gendron Team at BMO Nesbitt Burns. Founded by patriarch Jérôme Gendron in the 1960s, with son Christian and daughter Isabelle later joining the fray, the team has consistently been one of Nesbitt Burns’ best performers, currently boasting an AUM of more than $300 million. Gendron oversees discretionary accounts and manages the team’s model portfolio, and he outlines how using the right research is key to staying ahead of the game. “We use our own research at Nesbitt Burns, but also research from the Street,” he says. “Every Thursday I check the AMF Insider Report bulletin; that is a great tool to find gems. The most significant transactions are when a bunch of insiders buy shares in their own company. We saw this with Canam Group and Héroux-Devtek, which are smaller-cap but can make a big difference to a portfolio.” As for his portfolio, he explains that diversification is key. “We have a bunch of ETFs. Canada is underweight on technology, and when we don’t want to make a specific company call, we use ETFs. We use lots of ETFs for fixed income. We also like good-paying stocks that go to dividend, as well as special situation small-cap stocks and convertible debentures, which is a market that is being ignored.” The up-and-down course of the Canadian dollar over the past year is another area that has provided plenty of headaches, but also potential returns. “There has been a big fluctuation on oil and with the exchange rate,” Gendron says. The exchange rate has defined a trading range that will be reduced over the next few quarters. I don’t think the US dollar will go back to $1.46. I think that will be good for
“We also like good-paying stocks that go to dividend, as well as special situation small-cap stocks and convertible debentures” companies wondering whether to hedge or not.” The investment industry is also in a state of flux, but Gendron says his team is well prepared to meet the coming changes. “The system is not perfect, but it is enabling us to be more efficient – and really, we needed to be with all the new regulations,” he says. “The industry will continue to change a lot; it is getting more organized. The biggest challenge now is not going into overkill territory with the new regulations.”
ISABELLE GENDRON Gendron Team, BMO Nesbitt Burns
The other lynchpin of the Gendron Team at BMO Nesbitt Burns, Isabelle Gendron joined the family business in 2006 after a stint at Merrill Lynch Canada as an investment banking analyst. Working alongside her father, Jérôme, and her brother, Christian, she has helped develop the team into one of BMO Nesbitt Burns’ best performers. As she explains, the close familial bond has allowed them to succeed in the workplace. “I’m more involved with trading and managing the financial plans for the clients,” she says. “I will do the analysis for clients, but we really work as a team here and share clients.”
“We have recently started to focus more on gold” Building an AUM of more than $300 million hasn’t come overnight. Rather, careful analysis of the markets and anticipation of its peaks and valleys has allowed the Gendron Team to excel – and Isabelle Gendron has been at the forefront of that success. “We have mainly Canadian exposure,” she says, “but in sectors that are weak here – healthcare, technology, consumer discretionary – we look at US companies or international. We like to have a diversified portfolio. We have about 20% financials, but we don’t want to be overweight in a particular industry.” As more and more people move into the discretionary management space, clients have never had greater choice when it comes to seeking expert advice for their money. What information managers must supply to them is another major change, one that Gendron acknowledges can be very time-consuming. “We are ahead of the wave, I think,” she says. “We started as discretionary portfolio managers in 2010, and now it is becoming very popular. The main change has been administrative and with regulation. Paperwork takes up a lot more of our time now.” Despite the extra regulatory burdens, the ability provided by discretionary management to make moves in a timely fashion is critical to staying one step ahead. “We have recently started to focus more on gold,” Gendron says. “We can take a position in the market really rapidly and do well that way. Recently we have added some Canadian names in the portfolio because we think Canada will do a bit better in 2016. Are we selling our US stocks, though? No, it’s just a marginal move.”
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FEATURES
COVER STORY: LEADING PORTFOLIO MANAGERS SUSAN ANDRIGHETTI
YOUSSEF ZOHNY
CIBC Wood Gundy
StennerZohny Investment Partners
A first vice-president at CIBC Wood Gundy, Susan Andrighetti and her team excelled amid the market volatility of 2015 and most of this year. While last year was far from a vintage period for Canadian stocks, her exposure to the US more than balanced that out. Now that the US-Canada dichotomy has turned around somewhat, her team has reacted in turn.
“I think you need an overlay on every portfolio right now to think about potential disruptors” “It’s nice that the Canadian market is finally starting to add some returns to portfolios,” she says. “The majority of returns over the past number of years has come from US dollars, US securities, dividend income and bonds. This year Canadian securities have started to kick in, and because my focus is on divided-yielding Canadian securities, it has been a good place to be this year.” Which, of course, is exactly the opposite of what was happening this time last year. “We did really well because of our exposure to the US dollar and securities, but we’ve been transferring back into Canada this year,” Andrighetti says. “My view now is that we are transitioning out of a growth market and into a value-oriented market for energy here, and you have to buy if you’re a long-term investor.” Another factor to consider is the loonie’s rally. Andrighetti believes we have probably reached a ceiling as far as the dollar’s gains against the greenback go. “I think that currency is a really important lever for the global economy,” she says. “It can create and solve a lot of problems. Here in Canada, when it went to 68 cents, that was just too low. Purchasing-power parity on the Canadian dollar is over 80 cents, but I suspect it will be hard for it to break above that level. The trading range is probably 70 to 80.” As for future investments that will keep her portfolios healthy going forward, Andrighetti identifies developments in technology as something any self-respecting money manager must keep on top of. “I think everyone needs to be thinking about disruptive technologies out there,” she says. “Look at the banks – they are all over that area right now with Fintech. Car companies, too, with the likes of Tesla. I think you need an overlay on every portfolio right now to think about potential disruptors.”
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Youssef Zohny has built quite a reputation in the investment business. From managing one of Canada’s bestperforming equity funds at Van Arbor Asset Management to founding his own firm at Richardson GMP with partner Thane Stenner, he’s had an impressive career arc. Today, StennerZohny Investment Partners is a key component for Richardson and its $26 billion assets under management. With $500 million AUM itself, StennerZohny has emerged as a key player in the industry. Around one-third of its portfolio is in alternatives, while the other two-thirds are divided mainly between equities and fixed income/income alternatives. This approach was borne out of careful consideration into how the markets are today and where they may be headed. “Since we started, we have actively moved most of our accounts to discretionary management,” Zohny says. “We are using more ETFs in our portfolio, which is a big component of what we do. We look at ETFs as a way to get efficient, low-cost exposure for our clients. The remainder of the portfolio is then made up of institutional-class, third-party managers.”
“One area that we have positioning in since late last year is gold and precious metals” A certain way to find yourself on the back foot in the investment industry is to fail to read the seas of change. Easier said than done, perhaps, but it is achievable. The oil shock of the past two years, for instance, was not a surprise to StennerZohny, and they moved to limit their exposure to energy before the fall really hit home. Although oil has recently rallied somewhat, the market will remain highly volatile, and as such, continues to present a big risk for investors. Where, then, has Zohny looked to find value in the markets, given the ongoing turbulence? “One area that we have positioning in since late last year is gold and precious metals,” he says. “It has been a very good performer for us. We have taken some profits there, given the significant rally, but we still have some long-term resource managers we are allocated to.” Like his partner, Zohny believes that preparing for all eventualities, good and bad, is the right course to take. “We expect there will be some choppiness in mining and commodities in general,” he says, “but over three to five years, they look cheap, so we are allocating for that. Also, short-buys and hedge strategies are opportunities we see going forward.”
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EMERGING MARKETS
LANDS OF OPPORTUNITY Wealth Professional spoke to some experts in their field to find out which emerging markets could bring high returns heading forward
WHILE THE investment community is divided over what short-term gains may mean for Canada’s long-term financial health, there does seem to be general consensus when it comes to emerging markets. In this case, the agreement is that growth in developed nations (ours included) is unlikely to rise anywhere above anemic levels anytime soon – but it’s quite different in emerging markets such as China and India, and also smaller countries such as Mexico and South Africa. At the recent Excel Funds symposium at the Royal York Hotel in Toronto, three subadvisors for the firm’s investment strategy in these regions – Richard Pan of the China Asset Management Company, Mahesh Patil of Birla Sun Life Asset Management and Sergei Strigo of Amundi Asset Management – outlined the reasons why these markets are
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attractive investment propositions, as well as the risks involved.
China’s new stability As the head of QFII investments and international equities at China AMC since 2013, Richard Pan is at the forefront of a nation that is moving away from heavy industry to a service-based, consumer-driven economic model. “China has had consistent growth of around 10% over the last 10 years, peaking in 2007 at 14%,” he says. “Over the next 10 years, that will slow down to around 6% to 7%, then 5% over the long-term, which is much better, as it is more sustainable.” Driving that change is a demographic shift among the population, of which China has no shortage.
“The balance between life and work is changing,” Pan says. “The growth we have now is much more balanced and healthy. We are transferring to a knowledge-based economy with internet companies and healthcare replacing coal and steel producers.” China currently produces 50% of global steel, according to Pan, but that ratio is likely to diminish markedly in the years to come. In addition to the population becoming wealthier, better educated and more urbanized, the effects of the country’s infamous one-child policy are finally being felt. China’s huge population was once its main advantage in fuelling growth, but now other areas have to be pursued. “The long-term demographic change is worrying because the working-age population is shrinking, similar to what we have already
“China needs to evolve from being a low-cost manufacturing centre. We cannot compete with India because workers are four to five times more expensive here, so innovation is key to our future growth” Richard Pan, China Asset Management Company seen with Japan,” Pan says. “We have many advantages for investors, though. There is great infrastructure with high-speed rail, 4G telecommunications and expressways across the country. The foundations are there.” “The Chinese government has the tools to achieve its goals and are very quick to imple-
ment specific investment programs, fiscal and monetary stimulus,” agrees Sergei Strigo of Amundi Asset Management. “They know what type of growth they need, and I have no reason to believe they won’t achieve that.” Pan, too, is confident in China’s prospects for transforming its economy.
“The phrase ‘Made in China’ will change in the future as China adapts to the new technology and moves toward a supply-side economy,” he says. “China is second in the world for R&D spending, behind only the US. Our internet companies have a $600 billion market cap, and we have the largest ecommerce company in the world in Alibaba.” Despite the volatility in Chinese stocks over the past year, clearly there are still plenty of opportunities for savvy investors to explore – and Pan points to tech as a particularly promising sector. “A good example of how the country is changing its economic model is the WeChat app,” he says. “It is the most popular social network in China and has built up 700 million users after only five years, making it the largest messaging app in the world.
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EMERGING MARKETS Most of the news in China is now spread using WeChat. Unfortunately, that’s how rumours about the economy are spread too, so that can often make the markets more volatile.” With a population of 1.4 billion people, a large slice of whom are now moving into the middle class, China’s consumer base is like no other on earth. “The smartphone market is an area that China is very ambitious about,” Pan says. “Xiaomi is currently number four or five globally for smartphones, but it is aiming for the number two or three position. Many phones are assembled here, but China needs to evolve from being a low-cost manufacturing centre. We cannot compete with
India’s rapid transformation While China moves away from the land of double-digit growth towards a more sustainable long-term vision, another huge country hopes to take its place. At 1.3 billion people, India isn’t far behind in terms of population, and the UN predicts it will overtake China by 2022. However, it lags somewhat behind in terms of GDP (ninth in the world), so motivation is there to expand exponentially over the years to come. Central to that ambition will be having a government in place that can harness India’s huge potential for growth. No stranger to political strife, and with tensions with neighbouring Pakistan always looming, India
“There is competition now between the states to attract investment into their areas. So that creates job opportunities, and Modi has realized that is the best way to stay in power” Mahesh Patil, Birla Sun Life Asset Management India because workers are four to five times more expensive here, so innovation is key to our future growth.” While its massive population has been China’s main strength in becoming the world’s second largest economy (projected to be number one by 2026), it’s fast becoming one of the country’s main burdens. The aging demographic certainly presents a worry for the People’s Republic, but if Beijing’s reforms have the desired effect, China will be able to emerge as a true superpower with crossgenerational longevity. “The demographics are shifting with the growth of the middle class,” Pan says. “In 1985, Chinese people were largely rural and poor. By 2015, that had changed to a much larger urban population and a growing upper middle class. By 2025, it is predicted that 60% of the population will be upper middle class, and that will be a major driver of economic growth.”
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nevertheless looks to have turned a corner in its bloody recent history. The government of Prime Minister Narendra Modi has won praise from the world’s investment community. Mahesh Patil of Birla Sun Life Asset Management reveals that political reform has allowed India to become a market with enough potential that economist and former Harvard president Lawrence Summers felt confident enough to predict a growth rate of 9% for the subcontinent. “When Mr. Modi and the BJP [Bharatiya Janata Party] came to power, the agenda was to empower the states much more,” Patil says. “The government dismantled the planning commission, which allocated budgets, so states were given the freedom to run their own policies. There is competition now between the states to attract investment into their areas. So that creates job opportunities, and Modi has realized that is the best way to stay in power.” India’s own brand of federalism has
thus created a healthy sense of competition among the states, and that is fuelling growth nationally. “The states do have a lot of power – things like a land acquisition or labour laws are governed at the state level,” Patil says. “Some of the states are seen as more progressive – Gujarat, Maharashtra and Tamil Nadu have seen a lot of industrial activity. If you look at the overall GDP growth of India, which is about 7% or so, there are certain states that are as high as 10%.” Of course, a national growth rate of 9% or 10% is far from predestined. There still is a lot of work to do to maintain India’s development as it transitions from an agrarian society to an industrial one. Another challenge is the Indian people’s deep-rooted aversion to banks. “Culturally, Indians have preferred hard assets like real estate and gold, but that is changing,” Patil says. “There are two reasons for that. One is that the younger generation prefer financial assets; they are much more savvy in that sense. More important than that is the fact we are in an interest-rate regime that is positive. That’s the stance of the Modi government and the central bank, so we will see more money coming into the banking system.” The government is also taking steps to eradicate the nation’s still-thriving underground economy. “There is a lot of money in the black economy,” Patil says. “With new technology, you can track transactions, and that will make it difficult to keep large amounts of black money. These factors will drive more financial saving by households, which will come back into the markets and help development.” Infrastructure will be another key driver of India’s burgeoning economy, says Amundi’s Sergei Strigo. “If they implement all the infrastructure development they are planning, we will see growth go significantly higher,” he says. “The growth rate as it stands is quite incredible.” For India to maintain and build on its growth rate – currently the highest of all the major economies –Patil says outside investment is key. “Foreign capital is coming into services, banking, insurance; there is a lot of money
coming into the internet space and ecommerce. Manufacturing, too – for example, in the automobile and telecom sectors. A lot of sectors have opened up for FDI. Recently Ikea announced its first big store for India, so retail is growing, too.” In addition, China’s economic realignment offers India plenty of windows of opportunity. “On the manufacturing side, textiles is one area that is growing,” Patil says. “Because China is not as competitive now in textiles, there is a lot of scope for Indian companies to really capture that market. We also have a large engineering talent pool, so there are a lot of companies there. Chemicals has started to really grow as China introduces new pollution laws and their plants shut down, so India is benefiting from that.” Then, of course, there is India’s huge geographical size and population demographic – the median age is 23, and 65% of people are below the age of 35. With approximately 1 million people added to the working population every month, India is also projected to have 40% of world’s middle class by 2050, according to Patil. Statistics like that paint a picture of a country that could rise to become a dominant power over the next century. And according to Patil, this phenomenon has already started to take shape. “Pharmaceuticals here has a lot of R&D capabilities, and that has been demonstrated by India capturing a large share of the US generics market,” he says. “For electronics, India has never had a large manufacturing base, but now it is starting to build more large factories to make mobile phones and other electronic items. Recently Foxconn, which is the world’s largest manufacturer of mobile phones, set up a shop in India just to supply to the local market.”
Other developing markets to watch As head of emerging market debt and currency at Amundi, Sergei Strigo knows the importance of sound fundamentals for developing economies like China and India. Amundi is the number-one asset manager in Europe, overseeing more than US$1 trillion; as such, it has a truly worldwide presence.
“The emerging market debt funds that we manage are global,” Strigo says. “We invest in Asia, Central and Eastern Europe, the Middle East, Africa, and Latin America. We do pretty much the same across the board – we invest in government and corporate bonds.” While the possibility of large returns in China and India isn’t news to most advisors, Strigo identifies some lesser-known nations where Amundi has exposure. “In Africa we invest in countries like Tunisia, Egypt, Morocco; also sub-Saharan Africa in places like Nigeria, Gabon, Zambia, Ghana and obviously South Africa,” he says. “The main issue with growth in Africa, especially sub-Saharan Africa, is that they are
“The interest rates in some of these countries are very high. Russia is 11%; Brazil is over 14%, so these are quite significant yields” Sergei Strigo, Amundi Asset Management exposed to commodity prices one way or the other. Nigeria, for example, Ghana, Gabon and Angola are all oil-producing countries; South Africa is linked to metals, so the drop in commodity prices has been negative for these countries.” While political upheaval and unpredictable commodity markets mean investment in these countries is always a risk, there are plenty of reasons to make that leap. “They have very low debt,” Strigo says. “Some of these countries, in terms of public debt, have very few bonds. They also have help from institutions such as the IMF, which is now working with several countries to provide a plan for them to grow. The medium- to longterm perspective for us is that these countries have a lot of development to come.”
Strigo, a Russian native now based in London, has watched his home country’s economy plummet since the oil shock took hold in 2014. The descent wasn’t bad for everyone, however, and as the economy sank, those looking for returns on fixed income could find great value in Moscow. “Last year, Russia was one of the best bond markets in the emerging market space,” he says. “This year we’re hoping for growth in the economy to be around zero, but it looks like it will probably still be negative – less than 2015, but still negative. A lot depends on the oil price, but we can see small growth returning in 2017.” Canada, of course, has had its own cross to bear regarding its energy dependence. Now seeking greater diversification in its economy, can it offer any lessons to Russia? “There have been steps taken, but clearly it’s not that easy; otherwise, Canada would have done that many years ago,” Strigo says. “Due to the international sanctions and the counter-sanctions Russia imposed on European exporters of agriculture, we saw that domestic food production replaced imports, so that was one of the most positive stories we have seen in Russia.” An expert in the realm of central banking policies and their effects on market debt, Strigo doesn’t foresee the Fed showing much inclination to increase its rates any further this year. “I don’t think the Fed is in a hurry to tighten interest rates, and even if they do, one rate hike will not do much for emerging markets,” he says. “Also, if it is more than one, there are major central banks across the world that are doing the exact opposite – the ECB and the BOJ in particular. The interest rate situation globally is favourable for emerging market debt.” Global currency is another area of expertise for Strigo, and it’s one where he sees plenty of potential for solid returns. “In our portfolio, what we like is exposure to the currencies that pay high interest rates if you invest,” he says. “In India, you are able to have about 7% yield per annum investing in Indian currency. The interest rates in some of these countries are very high. Russia is 11%; Brazil is over 14%, so these are quite significant yields.”
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ADVISOR PROFILE
Making investments at the core Ronald Chui of CIBC Wood Gundy has navigated the stormy economic seas in Western Canada better than most. He explains his dedicated strategy for safeguarding his clients’ wealth BASED IN Calgary, Ronald Chui has witnessed firsthand how the plummeting price of oil has laid the city low over the past year. Cowtown, like most of Alberta, is dominated by energy, with all the associated highs and lows that are intrinsic to that industry. Although his exposure to oil was nonexistent until very recently, the fact that his home base is in Calgary means Chui’s business has become more personal. “If my clients have experienced a layoff, we are able to support them with that and go through documents and all the fine details,” he says. “Overall, maintaining a client relationship over the long term is not always revenue-driven. That’s key for us.”
Building blocks It’s been a consistent rise for Chui, who entered the industry a decade ago and steadily built his client base and assets under management. Developing a strong relationship with those who elect to walk into his office has been central to that success. “I started in 2012 with zero and built the business up to an AUM of $100 million,” he says. “I deal with institutional dollars, too, and sometimes money comes in and out quite fast, so it’s a little lower now at $76 million. I think the biggest thing for my institutional clients is the educational piece. I’m able to share my knowledge, and that’s what they enjoy.”
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That know-how certainly was evident when he chose to sell off his oil assets right before the energy crash devastated his home city. Given the economy’s growth south of the border, moving into US assets was a natural switch. “In 2014, we sold off the oil exposures in our portfolio,” he says. “Since then, I have been sitting more in the cash side. I have been buying consumer staples and sticking to low-volatility strategies. When Canada and the US were near par, we transferred a lot of cash into US dollars.” Fast-forward to today: Oil has rallied somewhat, although it’s still way below a level Canadian producers would deem sustainable. That said, Chui has decided to reintroduce energy to his core portfolio, Global Core Plus. “In my portfolio, I have 5% oil. I will be looking to add a little more, but for me, the fundamentals are the same, so I will remain on the cautious side. We do have cash available if we need to purchase more oil stocks.
That could be through an ETF or a specific security.” Wearing two hats for his team at Wood Gundy as an advisor and portfolio manager, Chui also likes condominium reserve funds as an investment in his home city. As a portfolio manager, his focus is on Global Core Plus, which is exclusively ETFs and is made up of Canadian, US and international low-volatility assets, with specific sectors such as healthcare a key component. “I have a high concentration of US, Canada and MSCI – those three account for a large part of my core,” he says. “Then I have been buying in other areas such as consumer staples. We have a team approach here; I work closely with Susyn Wagner, who looks after securities for the team, and I focus on ETFs.”
A balanced approach Self-avowedly conservative in his investing, Chui prefers to avoid picking specific stocks, focusing instead on sectors with a likelihood
WATER, WATER EVERYWHERE It takes up about 71% of the earth’s surface, yet there is a distinct shortage of potable water all around the globe. It’s one of this planet’s great contradictions – but also an area were savvy investors can get involved, as Ronald Chui has witnessed. “Recently I have also become interested in global water ETFs,” he says. “It tracks companies involved with water-related business in developed markets. That could be water utilities, infrastructure, etc. Water is only going to get more expensive down the road, so people need to get ready for that.”
LANGUAGE LESSONS
Chui’s father became fluent in French while working for a Calgary oil company
“Maintaining a client relationship over the long term is not always revenue-driven. That’s key for us”
Chui emigrated from Hong Kong to Canada with his family in 1989
Soon after arriving in Canada, he enrolled in a French immersion program
of strong returns. “I have also been looking at healthcare – not a specific stock like we seen with Valeant, which can really hurt an investor,” he says. “It’s better to have a whole basket of healthcare stocks across Canada, the US and internationally.” The loonie’s rally since February is another area with plenty of potential for returns, especially in today’s investment world where different investment vehicles
like ETFs are available. “I think the interesting part about currency and its constant changes is that for ETFs, you can now have Canadian hedged or unhedged,” Chui says. “I have a US dividend growers index that’s hedged in Canadian dollars. That has more than doubled what the S&P composite has done, year-to-date for May. As a discretionary manager, we are not just buying and holding passive securities; we really have to look at currencies.”
He learned French, English and Cantonese during his school days
Today, he studies Mandarin – a useful tool for a wealth manager
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PORTFOLIO MANAGER
In their element WP caught up with two of the managers of the AGF Elements portfolios, Tony Genua and Jean Charbonneau, to get their opinions on strategy, asset allocation and interest rates
WP: Why did you create the AGF Elements portfolios? Tony Genua: We introduced the AGF Elements portfolios to address the different needs and risk profiles of investors. AGF has always offered a number of mutual funds to clients, including balanced portfolios, which range from more conservative portfolios – with less exposure to equities – to an all-equity global portfolio. AGF Elements consists of five portfolios, each with an individual risk profile based on its asset mix. The portfolios consist of fund-of-funds. About a year ago, we introduced a tactical fund into the Elements portfolios, which gives us added flexibility to introduce individual securities as well as ETFs. It helps us to be more nimble in response to the volatility that seems to be increasing in the marketplace.
WP: What benefits does the AGF Elements solution offer to investors and advisors? Jean Charbonneau: This is an actively managed solution with an asset allocation team that analyzes tactical decisions on a quarterly basis. That’s one of the main benefits for investors. Also, our tactical fund acts as an umbrella fund, which overarches the five profiles within Elements. The tactical fund provides us the flexibility
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to capture opportunities whenever they arise. We’re able to implement a flexible strategy, and that’s a big benefit.
WP: How do you identify investment opportunities for AGF Elements? TG: AGF has over 50 investment professionals in offices all around the world, and we have an asset allocation committee that is a subcomponent of these investment professionals. Our investment professionals work across the spectrum of portfolios, and we utilize all of their input and knowledge. Every quarter, we survey our investment professionals to make sure we capture all of their opinions on events in the capital markets. I’m responsible for US growth equities, and I’ve been looking at the US stock market for over 30 years. Jean has been working in fixed-income markets for over 30 years. That depth of experience is brought to bear for investors. It’s about the debate, the dialogue and different points of view. It doesn’t just depend on one person or asset category – the committee brings together diverse opinions to develop a broad-based, informed view of the capital markets.
WP: How important a role does the AGF Asset Allocation Committee
play in your overall strategy? JC: It’s very important. We initiate debate, have discussions and funnel all of our knowledge and expertise. We use the Black-Litterman reverse optimization process, and the committee meetings are where we get the information needed for that reverse optimization. The AGF Asset Allocation Committee determines the overall asset mix within the portfolios, and as you know, asset allocation can be a strong driver of returns.
WP: What has been your approach regarding interest rates? JC: A combination of interest rate anticipation and duration management is
the markets are starting to stabilize on a subdued rate of economic growth, and we think that eventually the markets will work themselves into a better position. The AGF Asset Allocation Committee particularly likes US equities, and although the US is somewhat challenged by weak oil prices, there are still relatively good conditions vis à vis other corporate profit pictures around the world. We’re liking the US, and we’re overweight there. In Canada, oil prices have rebounded from their lows in late January and early February, so we’re becoming more constructive on the Canadian stock market and in our Canadian portfolios, compared to the benchmarks. JC: The central bankers have created distortion in the marketplace in recent years; there’s been a disconnect between value and fundamentals. The transparency created by central bankers has resulted in less value in the market; the fundamentals are less clear. In recent years, there has been a significant repricing of emerging markets, and that could highlight some value at some point.
WP: What are the biggest risks you see for global investors over the next few years?
central to the strategy of AGF Elements. This is what a bond manager is all about. Since the Great Recession, we’ve had to closely monitor our policymakers; that’s been an underlying theme. Central bankers have been the dominant players in the marketplace, and we need to understand how that impacts the markets.
WP: How would you assess the current state of the markets? TG: Recently, we’ve seen considerable volatility and uncertainty, particularly as global growth continues to slow down. Barely two weeks ago, the IMF reduced the global growth profile based on slowing global economies. It does seem as though
TG: The EU Brexit vote and Fed policy in North America are two definite risk factors. I would welcome a Fed rate increase because, compared to where they’ve been historically, we’re far from normal in terms of interest rates. In the US, both candidates in the upcoming election have attributes that may not be welcomed by the stock markets. JC: The markets are driven by liquidity and momentum more than fundamentals at the moment. We’ve seen a lot of liquidity taken out of markets in recent years, so that could prevent brokers from marketmaking, which could have a big impact.
WP: What opportunities are there for advisors for investors in today’s volatile markets?
TG: I draw an analogy between now and where we were in 2011. With the sovereign debt crisis in Europe in 2011, we had a lot of international risk, and today it’s more around slowing economic growth internationally and the Brexit vote. We have a fair number of risk factors. In 2011, we had domestic concerns around the US losing its triple-A bond status, and today it’s around Fed policy and lacklustre economic growth. In 2011, those risk factors ended up creating a buying opportunity for the stock market, and we think that something similar could happen again. The AGF Asset Allocation Committee is keeping a cash position to be ready for this opportunity. Advisors should stay the course and not be too shaken up by downdrafts in the stock market. JC: Leave market timing decisions to the professional asset allocation committees, who can monitor markets daily and have the nimbleness to make adjustments to portfolios. Market timing is not a thing that an advisor should be concentrating on.
TONY GENUA Years in the industry: 30+ Position: Senior vice-president and portfolio manager, US equity, and co-chair of the Asset Allocation Committee Career highlight: Looking for investment opportunities around the world
JEAN CHARBONNEAU Years in the industry: 32 Position: Senior vice-president and portfolio manager, fixed income, and co-chair of the Asset Allocation Committee Career highlight: Along with Genua, bringing the asset allocation committee concept to AGF
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SPECIAL PROMOTIONAL FEATURE
MANAGED PORTFOLIOS
What actively managed portfolios could do for your clients Wealth Professional sat down with iA Financial Group’s Clément Gignac to discover why advisors need to look beyond traditional fixed-income strategies and begin to create diversified portfolios DIVERSIFICATION HAS always been a critical component of successful investing, but now that global markets are more interconnected than ever, having investments in different geographical locations, asset classes, currencies and bonds is a must. “Investors with a narrow approach are at risk in the case of a significant economic downturn, like what has happened in Canada’s energy sector over the last year,” says Clément Gignac, chief economist at iA Financial Group and lead portfolio manager at IA Clarington Investments [iA Clarington]. “When you have a diversified portfolio, you reduce your currency risk, interest rate risk and geopolitical risk, and you reduce the volatility of your portfolio. If you want to be successful in investments, it’s very important to have a more diversified approach.” Seeking out investments in alternative locations is integral to creating that diversification. This is especially true for Canadian investors, since the country’s output only
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represents 3% of the global economy. Gignac sees mutual funds as an effective way for Canadian investors to diversify. “A mutual fund’s investments spread out the risk and open avenues for more opportunities,” he says. “But it’s important for advisors to not just recommend one or two mutual funds or limit their clients to Canadian mutual funds. You need to go beyond a singular region and consider different regions and asset classes. Managed products also offer a great alternative for advisors.” With that in mind, iA Clarington created a new managed asset program consisting of five diversified portfolios with a fund-offunds structure. The IA Clarington Managed Portfolios, which will be overseen by Gignac, were designed to achieve a balance of target risk and return by carefully combining asset classes for broad diversification. “We have some conservative portfolios, which target an 85% fixed income, 15% equity asset mix,” Gignac says, “and at the other extreme, we
have the Maximum Growth Portfolio, which has a target asset mix of 100% equities.” The flexible solutions aim to help investors navigate the combination of volatility and low interest rates. “All of the managed portfolios are constructed with the intention of providing diversification through asset classes, investment style, geography and market cap,” Gignac says. “We have an equity investment style for each portfolio that is diversified by value, core and growth mandates. We have some foreign exposure, too.” The portfolios will be actively managed in all aspects: asset allocation, foreign currency exposure and due diligence. Although Gignac is taking the lead role in managing the new funds, it’s not a one-man show. Industrial Alliance Investment Management [IAIM] has put together a committee to determine the asset allocation of each fund. “The underlying portfolio segments are managed by high-profile portfolio managers, including Dan Bastasic and Jeff Sujitno,”
Gignac says. “As well as having access to bright people within iA Clarington and IAIM, we’ve also connected with some external managers, including QV Investors, Radin Capital Partners and Loomis Sayles. We’re excited to have put in place such specialists in different asset classes.” When he joined iA Financial Group three years ago, Gignac implemented a top-down asset allocation process. “The committee has meetings on a regular basis, and we always start with the big picture,” he says. “We have an overview of the economy – our view on economic growth, currencies, commodities, interest rates and the geopolitical climate. After that, we look at valuation of the current asset classes and market momentum. Then we decide the asset allocation of each fund.” Gignac and his team have full discretion regarding asset allocation and are flexible to fine-tune the strategy if necessary. “If, for example, we want to adjust strategy, we can use an ETF to tactically increase an
exposure to an asset class beyond what we have already,” Gignac says. “We always do due diligence on the underlying funds to be sure they’re consistent with the investment policy, and, on a daily basis, we monitor the performance of each portfolio manager compared to their benchmark.” Gignac meets with his inner circle every day to analyze the impact of any geopolitical events. “From time to time, there are significant game-changers,” he says. “For example, 18 months ago, when OPEC decided to shift their market share strategy, or last August when China decided to allow the yuan to depreciate against the US dollar for the first time in a decade. We monitor the risk of all our managed portfolios, and we watch for any game-changers.” Gignac believes that, in addition to enabling advisors to meet clients’ goals, the IA Clarington Managed Portfolios simplify the overall investment process. “With the funds being actively managed, advisors have time to put more emphasis on financial planning,” he says. “This is important because, for many clients, the biggest risk is not capital markets volatility; it’s longevity. Advisors can take comfort in knowing that the portfolios will be managed and monitored on a daily basis and remain within their risk tolerance.” As average life expectancy continues to rise, Canadian advisors are under increasing pressure to adopt long-term strategies that will fund clients’ lifestyles well into their 90s. “With the longevity risk, all investors need a diversified portfolio,” Gignac says. “That’s the reason we launched the actively managed solution – it creates diversification in terms of geographic, asset class, investment style and market cap exposure.” Commentaries are provided by the portfolio manager or subadvisor responsible for the management of the fund’s investment portfolio, as specified in the applicable fund’s prospectus (“portfolio manager”). The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decision. Statements by the portfolio manager represent their professional opinion, do not necessarily reflect the views of iA Clarington, and should not be relied upon for any other purpose. Information presented should not be considered a recommendation to buy or sell a particular security. Specific securities discussed are for illustrative purposes only. Mutual funds may purchase and sell securities at any time and securities held by a fund may increase or decrease in value. Past investment performance of a security may not be repeated. Unless otherwise stated, the source for information provided is the applicable portfolio manager. Statements that pertain to the future represent the portfolio manager’s current view regarding future events. Actual future events may differ. iA Clarington does not undertake any obligation to update the information provided herein. 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. Trademarks displayed herein that are not owned by Industrial Alliance Insurance and Financial Services Inc. are the property of and trademarked by the corresponding company and are used for illustrative purposes only. The iA Clarington Funds are managed by IA Clarington Investments Inc. iA Clarington and the iA Clarington logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under license.
GETTING TO KNOW CLÉMENT GIGNAC CURRENT POSITIONS Senior vice-president and chief economist, Industrial Alliance Financial Services Lead portfolio manager for the IA Clarington Yield Opportunities Fund, IA Clarington Monthly Income Balanced Fund and IA Clarington Managed Portfolios President of the Industrial Alliance Asset Allocation Committee EXPERIENCE 30 years in the public and private sectors Acted as economic consultant and strategist for several prominent financial institutions, notably as vice-president and chief economist at National Bank Financial from 2000 to 2008 During this period, he was regularly named one of Canada’s top three economists/strategists in the Brendan Wood annual survey of portfolio managers EDUCATION Master’s degree in economics from Université Laval POLITICAL CAREER Former member of the National Assembly and minister in the Quebec government. As minister of economic development, he introduced the government’s strategy in research and innovation In 2009, served as special advisor to the deputy minister of finance in Ottawa, and officially represented Canada on a G20 task force RECOGNITION Elected president of Association des économistes québécois [ASDEQ] in 2008 In 2012, was asked to chair the committee on competitiveness at the prestigious World Economic Forum in Davos Invited to be a standing member of the Conference of Business Economists in Washington, DC
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JUNE 2, 2016 | THE LIBERTY GRAND | TORONTO
WPAWARDS.COM
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THE SECOND ANNUAL Wealth Professional Awards took place on June 2 in the luxurious surroundings of the Liberty Grand on the banks of Lake Ontario in Toronto. In attendance were luminaries from across the wealth management sector, recognizing those selected as the best in their field over the past year. One such individual was William Vastis of William Vastis Wealth Management Group, honoured as Advisor of the Year on the night. “It’s a fantastic industry – you get to meet some wonderful people, and you never stop learning,” he said after receiving his award. “I really appreciate what I have learned from my clients, and that’s what keeps me going.” The common theme among the winners was pride in one’s work. Financial advisors have sometimes suffered from certain members of the profession behaving in less than scrupulous ways. The ‘few bad apples’ analogy certainly had a ring of truth to it in the past. In 2016, however, that appears much less
of an issue; transparency is the buzzword of the day, and the vast majority in the industry welcome the changes that are improving the reputation of those who manage money for a living. Technology is another key issue for advisors, and the firms that harness the vast potential of the digital era will prosper most going forward. This realization was reflected at the Wealth Professional Awards, where prizes were given for Digital Innovation & Marketing and Outstanding Service Provider. The need for today’s advisors to have a grasp of international affairs and the opportunities offered by emerging markets also was reflected in the prize for Best Global Advisor. Advancements in technology mean that the world truly is local now, but that’s not to dismiss the actual meaning of local, and the importance of community and small businesses that do so much to drive the economy. Wealth Professional
therefore thought it was imperative to recognize those who excelled in community service, as well as smaller firms that are no less committed to their clients. The presence of Young Gun and Lifetime Achievement awards provides evidence of the progression of the industry, one that has been criticized in the past for being too averse to change. The evolution of wealth management is happening regardless, and those who were celebrated at the Wealth Professional Awards are clear evidence of that.
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The Investment Planning Counsel Award for
BROUGHT TO YOU BY:
Digital Innovation & Marketing Award WINNER SHANNON LEE SIMMONS New School of Finance
“I’m overwhelmed and very excited. This is the first award I have won in my industry, so this means so much to me” IN THIS industry, it’s vital for advisors to embrace technology and use it to meet the ever-evolving needs of clients. Shannon Lee Simmons of the New School of Finance realizes that better than most. Her firm is a fee-only practice that offers
guidance for individuals and small business owners in making sound investment choices. In building her business, online marketing has proved an invaluable tool in creating awareness for the brand, as Simmons revealed after accepting her award.
“It’s really important for a company our size with 900 advisors to ensure we provide a great support structure for the customers. Digital innovation is extremely important to us” JOHN NOVACHIS Investment Planning Counsel
AWARD SPONSOR Investment Planning Counsel Inc. is an integrated wealth management company founded in 1996. Investment Planning Counsel supports advisors in delivering a distinctive client service experience by providing client-focused advice that helps Canadians live their dreams. With over $24 billion in assets under administration, Investment Planning Counsel is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada’s premier financial services companies with $135 billion in total assets under management as of May 31, 2016. For more information, visit ipcc.ca
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“Without clients, there is no wealth management industry, so getting the word out about your business is so important.” Simmons quite rightly places a great deal of emphasis on marketing. As she says, there isn’t much point having a great advisory firm if nobody knows about it. A frequent presence in the financial media, and now an award winner to boot, there’s little chance that the New School of Finance will fade into the night anytime soon.
FINALISTS Randy Cass Nest Wealth Desmond Chow ATB Securities Patti-Jo Wiese Allan Financial Peter Katevatis Canaccord Genuity Wealth Management Shannon Lee Simmons New School of Finance Tea Nicola Wealth Bar
The Nest Wealth Award for
BROUGHT TO YOU BY:
Business Development Manager/Wholesaler of the Year WINNER GREG LAGASSE Edgepoint Wealth Management
“We are on the cusp of great changes in the industry, which I think are a good thing. It will make all of us in the industry more professional and more accountable” A PARTNER with Edgepoint Wealth Management, Greg Lagasse welcomes the changes in the wealth management industry. The son of a financial advisor, Lagasse has built a reputation for putting the needs of clients first, which has served him well in his professional life. Lagasse joined Edgepoint in 2009 and quickly became known as someone who could build strong relationships with clients. The independent firm offers mutual funds, institutional and other investment products to those seeking to consolidate and grow their wealth. As such, Lagasse has played a crucial
“We have a vision of the future that, whether you’re a wholesaler, a broker dealer or a traditional advisor, there is room within your practice to improve with digital” RANDY CASS, Nest Wealth role in the business continuing to grow. “With our firm, the target is always doing what’s best for our clients,” he says. “Right now we deal with 130,000 families, and we are very focused on doing our best to protect them.”
AWARD SPONSOR Nest Wealth is Canada’s original and largest independent digital wealth advisor and the engine powering better digital wealth management for advisors, portfolio managers, and institutions in Canada. Nest Wealth’s newest product, Nest Wealth Pro, gives advisors the tools they need most, including but not limited to: white labeling, paperless and secure onboarding, and the ability to keep all assets at the advisors’ custodian of choice. Nest Wealth Pro is the easiest and most innovative way for firms and advisors to rapidly provide exceptional digital experiences to their clients, all while managing their own business with greater efficiency. For more information, visit nestwealth.com
FINALISTS Craig Koenig CI Investments Coby Bucci NEI Investments Jack Slusarczyk Excel Funds Management Warren Miles Sun Life Financial Greg Lagasse Edgepoint Wealth Management Alain Desbiens BMO Global Asset Management Philip Douglas Horizons Exchange Traded Funds Mark Bourgeois Fidelity Investments
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The Sprott Asset Management Award for
BROUGHT TO YOU BY:
Best Advisor - Alternative Solutions WINNER JESSE KAUFMAN Richardson GMP
“I feel great. I would like to thank my partner, Sean Seidman, and my associate par excellence, Fariale Pacha. Without them, none of this would be possible” JESSE KAUFMAN believes his role as an advisor offers great opportunity to make a real difference. “I’ve been in the industry 16 years; it’s an industry where we have the ability to do great things,” he said after receiving his award. “The old model of buy, hold and hope for stocks
is less impactful than portfolio construction. So we try to focus on consistently making money for our clients.” Richardson GMP achieved its status as Canada’s top independent advisory firm by finding and hiring the industry’s best talent. A
“We do a lot of alternative solutions for investors. Traditionally we are known for resource investing, and over the last six years, we have mostly been investing a whole new suite of products for alternative investors” RICH GOODE, Sprott Asset Management
AWARD SPONSOR Sprott Asset Management is a Toronto-based asset management company that is dedicated to being the most innovative fund company in Canada. Through our diversified offering of mutual funds, hedge funds, physical bullion funds and specialty products, we offer financial advisors unique investment solutions that help them differentiate their businesses and add significant value to their clients’ portfolios. For more information, visit sprott.com/youralternative
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portfolio manager and investment manager with his own group, Kaufman can certainly count himself among those individuals. Consistently making returns for clients, especially in an uncertain economic climate, is certainly challenging. The fact he has excelled in the alternative space is a major reason Kaufman has been able to do so, making this award of little surprise to those who know him best.
FINALISTS Arthur Salzer Northland Wealth Management Erfan E. Youssef National Bank Financial Lorne Zeiler TriDelta Investment Counsel Wenbo Zhang Pinnacle Wealth Brokers Jesse Kaufman The Seidman Kaufman Group at Richardson GMP Chad Larson National Bank Financial Faisal Karmali and Team Popowich Karmali Advisory Group, CIBC Wood Gundy
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The National Bank Financial Award for
BROUGHT TO YOU BY:
Community Service Effort of the Year WINNER ROBERT REDMAN HollisWealth
“This is very unexpected. I’m very thankful for the honour, and it really feels great”
WHILE MANAGING and creating wealth is the prerogative for those honoured at the Wealth Professional Awards, it’s also true that other areas of the business deserve to receive recognition. Using some of that wealth for good causes and giving back to the local community is one such area, and the award for Community Service Effort of the Year recognizes that.
FINALISTS Rhonda Sherwood Independent Financial Advisor Gerald Perron BMO Nesbitt Burns Daniel Frost The Frost Group at Raymond James Jay Nash National Bank Financial Debra and Tom Wooding The Wooding Group, CIBC Wood Gundy Robert Redman HollisWealth, a division of Scotia Capital Philanthropy and Sponsorship Team Sun Life Financial
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This year’s winner, Robert Redman of HollisWealth, certainly realizes that success in one’s professional life often offers opportunity to give back, and it’s a responsibility he has not shirked. A senior investment advisor with HollisWealth, Redman has been instrumental
in the 100 Holes of Hope golf marathon campaign. Raising more than $140,000 for two hospitals in Ottawa over the past three years, the event’s organizers are now hoping to raise an additional $100,000 this year with a series of events.
“National Bank donates upwards of $25 million per year, and that doesn’t take into account our advisory channel. Giving back to the community is one of the major things you can do as a business leader” JOHN CUCCHIELLA, National Bank Financial
AWARD SPONSOR National Bank Financial is a leading purveyor of financial services to individuals, corporations and governments since 1859 – making it one of Canada’s oldest financial institutions. With a workforce of 20,000 highly motivated employees totally committed to delivering the bank’s promise, “We are the bank that truly takes care of its clients,” it is also the leading bank in Quebec, and is steadily expanding its footprint across the rest of Canada. Overall, it is one of the best-performing Canadian bank stocks over the past decade (2005-2014).
The iShares by BlackRock Award for
BROUGHT TO YOU BY:
Portfolio/Discretionary Manager of the Year WINNER ARTHUR SALZER Northland Wealth Management
“I really want to thank KMI and Wealth Professional magazine for creating this awards gala to recognize professionals, whether they are dealers, MFDA members or independents” NOW A two-time winner at the Wealth Professional Awards, Arthur Salzer of Northland Wealth Management identified the reasons why the firm he founded has continued to grow. “Northland is independent; we are owned
FINALISTS Arthur Salzer Northland Wealth Management Chad Larson National Bank Financial Christian Gendron Gendron Team, BMO Nesbitt Burns Kash Pashootan First Avenue Advisory of Raymond James Paul Green Green Private Wealth Counsel
by the employees,” he said. “We were founded to provide advice to every asset class, plumbers, teachers and those on the Canada Pension Plan – that makes us different.” Having spotted a real gap in the market, Salzer and his partners started Northland as somewhere clients could go where selling products wasn’t an advisor’s primary focus. It was a shrewd move, and Salzer fully intends to expand the company further in the years ahead. “It would be nice to make Northland a household name. We are a big supporter of family businesses in Canada. Given that families in business provide 70% to 80% of all jobs around the world, we want to do everything we can to help them.”
“We believe in the scalability of the portfolio manager. It takes a great deal of skill to be a portfolio manager, and we take what they do to heart” ELISABETH PREFONTAINE BlackRock Canada
AWARD SPONSOR
Thane Stenner StennerZohny Investment Partners
iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm. iShares is a global leader in ETFs, with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than US$1 trillion in assets under management, iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views.
Francis Sabourin Richardson GMP
For more information, visit blackrock.com
Susyn Wagner CIBC Wood Gundy
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The TRSB Award for
BROUGHT TO YOU BY:
Advertising Campaign of the Year WINNER JULIE YOSHIKUNI The Empire Life Insurance Company
“This award is testament to the team that worked so hard to find a campaign that stands out. The look and the feel of this campaign was to be different, and to get our message across” WHILE ENJOYING a status as one of Canada’s leading insurance providers, Empire Life nonetheless realized that in a competitive marketplace, presenting their message in the best possible fashion was paramount. Thus, Julie Yoshikuni, VP of retail investment products and marketing, decided to take a
different path for the firm’s summer ad campaign, one that the advisors it was targeting would identify with. “This was the Emblem art meets science campaign,” she said after stepping off the stage at the Liberty Grand. “We used pop art because we thought that would appeal to the demographic
“We are very proud and flattered to be associated with this event, so to sponsor this award really is great for us” JOE GRIMALDI, TRSB
AWARD SPONSOR At TRSB, Canada’s leading translation services firm, we believe in putting the customer first. Canadian businesses count on TRSB for its high-calibre translation solutions, which include marketing adaptation, proofreading and terminology services, all adapted to each customer’s needs. As a first-class translation supplier, TRSB has become the partner of choice to many well-known banks and financial organizations. Our teams can handle all of your translation requirements, big or small, complex or simple. Using state-of-the-art language solutions, TRSB connects your business to your clients, one partnership at a time. For more information, visit trsb.com
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we were targeting. We wanted to do something fun and different for the summer, and we are very happy with how it turned out.” As the insurance space continues to become an increasingly important sector for wealth professionals, Empire Life has plenty of competition to maintain its market share. This award shows that it is ready and able to meet the challenge. “A talented team of designers and marketing people really worked hard to come up with an idea that would resonate with advisors and tell about the products that we sell,” Yoshikuni added.
FINALISTS The Empire Life Insurance Company Dynamic Funds Mackenzie Investments RBC Global Asset Management CIBC Asset Management/ Renaissance Investments Sprott Asset Management The Vanguard Group Invesco Canada’s PowerShares
The Canadian Securities Institute Award for
BROUGHT TO YOU BY:
Newcomer Advisor of the Year WINNER ANDREW OPROIU Manulife Securities
“My heart is still shaking, but I’m very happy. Four years ago, I was living in my car, and now I’m winning a professional award” ANDREW OPROIU’S story stands out from many of his peers. Four short years ago, he was at a particularly low point, homeless but still with a strong conviction that he could be a success in his chosen field. His selection as Newcomer of the Year confirms that his instincts were right, and he had some words of thanks
for those who helped him along the way. “Coming from where I came from, it’s amazing. I started with Manulife Securities with the Elie Nour Group, and I promised Elie I would do at least $7 million in assets, or I would walk away from the business. People like Elie and Darius Muica mentored me when times
“I think it’s really important for new advisors to be recognized, to see they have a place in the industry and get some visibility” MARIE MULDOWNEY, Canadian Securities Institute
AWARD SPONSOR Canadian Securities Institute [CSI] is Canada’s leading provider of financial services training and certification, helping more than 750,000 professionals reach their career goals. CSI has earned its reputation through real-world training courses and assessments, innovative educational offerings and expertise, ranging from securities to mutual funds, from banking and trust to insurance, from portfolio management to financial planning and wealth management. For more information, visit csi.ca
were hard, and because of them, I can be here tonight and hold one of these awards. I didn’t do this on my own.” His journey over that period helped him build a strong belief in his abilities as an advisor. “My goal now is to win the rest of these awards,” he said. “I want to be the Advisor of the Year, and I’ll do whatever it takes to win.”
FINALISTS Alexander Massouras RBC DS Andrew Oproiu Nour Private Wealth at Manulife Securities Reez Sajan CIBC Investor Services Sean Mikucki National Bank Financial Shawn Allen Matrix Mortgage Global Daniel Frost The Frost Group, Raymond James Francis Vinet National Bank Financial Justin Lim Echelon Wealth Partners
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The Vision Systems Award for
BROUGHT TO YOU BY:
Engagement, Loyalty and Client Care WINNER JENNIFER BLACK Dedicated Financial Solutions
“There was a lot of great competition, so it’s an honour to win this award. This really is an award for our staff – they are the ones who deliver for our clients on a day-to-day basis” “WE SET VERY high standards for our firm as far as treating our clients goes and providing everything they need. Our goal now is continue to do that,” said Jennifer Black of Dedicated Financial Services. While each of the nominees at this year’s event would undoubtedly tell you client care
is their MO, it is only Jennifer Black who returned home with a trophy acknowledging excellence in that regard. Previously a nationally ranked tennis player, Black currently sits on the advisory council of Mandeville, a sure sign of the esteem in which she is now held as a financial planner.
“The industry tends to focus on retirement planning, and a great deal of what we do is not only the software that helps for planning retirement, but also has a very current lifestyle focus” MICHAEL CURTIS, Vision Systems
AWARD SPONSOR Vision Systems, the provider of Canada’s premier planning software, is honoured to sponsor the first Engagement, Loyalty, and Client Care award. Engaging clients may take many forms, such as internet marketing and stating your value proposition. Vision Systems believes that the most worthwhile form of engagement contributes to clients so that they live far more satisfying and fulfilling lives. For more information, visit visionsystemscorp.com
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This hasn’t gone unnoticed by Wealth Professional, and her ability to build relationships with clients has led to this award for customer care.
FINALISTS Greg Milley HollisWealth, a division of Scotia Capital Jason Nagel Three60 Wealth & Estate Solutions Rod Tyler The Tyler Group Dora L. So Peak Investment Services/Toronto First Branch/iAnchor Group Julia Chung JYC Financial Chris Lennox Lennox Financial Group Jennifer Black & Janet Baccarani Dedicated Financial Solutions, Mandeville Private Client Robert Roby The Roby Retirement & Wealth Team, IPC Securities
The Excel Funds Award for
BROUGHT TO YOU BY:
Outstanding Global Advisor of the Year WINNER FRANCIS SABOURIN Richardson GMP
“The other candidates for the award are just as good as I am, so I’m very happy to have won. As I always say: eat locally, drink locally but invest globally” EMERGING MARKETS are a hot topic these days, so those following Francis Sabourin’s advice to “eat locally, drink locally, but invest globally” have plenty of food for thought. Another winner from Richardson GMP, Sabourin explained why looking outside the Great White North is an investment strategy everyone should at least consider. When choosing where to put your money, one emerging market in particular stands out for him. “For me, all my portfolios are overweight globally. Canada is only 3% of the stock
FINALISTS Atul Prakash Shopp Finance David Esch National Bank Financial Wealth Management Dan Noonan Argosy Securities Francis Sabourin Richardson GMP Frencho Rampersaud Wealth Dejavu Randall Larsen Assante Wealth Management
market, so you have to have a look at that other 97%. India, for example, is a no-brainer to invest for us.” Given the country’s massive population and
young demographic willing to put in the hours to help create a new superpower, Sabourin’s logic certainly appears sound, making his victory in this category particularly apt.
“The world has changed, and we need to make sure that Canadian investors understand that to succeed, they need to look globally. Eighty per cent of the world’s population lives in emerging markets – that’s 6 billion consumers” BHIM ASDHIR, Excel Funds
AWARD SPONSOR Founded in 1998 with the launch of the Excel India Fund, the largest and longest-running India-focused mutual fund in Canada, Excel Funds has become a true leader in the emerging markets investment space by offering a wide range of innovative investment products that capture new growth opportunities. Leveraging a best-in-class investment team and an unrivalled network of subadvisors, Excel Funds has access to the knowledge base of more than 500 local portfolio managers and 200 analysts around the world. Its on-the-ground subadvisors and proprietary asset allocation models contribute to the firm being recognized as “The Authority in Emerging Markets.” For more information, visit excelfunds.com
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WPA 2016 WINNERS’ LOUNGE SPONSORED BY
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The NEI Investments Award for
Responsible Investing
BROUGHT TO YOU BY:
WINNER RYAN COLWELL IPC Investment
“Last year I was shocked to win; this year is a surprise, but to win two years in a row is unbelievable, so we are very excited” RYAN COLWELL returned to the stage at the Liberty Grand for the second year in a row to pick up the Responsible Investing Award. Working alongside his wife, Darlene, at the Investment Planning Council in Georgetown, Ontario, Colwell has built his business by offering financial guidance with a strong ethical component. For him, responsible investing need not mean lower returns – quite the opposite, in fact – but with the added bonus of doing your part for the greater good. Now approaching his 20th anniversary in the industry, he explained to Wealth Professional
FINALISTS Aaron Ruston Purposed Financial Corporation Ross Campbell Assante Capital Management Inc. Christine Hughes Otterwood Capital Management Ryan Colwell C&C Planning Group/IPC Investment Corporation Stephen Whipp Stephen Whipp Financial Wolverton Securities
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in the Sprott Skyfall Lounge that this longevity certainly wasn’t something he planned from the start. “I got into the business in 1997, and that was only meant to be for one year to make ends meet. I ended up loving the business, so I never left. It’s a great career.” Now running his own firm and winning awards for his performance, both Colwell and the industry in general are lucky the short-term plan blossomed into something much more.
“Right now we are the leader of social investing in Canada, and it’s very important to us” CHRIS NICKERSON NEI investments
AWARD SPONSOR NEI Investments is a national investment firm with over $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. For more information, visit: neiinvestments.com
The CETFA Award for
BROUGHT TO YOU BY:
ETF Champion of the Year
WINNER BRENT VANDERMEER Vandermeer Wealth
“It’s very unexpected, especially considering some of the other names of the people nominated for the award. It’s a great honour for me” FINALISTS Brent Vandermeer Vandermeer Wealth Management, HollisWealth, a division of Scotia Capital Justin Bender PWL Capital Mark Yamada PUR Investing Martin-Charles Plouffe National Bank Financial Robert Sewell Bellweather Investment Management
ANY ADVISOR worth their salt is aware of the importance ETFs now play in the industry. An awards show that didn’t recognize that important section of wealth management would be severely lacking. This year’s ETF Champion of the Year, Brent Vandermeer, explained how greater knowledge of these products is vital for the industry. “I would like to thank the companies that make up the Canadian ETF Association for pushing education to advisors,” he said. “They give us an academic background and the reasons why we should invest in exchangetraded funds.” Once that knowledge is acquired, ETFs offer
AWARD SPONSOR The Canadian ETF Association was formed in 2011 and was the first ETF association in the world. In just a few short years, it has grown to where we now represent 95% of the Canadian ETF AUM and have 42 members in all sectors of the industry. The focus of the CETFA has remained to help educate institutional and retail investors, as well as the advisor community, on the benefits and uses of ETFs, provide industry statistics and commentary on ETF-related issues to the Canadian financial media, and advance industry issues with regulators, government agencies, and interested third parties. For more information, visit cetfa.ca
a fantastic way to diversify a portfolio to suit clients’ needs and keep them from becoming overexposed in any one area, something Vandermeer was quick to point out. “From a performance point of view, and without the noise of asset management that is underperforming, ETFs can be clearly allocated to what you want to do for clients and give a cleanness to a portfolio.”
“As an industry association, we felt that it was quite important to further our mandate of education and awareness around ETFs for advisors and investors in Canada” ATUL TIWARI, CETFA
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The Radius Financial Education Award for
BROUGHT TO YOU BY:
Outstanding Industry Service Provider of the Year WINNER LUIS ROMERO EquiSoft
“We are very proud of this award. For the past 22 years, we have been working for the advisor community, mutual funds, insurance, so this is a great achievement” IN AN industry where the speed of change is ramping up all the time, the need for dedicated service providers grows with it. In that respect, Montreal-based EquiSoft stands ahead of the
pack in providing technological assistance for insurance and wealth management advisors across Canada. With two decades of experience to call on,
“I would like to thank Wealth Professional for an outstanding evening. I’ve been to many professional awards, and this is by far the best I’ve been to” TONY SANFELICE, Radius Financial Education
AWARD SPONSOR Radius Financial Education, a division of CHW Inc., has been producing high-level conferences within the financial services sector in Canada for over 14 years. As Canada’s leading producer of conferences within the financial sector, Radius events focus completely on education and networking through an exchange of unbiased ideas and information, allowing our delegates to be leaders in their chosen fields. Our top-down approach to the agenda enables us to deliver timely, thought-provoking, cutting-edge and sometimes controversial insight in a stimulating manner. We understand the importance of learning from the best. Each conference offers a well balanced speaker composition, consisting of insight from authors, educators, economists, regulatory bodies and industry leaders from around the globe. For more information, visit radiusfinancialeducation.com
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it’s clear the firm has earned its status – and indeed, its selection as Service Provider of the Year. Speaking to Wealth Professional, EquiSoft CEO Luis Romero explained why his business is thriving. “Right now the industry is evolving very fast. With CRM2 and robo-advisors, technology is moving at an accelerated pace. That provides opportunities for us to help advisors keep up with that, so it’s a good time for EquiSoft.” The dedication to leading innovation in the space has allowed EquiSoft to build a business and brand that advisors across Canada call on. This award is reflective of that.
FINALISTS StickyAdvisor Canadian Securities Institute EquiSoft FundServ Iress Market Technology Wickware Communications TRSB
The Invesco Canada Ltd. Award For
BROUGHT TO YOU BY:
Lifetime Achievement
WINNER DOUG MACDONALD Macdonald, Shymko & Company
“I think the honour means a lot because it recognizes what we started with – it was a concept that we had, nobody really thought it could happen” WHEN DOUG MACDONALD talks about the business he created with his partners in 1972 and where it stands today, it is understandably with a great deal of pride. “We’ve not only implemented our concept and made it a success, we have a business that continues today on the same principles,” he said. “The business is now passed on to a younger set of advisors, and many people in this country have emulated our business.” It’s clear that while this is an industry that has changed hugely since Macdonald, Shymko & Company first opened its doors back when another Trudeau held the office of prime minister, some things – and some basic tenets of good business – never change.
“Our concept was that we were going to offer independent, comprehensive personal financial advice to individuals on a fee-for-service basis,” Macdonald said. “That was in 1972; the industry was all transaction-based and all commissions. Consumer knowledge was low, brokerage and transaction fees were high, and people weren’t really educated in the business. We charged by the hour, and our business grew more in bad times than good because people needed the advice more then.”
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. For more information, visit invesco.ca
“Advisors are the lifeblood of our industry, and at Invesco, we like to partner with principled advisors who put the clients first” JAMIE KINGSTON Invesco Canada
COMMEMORATIVE GUIDE WP AWARDS 2016
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The Vantage Asset Management Award for
BROUGHT TO YOU BY:
Best Practice Individual Office (25 staff or less)
WINNER ROSS ALLAN Allan Financial
“This is a big deal for me. There are a lot of very talented, hardworking people in our industry, so to win this specific category is quite the honour” SMALL AND medium-sized businesses have a vital role to play in the Canadian economy, and it’s no different in wealth management.
FINALISTS Ross Allan Allan Financial Rona Birenbaum Caring for Clients Dennis Crawford Crawford Financial Services Corp., Desjardins Financial Security Investments Independent Network Trudy Butt Trudy Butt & Associates Private Wealth Management Lance Howard The Lance Howard Group Diane McCurdy McCurdy Financial Planning Polson Bourbonniere Polson Bourbonniere Financial Rob McClelland The McClelland Financial Group of Assante Capital Management
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Allan Financial of Vancouver has excelled over the past year, making the firm a great choice for this award. Founder Ross Allan couldn’t hide his delight with the recognition his firm had received. For him, the youthful exuberance of his team has been key to Allan Financial’s success. “I have 10 staff who work full-time, and it’s a fantastic young staff,” he said. “The insurance industry is old-school, so it’s great to have a bright young staff who can help me see the future. We need to innovate and regenerate an industry that has fantastic opportunities right now, but is encumbered by some pretty old ways of doing business. We are excited to be at the cutting edge of that.”
“I think this is an underserved market in Canada, and I think it’s important that these smaller offices are represented at an event like this” MARK TREDGETT Vantage Asset Management
AWARD SPONSOR Vantage Asset Management manages capital on behalf of families, charities, trusts, pensions and institutional investors – both domestically and internationally. The company manages only one investment strategy, the Vantage Protected Performance Fund. The fund is focused on opportunities in the Canadian equity market. The strategy has successfully delivered double-digit annualized returns with superior downside protection for the past decade. For more information, visit vantage-asset.com
The EquiSoft Award for
BROUGHT TO YOU BY:
Fund Provider of the Year
WINNER ELISABETH PREFONTAINE BlackRock/ iShares
“It is a pleasant surprise. I would like to thank Warren Collier, head of iShares Canada, and of course our CEO at BlackRock, Marcia Moffat” AFTER MORE than two decades in the industry, and currently the head of wealth sales in Canada for the world’s largest asset manager, BlackRock, Elisabeth Prefontaine knows a thing or two about how a firm gets to and stays at the top of the industry as competitive as this one. “There are so many products available now and more choice than ever,” she said soon after accepting the award at the Liberty Grand. “The quality of the advice is also much higher. We also try to do our best to be creative and
innovate to serve our clients.” BlackRock’s iShares products are testament to that spirit of innovation as ETFs continue to grow in prominence across the industry. With an AUM now exceeding the $1 trillion mark, the iShares branch of BlackRock’s business now represents a quarter of the parent company’s total assets under management. No surprise, then, that it took home this year’s Fund Provider of the Year prize, further confirmation of its dominance in the wealth management space.
AWARD SPONSOR EquiSoft specializes in the design and development of digital solutions for the wealth management and insurance industries. Founded in 1994, EquiSoft is a Canadian-based company featuring a growing team of over 200 professionals with offices in Montreal, Philadelphia, Dallas, Cape Town and Santiago. EquiSoft’s innovative product lineup includes solutions addressing the ever-changing needs of investors, financial advisors and fund providers. The firm’s flagship products include WealthElements, a web-based platform designed to help investors and financial advisors collaborate in the creation of personalized wealth plans, and PortfolioElements, a web-based solution designed to help fund wholesalers effectively position investment solutions with financial advisors. For more information, visit equisoft.com
“We are really impressed with the dedication these companies have to the financial advisors and investment community” JONATHAN GEORGES Wealth Management Solutions
FINALISTS Manulife Investments Dynamic Funds Edgepoint Wealth Management Invesco Canada CI Investments iShares by BlackRock
COMMEMORATIVE GUIDE WP AWARDS 2016
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The FundServ Award for
Advisor Network/Broker/ Dealer of the Year
BROUGHT TO YOU BY:
WINNER REGGIE ALVARES Investment Planning Counsel
“I think we have a fantastic team at IPC. I would like to thank the senior management, but the focus for us is with our advisors” AS EXECUTIVE vice-president at Investment Planning Counsel, Reggie Alvares has done his best to help cultivate a family-like atmosphere among his team. His reasoning for that is simple: Such solidity gives strength
FINALISTS ScotiaMcLeod/Scotia Wealth Management Investment Planning Counsel Mandeville Private Client HollisWealth Assante Wealth Management
and creates a bond among his staff that is hard to break. “Our approach is unified,” he said. “That is why we do so well – the clients see our team as family. When you are together as a family, you can’t go wrong because you are looking out for each other.” Since its foundation in 1996, the IPC has established itself as a leading financial planner, offering independent, client-focused advice. Part of the IGM Financial Group, it currently has $22 billion in assets under administration, placing it at the top of independent firms in Canada.
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 over 35,000 investment fund products. For more information, visit: fundserv.com
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Now the IPC also has a Wealth Professional Award to add to its list of accolades, of which there are sure to be many more.
“The advisor network is an integral part of the FundServ ecosystem, and we are proud to be a part of an award that recognizes their successes” PETER LACASSE, FundServ
messageser
BROUGHT TO YOU BY:
Secure Communication Solution for the Investment Industry
The messageserv solution Ability to attach and exchange soft copies of documents for quicker resolution times
Enables customers to communicate securely with an end-to-end audit trail
Fundserv private network
Fundserv connects hundreds of fund companies and dealers
Built in escalation for unanswered messages
Automatic follow-up reminders through alerts
If you’d like to learn more about messageserv, contact us at: tech@fundserv.com COMMEMORATIVE GUIDE WP AWARDS 2016
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The Horizons ETFs Award for
BROUGHT TO YOU BY:
Young Gun Advisor of the Year WINNER ROSEMARY HORWOOD Richardson GMP
“A word of advice for every young person who’s starting out that you can do it, and I’m definitely an example of that”
ALTHOUGH SHE has a surname that is instantly recognizable to those within wealth management, Rosemary Horwood nevertheless reveals that her time in the industry hasn’t exactly been a breeze. Her age in this case has presented a challenge, as many clients believe experience is preferable to a hunger to climb
FINALISTS Adam Schacter Mandeville Private Client Adrian LeRoy The LeRoy Group at Investment Planning Counsel Christopher LeRoy Scotia Wealth Management Elie Nour Nour Private Wealth at Manulife Securities Eric Davis TD Wealth Rosemary Horwood Rosemary Horwood Wealth, Richardson GMP Steve Tate Tate Financial Investia Financial Services
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the ladder. It’s a common issue for younger advisors in what is still an industry that prefers tenure. However, Horwood has seen how these obstacles can be overcome with hard work and dedication. “It’s definitely an industry where there are very few younger people,” she said. “It’s a little bit discouraging because there are so many
older people who have far more experience, and it’s really hard to show your value to clients when you don’t have that many years of experience under your belt.” Now that she is winning awards for her dedication to her craft, Horwood can offer inspiration to younger advisors that success can come in this field before you reach age 40.
“The feeling is that there aren’t enough young people coming into the industry, so we’re proud to support this award” FAIZAN DHANANI, Horizons ETFs Management
AWARD SPONSOR Horizons ETFs Management and its affiliate, AlphaPro Management, are innovative financial services companies, which, combined, make up one of the largest families of exchange traded funds in Canada. The Horizons ETFs’ product suite includes a broadly diversified range of solutions for investors of all experience levels to meet their investment objectives in a variety of market conditions. Horizons ETFs currently has more than $6 billion of assets under management and has 72 ETFs listed on the Toronto Stock Exchange. For more information, visit horizonsetfs.com
The Empire Life Award for
Outstanding Advisor Insurance Channel of the Year
BROUGHT TO YOU BY:
WINNER JASON PEREIRA Woodgate Financial/ IPC Securities Corp.
“Insurance has always been a core part of our business for the better part of 10 years, so I think we were ahead of the curve in that regard” WHILE HE admitted his surprise at winning an award for the insurance channel when other nominees were devoted solely to that side of the business, Jason Pereira did reveal that the sector was a key consideration for Woodgate Financial. Life & health insurance is becoming an increasingly popular investment tool, a trend that Pereira and the team at Woodgate saw coming.
FINALISTS Jason Pereira Woodgate Financial/ IPC Securities Corp. Asher Tward Tridelta Financial Dina Isabel Maia and Associates James Britton WCBG
“In this industry, you don’t have education to insurance upfront,” he said. “I was lucky enough to get exposure to it and realize what an unbelievable opportunity I was missing. Because of that, we worked it into our business
plan very early.” That foresight has obviously paid dividends for Pereira – not only in accolades, but also in watching his business grow more than $8 million AUM.
“We are all about providing solutions to help build wealth and make it fast and easy for advisors and their clients to access our insurance products. It truly is an honour to host this award; it’s a big part of our business” JULIE YOSHIKUNI, Empire Life
AWARD SPONSOR
Yan Yu Swift Financial Solutions Corp., a subsidiary of Sun Life Financial
Empire Life is a subsidiary of E-L Financial Corporation Limited. Since 1923, Empire Life has provided competitive individual and group life & health insurance, investment and retirement products to Canadians. Our mission is to make it simple, fast and easy for Canadians to build wealth, generate income, and get the insurance and group benefits coverage they need. Follow Empire Life on Twitter @EmpireLife.
Sterling Rempel Future Values Estate & Financial Planning
For more information, visit empire.ca
Nelson Simoes WealthSense Financial Group
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The B2B Bank Award for
BROUGHT TO YOU BY:
Multi-Service Advisor of the Year WINNER KEVIN HEGEDUS Prairie Wealth Management
“This was a big category with a lot of nominees, so I’m very proud to have won. To win an award for multi-services, you have to have a strong team, so I’m very lucky in that respect” BEING A financial advisor in 2016 requires an ability to wear many hats at once. While being able to specialize is valuable, of course, the ability to offer insight to clients on a raft of different financial products and services is vital. For Kevin Hegedus of Prairie Wealth Management, providing guidance no matter what road a client may want to go down means his clients usually leave his office in an enlightened state. “I think it’s really important to be versatile,” he told Wealth Professional in the Skyfall Lounge. “You have to prove your worth to clients and investors. If you can provide a number of different levels of service to clients, it’s much better. We do insurance and we do tax planning, as well as comprehensive financial plans, and that sets us apart.”
“We mainly work with independent financial advisors, so it’s great to show that we are here and we care and want to be a banking partner to them for a solid 2016” ROHAN BAKSH B2B Bank
AWARD SPONSOR B2b Bank is a leading provider of banking products to more than 27,000 financial advisors and brokers across Canada. Through the professional advisor and broker channels, it offers a broad range of products and services to consumers, including investment and RSP loans, mortgages, GICs, banking services, and investment accounts and services through B2B Bank Dealer Services. For more information, visit b2bbank.com
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FINALISTS David Little Little Wealth Management Group at HollisWealth, a division of Scotia Capital Kevin Hegedus Prairie Wealth Management at HollisWealth, a division of Scotia Capital Ludovic Siouffi Canaccord Genuity Wealth Management Paul Butchard Investors Group Financial Services Rhonda Sherwood Independent Financial Advisor David Christianson Christianson Wealth Advisors at National Bank Financial Sean Baylis RBC Dominion Securities Sterling Rempel Future Values Estate & Financial Planning Kyle Richie Kyle Richie-Investors Group Debbie E. Hartzman Professional Investments
The Mandeville Private Client Award for
BROUGHT TO YOU BY:
Advisor of the Year
WINNER WILLIAM VASTIS William Vastis Wealth Management Group
“Anybody who’s nominated for an award like this deserves an award, but obviously you have to select one. I’m privileged to be that one” FOR AN advisor, to be named as your profession’s number one is high praise indeed – and it was praise totally deserved in this case. William Vastis was candid about what the honour meant to him, as well as the goals he
has as he enters the latter part of his career. “I have seen the business evolve over many, many years,” he said. “But what hasn’t changed is that clients want to know they are dealing with someone who really cares about their
“This award is near and dear to our heart. Our chairman, Michael Lee-Chin, is one of the most successful advisors in the industry and we celebrate what he has done and what advisors are doing across the country. It’s a noble profession” FRANK LAFERRIERE, Mandeville Private Client
savings and their personal finances. Now we have to start thinking about the next generation when it comes to assisting clients.” Legacy planning is, of course, a major part of the business of a wealth advisor. In this case, however, Vastis was referring to his own legacy, and what he could do to help the advisors now trying to make a name for themselves. It’s a noble sentiment, and one at the heart of what the Wealth Professional Awards are all about.
FINALISTS Arthur Salzer Northland Wealth Management Daniel Girard Girard, Pilkey & Associates Wealth Management, CIBC Wood Gundy
AWARD SPONSOR
Don Emond Assante Wealth Management
At Mandeville, your interests always come first when we suggest solutions or investment approaches. We are dedicated to conducting business with the utmost transparency, professionalism and integrity. We are committed to creating and preserving your wealth.
Gina Macdonald Macdonald, Shymko & Company
For more information, visit mandevilleinc.com
Thane Stenner StennerZohny Investment Partners William Vastis RBC Dominion Securities
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LIFE | HEALTH PROFESSIONAL LIFEHEALTHPRO.CA ISSUE 2.02
THE
HOTLIST These 20 men and women are helping to propel Canada’s life & health insurance industry to new heights
CAN’T GET COVERAGE? A new solution offers up to $10 million for high-risk clients
SHELTER FROM THE TAX STORM Why more Canadians are looking to life insurance to limit tax liability
CARON CZORNY The retiring BMO VP reflects on four decades in the industry
CONTENTS 77 Market wrap
The latest news from the life and health insurance marketplace
MARKET WRAP
Q&A
It’s not a business – it’s a calling Jim Ruta, president, AdvisorCraft Media & Consulting Years in the industry: 38
80 In depth
The Liberals’ infrastructure plans have many high-earning Canadians turning to life insurance as a way to reduce tax liability
82 Spotlight
BMO Assurance’s Caron Czorny reflects on the industry’s challenges and opportunities
84 The $10 million game-changer
A recently introduced product offers high-risk clients up to $10 million in coverage
THE
HOT LIST 86 Cover story: The Hot List
Get to know 20 of the most influential men and women in the Canadian life & health insurance industry
Career highlight: “Presenting to 8,000 on the main platform at the MDRT Annual Meeting” Career lowlight: “Watching productivity decline among advisors and managers over the last 20 years”
You’re a coach for life insurance agents – how did you get into that? I’ve done it all in life insurance distribution. I started as an in-house career agent. I had my own insurance agency. I had two years in head office and led four agencies with three companies. The last was on Bay Street in Toronto with 250 advisors and $6 million FYC. I was an assistant manager, associate manager, agency manager, branch manager, divisional manager, regional manager and regional executive manager. I helped found two managing general agencies. I started coaching in 1999 because I knew most advisors and managers could still use a ‘manager’ to help them overcome obstacles, take on new challenges and do their best. I knew out-of-the-box coaches, without my real-world experience, couldn’t do what I had already been doing for 20 years. I am professionally equipped and positioned to help advisors and managers at all levels do better. How can you help advisors and agents? Are there any common themes with your coaching? Advisors and managers get the most from me when they want to: • Get unstuck from a productivity rut and do better • Start something new in their business – market, approach, style • Start off a new advisor/manager on the right foot • Take their business to the next level • Re-market their business using their market strengths
• Re-energize their business with a business development mindset • Be a better speaker and presenter • Move through a crisis successfully and quickly The common theme is ‘the winning perspective’ – making your reality work to your advantage. What makes a good coach? Good coaches care about you. It’s not a business – it’s a calling. Good coaches understand your business and what it takes to succeed because they’ve lived it. They hold your hand, from strategy to tactics, to minimize the time to implement and change for the better. Good coaches deliver the processes, templates, content and systems needed to upgrade yourself and your business. They show you how to be amazing and stay with you until you are. Are advisors and agents open to receiving coaching, or do you face hostility? I can only coach advisors who want it. Advisors have to be prepared to listen, to take advice and to get to work. Coaching is not for everyone. Finally, do you have any advice for our readers? Your most important decision is the right market for your business. Targeting those best suited for and most susceptible to your favourite advice makes you the best advisor you can be. It becomes your purpose, and it changes the nature of every activity and experience required to achieve it – making it easier to accomplish.
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MARKET WRAP
NEWS BRIEFS - HEALTH Pregnant woman gets reprieve A Chinese woman who was asked to pay a $12,000 deposit to the Quebec government for her upcoming childbirth has received a reprieve. Liang Zhong’s case made national headlines when she took on extra shifts at work in an effort to fund her child’s birth after she discovered that the province wouldn’t allow her to renew her health coverage, despite having lived in Quebec since 2008. Her husband, Jason Lizotte, made an appeal to Quebec Health Minister Gaetan Barrette, who finally intervened on their behalf.
Takeover hits a roadblock Two giants of the health insurance industry have seen their shares slump after a planned acquisition hit a roadblock. According to a Bloomberg report, Cigna Corporation stated in a regulatory filing that its planned takeover by Anthem may not receive approval this year as hoped. The news saw shares in both companies drop as analysts speculated that the deal could be in trouble; regulators have expressed concern about the healthcare industry in the country becoming increasingly concentrated. Initially an agreement was made for Anthem to purchase Cigna in a $48 billion deal.
Commons tackles genetic discrimination Canada needs to pass legislation to protect patients who fear genetic discrimination, said Liberal MP Rob Oliphant as a bill addressing the issue made its way to the Commons after receiving unanimous support in the Senate. Oliphant added that the legal landscape needs to be reformed to ensure third parties, such as insurance companies, cannot access the results of genetic testing. If passed, the legislation would add genetic characteristics as a prohibited ground of discrimination under the Canadian Human Rights Act.
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Olympian waiting on insurance bill It’s been a difficult period for Olympic speed skater Denny Morrison The man who won Canada’s only long-track Olympic medals at the Sochi Winter Olympics in 2014 – earning both a silver and a bronze – is facing a difficult fight as he recovers from a stroke and waits to discover the size of his hospital bill. Speaking to the Canadian Press, Denny Morrison said: “We’re still working on insurance for the medical coverage through Speed Skating Canada. I’m not really looking forward to receiving the bill in the mail.” In an interview with the media following his ordeal, the winner of four Olympic medals, including a team pursuit gold back in 2010, outlined how he had flown home to Calgary after spending three nights in a hospital in Salt Lake City, Utah. He has been taking three-hour naps during the day and sleeping
10 to 12 hours a night as he recuperates from a stroke. Describing his experience, he described how he was travelling with his girlfriend, Josie Spence, after mountain biking on the Arizona Trail when his speech slurred and his face drooped. He commented that he felt like he “had 45 shots of whatever.” His teammate insisted he go to the hospital, where his condition initially deteriorated rapidly before improving enough for him to avoid emergency surgery. Prior to the stroke, there were several precursors for Morrison. He had five different episodes of going partially blind in his left eye for periods of around 30 minutes, and he had a near-fatal motorcycle accident in Calgary a year ago.
“We’re still working on insurance ... I’m really not looking forward to receiving the bill in the mail” Health giants unite in $9 billion deal Two of the most signifi cant companies in the pharmaceutical sector are about to join forces. IMS Health Holdings has revealed that it plans to acquire Quintiles Transnational Holdings. The all-stock transaction will boast an equity value in the region of $9 billion and will unite two of the largest data providers in the industry. Shareholders in IMS, which operates in Canada as IMS Brogan, are set to pick up 0.384 in Quintiles common stock for each share – and they will collectively own around 51.4% of the combined business.
Social media blamed for outbreak The rates of infectious syphilis and gonorrhoea in Alberta spiked to outbreak levels not seen since the 1980s, and health officials say it’s because of social media, according to a report from CBC News. Overall, the reported cases of gonorrhea skyrocketed by 80% – from under 2,000 cases in 2014 to more than 3,400 cases in 2015. According to Karen Grimsrud, Alberta’s new chief medical officer of health, people using social media for sexual hook-ups are driving the outbreak, as anonymous online accounts make it easier for them to meet.
Manulife transforms insurance applications Applying for life insurance just got a little bit easier thanks to the insurance giant’s change in approach Manulife has announced that it will now underwrite term life insurance policies without requesting that customers meet with a medic in order to gather biometric data and take urine and blood tests. The new approach will apply to policies worth up to $1 million for eligible applicants between the ages of 18 and 40. “Manulife is the first insurer in Canada to raise the limit to $1 million,” said Marianne Harrison, president and CEO of Manulife Canada. “We are focusing on making the life insurance application process faster and easier so Canadians can achieve the level of protection they need.” There will be some exceptions to the increased limit, however. These will be based on various diagnosed medical conditions, including diabetes and heart disease. According to the LIMRA Canadian Life Insurance Ownership Study, almost half of Canadian households surveyed admitted they
Retiring chairman receives honour Douglas Dodds, chairman of the board at Equitable Life, received an honour as he stepped down from the board after 23 years of service. To acknowledge his many contributions, Equitable Life president and CEO Ronald Beettam announced the establishment of the Douglas Dodds Equitable Life scholarship for students entering the MBA program at the Lazaridis School of Business and Economics at Wilfrid Laurier University. Dodds was first elected to the Equitable Life board in 1994. During his tenure, he served on every committee before becoming chairman in 2000.
“We are focusing on making the life insurance application process faster and easier ...” would have trouble meeting everyday living expenses if a primary wage earner died. A Manulife study also found that 43% of middle-market Canadians surveyed have no individual life insurance, and while many rely on group coverage, 27% have no group life insurance. Even among those with some life insurance, 70% have less than $500,000 worth of coverage. As such, Manulife hopes that by raising its limit without the requirement of fluids from $250,000 to $1 million, it can attract more people to take out cover.
Empire Life reveals new senior team Canadian life insurer Empire Life, based in Kingston, Ontario, has announced two key appointments. Ian Hardacre will join the company’s investment management team, taking the role of senior portfolio manager. He will be responsible for managing the Empire Life Dividend Growth GIF and the Empire Life Dividend Growth Mutual Fund. Meanwhile, Lieh Wang, who joined the investment team back in 2009 and has racked up more than 20 years of investment experience, will now take on the role of senior portfolio manager for US equities.
NEWS BRIEFS - LIFE Great-West Life changes leadership After a 38-year career with Great-West Life, Dave Johnston, president and COO for Canada, has announced his intention to retire in the third quarter of 2016. Effective August 6, Johnston will be succeeded by Stefan Kristjanson, who currently serves as executive vicepresident of strategy and transformation. “As president and chief operating officer [for] Canada, Dave launched the strategy to invest in the capabilities required to ensure that our Canadian investors remain competitive, responsive and relevant in a dynamic and changing environment,” commented Paul Mahon, Great-West Life’s president and CEO.
MetLife’s net income rises MetLife reported that its net income rose in the first quarter of the year, but the company still fell short of analyst expectations, primarily due to a slump in its hedge fund holdings. Overall, net income increased by 2% to reach $2.2 billion, up from $2.16 billion one year earlier. However, operating profits missed the estimate of most analysts by around 18 cents a share. In a statement, Steve Kandarian, the company’s CEO, outlined how the company had been battling against market swings and low interest rates.
AIG commits to life insurance American International Group, which has operated in Canada for more than 50 years, has faced a series of pressures from investors over its corporate strategy in 2016 – but now its chairman has come out in defence of the company’s operations. At AIG’s annual meeting, chairman Doug Steenland outlined that the combination of property & casualty coverage and life insurance is the “right long-term position for AIG.” However, he did add that “the specific components of what’s in each of those businesses may change.”
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IN DEPTH
Life, death and taxes Life insurance policies are becoming a popular way to limit tax liability, especially among higher earners in Canada
IT IS PERHAPS a misconception that the affluent members in society are likely to have their financial affairs entirely in order. After all, what made them wealthy in the first place was an ability to manage money and create more of it, right? In reality, that’s a simplistic view – as Mark Halpern of WEALTHInsurance.com reveals, his high-net-worth clients are often the ones most likely to have little or no long-term planning in place for their own personal well-being. “The majority of the people I see, perhaps 85%, are so busy looking after their business that when it comes to themselves, they really haven’t done the planning that’s necessary,” Halpern says. “Many don’t even have a will, or it’s not up to date. They haven’t looked at probate taxes; they haven’t crystallized tax liability or looked for ways to protect themselves in case they get sick or die.” In business, as in life, it is best to always
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be prepared. Your business may be consistently generating profit, but that doesn’t mean that will continue in perpetuity. Despite that, many professionals, executives and entrepreneurs continue to ignore the possibility of a rainy day – both financially and physically.
The reasons for this are simply explained, albeit hard to understand, considering the implications of such oversights. “People think of life & health insurance like a grudge purchase, much like their house or car insurance,” Halpern says. “They buy it to replace lost income, or pay for their kids’
“The first thing to consider is having a will. I have met guys with estates of over $100 million without a will” Mark Halpern, WEALTHInsurance.com “The first thing to consider is having a will,” Halpern says. “I have met guys with estates of over $100 million without a will. I just had two partners come to my office with a $15 million business with no partnership agreement, no wills, no power of attorney and no insurance either.”
education, or pay off their mortgage, should they die early. That is what the majority of people use the insurance for.” That is changing, however, and life & health insurance is becoming much more of a tool for savvy investors. One of the primary reasons for that is its tax-limiting capabil-
“When the government is taking more money than you get to keep yourself, people will look for opportunities to mitigate that tax liability. That’s where insurance comes in” Mark Halpern, WEALTHInsurance.com ities. That’s becoming more attractive now that the Liberal government has committed to an infrastructure building project across Canada that’s projected to cost around $125 billion over 10 years; the Trudeau administration hasn’t been shy about its plans to pay for the project in part with taxes on higher earners. Pushback to the plan has increased the client base for those who specialize in such matters – Mark Halpern included. “As someone’s assets increase, you know the government is going to have its hand out the minute a husband or wife dies, looking to get between 25% and 50% of those assets,” he says. “So people use insurance to pay
4 WAYS TO REDUCE TAX LIABILITY The Liberal government’s tax policy has not been welcomed by many higher earners. Those earning above the $200,000 per year threshold have been identified as a key source of funding for Ottawa’s $125 billion nationwide infrastructure plan over the next 10 years. For those looking for legal ways to minimize their tax liability, there are a number of options available.
Tax-free vehicles in Canada Tax-free saving accounts
Lottery winnings
Primary residence
Life insurance
those tax bills instead of the family coming up with the money.” Based in Markham, Ontario, Halpern uses Canada’s most populated province as an example of the tax liability imposed on higher earners. When provincial and federal income taxes are combined, individuals in this bracket often end up paying more to the government than they keep themselves, a situation that is anathema to most people. “It’s 53.5% for personal income for those earning above $200,000 per year,” Halpern says. “Added to that, if they have a company and they are investing, the tax there is 50.17%. So for the first time in Ontario, the tax regime means people are paying more to the government than they are keeping for themselves. The Liberals have made clear their intention to take more from the wealthy to benefit the middle class. “If you’re only paying 25% tax, most people are fine with that; it’s the price of being a Canadian citizen,” he continues. “But when the government is taking more money than you get to keep yourself, people will look for opportunities to mitigate that tax liability. That’s where insurance comes in.” It’s an idea people are increasingly turning to, but for those looking to reduce their tax bill in the long-term, they need to strike while the iron is hot. In this case, that means before the end of this calendar year. “January 1, 2017, is an important date because the tax-exempt status of life insurance is coming down,” Halpern says. “That’s why the banks and most of the major providers are pushing people to get grandfathered in before that date.”
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SPOTLIGHT
A life assured After four decades in the insurance business, Caron Czorny has decided to hand over the reins at BMO Assurance. She offers insight to Life Health Professional on the industry she leaves behind
A RECENT study by BMO Life Insurance revealed that three-fourths of Canadians have life insurance, but most are not confident with their level of coverage. It’s a good sign for an industry hoping to expand, and something that Caron Czorny will be driving home to her team at BMO Assurance. The vice-president of business development made headlines recently with the announcement that she would be retiring from her post after a seven-and-a-half-year tenure. June 23 will be her final day, bringing to an end a stellar 40-year career in the insurance industry that began with an underwriting position at Commercial Union Life Insurance. From there came stints with Westbury Life (now RBC Insurance), Imperial Life, and as president at ReMark, which led to senior VP positions with Equinox Financial Services, Hooper-Homes Canada and then COO at Peak Insurance. That line of success ultimately led to Czorny to her current role at BMO. “I have responsibility for the wholesaling team across the country, and I’ve been doing that for seven and a half years,” she says. “That involves building relationships with all our distributors, who are the wholesalers responsible for promoting our products and services to the independent distributors – managing general agents and independent insurance advisors.” In an attempt to stay on top of a constantly evolving industry, BMO Insurance commissions regular reports to try to garner insight into the average Canadian and their insurance needs. One recent study uncovered that while close to two-thirds of respondents believed you should buy a life insurance policy as early
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as possible in order to receive lower premiums, 80% were not familiar with the different life insurance options available. The data isn’t surprising to Czorny, who posits that there is a thirst for knowledge, but a dearth of people who are actually well informed enough about insurance options. “I think people are better educated, but they can get confused by the complexity of the products,” she says. “Whether it be on the investment side or the insurance side, I just think there is a multiplicity of places to get
in technology mean today’s advisors do have plenty of advantages over their predecessors. “The proficiency now with software and providing needs analysis and illustrations for business has helped a lot,” Czorny says. “There also seems to be a lot more trust now in the business with the tax sheltering side of products.” Given the public outcry over the Panama Papers in recent months, during which the shadowy world of offshore tax havens was brought to light, more and more investors are
“I think people are better educated, but they can get confused by the complexity of the products” information, so people need to get the proper advice.” Education is a common theme in conversation with Czorny – not surprising, perhaps, considering that she’s a former chair of the Institute for Advanced Financial Education. In her view, the only way to meet the needs of clients is by gaining expertise in the multitude of products on the market. As these products are in a constant state of flux, that means a lifelong commitment to training and education. “Advisors are expected to know a lot more nowadays,” she says. “They need to be educated and to continue their education. The level of advisors’ education coming into the business has improved. Compliance is also a big difference. When I started, the application was one page; now it’s anywhere between 30 and 50.” While regulatory requirements are a great deal more elaborate in 2016, the advancements
searching for legal means to reduce their tax liability – and life insurance has emerged as a safe way to achieve that goal. Aside from her day job at BMO Assurance, Czorny is also chair of the Advocis board, which is consistently pushing for more professionalism in the wealth management industry. In Czorny’s opinion, the best way to achieve that goal is for those within the industry to set the parameters for regulation, then ensure those standards are upheld. “I think regulations can definitely be simplified,” she says. “Advocis has been calling for representation of the profession in regulation. In some provinces, they have insurance councils; in others, they don’t. In Quebec, membership in La Chambre is mandatory. We are calling for a professions model where all of those practicing in financial advice or planning – be they IIROC, MFDA or life licensed – they all should have a say.”
FACTFILE Name: Caron Czorny Company: BMO Life Assurance Co. Title: Vice-president of business development Years in the industry: 40 Designations: Fellow Life Management Institute, Associate Customer Service, Certified Financial Planner, Chartered Life Underwriter, Chartered Financial Consultant, Certified Health Insurance Specialist, Elder Planning Counsellor, Institute of Corporate Directors Directorship, Certified Executor Advisor
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SPECIAL PROMOTIONAL FEATURE
The $10 million game-changer A recently introduced product is enabling advisors to offer up to $10 million of life insurance coverage to high-risk clients
CANADIAN LIFE INSURERS, for the most part, do an excellent job of providing life insurance coverage. In a recent survey conducted by specialty underwriting firm Hunter McCorquodale, almost 90% of the 500+ advisors who responded indicated they were either extremely satisfied or somewhat satisfied with the traditional market’s ability to solve their clients’ insurance needs. However, when asked what they were dissatisfied about in the traditional insurance market, 80% of respondents cited medical declines. This is not surprising, as industry statistics indicate that approximately 10% of life insurance applications (around 50,000)
are declined each year. The majority of these declinations are due to medical history or lifestyle (e.g. alcohol and drug use). In recent years, many insurers have developed simplified- and guaranteed-issue products that enable individuals with significant health issues to obtain limited amounts of coverage. However, a chasm remains in the market for those with substantial insurance needs who have been unable to obtain coverage. To address this gap, Hunter McCorquodale partnered with Co-operators Life Insurance Company to introduce Acceptional Life, a product that can provide coverage of up to
“Acceptional Life deals directly with our corporate strategy of increasing security for Canadians and the communities in which they live” Alec Blundell, Co-operators Life 84
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$10 million to individuals who have previously been unable to acquire coverage. This was made possible by using an innovative approach to addressing the most common reasons for declinations (see box at right). When an advisor is forced tell a client that their application has been declined, that has a negative impact on the relationship, the potential of future referrals and, of course, the advisor’s bottom line. Many advisors appreciate being able to provide an option for clients who would otherwise be declined. This may be particularly true in business insurance situations where, for example, insurance on a key person is a condition of a financing agreement, or when insurance on a shareholder is required to fund the buy/sell provisions on death under a shareholder agreement. “Many years ago, we identified a significant need for a new and creative approach to offer life insurance to individuals who have a substantial insurance need but have been unable to acquire coverage due to their medical history or lifestyle,” explains Ken
HOW ACCEPTIONAL LIFE SOLVES 3 COMMON PROBLEMS Problem: Virtually all products on the market provide long-term guarantees – i.e. they are underwritten once ‘for life,’ and consequently, underwriters must take a long-term perspective on risk. Acceptional Life solution: Coverage is provided for a 10-year nonrenewable term (or, in some cases, five years), so the underwriters need only be concerned about ‘short-term’ mortality. Problem: For those who have significant health or lifestyle risk factors, life insurers have only two options: charge extra premiums or decline applications. Acceptional Life solution: The plan includes certain exclusions, such as suicide and alcohol and drug use, that are designed to eliminate claims from certain
high-risk behaviours that are within the control of the applicant. Also, underwriters can approve coverage with exclusions for specific medical conditions, such as cancer. Although they have been used in other classes such as disability insurance and critical illness insurance, this is the first time in Canada that medical exclusions have been applied to life insurance. Problem: Underwriters’ performance is primarily measured based on time, service, productivity and adherence to ‘the book’ (insurer and reinsurer underwriting manuals), and not on their success in making offers that result in cases being issued. Acceptional Life solution: Seasoned underwriting experts are given sufficient time to exercise their experience and judgment to make an offer wherever possible.
Hunter, managing director at Hunter McCorquodale. “Acceptional Life is designed to address gaps in solutions provided by the traditional markets for hard-to-insure individuals. We are delighted that, thanks to the support of Co-operators Life and two major reinsurers, we have now been able to make this product available to advisors with hard-to-insure clients.” For Co-operators Life, entry into the brokerage sector started with their partnership and ultimate acquisition of Edge Benefits, which provides simplified-issue products to self-employed individuals across Canada. “Acceptional Life is an exciting development for us,” says Alec Blundell, VP of individual insurance and chief actuary at Co-operators. “It deals directly with our corporate strategy of increasing security for Canadians and the communities in which they live. At the same time, working with Hunter McCorquodale, the leader in this space, offers us an opportunity to expand distribution, not only in our advisor force, but also in their wider market of sophisticated advisors.”
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COVER STORY
THE
HOTLIST Life Health Professional spotlights 20 of the industry’s most inspiring and enigmatic figures
LIFE & HEALTH insurance is an industry that is continually growing in scale and importance in Canada. According to the Canadian Life and Health Insurance Association, the sector accounts for $720 billion in assets nationwide and serves 28 million Canadians – a number that is likely to grow as an aging population starts to consider the long-term benefits of insurance. Insurance products are becoming increasingly attractive as investments, too, especially in this period of higher taxes. Taking all this into account, conditions are ideal for advisors in the space to prosper. That said, the industry is not without its problems, as a number of the members of this year’s Hot List readily admit.
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Many feel standards for advisors could be higher to maintain the credibility of the profession. Others suggested the need for a sole national regulator, pointing out that the current disjointed system of various regulatory bodies leaves too much room for error. Regardless, the vast majority of Canada’s advisors are a credit to the profession, and this list is a microcosm of that fact. Those selected have made a big impression over the past year, whether with one of the industry’s giants or a smaller independent firm. What unites them is a commitment to maintaining and building this industry, whatever position they may hold on the totem pole.
NAME
COMPANY
PAGE
Berczi, Peter
Benecaid
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Berthiaume, Denis
Desjardins Group
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Bjerland, Karen
FaithLife Financial
94
Brooks, Doug
Ivari
94
Crosbie, Cam
Equitable Life of Canada
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Czorny, Caron
BMO Life Assurance Co.
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Dougherty, Kevin
Sun Life Financial Canada
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Forrest, Mary
Munich Re North America (Life)
93
Guloien, Donald
Manulife
90
Kristjanson, Stefan
Great-West Life
93
Marcobelli, Mona
Manulife
90
Plumb, Graham
Moola Financial Coaches & Advisors
91
Rampersaud, Frencho
Wealth Dejavu
89
Rempel, Sterling
Future Values Estate & Financial Planning
87
Schafer, Nancy
Desjardins Financial Security
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Sinclair, Roger
SBW Wealth Management & Employee Benefits
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Sylvia, Mark
Empire Life
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Tancock, Aurora
Aurora Tancock Financial Services
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West, Tracey
Murphy Neil Financial Group
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Wilson, Blaine
CIBC Wood Gundy
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STERLING REMPEL Founder and president Future Values Estate & Financial Planning
Since starting Future Values Estate & Financial Planning some 17 years ago, Sterling Rempel has developed a three-step process for dealing with clients. “We help them answer three questions,” he says. “One is: Will I be OK? Two is: How can I look after my family? Once you have those two answered, we can ask the profound question: How can I use the surplus of my estate to have an impact larger than myself ? How can I make my money matter and have a social impact?” Based in Calgary, Rempel’s business has been impacted by the recent downturn, of course, but the city does have plenty of investors left untouched by oil’s descent. “Some of my clients have been dramatically impacted, but it’s interesting that many have not been affected,” he says. “Having said that, there is an air of uncertainty, and people are a little reluctant to spend.” As a wealth and estate planning specialist with a focus on creative uses of taxpreferred insurance products, Rempel has positioned his business to be ahead of the curve when it comes to the regulatory upheaval of CRM2. “I see it as a positive,” he says. “We provide extensive value to our clients through the comprehensive financial plans we develop. Our clients tell us that the work we do for them hasn’t been offered in their previous encounters. So we feel good about the variety of services we offer.” CRM2’s rule that clients must see exactly what they are paying for is nothing new at Future Values, Rempel adds. “We have always made it a practice to offer full disclosure and transparency,” he says. “Over the last couple of years, we having been moving clients more towards fee platforms where they can see to the dollar amount where their money is going. I think CRM2 will bring the rest of the industry to the point we are at.”
KEVIN DOUGHERTY President Sun Life Financial Canada
As president of Sun Life’s Canadian operation, Kevin Dougherty oversees group benefits, group retirement services, individual wealth, insurance and investment management for the firm. Having been in the role of president since 2010, Dougherty is attempting to build on the firm’s strong position as the number-three life insurer in Canada. Sun Life announced its first-quarter results in May, reporting a 22% increase in net income from the same quarter last year. The result beat analysts’ predictions soundly and led to a dividend hike for investors. It wasn’t all good news last month, however, and Dougherty was at the forefront of efforts to assist those affected by the devastating wildfire in Fort McMurray, including donating $100,000 to the Canadian Red Cross.
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ROGER SINCLAIR Partner and co-founder SBW Wealth Management & Employee Benefits
An industry veteran with more than three decades of experience in wealth management, Roger Sinclair is direct when it comes to talking about changes that could help the industry across Canada. “I would like to see a national regulator for wealth investment and insurance,” he says. “The rules are different in each province, so it’s a burden. Also, the barriers to entering our business are generally pretty low, so I would like to see them higher. All the compliance issues over the years are because of people stealing money, and that comes from those low barriers – having advisors coming into the business who are not properly trained or supervised.” One of three founders of SBW Wealth Management & Employee Benefits, Sinclair has helped build the firm into one of Atlantic Canada’s premier wealth management entities. Serving more than 400 different companies in the region, SBW provides guidance on employee benefits while offering dedicated financial planning in all its forms for business owners and executives. For Sinclair, life & health insurance is a vital but often neglected side of wealth management. “Our definition of wealth is a little different than what many people think it is,” he says. “Wealth is not just an investment portfolio of stocks, bonds and cash. The biggest asset people have is their ability to earn income. If people aren’t protected from losing their income from either being sick, hurt,
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disabled or a premature death, then it won’t matter if your advisor is Warren Buffett. You need to be covered for risk.” Coming into the business in 1982, Sinclair has observed great change across the industry since then. While most of the developments have been for the better, the fact that we live in the information age creates plenty of challenges for advisors, too. “The tools that we have now are much better for explaining issues to people,” he says. “Most advisors now have access to people with different areas of expertise for financial planning. The resources to service the client are much better now. On the negative side, there’s a lot more noise these days about the marketplace, and that makes people lose focus and make knee-jerk decisions based on what they have read.” Another problem advisors often encounter is a general lack of awareness when it comes to preparing for unforeseen events – even among professionals and business owners who should know better. “I don’t think people really have a concept of what their life would be like if they got sick or hurt – even educated people who are successful,” Sinclair says. “Bringing clarity to people is invaluable. It’s a hell of a lot more than just worrying about a rate of return on an investment portfolio. It’s handling the risk side – how do I deal with my business succession, what estate plan do I want, who do I want to support, who is important to me?”
FRENCHO RAMPERSAUD Founder Wealth Dejavu
For Frencho Rampersaud, the switch from dealing solely with life insurance to encompassing all facets of wealth management at his firm, Wealth Dejavu, was an obvious step. However, life insurance still represents an important piece of the wealth management puzzle. Having first broken into the business with Manulife in 1998 as an insurance agent, Rampersaud knows this better than most, and he has built his business upon that foundation. “It’s the biggest part of Wealth Dejavu,” he says. “In terms of my book currently, the life insurance investments are segregated funds; they are based on individual annuity. Aside from that, anyone who has a life insurance policy with me usually has needs for their RRSPs, TSFAs and so on.” With the full implications of CRM2 set to take effect in July, it’s been a period of real change across the industry for advisors. Rampersaud is no different in this respect, although he believes the extra vigilance, while necessary, isn’t always directed in the right places. “I had a MFDA audit recently, and you would be surprised the things they pick up on,” he says. “If you don’t dot the i’s and cross the t’s, that’s the sort of thing they spend a lot of their time on. I’m all for compliance, but for me, those are simply oversights.” Though his clients are based in Ontario, Rampersaud’s outlook for the business is global. He cites emerging markets as a growing investment opportunity, particularly as the demo graphics of Canada’s aging society make these countries increasingly attractive. “I look globally for investments, including emerging markets,” he says. “That includes India and China, of course, but also Russia and Latin America. For India in particular, right now over 50% of its population is under 25. When I meet with a client who wants to invest globally, I say, ‘Think about the next 10 to 15 years, not right now.’”
TRACEY WEST Financial security advisor Murphy Neil Financial Group
Based in Labrador City, Newfoundland & Labrador, Tracey West made her way into the insurance industry after first making a living in retail management. These days she specializes in group benefits and investments for her clients, and welcomes the regulatory changes that are putting more power in the hands of the consumer. “There is a lot more paperwork now,” she says, “but you have to protect yourself and your clients, and I’m glad that is happening in the business.” Having received her break in the industry in 2003, she arrived at Murphy Neil Financial Group as a Gold Key advisor for Great-West Life in 2005. While acknowledging that clients have become savvier when it comes to their investment needs, she still sees improvements that could be made – in particular, earlier education about the basics of investment. “I think education about investing should be brought into the school system,” she says. “People should learn about that in high school.”
BLAINE WILSON Estate planning specialist CIBC Wood Gundy
An expert in insurance, annuities, and retirement and estate planning, Blaine Wilson is one of CIBC Wood Gundy’s go-to guys for those seeking sound advice for their later years. The days when estate planning could be sorted in an afternoon are long gone – at least for those who want proper protection for themselves and their loved ones. As such, experts like Wilson tailor their financial plans to the needs of clients, especially when it comes to providing a tax-effective retirement income. With stints at Sun Life, Assante, TD Waterhouse, Mercer and Marsh Canada under his belt, Wilson arrived at Wood Gundy in 2012 with a wealth of experience to call on as he navigates a field that is becoming increasingly important as the Canadian population grows older.
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COVER STORY
DONALD GULOIEN
CARON CZORNY
MARK SYLVIA
President and CEO Manulife
VP of business development BMO Life Assurance Co.
President and CEO Empire Life
It’s been a great start to the year for Manulife president and CEO Donald Guloien. The industry leader for insurance in Canada, Manulife more than consolidated its position this year with a 45% jump in year-over-year profits. While insurance sales for Canada were in fact lower in the quarter, dropping 28%, this was more than offset with an increase of 36% in Asia and 4% in the US. All together, that made for a climb of 14% to $954 million, confirming the firm’s emergence as a global player in the industry. Guloien has been at the forefront of this international outlook, and it’s clearly a strategy that is serving Manulife well amid a challenging commodity market in Canada and abroad.
Caron Czorny of BMO Assurance recently decided to call it a day with the institution. In retiring, Czorny brings to an end a 40-year career in the insurance industry, with stints at a host of firms, including Commercial Union Life Insurance, Westbury Life (now RBC Insurance), Imperial Life, ReMark, Equinox Financial Services, HooperHomes Canada and Peak Insurance. Lastly came BMO, where she has overseen business development for the group’s insurance arm across Canada for the past seven and half years. Also the chair of the board of Advocis, she has pushed for greater involvement by advisors in the regulatory process.
“I am very pleased with the progress made on improving our asset/liability matching in 2016 and the resulting improvement in individual insurance net income,” said Empire Life president and CEO Mark Sylvia in announcing the company’s first-quarter results. Empire Life saw a net income for common shareholders of $37.2 million for 2016, a nice rise on 2015’s $25.6 million. It’s been a big year for the firm – in March, Sylvia and chairman Duncan Jackman opened the Toronto Stock Exchange to celebrate Empire Life’s listing of its preferred shares. Since taking on the CEO role in June 2014, Sylvia has overseen the growth of the company to $14.9 billion AUM. Add in a revenue increase of 6% in the first quarter, and things are looking decidedly rosy for Empire Life.
MONA MARCOBELLI Insurance advisor Manulife Financial
Having risen to the top of her profession, Mona Marcobelli enjoys imparting some wisdom to those embarking on their own journey up the career ladder. She has self-published four books, each with a general theme of self-improvement and motivation to help readers strive for more in their lives. A graduate of the University of Notre Dame, Marcxobelli moved into the financial services realm with American Income Life Insurance in 2009. From there came stints with IDC Worldsource Insurance Network, Manulife, RBC Insurance and CDSPI Advisory Services before she returned to Manulife last year, where she now serves as a bilingual insurance advisor.
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GRAHAM PLUMB Founder Moola Financial Coaches & Advisors
It’s been a busy couple of months for Graham Plumb, as things tend to be when you start your own business. Spotting a large gap in the market, the Victoria-based advisor opened up Moola Financial Coaches & Advisors in February alongside his wife, Lindsay. So far, Moola has had no shortage of interest, which has only served to confirm Plumb’s instinct that something was missing from Canada’s wealth management landscape. “It’s been unbelievable,” he says. “The phone is going like crazy. We are doing something that no one else is doing in Canada – we provide a subscription service for financial advice. They do it a lot in the States, but we couldn’t find anyone doing it in Canada.” The model is somewhat different than the usual advisor/client relationship, and is tailored to the needs of a younger target market. “We have financial coaches who you call in to talk to,” Plumb explains. “Normally if you want advice on an investment, you talk to an advisor who is working on a commission or a fee basis. We offer completely unbiased advice.” The advice in this case isn’t strictly about safeguarding clients’ long-term financial well-being. Rather, reflective of the millennial generation that makes up a large part of Moola’s clientele, it involves climbing out debt in the short term.
“We will help a client buy insurance, buy investments, but really what we will help you with most is to get out of debt,” Plumb says. “It’s a massive problem for younger people.” Another issue is the fact that, despite living in the information age, people are still largely misinformed about financial planning, which makes the need for solid, impartial advice even more crucial. “There is a disconnect there,” Plumb says. “Anyone who wants to buy a mutual fund can just Google it and find out the information. Yet nobody knows what an RRSP is. There is obviously something missing there, and that’s where we come in.” In providing a new type of service, Plumb hopes technology continues to make it easier to break down complex information for clients. His other big wish is for a national regulatory body for financial advisors. “We would like to see more planning software options to offer our clients a visually appealing, easy-to-understand, concise plan that we can complete in a timely manner,” he says. “I would also like to see our industry be a lot more professional on the front end – having an organization that we all belong to that regulates, like with lawyers or accountants. I think we should do a lot more work in vetting advisors starting off.”
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NANCY SCHAFER VP of wealth services and distribution Desjardins Financial Security
As vice-president of wealth services and distribution for Desjardins, Nancy Schafer is well placed to comment on how Canadians are preparing for the future – and she believes that while the general public is generally more financially literate these days, that doesn’t negate the need for professional advice. “The level of knowledge the public has now is greater, but having a little bit of knowledge about a lot of things can lead to problems,” she says. “There are a lot of people who do self-investing, but that doesn’t take into account the expertise a professional may have in tax planning and estate planning.” Overseeing Desjardins’ wealth services across Canada, Schafer believes there is plenty of potential to grow the business. Central to that will be convincing Canadians of the benefits of life & health products, which, in her opinion, shouldn’t be a hard sell. “I believe there is a true need to educate the general population on the value of life & health insurance products,” she says. “I think life insurance as a whole is still misunderstood from a tax and estate planning perspective.” As the Baby Boomer generation enters retirement, these issues will become even more prevalent in the years to come. That said, life & health insurance is not just for those entering the twilight of their lives, as Schafer explains. “There are a lot of interesting products on the market right now that are a combination of a life product and critical illness,” she says. “Our Harmony New Generation product for children with critical illnesses is an example. It has a 100% return of premium; if you start it for your child at birth, it will be paid up at 20 years old. Then you can use the capital for their education, their first home, or simply use it for critical illness cover for their entire life.” After 30 years in the business, Schafer has witnessed firsthand how the industry has evolved. The pace of change won’t soon slow, but it’s a welcome development, in her view. “The next 10 years will be life-changing for everyone in financial services, and CRM2 is just one of the reasons,” she says. “Disclosure itself is a positive. It creates an opportunity for us to show clients the value of advice. I think there is a misunderstanding about how advisors are paid, but they are professionals, the same as a lawyer or an accountant. They should be able to provide a full disclosure of what they are paid and what value they are providing to the client. If they are not able do that, then you have to question what type of advice they are providing.”
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CAM CROSBIE Chief information officer and VP of information technology Equitable Life of Canada
As vice-president of information technology and chief information officer at Equitable Life of Canada, it’s Cam Crosbie’s raison d’être to drive innovation at the firm. Having served as an officer in the Canadian Armed Forces for six years, Crosbie decided to use his tech skills in the finance world. After stints at BMO and Scotiabank, he joined Equitable Life as assistant VP of business systems, and in 2011 was promoted to his current position. Equitable Life continues to lead the way in the insurance space when it comes to harnessing technology to make clients’ lives easier. Most recently, this meant a partnership with NexgenRx to provide plan members with a convenient option for submitting paramedical and vision care claims in real time. This built on Equitable Life’s online EZClaim service for plan members and its EZComplete life application, which saves time and increases accuracy for its advisors.
MARY FORREST President and CEO Munich Re North America (Life)
The first female executive to lead the Canadian Life and Health Insurance Association, Mary Forrest has built her reputation in the industry over 25 years with Munich Re. Today she heads the insurance giant’s life & health reinsurance operations in the US, Canada and the Caribbean, which accounts for more than 60% of the group’s total life reinsurance premium, as well as a considerable contribution to Munich Re’s Munich Health segment. The CLHIA’s selection of Forrest as the first female chair of its board of governors in its 100-plus-year history came after she had already distinguished herself as chair of the association’s standing committee on government relations. Her leadership abilities haven’t gone unnoticed by Munich Re, either; before ascending to her current position, she served as chair of the Munich American Reassurance Company board and was a director on both the Munich Reinsurance Company of Canada and the Temple Insurance Company boards.
STEFAN KRISTJANSON Incoming president and COO Great-West Life
It’s been a challenging year for Great-West Life. While its first-quarter earnings were a respectable $620 million, that still represented an 11% drop year-over-year – and the task at hand for Stefan Kristjanson is clear. Kristjanson, currently the EVP of strategy and transformation, will take the reins as Great-West Life’s president and COO on August 6. Kristjanson has built a reputation for his ability to mould Great-West Life to fit the needs of an evolving industry (including integration of the Irish Life business in Ireland), and the company is no doubt hoping he will produce similar results in his new role.
PETER BERCZI CEO Benecaid
Founded in 2000, Toronto-based Benecaid is a firm for the new millennium. Noticing a large gap in the market, the company sought to provide health benefits for small and medium-sized enterprises, a decision more than vindicated by its growth since then. Currently steering the ship is CEO Peter Berczi, who joined in 2014 after almost a decade with Rogers Communications. In addition to his role as SVP of enterprise IT with Rogers, Berczi also previously served as CEO at InsLogic and North Direct Response (now Sitel); as such, he brings a wealth of experience in the financial, IT and communications fields to Benecaid. Today, he seeks to drive the firm forward as it expands its presence among companies with one to 2,500 employees.
www.lifehealthpro.ca
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COVER STORY
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DENIS BERTHIAUME
KAREN C. BJERLAND
SVP and general manager of wealth management and life & health insurance Desjardins Group
President and CEO FaithLife Financial
As senior VP and general manager of wealth management and life & health insurance with Desjardins, Denis Berthiaume certainly has plenty on his plate, overseeing financial security, securities, Disnat and asset management for Canada’s largest financial cooperative. In its recent quarterly report, Desjardins revealed earnings of $97 million, slightly down from the same period a year ago. Berthiaume therefore will be seeking an upswing during the remainder of 2016 for specialized savings and in the life & health insurance segments. As such, he has the benefits of scale at his disposal: Desjardins Insurance alone employs more than 4,000 people and is aligned to more than 9,000 representatives and brokers. Berthiaume brings 25-plus years of experience to the table as he pushes ahead with reforming the group’s distribution model in wealth management and life & health insurance.
While Karen Bjerland is far from the only CEO on this year’s Hot List, she is the only one to lead a Christian financial services organization. The company has been in operation since 1973, formerly as Lutheran Life Insurance Society of Canada, and began operating as FaithLife Financial in 2005. Today, FaithLife Financial’s mission is to help Canadian Christians protect their financial futures, live their Christian values and build a better world through their offering of insurance and investment solutions. Joining the organization in 1980, Bjerland previously served as regional sales manager and director of field & branch services, as well as holding VP roles in member services, field services, brand development, fraternal and sales. Her success in these roles led her to become the organization’s first female CEO in 2010. Aside from her work with FaithLife Financial, Bjerland also holds positions on several nonprofit boards.
AURORA TANCOCK
DOUG BROOKS
Founder Aurora Tancock Financial Services
President and CEO Ivari
Going out on your own is always a risk – especially in financial services, where you are often at the mercy of temperamental markets. Despite that, Aurora Tancock decided to start her own practice in 2004 and hasn’t looked back since. Prior to that, she worked as an administrative manager at Prudential Insurance, and later at London Life when it acquired Prudential’s Canadian operations. From there, she became a financial advisor in 1999 and has excelled in that role since then, becoming a member of the Million Dollar Round Table in 2000 and later a life member. Her firm has also continued to grow, offering insurance, investment and retirement income products for both individuals and businesses.
It’s been a year of change for Doug Brooks. Most notably, the office he goes to every morning now has a new name above the door. Transamerica Life Canada became the much more succinct Ivari last October when US-based Wilton Re acquired the company from Aegon. That deal created holding company Proj Fox Acquisition, which is in the process of selling 100% of the shares of Aegon Capital Management and Aegon Fund Management to Foresters Financial. Even in the midst of all this upheaval, Ivari has maintained stability with Brooks at the helm as president and CEO, a role he served in for eight years with Transamerica. Having previously held senior management positions with both Sun Life and Equitable Life, Brooks brings decades of experience to the firm during this challenging transition period.
www.lifehealthpro.ca
PEOPLE
CAREER PATH
CHASED BY THE BEAR Darcy W. Hulston is no stranger to adverse markets – and he counts himself lucky to have had those experiences
Hulston’s first job was on his family’s farm, where he spent early mornings and afternoons after school milking cows “[There were] no sick days, and the idea of a holiday… it was not an option. It gave me a value set that I didn’t realize I had. Growing up on the farm was fantastic”
1970s
WORKS ON THE FAMILY FARM
1997
PLOTS HIS DEPARTURE FROM TD BANK After a 1997 transfer to Calgary that marked his eighth move in 11 years with TD – and as he and his wife became homeowners and prepared to welcome their first child – Hulston made the decision that he was “not mobile anymore,” realizing in the process that he had hit the top of his career with TD
2004 COMPLETES SIFMA PROGRAM AT THE WHARTON SCHOOL Hulston calls the executive-level graduate school experience “transformative” “It gave me the ability to critically think – how do you actually get your organization to push themselves beyond what is traditional? With Canoe, I flex these muscles every day”
1987
GETS CLOBBERED ON BLACK MONDAY Hulston got into the financial industry at TD Bank, which sponsored his writing of the CSC. He qualified toward the end of the year, just before the stock market took a memorable tumble. His parents had invested $5,000 with him, and they saw it slashed in half after the October crash “Capital markets are a form of wildlife – maybe a grizzly bear”
1999 MEETS IMPORTANT GOLFING BUDDY AND JOINS FIDELITY While golfing, Hulston happened to partner with a man who worked at Fidelity, a chance meeting would propel him to the next step in his career “Next thing you know, I’m playing golf with his boss; next thing you know, I’m playing golf with an HR person, and the next thing you know, they’ve got an offer in front of me. I was born to be a Fidelity person – wonderful company; world-class, platinum brand. And that kicked me into another gear professionally”
2010
TAKES STEPS TOWARD CANOE
2011 LAUNCHES CANOE On Valentine’s Day in 2011, Canoe launched its first open-ended mutual fund platform, only to watch the TSX begin an extended downward slide “Once again, the bear in the woods stepped out and chased me up a tree. That’s what experience is supposed to do for a CEO; I feel blessed with every one of those events. I’m incredibly proud of the fact that we continue to be Canada’s fastest-growing independent mutual fund company”
The purchase of the management contract for the Canoe EIT Income Fund closed in June of 2008 – just before the worst of the global financial crisis hit. Armed with deal experience, leadership skills and his Wharton education, Hulston took a meeting – and over a cup of coffee, agreed to join Enervest in developing what would eventually become Canoe Financial
“It was a $1.6 billion mutual fund company, and 30 days later, it was worth half. I’ve got some experience with what a bear market looks like; I’ve been punched in the face a few times” www.wealthprofessional.ca
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email wealthprofessional@kmimedia.ca
7
Age when Murphy started playing the fiddle
MUSIC MAN After office hours, advisor Zac Murphy thrives in the vibrant PEI pub music scene
96
www.wealthprofessional.ca
BY DAY he’s a financial advisor with PEI’s Younker & Kelly, but by night, Zac Murphy takes the stage at pubs around Charlottetown to play his amplified acoustic guitar. Although the native Islander has played the drums since childhood, took up trumpet in high school band and grew up playing the fiddle, it was in his early teens, when an uncle taught him some guitar chords, that Murphy says music became a major part of his life. “It’s always kind of been an escape,” he says. “People go fishing to relax and unwind; I pick up the guitar and play
12
Age when he learned to play the trumpet
13
Age when he picked up the guitar
around for a little while.” That route to relaxation has since led to playing regularly around the many music venues of Charlottetown, where he has ‘gigged’ a few times a month for the last few years. Currently, Murphy is working on adding the harmonica to his repertoire with an eye to being able to play classics such as Bruce Springsteen’s “Atlantic City” – and he has designs on making the piano his next instrument. “I’ve always been very taken by music,” he says. “Once I started, it was hard to stop.”
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These segregated funds are offered as investment options of policies issued by The Empire Life Insurance Company. A description of the key features of these policies is contained in the information folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract owner and may increase or decrease in value. Past performance is no guarantee of future performance. All returns are calculated after taking expenses, management and administration fees into account. Morningstar is an independent organization that groups funds with generally similar investment objectives for comparison purposes and ranks them on a historical basis. Morningstar Ratings reflect performance as of March 31, 2016 for Class A units and are subject to change monthly. The ratings are calculated from a fund’s 3, 5, and 10-year returns measured against 91-day Treasury bill and peer group returns. For each time period the top 10% of the funds in a category get 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. The number of Canadian Fixed Income Balanced funds for each period is as follows: 1-year: 454 funds, 3-year: 407 funds, 5-year: 254 funds, 10 year: 65 funds. The number of Canadian Equity Balanced funds for each period is as follows: 1-year: 475 funds, 3-year: 435 funds, 5-year: 311 funds. The number of Canadian Dividend & Income Equity funds for each period is as follows: 1-year: 169 funds, 3-year: 125 funds, 5-year: 88 funds, 10 year: 24 funds. The number of Canadian Equity funds for each period is as follows: 1-year: 341 funds, 3-year: 307 funds, 5-year: 249 funds, 10 year: 105 funds. The number of Canadian Focused Equity funds for each period is as follows: 1-year: 429 funds, 3-year: 407 funds, 5-year: 310 funds, 10 year: 172 funds. The number of Canadian Small/Mid Cap Equity funds for each period is as follows: 1-year: 103 funds, 3-year: 87 funds, 5-year: 71 funds, 10 year: 27 funds. The number of Canadian Tactical Balanced funds for each period is as follows: 1-year: 166 funds, 3-year: 103 funds, 5-year: 75 funds, 10 year: 37 funds. For more details on the calculation of star ratings or quartile rankings, please see www.morningstar.ca. © 2016 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) 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. ® Registered trademark of The Empire Life Insurance Company. All other trademarks are the property of their respective owners.
The
AGF Elements distinction 1 Essential expertise – Experienced investment management by AGF, a global multi-disciplined firm
2 Essential diversification – Built-in, multi-layered diversification by asset class, country, style, market cap, sector and security type
3 Choice – Five distinct portfolios ranging from income focus to 100% growth
4 Essential oversight – Portfolio construction and ongoing monitoring designed to help minimize risk and provide more consistent returns
5 Responsive – AGF Elements Portfolios are rebalanced quarterly to capitalize on shortterm (tactical) and long-term (strategic) opportunities
6 Global – AGF Elements Portfolios provide exposure to asset class opportunities both in Canada and around the world
7 Tax efficient – All five portfolios are available within a Corporate Class structure
8 Convenience – Simple one-ticket solutions with multiple purchase options including fee based and high-net-worth pricing
9 Income generating – AGF Elements Yield Portfolio is designed to deliver consistent income and growth potential with less volatility
10 Eligibility – AGF Elements Portfolios are suitable for registered and non-registered plans alike
Elements portfolio allocations change on or about January 15, April 15, July 15 and October 15. For up-to-date information, visit AGF.com/ElementsPortfolios. For more information on the underlying funds, please refer to AGF.com/Funds. ® ‘Elements’, ‘AGF Elements’, the e+ Elements logo, ‘Elements; the essentials of successful investing’ and all associated trademarks are registered trademarks of AGF Management Limited and used under licence. The All World Tax Advantage Group is a mutual fund corporation that currently offers approximately 20 different classes of securities. In addition to fund diversification by investment style, geography and market capitalization, a key benefit of investing in any of the classes within the group is the possibility of sharing incurred expenses (and losses) of the combined structure potentially offsetting income earnings to minimize chance of a dividend declaration. For a more detailed explanation, please see AGF.com/disclaimers. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. Publication date: May 25, 2016.
ELEM102 05-16-E
The all-in-one simplicity and coverage of AGF Elements Portfolios can serve as a core investment and take your clients from their accumulation phase to retirement. Visit AGF.com/ElementsPortfolios to learn more.