Title: Senior VP, Vice Chairman and Director of National Bank Financial
In the business: 32 years
Minimum investable assets: $500,000
Book size: $490 million over 126 families
Core and explore. The core of my portfolio constitutes value stocks and bonds that you can hold through peaks and troughs. It includes a lot of banks and insurance companies. We’re close to hitting our buy targets on energy stocks as well.
The explore part consists of creative stocks based on momentum that I hold for shorter periods. Companies like RIM, which seems to have bottomed, are part of this group.
Our core stocks are highly weighted in Canada, while some explore stocks are from U.S. and international markets. The 30-year bull market for bonds is ending. We’ve been selling a lot of bonds, and trying to get creative with customized structured products. We deconstruct TSX 60-linked notes to reduce costs and bring institutional pricing to mid-market retail clients.
We sold Wellington West to National Bank Financial two years ago because the industry landscape was changing and the regulatory environment becoming more demanding, which meant more costs. We conducted a silent auction, and used a point system to grade bidders on support systems, product selection, flexibility and back-office functions.
A decade ago, when government bonds were trading at 6% and corporates at 10%, I decided to offer alternatives. Lloyd’s of London wanted to guarantee bonds that people wouldn’t otherwise buy, such as a BBB-bond for the province of Saskatchewan. So our clients got a higher yield than on conventional government bonds.
To encourage my team to make quick decisions, no one gets fired for making mistakes. An associate once made a wrong decision regarding software, which cost almost $100,000 to fix. He expected to be fired, but I told him I’d probably have made the same call. We debriefed and moved on. Speed has helped us be creative, and adjust quickly to markets while others are still adapting.
Originally published in Advisor's Edge
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