We are thrilled to announce the release of the latest episode of the Polestar podcast by VELA Wealth, featuring an engaging conversation with Amar Doman, the President and CEO of the Futura Corporation. In this episode, Amar takes us on a remarkable journey through his life as a leader in business, his experiences in philanthropy, and his passion for community involvement.

Hosted by Jason Boudreau, this podcast episode delves deep into Amar Doman’s extraordinary entrepreneurial journey, starting from his grandparents’ arrival in Canada to his current role as the CEO of the Futura Corporation and the ownership of BC Lions. Amar shares stories of his family’s perseverance and hard work in the lumber business, the challenges he faced, and the valuable lessons he learned along the way. He discusses his approach to turning around struggling businesses, his involvement in both public and private ventures, and his insights into building and sustaining successful enterprises.

 

 

About the Guest – Amar Doman

Amar is the founder and sole shareholder of The Futura Corporation. Along with his team he has led and completed numerous acquisitions. Amar’s tireless dedication to creating shareholder value and his vision for long-term thinking when investing or buying companies outright has built The Futura Corporation into one of the largest and fastest growing companies in Canada. To read more, please visit the Futura Corporation website.

About the Host – Jason Boudreau

Jason has built VELA Wealth into an established life and estate planning firm, guiding families as they make meaningful choices at the intersection of life and wealth. Jason’s areas of expertise include intergenerational wealth transfer and estate planning with a focus on advanced insurance-based solutions that incorporate philanthropy and legacy planning. Leveraging these specialties, Jason brings a fresh perspective and outside-the-box thinking to the strategic planning process. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

Read the transcript of the Polestar Podcast here.

Listen to the Polestar Podcast here.

Podcast Transcript

 

Jason Boudreau:

Welcome back, everybody to the Polestar podcast by Vela Wealth. Today, I’m thrilled to have Amar Dolman joining me for a candid conversation. Amar is the founder and CEO of the Futura Corporation, located here in Vancouver, and I’ve got to know Amar a little bit over the last couple of years through the football community. Amar, I am grateful for you being here today, thank you so much for taking the time.

 

Amar Doman:

Hey, thanks for having me here.

 

Jason Boudreau:

Looking forward to getting into it. So, when we were leading up to this dialogue, I was sharing with you about what I thought would be a neat way to get to know you as a leader in business, life, and philanthropy, is to understand your back story and really get to know where you came from. If we could start the conversation from your grandparent’s story and their arrival to Canada, I’d love to hear that point on out all the way up to today, the story of Amar Doman, if that works for you.

 

Amar Doman:

Sure, let’s reach way back, I like it. So, back in 1906, my grandparents on my father’s side boarded a boat in India. They thought they were headed to the UK, ended up in New West and eventually on Vancouver Island, where my grandfather found work as a logger in manual labor. They proceeded to have five children, including my dad, my two uncles, my two aunts on Vancouver Island in the late 20s, early 30s. My grandfather continued to work till he passed away at a young age. My dad was only nine. He [grandfather] had kidney failure and back then there wasn’t a lot of good medical treatment for that kind of stuff.

My grandfather’s name was Doman Sing. He came up short and my uncle Herb quit school in Grade 7 to look after the family and put food on the table. So, quite a humble beginning there but that’s how things got started as far as my grandparents coming over. Then my dad and my uncles had to work to provide and my other uncle, he went to Grade 9 and that was it. He went right to work. The mid, my dad, the youngest brother, graduated from College Heights in Duncan, BC.

 

Jason Boudreau:

So, your dad was the only one then out of your uncles to graduate high school, correct?

 

Amar Doman:

Correct.

 

Jason Boudreau:

I guess maybe your grandpa as well. So, the first graduate of the family period.

 

Amar Doman:

I would say that would be the case.

 

Jason Boudreau:

So, he graduates from high school. What year was that?

 

Amar Doman:

That would have been somewhere around 1953-1954.

 

Jason Boudreau:

So, he graduates high school and then what? Does he join the family business?

 

Amar Doman:

Basically, he started to drive a truck as they all were. They were driving without driver’s licenses back in the day. They were picking up scraps of wood and selling them for firewood just to get cash to buy groceries for grandma. That is how it all got going.

 

Jason Boudreau:

So, he graduates high school, he’s driving a truck, they’re picking up wood scraps, and eventually transitions into sort of the lumber business mills, things like that. Tell me how that evolves?

 

Amar Doman:

They started by buying the trucks and then starting a trucking business for some of the local sawmills in the area. Then, the three brothers kept building and eventually bought a sawmill, saved all the money that they could, and one thing led to another. They had trucking going and then the sawmill generating money and they just kept working hard, reinvesting and built up to quite an enterprise over the years. There’s a bunch of children who came afterward out of the five siblings, of course.  I was the youngest sibling out of the whole five born in Victoria. My dad had moved down to Victoria to run one of the divisions there. So, I grew up on the island in Victoria, then I moved to Vancouver, back in 89.

 

Jason Boudreau:

When the business was growing on the Island with your dad and your uncles, was it primarily on the Island or was it all over BC as well?

 

Amar Doman:

Primarily on the Island with a couple of sawmills on the mainland, but the Iisland was pretty significant for the family.

 

Jason Boudreau:

Yeah, I bet, and it was a real hub for forestry back then too.

 

Amar Doman:

Yes, it was.

 

Jason Boudreau:

I could see that. I don’t know a ton about the history of that, but I just sort of feel like it would be that way. So, they’re building the business and then tell me the story about how your parents met and when that happened.

 

Amar Doman:

My mum was born in India. My dad went back on a trip, and they were all saying “No, he’s not going to get married back there”. My mom was arranged to be married to someone and my dad caught her eye. Then they went to go meet the family, and her family met his family and said “Hey, you know, maybe we should do this”, which is a little bit out of bounds over there when someone’s kind of prescribed to some you don’t really do those things. Anyways he’s a guy that kind of likes to go after what he wanted, and he came back six months later. He was writing letters to her, and  and we’ve seen the letters where he said he is going to get married back there. So, he came home with my mom, who’d never been to Canada before. At 19 she went to English school. She actually had four bad miscarriages before my brother and I came, which was quite sad. All boys, crazy. My mom had six boys in a row. And my brother and I were the only guys that survived. The last two. I am glad they kept trying. All I’ve got to say.

 

Jason Boudreau:

No doubt. Hey. So, you have an older brother. What’s his name?

 

Amar Doman:

His name is Rob.

 

Jason Boudreau:

What’s the age gap between the two of you?

 

Amar Doman:

18 months.  He’s definitely smarter than me. He’s got all the Degrees and everything like that. I was Grade 12 and went right into business. The school didn’t want any more of me and I didn’t want any more school.

 

Jason Boudreau:

Why don’t we go on that thread? I remember asking you last year about how you got going and you said “Right out of high school”. So, obviously, you and Rob grow up on the Island together in Victoria with your parents. I would assume a normal Canadian kid growing up, although you probably were spending time in the mills and getting to know the business.

 

Amar Doman:

I think you could say that.  That started when we were very, very young. My dad would take me and my brother to the mills around lumber since we were just tiny guys of six or eight years old. I look back now and wonder how we didn’t get killed or run over. We’re just let loose. Today you wouldn’t let anyone wander around these places, but he didn’t know where we were. We’d be climbing on lumber piles that are 50 feet high and when I look now at it – I wouldn’t let my kids go near that stuff. It’s crazy.

 

Jason Boudreau:

Neither would WCB, right?

 

Amar Doman:

Totally! All that stuff was absorbing. It was just sort of taking us around and, of course, osmosis you pick it up and if you like it, which my brother and I both did. Then we got to eventually start to work on the machinery and start to pile studs or load trucks. We did all those jobs all the way through every summer, every Christmas, Saturdays, dad would take us down there and we just go do it. It wasn’t sort of “Hi,  you’re coming to work”. You just kind of hopped in the truck with Dad and off you went. And it was awesome. I missed those days and I certainly wouldn’t trade that sort of education for anything.

 

Jason Boudreau:

No doubt! Obviously, then that led to you deciding at the end of high school to just get out and do this on your own. So, let’s talk about from that point on what happened when you decided to really start with, what is now the business.

 

Amar Doman:

So, probably around Grade 11, I started to map out what I am going to do. My mother thought that I was just going to pile studs my whole life and I wasn’t going to get too far. I’d be happy doing that some days right now, but I had my sort of business plan mapped out where I wanted to start a small lumber remanufacturing company because I had done a lot of the jobs and I thought to add some value. I didn’t want anything from the family. I wanted to do it on my own. And I’ve always had that sort of independent streak in me that I just wanted to do it on my own. So, certainly, my dad wouldn’t lend me any money, he was too tough. So, my mom lent me about 30 grand coming out of the high school Grade 12 in 1988 and I had formed a small company with three guys in Victoria. We manufactured lumber and when the phone rang I’d run off the green chain and go answer the phone and take an order and come back. It was awesome. Owning a small business a day after high school, I could not have been a happier guy.

 

Jason Boudreau:

That’s awesome. So that’s 1988, how many partners did you have in that business?

Amar Doman:

Well, there were three employees, and I was the sole owner.

 

Jason Boudreau:

And I know you’re the sole owner today, so does it always remain that way? You’ve been the sole owner through all your businesses?

 

Amar Doman:

Yes, with the Futura Corporation. We’ve taken some stuff public and we have ownership and public stakes, but I’m the sole shareholder in Futura.

 

Jason Boudreau:

Got it. So, in 1988 you started building up the business, let’s talk a little bit about the evolution of it. What did the first 10 years look like, from the late 80s into the late 90s?

 

Amar Doman:

Back around 1988, about one year later, an opportunity came up in Vancouver. A company that needed to sell in forestry that my dad had heard about and he said that maybe I should have a look at. So I took a look at it. I ended up buying it and moved to the big city of Surrey, business overnight. I stayed on my brother’s couch, he was going to UBC over there. So, I was his roommate, literally overnight. He was having more fun than me partying at the pub and doing other stuff while I was trying to figure out how to detangle a broken business. But that was the time of my life when I moved to Vancouver from the Island. It’s a big deal, move over to the big town, the big show and all that, and for me, I thought that this is where it would stop. However, I’ve turned that business around and started to grow it. Bought another one out of bankruptcy about two years later in Surrey as well that was competing with us. So, we gave it a tough time and it was fun watching that happen, then owned that competitor. A lot of people thought they were going to count me out in the industry saying I am taking on too much, that I am too young. Anyway, we haven’t looked back. I think that the work ethic that we commented on earlier, learning that from dad, it’s just instilled in me to this day.

 

Jason Boudreau:

I hear you there. That’s something I talk to my kids about all the time. Always be the hardest worker in the room and that’ll get you far.

So, late 90s. Now you’re got this business going. I want to learn a little bit more about this turnaround approach that you’ve got with these businesses. What were you seeing when you were coming into these companies? Why did they end up in the situation they were in? And then how did you feel you were able to turn it around and take it to the next level?

 

Amar Doman:

I think one of the things I’ve learned is that when you look at something that’s broken, try to analyze why it was broken. Don’t make those same mistakes and look at it as a big opportunity to try and do something the other guys didn’t do and make it work. It also allows you to create value because if you could buy something that’s broken at a good value that you can fix – the upside potential is just gigantic. That’s something that we pride ourselves on – we try to buy plants that are running 20-30%, and we don’t care if they are bankrupt. We are going to come in with our sort of surgical way of doing things and hard work ethic, and figure out a way to make it work. We don’t think any other way. We just have to make it work.

 

Jason Boudreau:

Got it. So, late 90s and early 2000s, what’s happening with you then? I know you mentioned that you acquired some public assets or took some companies public. When did that start?

 

Amar Doman:

So, we bought a company called Canwell Distribution from Canfor and Weldood, two large sawmillers here in BC, and it was a national distribution business. So I bought that. That was a big bite for us. It took us across Canada, added about 400 million in sales and it was losing money. A lot of money. And for the first time in my life, I had a bit of a panic at 29. It was 1999, I was thinking that I took too much and I wasn’t sure how I could plug all the leaks in this thing like I thought I could. I went out to sit down with the banks in Toronto, understanding what the “C” word is, which is a covenant, and I didn’t really understand all that stuff: big banking agreement that looks like 5 phone books … But I just came and sat with these guys and I said, “Look, I need about another six months. But I can see how this is going to get fixed, but think I’m in violation”. My CFO’s giving me all these notes saying there’s the pole pile of trouble here that I was out of bounds on. I just said look “I’ll fix it. Just give me a little more time”.  Those guys became very close with me. I was Wachovia Bank, which turned into Wells Fargo, and we’re still at that bank today. If those guys didn’t help me there, I’m not sure what would have happened, but turned it around and then eventually took that company public in 2004.

 

Jason Boudreau:

Is Wachovia Bank from the U.S. Aren’t they out of Washington?

 

Amar Doman:

They were, yes. They folded into Wells Fargo, probably through the financial crisis.

 

Jason Boudreau:

1. So, the bankers have obviously played an important role. Even for future acquisitions, it seems they’ve become your partners in a way.

 

Amar Doman

For sure. It wasn’t a debt issue. For me, it’s always a cash flow issue.  We’re not going to take on too much debt and bet the farm and risk on things that we don’t understand and take big long shots. We just needed more time to get the thing operationally efficient. And we’re bleeding, bleeding, bleeding, but we were bleeding to get to a point where they’re going to be a healthy body. So, you have to bleed out for a while and get the thing right sized and fixed, and the customers, and all this different stuff. We were never at the risk of a bank foreclosing on us because we did something stupid.

 

Jason Boudreau:

So, 1999 you bought it and took it public in 2004. What does that five-year gap look like? What does it take to get a company ready to be put it on a public exchange?

 

Amar Doman:

It’s painful. Halfway through my dad was kind of laughing, while checking in he would say “You guys are nuts. Don’t do this public stuff and stay private”. A lot of people say why would you go public if you didn’t need to? Well, there are a few reasons. Number one, I wanted the team I was building to be able to have straight direct equity ownership, something that’s tangible for them. Also, a stock or report card – it’s nice to see as well as to raise equity. I could start to see that being public and where I want to grow the company would line up collectively very nicely and your profiles are different and there’s two different paths, they’re both great as long as you’re making money. But I think that the public was the right time for us and took some chips off the table back then, which was nice just to kind of monetize at a young age, and take some risk off after working 16 straight years out of high school. I thought that would be an important thing to do. So, we did a little bit of that and also kept some of the companies private, which still are today.

 

Jason Boudreau:

Got it. So now, we’re sort of in the early 2000s, mid-2000s and I know you’ve got Canwell and Doman is the other one, correct?

 

Amar Doman:

Yeah, Canwell morphed into Doman and Doman now is the parent one now in the Toronto Stock Exchange.

 

Jason Boudreau:

There’s one other company, correct?  Under the Futura?

 

Amar Doman:

Yes, we control Tree Island Steel which is public.

 

Jason Boudreau:

Got it. What got you into the steel business? How long has that been in the fold?

 

Amar Doman:

We’ve been distributing Tree Island nails and mesh for a long time. I was watching the company become undervalued on the Stock Exchange. So, we ended up buying a pretty big ownership stake in it when we thought the value was right. The Board of the company owned less than 1% of the company and I owned 20% of the company and they wouldn’t let me on the board, which frankly pissed me off. So, we called a proxy contest, the only one I’ve ever done, and we lost the proxy contest, but the next day they called and said “You won. But really you won, not us. Our guns are down. The board’s yours”. So anyway, we went through this process, which I didn’t want to go through, but we took control of the company and it’s been a great business for us. It’s got a huge plant in Richmond, 450 employees and a bunch of staff in California. It’s been a great business for us and we continue to drive good cash out of it and run the business.

 

Jason Boudreau:

Well, obviously nails and mesh are complementary to the main business, right? So, just thinking back to mid-2000s. When did family life start to evolve for you? When do you meet Nat? When does that all start?

 

Amar Doman:

It was in my early 30s. I met my future wife in Vancouver. I started thinking that I’m in my mid 30s, setting my ways, maybe not getting married kind of guy and I’m building the companies up and having some fun. Certainly, when you meet someone who changes your life it’s great. We ended up dating for about a year and then got married. Right after that, we had three beautiful children. So, then I felt fully wealthy. Because being wealthy in a bank account is one thing. But when you’ve got children and a decent marriage – that’s all you can ask for.

 

Jason Boudreau:

Yes, that’s true. That’s very true.

We talk a lot about legacy in our business and obviously, a lot of the work that we do is helping families plan for that legacy. And really, it’s all about what’s the next generation coming into and the number one thing that comes up is the value set and these conversations about it. It’s one thing to transfer financial capital, but how do you transfer that family capital, the history, the stories, the knowledge, the values, all that kind of stuff, and that’s something that we’ve talked a little bit about the other week as well. I can see from hearing your story how that evolved for you being at the sawmills and climbing around on the lumber and all that. I’m curious from your side, when you look at your kids how do you envision their involvement in things?

 

Amar Doman:

That’s the 1-million-dollar question: do they want to be involved and carry on? I think the level children were born into is not their fault. I think it is up to the parents to assist in the navigation of where they’re starting from. It’s a lot different than not where I started, but how I had to get started.

I just wanted to know if the children do want to be involved in business, I’ll show them the path which starts with a very, very much hard-working foundation. That means starting to work somewhere else, which one of my children is already working at a young age. And he’s doing well and he seeks to work, which is great.

If they want to be an artist or whatever vocation they choose, they better choose something because I don’t want my children figuring out what they’re going to do in life during their four years in university. That won’t happen in our family. It’s “Choose what you want to do or you’re going to work”. Once you figure out if you do want to go to university for something specific, of course, we’re going to help you with that tuition as well as you’re going to pay a part of it. I don’t expect their path to be anything like mine. It can’t be, but if they want to carry on some of these businesses that we continue to build up, I’d be more than happy to teach them.

 

Jason Boudreau:

The other day we were talking about inviting them in to learn about the business firsthand, whether it’s taking them on a business trip or inviting them to a meeting or something like that. I know that’s something I really look forward to. It is really great to hear that they are already getting their hands dirty and earning some coins.

Tell me about the background of the Futura name. When did the Futura start as a company and where did the name come from?

 

Amar Doman:

I got to give my dad some credit. He had a small development company in Victoria way back in the day,  called Futura Developments for the Future and he built some apartment buildings. He always had a lot of stuff going on and he had this company name which he used for a long time and went into some building materials as well. I always used to draw when I was in school, not paying attention to the blackboard, I’d be drawing “Futura” all over my everything and just I used to always draw Futura Corporation since Grade 8 and I’d be drawing and drawing it. So, I formed that company in 1999 when we had purchased Canwell and restructured everything under one. I still remain the sole shareholder of that business, but it was kind of a nod to my father. He really liked me using that name, and I just love the name and still do. It’s my private corporation, so you won’t see it on anything public. It’s just got a very good sentimental history to me and my brother as well for sure.

 

Jason Boudreau:

When you told your dad that you were setting up the Futura of Corporation, what was his reaction to that?

 

Amar Doman:

He was very happy about it and he always just liked it. I think it felt like he’s still there because he taught me absolutely everything. I owe everything to Dad and I wish he was still around, and his anniversary of passing was just Saturday four years ago.

 

Jason Boudreau:

Thank you for sharing.

I’m curious about if we look to today and really look ahead, what’s in store for you and for Futura? When you look at the landscape of today, everybody talks about how fast the world is changing and commodities are moving like crazy. Obviously, you have the influence of expanded media out there impacting share prices and things like that. How do you navigate that? What do you see for the business today? If we look forward to the next 10 years, what does Futura’s future look like?

 

Amar Doman:

A couple of things. I’ve been through a lot of different cycles now and I’ve got some gray hair. So you can look back and see what to watch for a little bit, but the drive and focus and energy have not changed as far as building. So, there’s been no slowing down and catching our breath. It is more like keep looking for opportunities, keep running the main business as well as learn and stay close to our customers, do everything we’ve done to get here and then continue to build on. So, we don’t look out as far as 10 years. We look out sometimes 2 to 3 years, but we want to continue to build through acquisition.

As a group now with the Futura we crossed roughly $3.5 billion in sales, and we have 4,000 employees. So, it’s big, but for us, if we buy a company now that’s got 30 employees, that’s fine. If it’s got 300, that’s fine. But it’s got to strategically fit into our master plan that I share with our Board of Directors that we have. The word “retirement” doesn’t really fit in for a guy like me. I like to work, and you’ll see me working for a long time. So, we’ll continue to build and see how far we can take this.

 

Jason Boudreau:

That’s very neat. We were talking the other day and you were mentioning about that even though you’ve got 4,000 employees, you stay really close to the ground floor. How do you do that and why do you feel that’s important?

 

Amar Doman:

That’s a great question, Jason. I just think it always resonates with me that I feel like I’m one of the guys out there. All the time. So, I can go talk to anybody on the floor, whether it’s a forklift driver, whether it’s a Ship or Receive or whatever it is to the top executive. I just like people and I like working, I like working people. I relate to them. That’s why I don’t really stand for a lot of people that have picket signs out there. I am just grateful to have a job. I don’t think you should fight your company. I think that good companies take care of good employees and things work out. I really believe that there should be respect on both sides and I respect every single person that works in our companies, no matter what position they have. I fully respect them and appreciate them being part of our team.

 

Jason Boudreau:

Respect, for sure. That’s a big one. I’m very much the same way. I find it hard to not stay connected to the people because that’s the pulse of the business. It’s like a giant brain trust in a way. You ask questions and you’ll hear things that you never even thought of.

 

Amar Doman:

Right. Absolutely right.

 

Jason Boudreau:

I would like to touch base on the philanthropy side. And I know you’ve been actively giving back to the community and I know it’s not a philanthropic project, but it’s certainly a community-based project as you now own the BC Lions. Tell me a little bit about how that got going for you? It’s obviously a passion project for you, and you and I met through the football community. Then we’ll tie that into the more giving and giving back side. Let’s call it “The new side of the Lions”, how did that end up in the Amar Doman’s world?

 

Amar Doman:

This’s something that was on my mind for a lot of years, and we used to hear it wouldn’t come up for sale as David Braley owned it for 25 years and these assets are very hard to come by. For me, being a part of the CFL and part of the National History of the CFL it’s like a dream come through. To really help kids use sports here in BC, and to re-engage the football community here, invest in it, and obviously selfishly we want to grow the fan base. But really, it’s something that I tried to buy for seven years back and forth with David, going to Hamilton to his little office back there in Ontario, and thought I’d have a deal and then came back and he couldn’t let it go. He’s so passionate about football.

Then, of course, when we got the deal done back in 2021 it was surreal… Signing the paperwork back East and then knowing this is going to be announced… There’re those few moments in life when your children are or born or you’re married – these things are just etched in your mind. You can define them so well, like they’re yesterday. When I went out to Surrey to practice, they had all the players put on their uniforms with their names on them that day, and they blew the whistle and they’re all coming in there. There I was, standing there and that was one of those minutes I’ll never forget. They’d stopped the whole practice. And here they come and here comes the new introduction of new speech and that was one of the proudest moments in my life.

 

Jason Boudreau:

Oh, that’s so great. Well, I know, the BC Lions themselves, the team, the football community, everybody’s benefited so much over the last couple of years since you took over the helm there. I certainly see myself still being involved in the football community. Obviously, as you know, football was a big part of my life for many years and I’m hoping my boys get into it and they love the flag league that they’re in here on the North Shore and hopefully soon we’ll get into tackling all that. I feel like they got to at least put the pads on at some point, cause their dad did.

 

Amar Doman:

Yes, our boys play together, which is great too, and it’s awesome.

 

Jason Boudreau:

It’s so much fun. It’s really fun. I feel like for a young boy going through adolescence and coming to man, there’s probably not a better sport out there that they could play in terms of skills and all that. Obviously, I’m biased, but I’d like to say that it helped me turn out in a successful way.

I know one of the approaches for you with the BC Lions, and I think these ties into really kind of the giving back piece and philanthropy, is that BC Lions aren’t the Vancouver Lions, they’re the BC Lions, right? This is the province’s team, right?

 

Amar Doman:

100%.

 

Jason Boudreau:

And I thought that was so great and obviously it’s in the name. But given that they play here and practice locally, sometimes it feels a little bit like Vancouver Lions. I know you’ve done a lot of outreach to the province, and I remember last year you guys were helping to fly-in, ferry-in or bus-in fans. Tell me more about that sort of outreach to the BC community and get them reconnected with the team.

 

Amar Doman

So, we’re doubling down on that and what I mean by that is we’ve adjusted and worked with the TSN to sort out times across Canada for airing the games and then also CFL to get a bunch of four o’clock games here. The reasons for those are: number one, we can have people from Vancouver Island come over on a ferry, get back and not have to spend an arm and a leg in a hotel. Number two, we can have younger fans come in and be able to bring their two or three-year-olds in the afternoon, watch a game from four and be done at seven. Let’s face it, it’s Canadian summer, guys want to hit their barbecues on a Saturday night.

And the CFL has to always struggle with that. So, we’re trying to pull it forward a bit in the afternoon, enjoy it and then people can go to their house parties, do whatever they want with dinner. Also, do you want to get on a sky train at 10:30 or 11:00 at night? I’m sure I wouldn’t want to these days. So, families can get home safely out to the valley. You can even come from the island. We’ve got buses set up as well. So, we’re really trying to engage the whole greater part of BC wherever we can. I think some of those earlier start times will assist with that, Jason. And we’re always open to ideas to try to do better.

 

Jason Boudreau:

I know this season’s obviously starting soon and you’re getting excited about that. How’s it looking in terms of the growth that you’ve seen with the fan base and all that over the last couple of years with you in charge?

 

Amar Doman:

Super solid. Look, we’re coming off some tough numbers, we all know that. But we believe we’re going to double our season ticket holder base this year already. We’re very, very excited about it. And just to get almost under 40,000 and for that last playoff game in Calgary last year. It’s amazing. Once that thing gets going and people like being around people and of course at football the noise matters – we will get a good consistent fan base into BC Place for our home games, there’s only nine home games.

I think we’ve got a pretty good opportunity, we’re helping subsidize some of the concessions and big street parties coming up again here. It’s going to be the place to be.

 

Jason Boudreau:

Right on! Given that grassroots community level, I’m curious about your view on philanthropy and how you approach that because obviously you get approached a lot on giving to different organizations. What do you think about philanthropy in your world?

 

Amar Doman:

I think the term “Giving back” is used a lot, maybe too much. I just think it’s just about giving. I think that I really felt this way for a long time. We’ve helped out different organizations, whether it’s heart, stroke, cancer or other causes. The one thing that we differ on is as far as myself and part of the community, I don’t think hospitals should have their hands out into private corporations. These are big public assets and they should be run by our tax dollars- we’re taxed enough. But certainly when it comes to scientific research, going over and above helping children find different ways to find solutions for various diseases, someone that needs financial medical care – we do a lot of private donations. We do them anonymously as well. We like to write these cheques. We like to help. We like to help the Orphans fund. There is whole bunch of different things we’ve been doing for years and to me it’s just an automatic thing to do. When you’ve done ok and you can share – Share. I think it always comes back in some way shape or form and I believe that by just seeing some child happy or someone that’s had a life-saving operation – that’s great. What are we doing all this for anyway?

 

Jason Boudreau:

Yes, that’s very true, I couldn’t say it better myself. Amar, just to close out our conversation, I would love to understand from your point of view the given piece. What would you say if you were having a conversation with your kids or some young group of kids about giving and trying to really instill in them at a young age what it means to give?

 

Amar Doman:

I think number one is always remember that not everyone has what you have and don’t assume they do. Always help others and try not to choose the bad path. If someone’s doing a bad thing, don’t copy them. Try to stand down and it’s hard with peer pressure, but really try to just be your own person and try to help others. If there’s a new kid in class, be the person that goes up to that new kid in class. Don’t be the person gossiping about the new kid in class. Reach out, put your hand out, welcome them. That’s the type of citizens I want our kids to be – to help others and just be that good person. And don’t be the person giggling in the background and making fun of others. That person gets nowhere.

 

Jason Boudreau:

That’s a true story. Well, let’s wrap it at that. We spent a good half an hour together this morning. Amar, really appreciate you taking the time. Always pleased to speak with you and really enjoying getting to know you at a deeper level today. Thanks again.

 

Amar Doman:

Thanks, Jason! I really appreciate you doing this. We’ll see you!

 

Jason Boudreau:

See you tonight.

Transferring a farm or agricultural business to the next generation is a multifaceted and emotional journey, much like any other business endeavor.

Farmers face the challenges of estate planning, optimizing taxes, and ensuring the long-term prosperity of their business. It is vital for business owners to have a clear understanding of their current standing and future goals. Equally important is their awareness of the farm’s purpose and objectives for both the present and future generations, fostering effective intergenerational communication. Moreover, there are essential considerations to bear in mind when passing down a farm or agricultural business.

In this podcast you will learn the importance of:

• Acquiring a clear understanding of your business’s present situation and future objectives.
• Comprehending the motives and aspirations of both the current and future generations.
• Obtaining insights on essential factors to consider prior to and during the transfer of the farm business.
• Developing effective communication tactics to navigate challenging conversations with family members.

 

About the Participants:

Michael Baker
Licensed Life Insurance Broker, Baker Wealth
Michael Baker founded Baker Wealth to build meaningful success for people. A challenge-driven CPA, he wanted to help his clients forge a tighter connection between financial prosperity and a fulfilling life. Michael is your expert advisor and ally, with 25+ rich and illuminating years of experience as a professional. Talk to Michael about planning your future, starting a new business or welcoming a new family member. He’s an active listener; he not only hears your words, but he understands them – the key to solid financial results.

Shane Donner
Partner, Smith & Hersey Agribusiness Law LLP
Shane has been working as a Solicitor at Smith & Hersey Agribusiness Law for over 8 years. Shane’s practice is primarily focused on business transition planning (specifically agricultural operations), corporate finance, commercial/agricultural real estate, and negotiating renewable energy leases for wind and solar projects on behalf of landowners.

Shauna Trainor
Principal, A&O Partners LLP
Shauna works with enterprising families across North America to navigate the complexities of ownership, wealth, and family dynamics. Shauna engages in a planning process with family enterprises to help them identify, clarify, and articulate their ownership vision and strategy. In collaborating with families, Shauna helps them to establish relevant governance, enhance communication and engage in shared decision making. Shauna leverages her business and psychology background to help families and individual members achieve their desired objectives.

Rob Wallis
Partner and Senior Advisor, VELA Wealth

Rob has provided senior financial planning and advice to VELA clients for over 15-years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To learn more, please visit VELA team page.

 

The episode is also available on:

  

  

 

 

 

Disclaimer

The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

In the upcoming Polestar Podcast episode, Rob Wallis talks with Dan Pultr from TMG The Mortgage Group (TMG) about the interest rate environment and lending. Dan explains the impact of dropping interest rates to zero during the lockdown and where it led us as well as provides some recommendations to borrowers on how to ensure they receive competitive offers.

 

About the Guest – Dan Pultr

Dan is a Senior Mortgage Industry Executive that helps individuals and companies grow. He takes a hands on approach to all engagements, loves to immerse himself in the details and works with passionate professionals to deliver comprehensive solutions. Dan’s goal is to provide an incredible Mortgage Experience to Brokers and ultimately to their thousands of clients. To reach out to Dan, please visit his LinkedIn profile.

About the Host – Rob Wallis

Rob has provided senior financial planning and advice to VELA clients for over 15-years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To learn more, please visit VELA team page.

 

The episode is also available on:

  

  

 

 

Read the transcript of the Polestar Podcast here.

 

Disclaimer

The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Listen to the Polestar Podcast here.

Podcast Transcript

 

Rob Wallis:

Welcome to the Polestar Podcast by VELA Wealth. Today, I have the pleasure of speaking with Dan Pultr from TMG, The Mortgage Group. We’re going to be talking about the interest rate environment, lending, and what awaits us next. This is a particularly interesting topic because, having been in the advice industry for 20 years, cash has never really been something that we’ve talked to people as an asset class for at least a decade. That’s because interest rates have been low for an extended period of time, and recently, that has come to the forefront of many conversations. Conversely, that also means that interest rates are high on lending as well, which affects people in different ways.

Dan, welcome! First off, how did we get where we are at?

 

Dan Pultr:

Hey, Rob. Thank you so much for having me. It’s a pleasure to be on the podcast with you today.

So, how did we get here? Well, we had a few things happen that set the stage for where we are today. First and foremost, I think many of us choose not to remember, but we spent some time in lockdown. The central banks from around the world came together and realized that during a lockdown, they really didn’t want any risk of an economic meltdown. So, they effectively dropped all interest rates to zero in most markets. That fueled a steady stream of borrowing for various different reasons – some corporate, and some personal such as people buying houses, investment properties, etc. The savings rates went through the roof – we saw people accumulating, as you mentioned, cash. People were saving at an incredibly high rate relative to what they had in the past. Following that, we had the steepest and fastest interest rate increase that we’ve ever seen in this country. When you combine those two, you create a lot of uncertainty and find yourself in a market where people are a little uneasy and stressed about what the future holds for them.

 

Rob Wallis:

So, with that stress, how is the sentiment in the market right now? We’re obviously talking about Vancouver, but there’s a whole world outside of here and Canada. If you could give a little proxy for Vancouver and then maybe the rest of Canada, that would be helpful.

 

Dan Pultr:

For sure. So, where does that put us today? I feel as though what we’ve seen is an overreaction, both among the central banks, which many would probably say is not an overreaction and that they needed to do exactly this. But I’m not a central banker, nor do I claim to be at the taps of monetary policy. However, where that led us is what they call a confidence issue, which is where the Central Bank told us that we can feel confident or rest assured that interest rates are going to continue to be low through 2023 effectively. So, everyone was caught by surprise. And when you catch people by surprise, after they’ve made some incredibly large financial decisions, such as purchasing a house, they don’t know if they’ve made the right decision. The biggest impact was probably with variable rate mortgage holders. So, anybody that had a mortgage that’s based on prime effectively, which is often used as an index for variable-rate or adjustable-rate mortgages, or lines of credit, felt a bit of a sticker shock as it relates to the payments that they were paying or the interest they were being charged.

There are a number of institutions in Canada that offer variable-rate mortgages where the payment does not actually adjust when the rates change. So, they’re paying less and less principal or no principal at some point in time. At future points in time, in some cases not even paying enough to cover the interest. So, people found themselves in these circumstances, and the rules of which the banks were supposed to govern themselves were kind of held true for a short period of time. Then it appeared that everyone just took the piece of paper they were written on, threw them out the window, and said, “the number one thing we want to make sure is that we put people in a home. People have gotten mortgages. We want to make sure that they’ve continued to make payments”.

We’ve seen a number of people that have seen their payments increase and are feeling financial stress, so they’re in a position where they’re making different decisions today as a result of their mortgage payment increasing.

There’s a whole other class of people who know that their mortgage payments should be increasing, but they know they can’t afford it. Therefore, they’re trying to save and put together a small sum of money to make a prepayment towards their mortgage. We also have people who are in a comfortable position but are anticipating some sticker shock when their mortgage renewal comes up in six months, twelve months, or two years’ time.

When we talk specifically about Vancouver, it’s probably not surprising to hear that Vancouver prices are quite high, and people carry very large mortgages. Therefore, that sticker shock could be quite significant for some individuals. You may have seen your mortgage payments or the interest required to cover your mortgage payments have increased by 45% to 55% over the past year. That’s a material jump! People started making different decisions with their debt. First and foremost, prior to that, there were many opportunities for homeowners and investors to refinance or restructure their debt to get cheaper money. However, those opportunities have effectively ceased to exist. We know that fewer people are making the decision to refinance purely to decrease their interest costs. Also we are still seeing some individuals needing to refinance because they may have a business opportunity or have gotten themselves into more debt than they would like, and they need to pay consumer debt with mortgage debt. It’s still relatively cheaper than a 19.99% interest rate. We have seen people have to make different decisions relating to that, and we see it a little bit on the front lines. We obviously see the homeowner making these decisions, but we don’t see their day-to-day decisions as much. However, that’s what these central bankers wanted. They wanted people to change their vacation habits, dining habits, and spending habits to try and curb inflation because that was the driving force behind the rate increases.

If you look at Vancouver, how is this impacting the real estate market? Effectively, the real estate market almost came to a standstill compared to where it was previously. Recently, I heard a comparison that if you’re going 200 kilometers an hour down the highway, and someone slows you down to 50 kilometers an hour or even a 100, it may feel as though you’re completely standing still relative to where you were previously. That’s kind of where we went to. We were effectively going at a very quick pace, and now things are much slower.

Over the past 30 days, with some changes in the monetary policy, or more accurately, changes in the words that the central bankers are saying about the future, we have started to find a little bit of stability for people to start making financial decisions again. There seemed to be a period of time where people were uncertain enough that they were unwilling to make financial decisions. We saw this with developers and homeowners. They just didn’t know where interest rates were headed, and when they don’t know, it’s really hard to make a decision. Now we kind of know that we may be at or very close to the peak of interest rates as it relates to variable-rate mortgages and home equity lines of credit, anything pending its prime. We’re seeing people start coming off the sidelines, and we’re seeing developers restarting projects that they may have paused for a period of time. Therefore, we’re starting to see that momentum start to build. We’ve only seen it for 30 days, so whether it’s a blip or a trend, that’s yet to be determined.

As it relates to other parts of Canada, I would say that two markets that were most largely impacted by this would be the GDBA and GTA, primarily because of the levels of wealth and prices in those areas. If you look at Alberta or Atlantic Canada, some of those markets have moderated a little bit but not quite to the extremes that we’re seeing in some of those other markets. And part of that is to do with some of the shift that has happened in real estate habits. Prior to COVID, it would be very uncommon for someone to pick up and move, lets say Hope and work remotely. Now we have some of those new habits, so we’re seeing those dynamics start to play out in how the real estate market is behaving as well.

 

Rob Wallis:

It sounds like you’re talking quite a bit there at the end about the demand for lending returning because people can see some stability. How are banks assessing and underwriting risk right now in the current environment, and how does that affect people’s ability to borrow, certainly to the extent they were able to borrow, to a couple of years ago?

 

Dan Pultr:

The fortunate thing, and a number of people actually point this out as sort of a saving grace that we had implemented previously, is that in Canada, we have a mortgage stress test. So, it has been put in place to essentially hedge against the future of rising interest rates. Because borrowers were already qualifying at whatever interest rate they were at, plus 2%, we were seeing that people, at least on paper, looked to be in reasonably good shape to withstand an increase. Now, whether they want to increase their payments or not is another thing, but from a bank’s perspective, I think they were reasonably stringent enough already that it didn’t make a material impact.

Now, one of the interesting nuances is how the stress test is structured. We did see a period of time where people were almost rewarded for going variable because the variable-rate interest rates were a little bit less and as a result, by taking a variable-rate mortgage, borrowers were actually qualifying for a little bit more. I know that’s something some regulators have looked at as a risk or a concern because we don’t want to see people taking on more risk to get a variable-rate mortgage than a fixed-rate mortgage. With a fixed-rate mortgage, we know what to expect over time.

 

Rob Wallis:

So banks are still okay to lend?

 

Dan Pultr:

We haven’t really seen much of a pullback. We’ve seen a few, let’s call them “less competitive” than they would otherwise be. We’ve seen that, but that’s because mortgages are a driver for a number of other consumer products. So, you may hear banks from time to time refer to a client’s as “franchisable” or “franchise a client” which essentially means how many products they can they offer to one individual. It’s kind of a sweet spot that they have, and they offer what they know if they bring in a consumer as their mortgage client, they now have an opportunity to also convert that person to a savings account, a credit card, or whatever else they offer. I’m sure you’ve all experienced or at least your listeners have experienced some of the offers that they may get from institutions when you’re new to them versus existing clients, similar to with cell phone companies. Because mortgages have always been the lead in drawing new clients, I feel as though they’re still going to continue. And because they’re in a much smaller market to operate within, some are choosing to be ultra-competitive, and some are looking to just work with their existing customers and focus on that aspect. So, each major institution differs in how they’re operating. Within that, the nice thing is that there’s a cluster of companies, and we use the term “monoline vendors,” but a number of people know them as mortgage finance companies – these are major Canadian financial institutions that only deal in mortgages, and they are finding this as an opportunity to be ultra-competitive to try and acquire some clients because they know that that’s their only bread and butter. So, mortgages are the only thing that they offer.

 

Rob Wallis:

So, one thing I picked up on from what you said earlier is that some lenders are not being as competitive as others. Is that down to risks in their mortgage business? Or are they taking advantage of the situation? As a result of that, as somebody who’s seeking debt at the time renewal or a purchase, how those people should be responding so they make sure that they get the best value?

 

Dan Pultr:

Right. So, the single best piece of advice I would say to anyone listening is if you’re getting a renewal offer from your bank, if you happen to have a mortgage with a mortgage finance company, I highly recommend talking to a mortgage broker in your neighborhood. The reason I say that is that first of all, mortgage brokers are independent in the sense that they don’t work for any of these financial institutions. Their mandate is to try and obviously earn your business, but obviously they want to make sure that they are effectively providing you with a sound advice and good options for you. What we’re seeing right now is great time for you to take that time, send them your mortgage statement, have them review your renewal offer, so that you can actually see what is real and you can see whether or not the offer that you’re being offered is in fact competitive.

Sometimes what we see is that institutions will just essentially send out blanket letters and they just hope that people sign on the dotted line. Other times, they will effectively ratchet up their behavior as time moves on or get closer to your renewal date, so they might just send a letter. Then they might wait for a period of time. Then they might follow up with a phone call and only once they realize that you’re potentially leaving, they do actually offer you a good deal. Versus when you’re dealing with a mortgage broker, you know that in fact they’re compelled to make sure you get the best offer that they have available for you from the onset and they can tell you all of your options whether you can leave early, or if you have to wait, would there be a penalty or any sort of costs associated with the move. And a lot of the institutions do bank on the fact that there is some friction to move it. There is some time, energy and effort that goes into you moving from one institution to another. And so, they do factor that in when they make you an offer, but it is very prudent to at the very least have a second opinion on what you’re being offered. Earlier you can do that in the process the better. If you start that process 90 days out, that’s great. You can even start it as far out as six months out. So, it’s worth starting that conversation early.

 

Rob Wallis:

So pre-pandemic, how long were people fixing for versus now? How long are people fixing for if they weren’t fixed?

 

Dan Pultr:

It’s interesting actually because right now what we’re seeing is probably the most competitive interest rate out there. It seems to be that sort of four-five year rate environment. So that’s where we’re seeing the most competition. However, the desire among borrowers is much shorter than that everyone seems to feel as though that within one year or two years that rates are going to be better. I’m not an economist, however, I did major in economics as an undergraduate. But I do feel similarly to it. However, if you look at every economist globally and their predictions, no one’s always right and you probably find 50% of them being right and 50% of them being wrong. The reality is that there’s definitely some risk to either of those strategies. The single thing that I would focus on is trying to ensure that your mortgage is aligned with your life cycle timeline. That is a really important thing to consider. There’s a thing in mortgage terms called prepayment penalties, and probably the single biggest frustration among borrowers is if they get stuck with a prepayment penalty and it’s material. They never forget and they always remember it and they want see why it shouldn’t be as much as it is. I’ve seen some very, very large prepayment penalties in the 10th of thousands of dollars. So, if you plan on moving or maybe your investment horizon is different, if you can match up your timeline, that’s really valuable to some of the mitigations as it relates to that. But currently, most people are interested in a one- to three-year term. However, when they’re offered the rates that are available in the four and five year it does sway their decision a little bit because they’re more focused and I think this is based on natural human behavior – while people have the best intentions of going shorter term to try and be in a position where in one or two or three years’ time they’re renewing at a better interest rate environment. Once they see the difference and interest rates, which may only be 50 basis points or 0.5%, but that may be enough to make the four-year option more appealing. And I’ll take that because it’s a compelling offer. So it’s just important to sit down with somebody and let them give you all those options and then you decide what works best.

The other interesting thing about the shorter-term ones is that you have a little bit less market competition available for you as the shorter the term is. So, some of these institutions will offer to compensate you for moving from one to the other and as the term gets shorter, essentially their ability to recoup the costs of moving you from one institution to another decreases enough that they say they’re not going to cover the cost if you’re only going to come there for one year. They may convert you and you might stay within the institution, but all I’m simply saying there are options. It’s just that there’s less options than if you’re, for example, trying to move and it’s a four-year fixed we are looking at.

 

Rob Wallis:

Do higher interest rates create more stable housing market pricing?

 

Dan Pultr:

Well, that’s interesting. Do they create more stable markets? What I can say is this increase in interest rates has significantly decreased the demand for housing or put it differently it’s at least stalled it because I don’t believe that the actual demand has dissipated I just think that people are uncertain enough that they want to wait. That’s a bit of a double-edged sword, because if everybody waits, then that just means we get right back to multiple offer circumstances.

Secondly, we have another market condition that is also a stimulus to demand and that’s immigration. In the last 12 months, we saw a significant amount of immigration and it’s going to continue. That included temporary foreign workers, which is a whole another class beyond the actual immigration that we typically would count. And the numbers were staggering there. The numbers that I saw in the most recent presentation was almost 1,100,000 in 2022, if you account for the temporary foreign workers. So that’s a significant amount of people that we’re having to house. So, you’re causing a significant stimulus to demand, all else being equal, and then you have a demand start to come back online because it was delayed. I think if you’re going to move, you’re going to want to change your home interest rates aside, interest rates may only stall for a period of time. Eventually, you’re just going to say “Look, we can’t live in this one-bedroom townhouse or condo with three kids…”. Eventually you have to make that decision, whatever that decision may be, you may move further out to find more affordability.

Thirdly, we did see a bit of a pricing correction. We did see a decrease in price, but it was almost offset enough that the payments were effectively close to the same.  There’s a rule in Canada around mortgage default insurance and that it’s only available for properties that are under $1,000,000. And this is where it did create a little bit of stimulus: if your property was worth $1.1 million and now is worth $980,000 there’re actually more people able to purchase that home because the amount of down payment that is required for a property that’s $980,000 is materially different than if you’re purchasing a property worth $1.1 million.

Now, we’ve talked a lot about demand, but the other piece that is more problematic, and which is going to continue to be a challenge for us and what’s going to keep home prices at least elevated, my comment on it would be – I think it’s going to be still elevated for a period of time. I think if nothing else it’s going to maintain stability and pricing it’s going to pose some frustration though, because it’s going to continue to see multiple offer situations, is that we still don’t have supply. We are not building enough housing in Canada for the number of people we have, nor for the amount of immigration we receive. And now, there is less willingness to sell homes because of some of the existing market conditions. People are seeing that interest rates are high, and they hear that prices are coming down. Is that the time when you want to try to sell your house for top dollar? Of course, if you’re selling you eventually buying, but we know that people are considering this option. We are starting to see some of those things play out. For instance, the provincial government in BC is trying to mandate the type of allotment you have on any single-family lot. So, we’re hopeful that this will increase supply and create more opportunities for affordable housing. However, it will take years for any of these changes to come into effect. Supply is not something you can turn on or off, and the impact of it takes quite some time through the cycle.

Right now, if you look at the current market, people are unwilling to list their homes. Therefore, the properties that are on the market have been there for some time, perhaps because the price is too high or it’s not very desirable. The properties that are desirable get a ton of interest, and if you talk to a realtor today, they will probably tell you they have a ton of interest. They may even end up in a multiple offer situation, where people jump on a specific property in the neighborhood. If there are only two properties for sale in the entire neighborhood, and 50 people show up at each, the price is almost irrelevant. It now becomes a matter of what someone is willing to pay for one of these properties, and they have a timeline and a budget. So, we are back to this sort of imbalance in supply. We need steady, long-term, consistent supply, and that’s what’s going to allow us to be in a position where prices will be a little more stable over the long-term, versus some of the big ups and downs we’ve seen. Those big ups and downs are a little concerning too, right? We don’t want to see wild swings because somebody always gets caught at the peak of that. We’d rather see some level of stability. Personally, I want some headlines about multiple offers right now because it might bring more supply to the market with people willing to sell their homes because they hear that prices are no longer falling due to low real estate activity. Only time will tell, and as I mentioned earlier, we don’t know if it’s a blip or a trend right now, but we’re seeing a little more stability over the past 30 days.

 

Rob Wallis:

Got it. So, Dan, I’m not going to hold you to this, and neither of our listeners, but will we be looking at lower interest rates in one year?

 

Dan Pultr:

I had the opportunity to ask a couple of economists a couple of weeks back, and both of them bet that if you take the five-year fix, which is what everybody looks at in Canada, we would all anticipate interest rates being lower from where they are today. I do think that there’s room for that to come down, so I would say yes.

As it relates to variable-rate mortgages or anything pegged to prime, I don’t think we’re going to see any central banker, I don’t think in Canada or the US, which we typically take a price from the US. I can’t see them lowering the interbank lending rate this year. I would be very, very surprised. Would they lower it in early 2024? Maybe. But all the sentiment from all the economists is that the Bank of Canada has said, and has now called it “a confidence issue”, that interest rates were going to stay low, and then they went the other way. Right now, they’re telling us they want to kill inflate and they want to make sure inflation is dead, completely dead, like never going to rear its head to the levels that it was. So, until they actually see something that gives them that sort of certainty, that inflation is dead, they will not start decreasing rates. They will hold firm, and that may result in some stress to the overall economy that we just don’t know where that is yet. We haven’t really seen any real material pain in the Canadian economy just yet.

 

Rob Wallis:

Yes, totally I agree with that. I think that’s a good topic for another podcast – “When is inflation dead?”.

 

Dan Pultr:

Yes, that would be no expertise of mine but it would be something I’d love to listen to. I’m sure there’s a bunch of interesting thoughts on that and interestingly enough, can you kill inflation when the rates are high and part of the driving force to inflation is interest rate costs on mortgages, right?

 

Rob Wallis:

Dan, thank you. It’s been awesome conversation.

 

Dan Pultr:

Thank you very much for having me Rob, I really appreciate it.

 

Rob Wallis:

Pleasure. Cheers, Dan.

 

Disclaimer

The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

In this podcast, Lorraine McGregor from Spirit West Management and Rob Wallis discuss the low number of businesses that are actually selling in North America, despite 70% of baby boomers business owners saying they want to sell within the next five years. They explore the reasons why many businesses do not sell, including the lack of understanding of how to play the M&A game and not being “sale ready.” They also delve into the importance of increasing a business’s valuation in order to attract buyers and the options available for business owners who are not happy with their valuation.

 

About the Guests – Lorraine McGregor

Lorraine founded Spirit West Management in 1990 and has worked with CEOs to help grow their businesses through effective partnerships, marketing, and sales strategies. In 1999, she returned to Canada and has worked with both US and Canadian clients. Together with leadership expert Rob McGregor, they provide growth strategies and leadership expertise, as well as guide business owners and their families through a process to decide the best course of action for their business. They also work on improving systems, profitability, market focus, and organizational effectiveness, and address conflict, family dynamics, and partnership problems. To read more, please visit the Spirit West Management website.

 

About the Host – Rob Wallis

Rob has provided senior financial planning and advice to VELA clients for over 15 years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

Read the transcript of the Polestar Podcast here.

Listen to the Polestar Podcast here.

Podcast Transcript

 

Rob Wallis:

Hello everyone. Welcome to The Polestar Podcast by VELA Wealth.  I am delighted to have Lorrain McGregor from Spirit West Management joining us today. We’re going to be talking about what to do with business valuations, especially if you’re not happy with them. Lorraine and I have been working together for several years, and we’ve shared lots of different clients and different experiences. What really is very interesting for me is learning about the options for people who are thinking about selling a business and how they get the best value for their company and whether is it even possible to sell a business at all. So, before we jump into the content, welcome Lorraine. Please say a few words about yourself.

 

Lorraine McGregor:

Thank you, Rob, for having me on your podcast. I’m so glad that you’re tackling the topic of valuation. We, at Spirit West Management, have been helping owners grow their businesses to the next level and learn how to become sale ready and increase their valuation for about the last 20 years. It’s very difficult to learn how to play the valuation M&A (Merges and Acquisitions) game from the outside. So, we have taken a lot of time to understand what goes on inside dealmaking and translate it into language and actions that business owners can take advantage of. So, we love the opportunity to be able to talk about it.

 

Rob Wallis:

Well, before we jump in, I’m always fascinated to hear the stats about businesses that are for sale in Canada and indeed the world. And especially in the context of the greatest wealth transfer in history is taking place right now, and a lot of baby boomers have businesses. So, if you could let us all know what those stats are that would be awesome.

 

Lorraine McGregor:

Well, thanks for giving me the opportunity to describe this because these numbers aren’t apparent. These numbers have been tracked since 2008. So, across North America, Canada, and the US there are three and a half million businesses owned by boomers. People over 55, 60 I guess now, and you would think since there’s going to be this great wealth transfer that those companies would be on their way to sell. Since 2008 these companies have been surveyed by many different organizations and at least 70% reliably every single year say they will sell within the next 5 years. So, we would expect this to happen and in fact, many books and predictors have said this is what’s going to happen, but the stats of the number of companies that actually sell tell a very different story. So, Capital IQ and several other organizations track how many businesses actually sell each year. If you know if it was 70% that took the time to become ready to sell, we’d be seeing hundreds of thousands of companies sell each year, but in fact, the numbers stay steady. From 2008 to even 2022 there are roughly three to four thousand companies each year that actually sell. Way back when we started to see this trend we thought about why so few companies are actually selling and we got to the bottom of understanding that problem and we designed everything that we do to help our clients know how to play the M&A game because there are some secrets in how they do things that totally stop most business owners from finding buyers.

 

Rob Wallis:

Okay, so three and a half million companies (owned by boomers), and 70% of those wanting to sell within the next five years but there are only three and a half thousand transactions a year in North America.

 

Lorraine McGregor:

Right, so 70% is 2.8 million and in Canada will just take 10% of that, so 280,000 predicted they’d sell. In every year since 2008 we should see upwards of 100,000 sales and what we see in Canada has more like 1,500 to 2,000 and in the US more like 4,000.

 

Rob Wallis:

Staggering!

 

Lorraine McGregor:

Staggering, yes. So, if you’re one of the 90% of owners that never find a buyer for your business, that means you can’t actualize a return on investment. You can’t sell the business and liquidate all that you’ve built up, and if you’ve been counting on that wealth to power your retirement or your next act in life this can be a hugely rude awakening right at the point in your life when you kind of run out of energy to re-engage and reinvent.

 

Rob Wallis:

So, what kind of capital is out there actually chasing these businesses?

 

Lorraine McGregor:

Well, this is a confusing thing. I mean all the headlines are about how much wealth is searching for businesses to acquire. In fact, every year it gets a bit bigger, but the current number on the table is between eight and ten trillion dollars looking to acquire businesses. So, you look at it and you think, well, there’s ten trillion looking for businesses, but 90% are never going to sell. Well, how do you make sense of that? And that conundrum is exactly the problem that we solve for owners. There’s high demand for certain types of businesses that have been made sale ready. So, those businesses will get multiple offers or just find the ideal buyer, but you only need one. And then the rest of them will never find those buyers and there’s a low demand for companies that have not been made sale ready and that is an excruciatingly difficult situation for owners to come to terms with.

 

Rob Wallis:

So, what are some of the key reasons why businesses are not sale-ready?

 

Lorraine McGregor:

Well, they’ve not been told, not been educated, not been prepared over the course of their lifetime and their business to become sale ready unless they were in a tech business. Because in tech business they get investors early on and every single one of them is lecturing you constantly about how they’re going to get a return on investment when the exit is going to happen, how will the investor pull their money into the business, and etc. So, owners are always thinking about that. But if you don’t have a tech business, you’re not surrounded by an ecosystem of advisors saying here are the things that you need to do to ensure that an ideal buyer or an investor is going to be interested in liquidating your position. Instead, you are your sole investor, or maybe you with your partners, and if you’re not getting that kind of advice early on, you come to a certain point in your life and you want to move on and now discover that you can’t, and you’re not prepared in an easily curable way to get that return on investment.

 

Rob Wallis:

Got it. So, how does the opportunity to sell a business change depending on the sector? You mentioned tech, but there obviously would be a small percentage of what’s transacted each year. What about other industries?

 

Lorraine McGregor:

There’s interest in every single industry out there by acquirers. The real reason they want to make an acquisition is that they need to solve their own business strategy problems. So, if there’s another company, that needs to solve a particular growth problem, they will need to get into a new market, they need new technology to complete the picture for their customers, they need to acquire expertise, they want to get into a new geographic area and to build it themselves would take too long. So, making an acquisition solves a certain strategic problem.

Now, other companies such as competitive companies buy 90% of all the acquisitions. The other type of buyer buys probably 10 to 12% and those are private equity buyers and they’re buying growth in the future cash flow growth, so they’re not acquiring what you’ve done, they’re acquiring what you’re going to do, and you’re already on the way to proving that your business is growing through at least 30% year over year and is producing growth and cash flow probably both in gross margin at the same time. Those types of companies are super interested in it.

 

Rob Wallis:

Okay, so we have an unprepared seller of a business and they’ve got a valuation of their company, and let’s say it’s come as a shock to them because they thought the company was worth more than it was. What are their options now?

 

Lorraine McGregor:

Well, the first step we always say is to handle reality. Yes, it’s very painful, demoralizing, and embarrassing to get a valuation that is less than what you thought it should be worth. Because you’re looking at all that you’ve built, and you’re valuing all of that, whereas the evaluator and the people, the buyers that they represent, are valuing the future, and so that’s where we have a disconnect. By handling reality, you have to stand in the shoes of your ideal buyer and ask yourself, “What do I see that proves to me that if I acquire this company I’m going to get more growth in the future?” – so that’s the first step. Being able to look at your business dispassionately from the buyer’s perspective helps you see what the opportunities are to cure some of the things that get in the way of growth.

The second thing that you need to do after you’ve handled reality is to be prepared to make some changes in how you run your business so that growth is possible and so that you, as the owner, are not materially needed inside the business in some functional role. Solving those three things that perspective, the growth problem, and making sure that you’re not in a key position, meaning you’ll have to work for the new owner if you do sell the business, are the first places we look for helping a business owner improve valuation and then from there we look at profitability and growth prospects. And it sounds like an enormous to-do list, but sometimes you just want another two million and you need to become sale ready. So, the project to make these adjustments could be small, or it could be much bigger depending on your level of ambition and your level of risk talent.

 

Rob Wallis:

Interesting. So, how long does it take typically to turn a business around to achieve what the owner wants?

 

Lorraine McGregor:

Well, first of all, let’s tackle where the owner is now. Of course, the owner probably has a successful business, and for all intents and purposes it makes money, it’s a great place to work, great employees, great customers. It’s just the owner has come to a point in time when for whatever reason they want a return on investment, and I think it’s important to acknowledge all that’s been built. But to be able to sell it to somebody who can easily step into the owner’s shoes and transition the business so that it continues on its growth trajectory that takes a bit longer for two reasons. One is the evidence – the proof that the business is growing has to be in the financial statement. So it’s going to take 6 to 12 months, maybe even 18 months for changes to be seen on the bottom line, at the net profit margin level, at the gross margin level, and at the revenue level – thinking about the income statement. The second thing is the amount of change needed. Might just be a few adjustments or it might require installing someone to replace you as the functional role, it might be cleaning up how you collect your financial data, and it might be entering a new market, or exploring introducing a new product. So, that can take 12 months to two years.

The way that we do things, we aim at the ideal buyer early on in the process, so today you might be part way through implementing the plan to make the company sale ready but because we’ve signaled your ideal buyer that you’re probably coming onto the market, you could probably get a deal much earlier in one to two years and still be on your growth trajectory. As we said, there’s ten trillion in wealth looking for businesses, and they’re all looking at the same few companies that are willing to take the journey to make the company sell-ready. So, once you pop up on the radar you get a lot more interest. You could have a deal, but not be finished your growth process.

 

Rob Wallis:

So, in terms of popping up on the radar, let’s assume someone got an evaluation that they are happy with, and they want to go to market. How can that seller access these trillions of dollars of capital that’s out there looking for companies like theirs?

 

Lorraine McGregor:

OK, well first let’s make a distinction. Just because someone has said your company is worth ten million, or five million, or fifty million doesn’t mean a buyer wants to pay that. Having a valuation is no guarantee that you’re going to find a buyer. Secondly, another issue that’s super important is understanding how the game is played. There are two types of groups that sell or represent the selling of a business. The first is Merges and Acquisitions (M&A) Advisor and the second is a business broker. The M&A Advisor gets paid after the transaction takes place, meaning they get a success fee, some percentage of the sale price and they only want to work with those businesses they know they have buyers for. So, you have to be sale ready, and you have to have solved what their buyers are looking for strategically or financially. And if they can see that in you, how you talk about the business, the questions you answer about how the business makes money and loses money, then they might be interested. But for every hundred businesses they look at, they may only take on five or six maybe seven clients in a given. So, you might be given an evaluation but not be chosen to be represented by this company. And this is happening all the time, so you think “oh, but they told me it was worth X but they didn’t take me on as a client. So now what do I do? And they go shopping for another M&A Advisor or maybe they talk to a business broker and the business broker works quite differently.

 

Rob Wallis:

Sorry to cut in there. Just before we go into the business broker. What are the reasons an M&A Advisor wouldn’t take somebody even though they’ve given an evaluation?

 

Lorraine McGregor:

Well, I like to think of it as a consignment shop. A consignment shop takes used goods and puts them on the rack and in the window in hopes that somebody will see them and walk in and buy them. They don’t want to have goods on the shelf that isn’t saleable. Because M&A Advisors get paid after the company is sold and they put in a lot of effort to help the company present itself and do a search to find that ideal buyer, they’ve invested a huge amount and they want to be paid, so they’re playing the probability game. What’s the likelihood we’re going to find a buyer for this company, and if the lower it is then the more reluctant they are to take them on?

 

Rob Wallis:

As a claim, got it. Then, what about the business broker?

 

Lorraine McGregor:

A business broker maintains a website and displays one of the businesses that they represent for sale, but they most often take a retainer for doing that. So, every month you’re going to pay them a certain amount of privilege of being on their website, and sometimes they actively market your business, but they’re going to help you understand why your valuation is X and present your business in the best possible light. They’re going to take a percentage much smaller than the M&A Advisor at the end of the deal, but you’re going to pay that upfront cost so that they’re compensated for all the work in helping you get ready to go to market. So, you might get a valuation from them of five million, but you have to make a bunch of changes. Maybe you’ll get to six million. The M&A Advisor will tell you you’re worth five or ten million and sorry we’re not going to work with you. Neither group is going to tell you why or what to do to make the changes that would elevate your valuation, which is only one part of the formula. The other part of the formula is going to make you attractive to your ideal buyer, and you’ve got to solve for both. That’s why it’s so important to recognize that if your accounting firm says, “we’ll do an evaluation for you and you’re worth seven, we’ll stamp it, put it on our letterhead.” – that doesn’t mean that you’re going to find a buyer that’s going to give you seven million dollars. There are lots of companies that get valuations and will never find a buyer because they’re not sale ready, and the M&A Advisor needs sale-ready companies. The business broker tries to help you become more sale ready, but they can only sell what is of value to the buyer and this is a key point. Value is in the eyes of the buyer. So as an owner, you have to recognize that and stand in their shoes in order to detach from your disappointment that you didn’t get the valuation you wanted. And yes, it is your baby, you want people to appreciate and acknowledge all that you’ve done to build this up. And when people don’t give you the number that you’ve become attached to it’s crushing.

 

Rob Wallis:

So, is it ever too late to do anything about this?

 

Lorraine McGregor:

It is always possible to turn a business into a sale-ready company, but you need to consider a few prerequisites. One – you still need to have the ambition to increase the valuation of your business. Two – you have to be willing to make the changes and adjustments in how you run things so that it becomes sale ready. Three – I think you have to examine your tolerance for risk. Making a few adjustments, spending another year in the business, and writing about the next economic cycle. Do you have the fortitude to go through that? Some people don’t. So, I think it’s a personal decision about how much energy you’re willing to put into something or can put into something so that it can become sale ready. And of course, just being sale ready doesn’t guarantee you’re going to get a buyer, because as we saw at the start of this podcast, only a few thousand companies sell each year. So, your ambition has to drive you through the ups and downs of playing the M&A game, and it’s quite the rollercoaster sometimes.

 

Rob Wallis:

So, turning back to the baby boomers and the anticipated transactions over the next 10 to 20 years, there are instances where people cannot find buyers and end up going to shut their companies down completely.

 

Lorraine McGregor:

I think that’s happening all across North America. As owners age and they want a smoother life for themselves, their revenues are flat, maybe key employees are starting to leave because they don’t see the company growing and there are other opportunities out there. I think that companies are closing all the time and buyers are wanting companies that are more modernized, more agile, that have automated, that have a higher quality of revenue, that have transitioned from just providing services to adding more value, creating recurring revenue, creating other sources and ways of being of service to their target markets. So, if a company hasn’t evolved it kind of runs out of steam at some point.

 

Rob Wallis:

So, it just closes down and that’s that?

 

Lorraine McGregor:

Yes, that’s happening everywhere.

 

Rob Wallis:

Any stats on that?

 

Lorraine McGregor:

I do not have those stats. It’s mixed up with bankruptcies, so their stats on bankruptcies, but not companies that have closed in any easy-to-grab in a way.

 

Rob Wallis:

Got it. So, coming back to the not happy with my business valuation. What do I do? What would be the key advice that you would give that person?

 

Lorraine McGregor:

Well, the key advice is to talk to someone like us who can explain what’s going on behind that number. Why is that number as it is deconstructing what red flags created the lower valuation and also with green lights? What good things? What X factors have built the valuation up? In light of who the potentially ideal buyer is. So, that starts the process of helping the owner understand the dynamics of the marketplace so that they begin to see their business in a way that a buyer would and start to go thinking “Okay, if I improve profitability, or if I went into this market, or if I had someone who was running the area that I run and we offered some new data or a new service to our customers to help them solve a problem, we’d suddenly be of interest to a buyer”, and when we start to have that conversation what I notice is owners start to get excited because they may be run out of ideas on how to grow to the next level. So, we inject some enthusiasm, some potential, some hope tempered with how much risk and ambition the owner has, and they can see an endpoint, they can see how the games played, how they get from a valuation of ten million today to the fifteen million they actually want. And now they see all the steps in between. So, this is what we do we work with an owner and if they are unhappy with the current circumstance, we create a plan of action. It’s great to know how come it is the way it is, but now how do I fix that? And since we’ve been doing this kind of work for the last 20 years, we’ve mapped out a whole lot of processes and the inside information on this is every business, no matter whether it’s a tax or traditional has the same issues that make them unsaleable. So, we have processes that are designed to solve problems and it doesn’t matter what kind of business you have. They’re the same log-jams, the same frustrations, and the same way of organizing things that make it difficult for someone else to step in and take over.

 

Rob Wallis:

So, with everything in our world and the conversations we have with clients this occurs to me as being quite similar to tax planning, for example, or financial planning in general. It takes many years to put the right programs in place to get the desired outcome and everything has to work together to produce a really good outcome for somebody in the future, and it’s ultimately patience and taking their advice.

 

Lorraine McGregor:

Well, very well said – patience and taking advice, and taking action. We’re the kind of company that doesn’t let you just run away with the salability blueprint. We didn’t want to sit down and break it down into projects because as we all know we all have full-time jobs and changing your organization on top of the work of running your functional area in the business, it’s like having two full-time jobs. So, the project management of organizational change projects is where we sell. So, that is where you start to see results and that’s crucial. No action, no result.

 

Rob Wallis:

Got it.

 

Lorraine McGregor:

I think the other thing that you said that I really liked is that we tend to hope that there will be a plan, that our lifestyle business will turn into a saleable asset at some time when we’re ready to sell. But the truth is that buyers are looking when it suits them, not when owners turn a certain age, not if they’ve planned or not planned for that kind of outcome. So, to count your company as an asset before you’ve made it sale-ready is a recipe for disaster. And as you know, for example, VELA is a wealth management company, and helping them understand that this company is not going to give a better return unless they make it sale ready, is kind of crucial to that planning process.

 

Rob Wallis:

So, sounds like lots of preemptive work needs to be done. Thank you for sharing that, Lorraine.

Just before we wrap up, could you share a little bit more about a cool project you’ve got coming up that helps business owners find answers to the question that we posed today, which is what to do with an evaluation that they’re not happy with?

 

Lorraine McGregor:

Well, we are about to launch something that we call the Scalable Saleable Business Formula, that’s scalablesaleablebusiness.com. This is a program where we will help you in a five-day period understand why you have the valuation you do, and what things you can change about it so that you can actually get the valuation you really want. It’s a report that gives you a deep dive into what to do to make the change happen. We also have a longer program where we can train one of your people to make those changes in the business. So, we won’t just hand you the salability blueprint will show one of your top team members or you how to go and implement those changes.

 

Rob Wallis:

Cool, it sounds very exciting!

 

Lorraine McGregor:

It is! It’s the first time that we’ve offered this on a much larger scale. We generally work with five or six companies at a time, and with this program, we’ll now be able to work with a lot more. And get the word out that if you really want in return on investment from all that you’ve built in your business, now it’s the time to do it, and here’s the plan to go out and play the M&A game to win.

 

Rob Wallis:

Great! Thanks, Lorraine. Great to have you on today and all the best for the new project.

 

Lorraine McGregor:

Thank you, Rob. I really appreciate the time and attention. Great questions. Thank you.

 

In this podcast, Som Seif, a prominent figure in the Canadian financial services industry, discusses his background and journey to success with Jason Boudreau. He shares his experience immigrating to Canada as a child, his initial aspirations to become an architect, and his path to discover his true passion.

 

 

About the Guest – Som Seif

CEO of Purpose Inc.
CEO of Purpose Unlimited
Som Seif is the Founder and Chief Executive Officer of Purpose, which he formed following the sale of Claymore Investments to BlackRock Inc. in March 2012 and the Co-Founder of WealthSimple Technologies Inc. Prior to Claymore Investments, Som was an investment banker with RBC Capital Markets. He has a strong commitment to community and is currently a member of the AGO Foundation Board, Next Canada Board, and UofT Pre-Campaign Committee and Mechanical and Industrial Engineering Advisory Committee.

About the Host – Jason Boudreau

Jason has built VELA Wealth into an established life and estate planning firm, guiding families as they make meaningful choices at the intersection of life and wealth. Jason’s areas of expertise include intergenerational wealth transfer and estate planning with a focus on advanced insurance-based solutions that incorporate philanthropy and legacy planning. Leveraging these specialties, Jason brings a fresh perspective and outside-the-box thinking to the strategic planning process. To read more, please visit the VELA team page.

 

The episode is also available on:

    

 

Read the transcript of the Polestar Podcast here.

Listen to the Polestar Podcast here.

Podcast Transcript

 

Jason Boudreau:

Welcome, everybody to the Polestar Podcast by VELA Wealth. We are honored and excited to have Som Seif – entrepreneur, extraordinaire and well-known guy in the financial services industry in Canada. Looking forward to having a great dialogue with him. Welcome Som, thank you for being here.

 

Som Seif:

Well, thanks for having me, Jason.

 

Jason Boudreau:

So normally these podcasts go as a nice open conversation, but one of the things I was hoping we could do today is get a bit of background on you. I want to understand where you came from, where your family came from and how you ended up in Canada.  I love sharing the entrepreneurial journey but also interested to know how someone’s family life originated in Canada. So, why don’t we start the story and then dial up from there and then we’ll move it ahead.

 

Som Seif:

Sure. I think that a large part of my actual background story is a large part of the character of who I am, as I’d say most people are.  My family immigrated to Canada when I was three from Iran, just around the time of the Iranian Revolution. As we fast forward to the world that we’re in today there are a lot of correlations to that time, of course, in a different way and I think it’s an interesting time to be reflective of the last 40-plus years in the world, in the Middle East and of course, in Iran. My family moved to Canada, and it’s an interesting story actually. I asked my parents about a decade ago what it was that made them come to Canada. And it’s an interesting story because my father was studying for his master’s degree in England. I was born in England. We moved back to Iran, and he originally wanted to stay in England and his professor told him, “it would be stupid for you to stay here. You’re a Middle Eastern man and we are in the 70s in the UK. This is not a progressive society for someone like yourself.  You should go to a country that is more welcoming–a country such as Canada” and so that led to him applying to do his PHD at York University and coming to Toronto, Canada. We immigrated a year after that, in 1980, and I’ll tell you, it was one of the greatest decisions my family ever made, but most importantly, one of the most important decisions in my life that I didn’t make because that single decision changed the probability of success for me and my family by 100-times.  I’m a big probability guy. I’m a math guy and I look at life based on very, very specific factors. If I think about where I’d be if we hadn’t made that move, if we lived in Iran versus where I am today, would be in the top quartile of opportunity in my life relative to anything else. It was really powerful to grow up in Toronto.

When I was growing up, I always wanted to be an architect. It was my dream, and you know the reason? I have a very creative mindset. I loved the idea of building and designing, and it was something that applied a lot. I mean basically, from the age of eight I had always had this focus and it was interesting because when I had to make a decision about where to apply to go to school, I went and spoke to a couple of well-known architects in the Toronto Area and they all said to me don’t do it. It’s not going to be the job that I think it is and they all said that I won’t make any money and I didn’t grow up with anything.

My family provided extremely well for me and I’m very proud of that, but I always had this great ambition of making lots of money. It was actually the thing that really drove me. At least that’s what I thought. So, that led me to question becoming an architect. So, instead I went into Engineering at the University of Toronto. Very shortly thereafter, I made the decision to pivot to more of a business path. I went to work at RBC Investment banking in 1999, just in time for the tech bubble. It was one of the most exciting, crazy nine months of my career. I did more in the first nine months of my career than I did for the next two years. Frankly, it was quite amazing, but it was an unbelievable experience for the next number of years. I worked at RBC for six years and really applied myself. Then, I just started to ask myself, whether this was what I wanted to do? I remember the big moment. I was 25 years old, and money was one of my priorities at that point. I was starting to make really good money for a young kid, and I remember coming home one night at two in the morning, which was the hours I was normally working…

 

Jason Boudreau:

Investment bankers hours, right?

 

Som Seif:

Right.  I sat on my bed, and I said to myself “I’m not happy”. It’s not that I wasn’t enjoying what I was doing. It was that I wasn’t happy because I had pursued all of this with the singular goal of making money. And now I was making some money and I was on the path to making lots of money and I didn’t feel like that was the right goal. I did a lot of soul searching. I had to step back and say “Ok, what is it that I really enjoy?”. I still enjoyed waking up Monday morning and jumping to work and doing the things I was doing and what I realized was the thing that really made me happy was the thing that made me most excited. It was seeing my ideas progress, seeing things that really materialize and being a part of progress in a really meaningful way. And if I actually go back to what I loved about being an architect, it was the idea of seeing your efforts result in something that you actually physically touch and see. This was appealing to me. So, I had to step back and think about what I really wanted. Then I needed to apply myself in a way that was going to allow me to see my ideas flourish. I realized I wanted to build something. So, I sort of decided I’m going to leave at some point. I decided that if I’m still in this seat at the age of 30, I’m going to walk in on my birthday and I’m going to resign. And that gave me a date and I had to solve this problem of what I was going to do next.

Anyways, before the age of 30, that day came. It came at the age of 28, when I decided to break off and start my first company. I started a company called Claymore. At the time I had no idea what I was doing, but I had a really strong mental model and vision about how to build a better asset management firm. I advised a number of firms over the last number of years and got into what was happening in the industry really deeply. So, I believed there was an opportunity, and I built Claymore over the next seven years to become one of the most important financial asset management firms in the Canadian marketplace. It really changed the way the industry looked at asset management, specifically about fees, transparency, quality of investment strategy, and all the rest of it. I think we did a really cool thing, but I had a partner and the partner wanted to exit, so we ended up selling the company to BlackRock in 2012 and that gave me another moment to step back. I was 35 years old, and I had to ask myself what I wanted to do next? So, I decided that I wanted to do it again, but I had a bigger vision for the industry including asset management, wealth management and around financial services and banking. I went back to do it again. I started Purpose a year later and I also co-founded a firm called Wealthsimple We’ve been effectively executing over the last nine years across multiple areas of financial services trying to really drive innovation on behalf of Canadians within the industry. I’m really proud of what we’ve been able to do over the last little while.

 

Jason Boudreau:

Som, thank you for sharing. I learned a lot about you! I thought I knew quite a bit about you, but I really appreciate that background on your story and I know a lot of Canadians share a similar story, where they immigrated here at some point and really made something of being a Canadian and then the next generation, like you have recognized that and taken it to a whole other level. It’s just always really neat to hear that. So, I appreciate you sharing it.

 

Som Seif:

It’s actually quite amazing. I think of myself as someone who’s comfortable taking risks as an entrepreneur, but I’ve really gone through this journey of thinking about those who, either by their own will or, of course, through being forced to go away from the world that they know, friends that they grew up or their family, and move to a brand-new country, often times not able to speak the language or don’t know the culture and don’t know anybody. And they have to integrate into that society, build a life – that to me is risk. And I’m so amazed by this journey that people go through, and what they do, and, of course, Canada is an amazing destination for immigration for people around the world. Well, I’m encouraged, and I’m always inspired by it. I hope that Canada continues to really drive to be the best place in the world, to drive immigration because on behalf of those individuals it’s about creating an environment that only helps our country in the long-term. It also helps those individuals really be a part of a society in a meaningful way.

 

Jason Boudreau:

Totally, it is so important for Canada’s future to have strong immigration. I remember listening to Darrell Bricker’s book last year called “Next” and he talks a lot about the fact that without immigration Canada has basically a net zero new job growth and we need people to come here to help Canada grow and continue to be competitive globally. So not only is there the opportunity, but there’s almost a necessity for us as a country to welcome immigrants and their skill sets.

 

Som Seif:

I agree with that, and I actually think that it’s not only the future that is critical, but actually we don’t have to look much further than what we’ve gone through in the last 23 years. One of my theses around this is that if you look at the US, the US has been winning economically by driving a really strong strategy around IP ownership. If you think about the history of productivity, it was always around, call it physical manufacturing, economic growth and over the last 20 years we’ve seen such great progress on intellectual property and intellectual capital growth and the US has been winning that game against the players around the world. I’ve tried to deeply understand how Canada has been able to maintain a level of growth given that we don’t have the same strategy on the IP side. In fact, we’ve actually had a lot of our IP taken by the US in many ways, but I would say I think immigration has been one of the key driving forces for us being able to keep up with the economic development and growth that the US has been able to achieve. So, I think this is one of our strengths and I think it’s critical for us unless we do have to get our IP strategies right. We also have to continue to drive immigration for demographic reasons obviously, and also just for economic development and growth.

 

Jason Boudreau:

No doubt. I totally agree with that. One of the questions that I wanted to ask you is about your journey with Claymore and then selling that and then obviously starting Purpose. You’ve sort of alluded to it a little bit when you said that Purpose is almost a second chance in the same industry, that you took what you learned from Claymore and take it to the next level where you’re at now. Would you do anything differently if you went back again? Let’s say on the Purpose side, would you do anything differently in the past than you’re doing right now?

 

Som Seif:

So, one of my fundamental beliefs is that we shouldn’t have regrets in life and I actually don’t. Especially when it comes to business. Every decision that I’ve made in history, right or wrong, has been for reasons that were in the moment, and I think it’s important to go back and reflect on the decisions and whether or not you made good decisions or poor decisions.

I do that as often as I can. So, that I can learn from that, but I don’t actually ever look back and say “Oh, I wish I’d done that”. I’ve done that and I think having regret in your life is having an anchor. So, I’ve always believed in that and when I look at it, I’m very proud of what we’ve been able to accomplish with Purpose, but I wouldn’t change a thing because I think where we are today is a really good place. I think where we’re going is really exciting and really, what I hope is that every decision that I’ve made that has been a poor decision over the years will help me make a better decision in the future. I think that’s really the way I try to apply that thinking, so I don’t think I’d do anything differently. I think the only thing that I actually regret, was missed opportunity with my interactions with my wife and kids rather than on the business side.

 

Jason Boudreau:

Yes. I hear you. Well, let’s pull on that family thread a little bit because I know you’ve got a big family. You have four, right?

 

Som Seif:

Yes, that’s right.

 

Jason Boudreau:

That’s crazy. I mean I’ve got three and that’s crazy as it is, although I know my wife would love to have another one. Tell me about the background of how you guys decided to build such a big family.

 

Som Seif:

Well, I grew up in a very loving home. I’ve thought a lot about my upbringing, my parents were wonderful individuals who showed me love every day, very highly demanding but a lot of support, which is a very important thing in life. I also had a wonderful brother and older brother and then we had the benefit of my cousin who was my brother’s age living with us and so we grew up in this really interesting dynamic. My mum’s twin sister lived with us, so I had like two moms, two siblings and my dad, so our house was full. It was always something that made me feel joy. So, when my wife and I, who I’ve been with since we were teenagers, were planning our lives, we didn’t really plan at all. We both really enjoy a full house, we enjoy a full life, and we love kids and frankly, to your point, I would love to have many more.

We have four and we’re really happy with that, but every single time I see a baby, I always think that it would be great to have another one and they’re wonderful. My life has changed with them. I used to work non-stop most of my career and then we had our first child and I’ll tell you – your personal perspective changes you. All of a sudden, you become accountable to somebody else, you have a different perspective on priorities and what’s important. It’s been amazing, but I will say that even with that, it took the pandemic to open my eyes up to the importance of being more present regularly. I think all of us have taken the pandemic to teach us really important tricks about life and business, but one of the things I think it taught us is the importance of being present and slowing down. I think that’s been the trick that I’ve been learning really, really, deeply and it’s been exciting to build my new life, structured around my family, around the business, around the way that I want to still work at a highly competitive level. I want to accomplish amazing things, but at the same time balancing much more of the presence and time that I want to be with my family and my kids.

 

Jason Boudreau:

Yes, that also resonates with me. Just recently, I was saying the same thing to somebody that I was at more family dinners in the last two to three years that I have been in the past 12 years. It’s like one of those things where your family is your priority. And then at the same time it’s the easiest to take for granted, and it’s one of those things where the pandemic just kind of hit you square in the face and showed you your priority, right? And I’m very grateful for that happening. To your point, I’ve been totally rebuilding the way I do life and business since then to make sure that presence is there in my life with my family as much as humanly possible.

 

Som Seif:

I think that’s great, and you said the word “grateful”. I think it’s an extremely important word in our lives that we all have to make sure to implement in our day-to-day routines – what we’re grateful for. What I think about life in general, the thing that drives me is that I want to get to a stage where I don’t want anything. I think we always get all these cycles where you want this, or I wish for that. I had that and I think one of the things I’ve been trying to learn a lot more about is being grateful for what I actually have and reflecting a lot on the life that surrounds you today. To me that is very deeply important to have happiness in life in the long run. So, I think this is a really important thing and to your point around dinner – I used to never be home during the week for dinners and in my first business with Claymore I never used to be around even on the weekends, frankly. When I started Purpose, I made a certain set of rules around being home on weekends. I didn’t work on weekends, I made that a set discipline, but I still was Monday to Friday pretty much never home, I’d be at the office until 7:30pm or 8pm or later and I would rush home to tuck the kids in and give them a kiss and that would be the night. And during the pandemic we spent every night together for dinner and I have made that now a rule that I want to be home four nights during the week as well as the weekends having dinner with my kids. And even if that means I’m going to do a call after dinner or whatever, it is that important thing of not being absent for what I think is the most relevant period of my kid’s life in just that family time of being around the table, debriefing on your day and just being there.

 

Jason Boudreau:

What are their age ranges?

 

Som Seif:

So, our youngest boy is just about to turn 7 and then we’ve got three girls that are 9, 12 and just about to turn 14. So, it’s a wonderful age. I’m sure it is the same with your kids, where the baby is not a baby anymore and is not yet a teenager in a meaningful crazy way and we’re just having such a blast with them. They’re the other personalities. They’re fun to be around and they’re funny, really funny.

 

Jason Boudreau:

Yes, totally. We have two boys and the youngest girl who is turning 7 on December 27th. She’s so confident and getting a little sassy, sort of chuckle. It’s fun to watch and just see their expressions and the neatest thing is we just got the report cards from school and all their teachers said how much they love having them in the class, how great they are, how much they participate and they’re so inclusive. So, all these values that we’re trying to instill in them are really starting to show up. I think that’s one of the coolest things for me as a parent, and for Carissa too. So, it’s neat to hear that’s happening for you as well as, especially with the older ones. And obviously, as they get older, it’s probably only going to show up more and more.

 

Som Seif:

I think that’s exactly the case. One of the key beliefs I have that I live my life is this idea that you are the average of the five people you spend the most time with. It’s one of my favorite principles in life and you can apply it in so many ways.

 

Jason Boudreau:

It’s totally.

 

Som Seif:

To your point being a parent specifically is a very stressful job, especially for people like you and I that attack our jobs, we attack our lives with discipline with focus, and when we don’t know something, we learn it and then you get sort of thrown into the deep end with having kids, which is sort of like… I’ve never done this before.

 

Jason Boudreau:

Figure it out, yeah?

 

Som Seif:

…and learning as we go. The only experience I have is watching myself growing up with my parents. You are constantly asking yourself if I’m good? Am I going to be a good parent? Am I going to do the right things? Are my kids going to be okay? Am I teaching them properly? Now people talk a lot about values and they teach their values. To me, this is a really important principle. Your values are being exposed to them every day, you are exposed to them every single day, and so if you’re a good person, if you’re the type of person who believes in the right things and acts in the right way, treats others people with respect, grateful for the things you have, then your kids are going to learn that because they’re seeing you every day, they’re watching you, so they’re learning from you. I believe that for the first 12 years of their lives it’s about you and your spouse. After that it becomes about their friends and who they spend the most time with, and those people are the people who help them grow up to the next level of maturity. So, there’s only so much we can do up to that stage. But I do think that presenting a set of values to them every day…  and it’s not about what you say to them, it’s what you do. I’d say it’s the same in your life with your team at work, it’s the same with your friends, it’s the same with everything that you expose yourself to and it’s so critical that you see that. It brings to the concept that if you want to be great, hang out with people that are great. If you want to learn how to play guitar go and join a guitar club, you want to do really smart things around math go join a math club. The people you hang out with are the people that are going to influence you to learn the skills and do the things you’re going to do and the characters that you want to ultimately develop.

 

Jason Boudreau:

Wise words! I just wanted to pull a little bit of this sort of gratitude and give back a little bit. One of the things I love talking with entrepreneurs about is their value set around being a contributor, giving back and it’s one thing obviously for us to build businesses and employ people. But then there’s this whole extension that goes beyond that – into the community. I’m just curious to get your thoughts or your philosophy around philanthropy. How do you weave that into what you’re up to as an entrepreneur, as a family man, as a person? Where do you stand on that thing today and then do you have a vision for it for the future?

 

Som Seif:

It is a really important thing in my life. Going back to my upbringing as being important, I’ve been involved both with my time and my energy and money in different organizations to help and give back to society for a long time. It’s something that I believed in, and I’ll give you a story there. I’ve thought a lot about this as my parents came to this country, I’m again very grateful for the opportunity that Canada has given me and so I feel this sense of duty to give back to this country, to my community, to help people around me be better off and to support them in every way possible. It’s just something that is ingrained in me because I feel a level of thankfulness and gratefulness to everything I’ve been given.  I’ve always kept a very busy life sharing and having a social life and a deep career and all the things that have been going on. I’ve always in my life made time for giving back to really important parts and things I’m passionate about. My first interaction with this was in my second year of university. It was a crazy time in engineering and all these things going on in my life, I constantly had no time, but I went out for pints with a couple of friends and one of my buddies who I went to high school with came late and I asked where he was and he said “Oh, I was out with my little brother”. And I said you don’t have a little brother, what you talking about? He said he is a volunteer with Big Brothers. I started asking about it and then I sort of went away that night and I asked myself “Am I doing enough?”. The next weekend I signed up for Big Brothers and became a Big Brother and that taught me so much. I balanced it in my life and people would ask me how I’m going to make that work and I just did it. It taught me so much about giving and getting as an individual. When you give, the importance of it and the joy of it – and from there on I just started to get involved. So, today I have a deep engagement in many important organizations that I’m very passionate about. I apply myself to them, but I will say that I will do that for the rest of my life. But I will say what I am aspiring to and I’m still building it – it is the most important project of my life – how I can make an impact. Today I know that I try to add value and all the rest of it, but I’m talking about really giving with impact. And I want to apply the same rigor and entrepreneurial spirit to the way I build businesses, and how I helped try to change the financial services industry, and improve that on behalf of Canadians, to how I can give and help causes that I believe not just in a short-term, with time and money, but actually for the long run to really innovate and help drive outcomes that are meaningful and change society in a meaningful way. So, I’m excited about that. That’s my next big project. My wife and I have spent a lot of time talking about how we will start to pivot our minds towards that as a core, and I haven’t sold it yet, I’ve got lots of ideas. I’m really energized by getting to it, I’m excited, but we haven’t solved it yet.

 

Jason Boudreau:

That’s great. It’s so neat to hear that you were a Big Brother. I joined Big Brothers in 2008 Carissa and I worked together at the time, but she was living in New York, and so we did a couple of years long distance. I found myself thinking the same things as you just saying. “Am I doing enough?” And then someone introduced me to Big Brothers. I had all this time because I wasn’t in the dating scene and I had my soon-to-be wife living in New York and I said, you know what? I’m going to be a Big Brother. I have two younger brothers, but this was obviously a really important thing for me outside of the family, and I ended up being matched with my little brother and we had a 5-year official match from 2008 to 2013 and they gave us this award for long standing match. We’ve kept in touch ever since. Even though we officially kind of left the Big Brothers program, we’ve kept in touch, and it’s been really neat to see his life grow and I got to know, obviously, his mom really well and it was just such an impactful organization. I think the work they do in the community is so phenomenal that it’s really amazing to hear that you were also a Big Brother.

Just to wrap up the dialogue here, I wanted to ask you about sort of giving back impact. If you’re talking to the next generation, let’s say you’re talking to your kids about this sort of subject. This is something that Carissa and I talk to our kids a lot about, because obviously we recognize that there’s certain privileges that they have in their life that we didn’t have and we want to give that to them, but at the same time recognizing that there’s a responsibility to give back to the community. Let’s say you’re talking to your kids or a younger generation. What would you share with them about the importance of giving back and how to go about it in their lives today.

 

Som Seif:

I think it’s about showing them the joy that comes with it. I go back to the statement I made earlier about your actions, the things that you do every day that they are watching. They see all the things that you do and how you feel about it and how it makes you happy or not, and the impact of it. I think that’s the best thing you can do with them is showing that. When I was growing up, I didn’t have lots of stuff. All I had was my dreams. In many cases I’ve taken away some of those things from my kids because they grow up in a different life setting and many things that they have in their lives or they’re very fortunate to have. We have to find different ways to inspire them to be something greater than what they are today in many ways. I talked earlier about wanting to learn how to be able to give with impact…I think the passion that goes into that is something that we’ll teach our kids because they’ll watch us, and I think it is the best way of learning through being in your own actions.

When I look at my kids, to me the most important thing is to always be developing and learning. I have this belief that life is you versus yourself 12 months ago. All other competitions are crap, it just doesn’t matter, right? So, this idea that people should be worrying about how they are relative to somebody else doesn’t matter. It’s about how you have progressed as an individual over the last 12 months or the last six months or whatever benchmark you want to judge yourself by. If you, as an individual, think that way, you’re just going to get stronger. You’re going to get better. You’re going to do more. You’re going to feel more accomplished. You’re going to attack your goals, and I think that’s the most important thing I want to teach my kids. I think it’s a really powerful way to think in life.

 

Jason Boudreau:

No doubt, that’s great. I just finished listening to Dan Sullivan’s latest book called “The Gap and The Gain”, and that’s exactly the message. The natural human instinct is to measure ourselves against others and against some horizon that we’re really never going to get to. It’s truly a horizon. However, if we look back and measure ourselves against how far we’ve come, that’s where we get fulfillment, that’s where the gratitude comes from, that’s where that energy and that desire to keep progressing comes from. It was just a really neat reminder about the importance of acknowledging growth from the past to today versus trying to just keep growing and growing and growing without knowing where you’ve developed from.

 

Som Seif:

That’s right, it’s a great way to think about it.

 

Jason Boudreau:

Well, why don’t we wrap it there? I mean, this has been such an awesome juicy conversation. I really appreciate you taking the time in and thanks for opening up and sharing about your journey and your family’s journey. And speaking of gratitude, I am really grateful for the relationships that we’ve built over the last 5-6 years, and certainly excited to see where things are heading.

 

Som Seif:

Well, thanks Jason and I feel the same way. It’s a real joy to watch you and the way you think, the way you act and the way you have built a great practice in supporting your customers. What makes me excited about what we do every day is supporting entrepreneurs like yourself. So, it’s a real joy to be a partner of yours?

Jason Boudreau:

Thanks everyone for tuning in to the Polestar Podcast by VELA Wealth and stay tuned for our next guest next month. Thanks everyone.

In this podcast, Keith Allan of Harness Investment Management and Rob Wallis discuss positioning for portfolios and investment markets over 2023. They go through the current themes in asset allocation in portfolios given the current economic backdrop and what may happen in the coming year. They also discuss the recent talk around interest rates and the effects on growth and returns in the coming twelve months.

 

 

About the Guest – Keith Allan

Keith Allan is a Portfolio Manager with Harness Investment Management. Harness has engaged in a strategic partnership with VELA Wealth and provides discretionary portfolio management for many of VELA’s clients. With more than 15 years of buy-side investment management experience, Keith brings a wealth of knowledge and experience to provide insight and guidance to clients regarding their investment portfolios. At Harness, Keith is responsible for developing and maintaining investment portfolios for VELA clients. Keith is dedicated to fostering long-term relationships with high-net-worth individuals and families by providing a clear and transparent vision to help them achieve their investment goals. To learn more, please visit Harness Investment Management team page.

About the Host – Rob Wallis

Rob Has provided senior financial planning and advice to VELA clients for over 15-years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To learn more, please visit VELA team page.

 

 

The episode is also available on:

    

 

Read the transcript of the Polestar Podcast here.