In this episode of the Polestar Podcast by VELA Wealth, host Jason Boudreau welcomes trailblazing technology entrepreneur, Stewart Irvine. Stewart is the founder and CEO of MerchUX & ESquared Foundation, and his experience spans over thirty years of pioneering visionary business transformations through a myriad of industry sectors with digital media, blockchain and innovative engagement technologies while making a significant impact on society. Stewart’s journey reflects a relentless pursuit of creating positive impacts through inventive solutions, particularly from a consumer-focused perspective.  Listen to learn about his insights into consumerism, revealing much about the shifting landscape of buying behaviours, the role of technology in society, and the increasingly important intersection of business and philanthropy. 

Podcast Highlights: 

• Explore the impact of technology on society and consumer interactions. 

• Discover the growing importance of intersecting business and philanthropy in natural ways for consumers to engage.  

• Learn how business practices are evolving in relation to consumer expectations of sustainability.  

• Gain insight into consumerism, highlighting changes in buying behaviours and trends over the past 30 years. 

    

About the Guest – Stewart Irvine, MerchUX & ESquared Foundation

Stewart is an accomplished technology entrepreneur and CEO with over 30 years of experience in innovating, founding, and leading groundbreaking companies. His expertise lies at the confluence of technology, media, and engagement, where he has consistently pioneered advancements that redefine industry paradigms. With a rich background in developing startups and steering them toward strategic exits, Stewart’s business acumen is matched by his dedication to creating societal value, particularly in enhancing mental health and learning through advanced technologies.

Founding multiple revolutionary ventures, Stewart has demonstrated a unique ability to anticipate market needs and harness technology to deliver compelling solutions. Stewart’s approach is holistic, integrating his technical prowess with a deep commitment to corporate social responsibility. His initiatives have not only set new benchmarks in business but also underscored the potential of technology to foster significant societal change. His vision for the future is not confined to commercial success but extends to leveraging technology for a sustainable and inclusive world. 

In the realm of business development and leadership, Stewart stands out for his strategic foresight and ability to navigate complex market landscapes. His leadership style embodies agility and a capacity to think outside the box, qualities that have propelled his companies to the forefront of their respective industries.
 

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. 

More specifically, 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. His satisfaction comes from watching clients fulfill their vision of life and create impact with their wealth, knowing that VELA played a role in bringing that vision to fruition for the benefit of current and future generations. 

Jason is a long-standing, active member of CALU (The Conference for Advanced Life Underwriting), the leading advocacy group promoting the financial health of Canadians and influencing sound public policy. He is a sought-after speaker and contributor to a number of regular publications. 

A proud family man, outside of the office Jason enjoys spending time with his beautiful wife Carissa, their three wonderful children, Benjamin, Noah and Eleana and their Bernese Mountain dog Lucy. Jason is the Immediate Past President of the Rotary Club of Vancouver and an active member of the Thunderbird Football Alumni. He has a passion for leading an active lifestyle and as an avid golfer, can be found regularly pursuing mastery of the game that always seems to have mastered him. 

The episode is also available on:

  

  

  

  

The Podcast Transcript: 

Jason Boudreau: 

Welcome back everybody to the Polestar Podcast. I’m Jason Boudreau, founder of VELA Wealth and your host for this episode. Today I’m delighted to have CEO and founder of Merch UX, Stewart Irvine joining us for the conversation. Hi Stewart, how are you?  

  

Stewart Irvine: 

Great, Jason, it’s a pleasure to be here with you. I really appreciate this opportunity. 

  

Jason Boudreau: 

I’m looking forward to diving in. I was just thinking back to when you and I were originally introduced. We had coffee just down the road and I remember being quite enthralled with the conversation and listening to the history of what you’ve created as an entrepreneur, particularly in technology, which I know we’re going to expand on today. So, what I thought I would do is just open up the floor to you to allow you to share the story of your journey, because I know it’s quite a unique one with lots of twists and turns in it. So, as far back as you’d like to start, please tell us your story. 

  

Stewart Irvine: 

Well, thank you and it’s a pleasure. I mean for 3 decades, I’ve been transforming industries, digital media, innovative technologies, developing and creating solution-based companies that really deal with innovative solutions in real world impact. And what I mean by that is, you know, one of the companies I developed 15 years ago is called Somag, it was when digital cameras came out and I combined that with a Photoshop-type application so you could create photo to art and just drop and drag and click but the business models that I’ve developed have always been trailblazing in such a way that you’re rethinking and putting yourself in the consumer’s perspective. And it’s been interesting to see how things have changed, how things are evolving. It wasn’t that long ago that everyone was scared to buy online, and look at where we are today. 

  

Jason Boudreau: 

I don’t know any other way to buy online now, just put in the credit card. 

  

Stewart Irvine: 

 Yeah, you don’t even need a credit card anymore in some cases so it’s evolving, and consumerism has evolved as well. 

I think this is one of the most interesting aspects of technology is how consumerism works. I still remember when Bezos came out with Amazon and everyone’s going, who’s going to buy a book online? That’s crazy. And it’s an adoption. You know, similarly, where did social media come from? Nobody can remember yet you can’t live without it. So, I think we’re on the precipice right now, and what we’re going to talk about in a little bit is like a perfect storm, and it’s time for evolution.  

When you look at all the factors that are going into our day-to-day consumerism, we were just talking about what’s going on every day. The rhetoric for climate change, for example because of COVID, people became climate fatigued and suddenly Earth Day was cancelled two years in a row. And whatever happened to Greta, that 16-year-old from Sweden, who motivated millions of youths and people around the world for climate change. Everything’s coming in waves and slides and now we’re into this because of what’s going on in the US. We’re entering into a whole new uncharted land. So, these are very, very interesting times. 

  

Jason Boudreau: 

They really are. If you can humor us and take us back to maybe less interesting times, it’d be neat to understand how you got started on this journey. 

  

Stewart Irvine: 

I got started on the journey when I developed my first technology company and that really does go back probably at least 25 years ago, when I was involved in digital media. Well, it wasn’t called digital media at the time, but that expanded. We had to learn about user interfaces and so every piece along the way, learning about how to handle high resolution files. How to be able to interface with laptops and then of course, all of a sudden came handheld units. And so, you’re constantly upping in the game. So as the companies that I developed and saw the need and research, my background is looking for business development and business administration, so you always are seeing where the opportunities are, where the market is going and developing.  

I think of technology as Lego building blocks. I add one piece, and I put another piece together, I create a solution, and you test it. But there has to be a marketplace for it, and then you expand it, build it out and that’s really been the nuts and bolts of my career. And I’ve done some things that are very interesting. One of my passions is mental health issues and developing solutions for this. I was a director of a school with learning disabilities for years and so, using technology, I developed basically it’s a handheld personal coach for anxiety. It’s surprising the number of students, especially university students, that have a lot of anxiety. So, I experimented 4 years ago with voice sentiment, so it could read and analyze your voice. And so, I created a company Life Well 360 and then we integrated, not just voice, but also being able to see what’s all the other aspects of your life. Because if you’re drinking 4 cans of Red Bull and you’re having anxiety, well, guess what? You’ll have anxiety. So, we look at complete solutions. And then I bring in experts and so I create a team, I understand the business model, but you’ve got to have teams and experts, and you’ve got to see those opportunities. And that’s exactly what we did. And when I developed Xbetter, we were developing biometric handheld authentication. And that just led us to think can we make an application by shaking your phone and placing a bet? And we did that. And that’s the type of progression and the way that I’ve been thinking about it. 

  

Jason Boudreau: 

If we think back 20-25 years, of course technology has evolved exponentially and we all know about Moore’s law, so I’m curious for you being a technology entrepreneur and to your point, kind of taking the Wayne Gretzky approach of skating where the puck is going. What have you seen in terms of some trends that have emerged in the last couple of decades that you think when you saw it back then, you saw an opportunity, whether it was 10 or 20 years in the future and you see how it’s actually playing out today, and you’ve been able to see that whole lifecycle, which trends stick out to you? 

  

Stewart Irvine: 

I think the biggest area has been in voice and voice capture. We now have Siri, Alexa, everything is turning to voice. And I’m thinking it must have been about maybe 7 or 8 years ago when we were experimenting with IBM and Watson. And getting voice commands and working with this crazy thing called a chat bot and figuring out how to instruct it to have structured conversations. And so, now it’s so seamless and fully integrated into every aspect of our life. So, we’re now getting very granular. You know, looking at aura rings, looking at the fact that everyone counts their steps on their Watch. We’re actually starting to become more wellness oriented, because we have the tools that are in our hand always. So, I think where the trend is going is more into smart devices and you know, when you’re dealing with applications that are health oriented and can save lives, that inspires me. 

  

Jason Boudreau: 

Yeah, very cool. I’d like to talk a bit about if we could bridge the gap between, let’s say, the last decade and the next decade. When you and I last met for coffee, you were sharing a little more about UON, which is a fascinating endeavor that I’d love for you to share more about and talk about how you see that playing out over the next decade, because we can imagine that if the last decade has accelerated as fast as it has, it’s only going to accelerate faster in the next 10 years. 

  

Stewart Irvine: 

Thank you for asking about that because we’re at a critical inflection point. Think about this; every day, 7.7 billion counterfeit goods flood into the marketplace every hour. This one really gets me, every hour. 2.5 million shoes are produced every day. 13 million phones are discarded.  

So, when you talk about a decade, in the last two or three decades, only 10% of our planet has been protected. The amount of deforestation alone, remember we used to see news about the Amazon and all the deforestation that was going on? Well, it’s still going on. It’s still happening out there.  

So, you’ve got this wave on one hand – Consumerism. We love to buy, but that also creates a lot more garbage, a lot more counterfeits, a lot more products. People love to collect points; they want to keep going out and get rewarded for it. Here’s the other fascinating fact, 20% of all online products and higher-end products are counterfeit. I saw on a Reddit about a guy that bought an Arc’teryx jacket, the tag, everything looks real. Except he figured out it was fake. And so you’re buying products because you’re buying online, as we talked about. Yeah, it’s really fast and easy. But I think one of the tipping points for me was getting an e-mail from Starbucks and saying your points are going to be discarded if you don’t use it. I thought, I don’t even use the points and I’m thinking wait a second, all these elements are going on. I have a solution for this. So I go back to my analogy of the Lego building blocks. We work with a company out of Switzerland that has what we call unforgeable QR codes, so it authenticates products, and we’ve worked with them in in our other businesses. And then I met with the whole team from Earth Today in Amsterdam a couple of years ago on what they’re doing and their unit of nature, and I thought that was brilliant, but it really is a digital product. So, I figured out a way how I could combine all the elements and create a win-win-win for everyone so that we can reward consumers for buying authenticated products, the brand wins because they now have a loyal customer and the planet wins because you’re now protecting it with the unit of nature, which is what we call the UON. So, to take a step further, we’re integrating UONs (unit of nature) into reward points rather than just having them being discarded. Instead, we can convert the points. So every consumer product should be tied back to being able to do something for the planet.  

And I just want to touch on something really quickly–greenwashing. Many companies are coming out and talking about their sustainability. And they talk about it, but they’re really not doing it. They could be buying carbon offsets, but how many people know what a carbon footprint is, let alone a carbon offset. So, all these things add up and they all come into this perfect storm for us to create a solution. If a brand works with us, you will be able to reward your consumers with a unit of nature which is one square meter of land that is protected under a customer name. We work with dozens of nature protection organizations around the world, these are registered. So, we’re building that out and my vision for this is that every product you make you should be protecting nature with it. Because if we’re not protecting nature, it’s not going out there. This solution is seamless, and everyone gets a chance by doing what they’re doing anyhow, buying. Now that can help the planet while doing so. 

  

Jason Boudreau: 

And so, it’s at the end of the day, the target customer for you are the businesses, right? And just so I understand correctly, the rewards points are replaced by UONs or they’re converted? 

  

Stewart Irvine: 

It’s always mathematical. Take a cup of coffee for example. They know exactly what their cost of goods are on the coffee, so their reward is, if you buy X amount, you get a free one. 

Well, for the UON, we have a finite amount for that. So it just becomes mathematical. So if you buy ten coffees, you get a unit of nature or you can take 100 points and buy one. That’s an example.  So, if you buy your Tide, you’re going to get 5 UONs and you can collect them and build that out. 

Jason Boudreau: 

And then that’s something that can be tracked in real time through the app? 

  

Stewart Irvine: 

Correct. And it’s registered to your name. That registration is logged on to the blockchain, so it’s forever registered in your name. Now you can give it to your brother, you can give it to your kids, you can transfer it. But remember, it forever remains registered in your name. 

  

Jason Boudreau: 

So, let’s say I have a UON and I transfer it to my brother, it’s still registered in my name, but now he’s looking after it? 

  

Stewart Irvine: 

That’s right. Now on that point, one of the things that I have plans to build out next year is going to be for greeting cards. We can make a digital greeting card that is tied back to a unit of nature. So you can also send somebody one square meter, 10 square meters, whatever it is, to be able to protect the planet as a gift.  And what I’m trying to get across on this is that it’s painless, seamless, you’re buying products anyhow, only difference is now the brand is rewarding you. 

  

Jason Boudreau: 

Got it.  

So when you and I met and talked about doing this podcast together, I shared with you that at VELA, as advisors to business owners across Canada, we’ve got a really strong focus on philanthropy and community impact. And one of the neat things that I discovered in talking to you is you found a way to interweave that impact piece into business. I know that a lot of the organizations that support the UON platform are nonprofits and foundations and such, but what is your mindset when it comes to philanthropy and community impact? How do you approach that? 

  

Stewart Irvine: 

Personally, with philanthropy, I feel that most people stand on the sidelines and throw a ton of money at, and it’s a one-time event. So, I’ve had several different foundations where I apply the technology and build it out and we do it for the greater good. But it’s not about giving. It’s about integrating what we do in our technology into the fabric of business.  

My take on it is, if you have the ability to create change, you have the responsibility to do it. Which is why I created the Esquared foundation to be able to take what we’re doing with all the different nature protection organizations and apply it, let’s say to the BC forests being protected, helping landowners that have massive amounts of land, come under protection. And also, I’ve had discussions now going on with Revenue Canada to be able to see if the UON can qualify as a charitable donation for work. And this is so foreign to them, they’re obviously having a hard time getting their head around it. 

 So, what most people think of with philanthropy is giving for example $50K to a hospital or donating massive amounts of money. The common person can never wrap their head around it being measurable. But the way we work, we’re now bringing people in through osmosis into philanthropy. You’re doing something for the greater good, so it’s reimagining philanthropy in a whole new way. And we’re taking it to new generations. We’re taking it down to the street level. Down to whatever you buy in the store. Now, everyone, even the general consumer, can become philanthropic. So, it’s doing a complete paradigm shift on philanthropy and that really excites me. 

  

Jason Boudreau: 

Yeah, me too. I remember when you shared about this integrated model of if we’re going to buy, it’s going to happen anyway, so why don’t we find a way to pair this up with philanthropy versus have it be an afterthought. 

  

Stewart Irvine: 

Yes, it feels good to help, it feels good to be doing those things. You’re going to feel good when you’re buying something. So, we want to launch this in Vancouver and work with the big brands, the Arc’teryx’s, the Herschel’s, the Vessie’s, you know, all these because they’re making amazing products. But now this is something revolutionary that the world has never seen before. And we want to launch it here with Vancouver companies. That’s, that’s my whole idea there. 

  

Jason Boudreau: 

And just to sort of round out the conversation, because I know when you and I were having coffee last, you were talking about your kids and I know they’re not kids anymore, they’re adults. But I’m just curious if you were talking to them about the future, whether it’s giving or philanthropy or things around that. I always like to end the conversation with thoughts from our guests about how they would communicate those types of values or lessons to that rising generation. 

  

Stewart Irvine: 

Well first, they are very concerned. They are really, really concerned about what’s going on. Deforestation, the environment, microplastics and all the things that’s happening all around us. From consumerism, they’re changing their consumer patterns slightly.  

Here’s the biggest thing, their generation will support a brand that is actually supporting with tangible, immediate impact evidence. So, they change their brands to go and support a brand that is actually supporting something that they can believe in. Because that generation are the biggest ones calling the BS on greenwashing. They’re the ones saying don’t get this because of them, know their business practices. So, they’re the ones that are the real big consumers, I mean you and I are pretty good consumers, but these guys are really coming up. They’re thrifting, and then when they’re learning about where their T-shirts go and where all these things start happening, that inspires them.  

And so, I asked my children if they would give UONs out as gifts and they said absolutely. Because it feels good, they can register in their name, and they get to zoom in and see their piece of land that’s protected – that’s really cool. They get excited about this. 

  

Jason Boudreau: 

Wow. So, it’s communicating to them in a way where they can bring forth this integrated model into their lives through what they’re already doing, really, which is supporting brands that really resonate with them and make them believers. 

  

Stewart Irvine: 

Well, yes. But I want to just digress for one quick second. There’s new technology that you can scan a QR code or with Google Lens and find out about that product because there’s so much information out there. So you can quickly tell if a brand has a good sustainability report, what ingredients they use in their products, etc. It’s getting more granular now. That is what the younger generations are doing. They’re scanning, they’re looking in depth at products. I mean, they’re much more of an engaged consumer than we ever were because we’re still influenced by advertising. They’re fact-checking, they don’t believe anything. They will believe what they read on Reddit and in different sources, but they do not believe advertising. 

  

Jason Boudreau: 

Fascinating. Well, this has been an incredibly compelling conversation, Stewart. Thank you for taking the time to be here. 

  

Stewart Irvine: 

Oh, my pleasure. 

  

Jason Boudreau: 

Look forward to continuing our dialogues together. Before we sign off, any other closing thoughts you’d like to share with our listeners? 

  

Stewart Irvine: 

Right now, we’re building our whole platform and engaging with this, we’re looking for business leaders like yourself to work together. We’re building a team, it’s ongoing, it’s a big project – sometimes it feels like a moon shot. But we’re inviting people that have a passion to join and to work with us and to be able to see the bigger picture and do something that’s never been done before that will help the planet. So, I appreciate this as a platform. 

  

Jason Boudreau: 

We’re happy to have you on and thanks for sharing your story. Where can people go to learn more about UON and what you guys are up to? 

  

Stewart Irvine: 

Earthtoday.com. And they can contact me at stewart@earthtoday.com. 

  

Jason Boudreau: 

Well, thanks again Stewart. We appreciate you being here and look forward to talking again soon. 

  

Stewart Irvine: 

Look forward to it. Thanks a lot. Take care. 

In this quarter’s episode of the Polestar Podcast, Kevin Parton sits down with Keith Allan from Harness Investment Management to explore market behavior beyond the headlines. Despite ongoing volatility, the Canadian market showed surprising strength, with the TSX posting its best weekly gain in over seven months. Keith emphasizes the importance of staying the course, avoiding emotional decision-making, and recognizing that real adjustments are happening under the hood of client portfolios. 

 

Key highlights from this episode: 

• Why Q1 2025 wasn’t as negative as it seemed—and what the TSX’s performance tells us 
• How investor biases like recency and confirmation shape market sentiment 
• The real impact of interest rates and what potential cuts could mean ahead 
• Market volatility: separating tweet-driven noise from economic fundamentals 
• Practical ways to stay resilient during uncertainty
• …and more.

 

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. To learn more, please visit Harness Investment Management team page.

 

About the Host – Kevin Parton

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin is diligently concentrating on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

Disclaimer

The information provided in the podcast transcript 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 episode of the Polestar Podcast by VELA Wealth, host Rob Wallis welcomes Nick Drake, a Senior Director of Growth and Transaction Capital from the Business Development Bank of Canada (BDC) to discuss BDC’s mission to support Canadian businesses. Nick explains how BDC differentiates itself by focusing solely on business banking and providing clients with tailored support to help them grow. This includes funding, venture capital, advisory services, and consulting to meet a variety of business needs. He also shares insights into current lending practices and the challenges faced by business owners in today’s economy. Tune in for a comprehensive look at the impact of BDC on Canadian businesses and how it can help unlock your potential for growth and innovation. 

Podcast Highlights: 

• Explore BDC’s unique approach to business banking and personalized client support. 

• Discover the range of services offered by BDC, including funding, venture capital, and advisory services. 

• Learn about current lending practices and the challenges faced by Canadian business owners today. 

• Gain valuable insights into how BDC can help unlock potential for growth and innovation in your business. 

  

About the Guest – Nicholas Drake, BDC 

Nick Drake is a Senior Director in BDC Capital’s Growth & Transition Capital group in Vancouver where he focusses on providing cash flow loans, mezzanine debt and quasi-equity solutions to BC’s entrepreneurs. Before joining BDC Capital in 2018, Nick spent 10 years with a US headquartered Private Equity firm where he spearheaded the acquisition of more than 15 Canadian businesses and served on the boards of the Canadian platforms. Nicholas earned his Engineering and MBA degrees at UBC and is registered as a non-practicing Professional Engineer with EGBC. 

  

About the Host – Rob Wallis 

Rob has been providing expert planning and strategic advice for nearly 20 years and has been with VELA Wealth since 2016. He is a detail-oriented strategist with a proven track record. Rob 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. A methodical and analytical thinker, Rob compassionately navigates clients through the complexities of a thorough financial planning process ensuring that they feel understood and supported throughout. Prior to joining the VELA team Rob worked in various client management, technical financial analysis, and financial planning roles both in Canada and the UK. Rob holds a BSc (Hons) in Investment & Real Estate Finance from the Cass Business School in London. British born and raised, Rob is a globe-trotting travel enthusiast who loves spending time with his family hitting the slopes and hiking. 

 

The episode is also available on:

  

  

  

The Podcast Transcript: 

  

Rob Wallis: 

Hello everyone, this is VELA’s 35th Polestar Podcast. Today I’m delighted to have Nick Drake from BDC here. Delighted to have him talk about BDC and all the things that they do, what’s going on in the M&A market at present and how BDC can help business owners.  So, Nick, it’s good to have you here. 

  

Nick Drake: 

Thanks for having me, Rob. 

  

Rob Wallis: 

You’re welcome. Why don’t we jump in, and you could tell us the story of BDC and its history, I’m always curious to know. I see you guys are out and about at events and I wonder how the company formed and how it helps clients. So, if you could jump in with some history, that’d be awesome. 

  

Nick Drake: 

Yeah, of course. BDC’s been around for over 80 years, we are the Business Development Bank of Canada so we’re a little bit different than a lot of other banks. We’re a dual mandate bank. So, the first part of our mandate is to make money for the shareholders and as a Crown Corp, our shareholder is the federal government. Second part of the mandate is to help Canadian businesses be the best and most competitive in the market. And that’s the part of the mandate and job that I really love and that gets a lot of us at BDC excited. A lot of BDC solutions are aimed at providing businesses with more free cash flow so they can invest more into their business to grow their business. That, you know, adds employment to the country and I think it’s good for the country and it’s good for our economy and businesses. 

  

Rob Wallis: 

So how does BDC compare to a regular merchant bank? 

  

Nick Drake: 

So, we don’t do a lot of things that the chartered banks do. We don’t have corporate bank accounts; we can’t do your day-to-day banking. We are 100% focused on banking for business. We don’t do operating lines, we just do term loans on the lending side. So, on the lending side, we come up with slugs of capital to put into a business like your regular Chartered Bank would do, but because we don’t do a lot of those things that the bank do, we work with other Canadian banks. So, we’re very supportive, very collaborative with the other lenders. 

  

Rob Wallis: 

Got it. So, a lot of the time are you lending alongside other banks? 

  

Nick Drake: 

Yes. A lot of the time we’re lending alongside other banks and a lot of the time, what I do is lending behind, in subordinated positions, riskier positions to the other banks. I should also mention at BDC, we have quite a large venture capital investing side of our business. We have a growing minority equity investment side of the business. And we are also, I believe, the largest consulting firm to small and medium sized businesses in Canada. So, we have a full advisory service as part of our business, which makes us a little bit different as well. We’ll come in and help businesses achieve certain objectives like plant optimization or operations optimization, sales and marketing help, strategy formation. So, we do a lot of things at the bank, and everyone at BDC works quite closely with all the other groups of the bank. So, we do a lot of things. It can get kind of confusing on who to talk to, but everybody at the bank will try to get you talking to the right person. 

  

Rob Wallis: 

Let me just jump into a little case study on one of those, so obviously on a no-name basis, but what kind of lending have you done recently? And how has that gone, given the current economic climate? And what are business owners looking for right now and why are they coming to you as a bank? Sorry, lots of questions there. 

  

Nick Drake: 

Yeah, that’s a lot of questions. So, maybe I’ll tell you a little bit more about what I do specifically within the bank and then that will kind of lead down the line a bit. So, most of BDC’s lending provides capital for secured transactions. So, if a business wants to buy a commercial property it operates out of, BDC can provide a loan with real high leverage to value. BDC provides a lot of equipment financing as well and other secured types of loans where you’re secured against hard assets. My side of the business is I do unsecured type lending where I’m not really secured by hard assets in the business. I’m looking at the cash flow of the business and deciding how much we’re comfortable lending, on our forecast of how much cash that business is going to generate. So, I end up financing a lot of M&A transactions. We can finance that from a senior term loan where we’ll be behind an operating line but only amortizing term loan on the books or we can also be in a mezzanine financing position where one of the large Canadian chartered banks. We’ll have the senior term loan, and we’ll have a slice of debt which is behind that loan from a security position that has no repayment, it would be an interest-only loan. So, we like to think about that as cheap equity, so mezzanine being, in between debt and equity, the cost of that capital is in between the cost of debt and equity and the risk is in between the cost of debt and equity. So those kinds of loans are for business owners that are very future oriented and don’t want to dilute their ownership just yet. They want to take on some additional leverage so they can take a big step with their business. 

  

Rob Wallis: 

Or maybe take some chips off the table. Is that commonplace? 

  

Nick Drake: 

That is commonplace. We do those transactions. We find business owners have a disproportionate amount of their personal wealth tied up in their business and as businesses get bigger, that affects the risk appetite. I think often if we perform a transaction, or if the business owner can take some money off the table, they can in fact become a little more rejuvenated and have a little more desire to take a little bit more risk and grow that business. At BDC we have a minority equity investment team that their sole purpose is to provide a meaningful amount of chips off the table, become an equity partner in a business where they see a growth path for that business that maybe they’re not executing on, or they’re too risk averse at that time to really take those big swings. So, to continue answering your questions. 

  

Rob Wallis: 

You’ve done well to remember them. 

  

Nick Drake: 

Yeah. 

What we’re seeing right now is quite a lot of M&A activity in the market. I’d say the second half of last year was very slow in that regard. I don’t necessarily know what’s driving it. It’s different in every deal. But I think the decreasing interest rates and understanding or assumption that rates aren’t going to go on a runway up anymore, that’s helping some people wrap their head around doing deals. And I think people have been sitting on the sidelines a little bit for a while, and it’s time to get going. 

  

Rob Wallis: 

What kind of industries do you serve? 

  

Nick Drake: 

In our group, we serve almost any industry. But we don’t do direct resource extraction. We will lend into industries or businesses supporting that, but maybe not doing direct resource extraction. Being a Crown Corp, we try to avoid industries that might be bad for our reputation, for sure. I don’t think that’s why we avoid that industry, but we do avoid some industries with that in mind. Generally, for me, I’m working with asset-like businesses, so companies that don’t have a lot of assets to secure additional lending, or businesses in high leverage position that already have enough lending on their assets that there isn’t really much else for me to lend on. 

  

Rob Wallis: 

So, looking at the M&A market in Canada right now, you said relative to last year, there’s been an uptick in in activity. That’s obviously interesting and a good indicator of economic activity. We look South of the border and there’s a lot of uncertainty that’s being created down there. Not only for Americans, but for us too. How do you feel that that’s going to influence sentiment and confidence? And are you seeing that in in deal flow and activity? 

  

Nick Drake: 

It definitely isn’t helping, and I think those tariffs are a real thing that’s going to be very difficult for a lot of businesses. Especially if you’re particularly directly involved and you’re a huge exporter to the US, which a lot of manufacturers are. I could see it being a difficult time from a bank perspective or even an equity investors perspective to write a big check to support a business that’s doing a majority of their business into the US right now. I’d say unless part of that capital is intended for that business to make a pivot in some way to expand their business into other markets, other countries or take a bigger foothold into the US and add some more value for their products down there, it is going to be hard. But I think it won’t affect some businesses or a lot of businesses. Those businesses will still transact, I believe. I think like any kind of crisis; I think somewhere in there there’s some opportunity for somebody and it reminds me of my old business. I did a lot of work in the oil and gas business and there’s a saying that “it always comes back, but it comes back different”, and I do think the economy is going to come back here and I think it’s going to be a little bit different. I absolutely love all of the nation-building sentiment that we have here to buy Canadian. I think that’s come on strong and hard and I think it’s great and I think there is opportunity in it. For example, we’re looking at a deal right now that we have authorized, it’s a business which exports a lot of its products into the US, nearly half those are tariffed products going into the US now. There happens to be a lot of information available online about types of products and I ended up diving into some of this data and realized that for this product in Canada, we’re importing a heck of a lot more of this product from the US than we export, and I think in general we import more from them than we export to them, if you take energy out of it. I believe that’s true. So I do think there is some opportunity here with certain products. I think if we can do more of this inter-provincial trade, you could have some changes in the supply chain. So, I do think there are some opportunities there and if you’re a business owner and you’re seeing some opportunity, I think the capital is going to be there. If your thesis is right and you can convince some people, people like myself, that there is an opportunity there, I think the capital will be there. 

  

Rob Wallis: 

Well, there’s a low shortage of capital, that’s for sure. So, what I’m hearing is if you have a good business, and you have a good story, there’s going to be opportunity for you to be flexible in how you grow and take value off the table. 

  

Nick Drake: 

I think that’s fair, yeah. And I’m a frontline guy in the bank. I talked to a lot of business owners. A number of them are doing business obviously in the US, there’s a lot of uncertainty here in general, people know what they need to do, which I think in general seems to be adding more value to products in the US or sourcing products from other non-tariff nations and no one knows really where that’s going to end up. I think diversifying your supply chain in manufacturing in general is good business sense. I do know that a lot of business owners, because of the uncertainty, are really struggling with the idea of when I actually throw money at the business. When is the right time to do that? I think people struggle with that because there’s so much unknown. But on the other hand, you look out there and you do see some big companies making some pretty serious investments. 

  

Rob Wallis: 

Uncertainty creates opportunity. 

  

Nick Drake: 

I think it does. 

  

Rob Wallis: 

Absolutely. With that in mind, I feel a lot of the M&A industry is focused on sellers. But there’s obviously buyers on the other side. With a lot of boomers selling or anticipating to sell their business at some point. There’s clearly lots of businesses out there for sale. How does BDC work with buyers to help them get businesses that are for sale? 

  

Nick Drake: 

It’s a good question. First and foremost, we’re a lender and a capital provider to those deals. Personally, I have done this for six years and before this I worked with a large private equity firm for 10 years. I’ve been on that equity investment side and been on the boards of some pretty nice sized companies and negotiated bank deals. Because of who we are, a dual mandate bank, I like to try to help business owners structure financing on these deals in a way that works for everybody. I have some experience in that regard, and I like to get involved very early, even before there’s an LOI signed, even when someone’s just thinking about it, I think I can help add some value.  

I’ve seen a lot of deals, honestly, I’ve probably seen 1000 over the last 15 years. I’ve looked at thousands of businesses and structured a lot of deals. So, I think I can be helpful from a financing perspective and maybe from a risk assessment perspective. So, I like to be involved early, and I like to provide options in a number of ways that things can be financed. A lot of times, chartered banks offer very attractive financing terms and I can say; “Look, we can’t beat that, that’s a good deal. Nice job. You should run with that.” So, I like to be very open and honest about that as well. 

  

Rob Wallis: 

Having borrowed money as a business owner and personally I know that all banks are not looking for the same thing. Everybody’s risk situation is different, right? So, would it be fair to say if somebody had an opportunity to buy a business that you could help them from an equity side and a debt and an offer side as well? 

  

Nick Drake: 

Yeah, I think definitely that would be fair to say. And we’d love to see whatever it is that we can do to help in all these situations. I think also in our advisory side, they have a pretty interesting post-merger integration initiative that they do and they can help businesses bring in an expert who’s sort of done this before or integrated another business, so you’re not reinventing the wheel and can be there to keep you accountable and on track with executing certain tasks that you need to execute and that you think you need to add value to in ways to grow your investment. So, we can help in a lot of different ways and we love trying to help. 

  

Rob Wallis: 

What size of lending and equity are we looking at? Does BDC cap out at certain point? And also, I guess what’s on the other end, what’s the minimum? 

  

Nick Drake: 

I think BDC probably from a maximum, we probably cap out before the other banks. I think our balance sheet is around 50 billion. We’re a bank that’s the size of, I believe Canadian Western Bank, from a balance sheet perspective on the secured lending side, I believe we have single name holds for large businesses that are 40-50 million. So, we can get high enough for the vast majority of businesses. But I do think the real nice part of BDC as a Development Bank is, there’s almost no minimum. We have a large online financing side of our business where you can go through the credit process online yourself and BDC can provide as little as $100,000 to support your business if it’s credit worthy, from our perspective. So, we do an awful lot on the small side. That’s partly because of our position as a Development Bank. Businesses have to get going and I think that’s the hardest time to get capital, is when you’re small. So we do an awful lot of lending in that regard.  

Personally, I’d say my smaller side might be 1-2 million and I can get up to over 20 million, on the larger side. but I think at BDC we will do certain structures that charter banks won’t do on a much smaller side that I think could be uneconomic for those banks to spend the time on those smaller loans to do that. 

  

Rob Wallis: 

Well, thanks Nick. This has been very interesting. My overall impression is that there’s a tremendous amount of flexibility within BDC to help all different types of business owners in Canada to grow, to get more balance for the business owner to take some chips off the table and to finance acquisitions, so thank you for sharing. We appreciate it. 

  

Nick Drake: 

No problem. Thanks for having me on. I really appreciate the time. 

 

 

In this episode of the Polestar Podcast by VELA Wealth, host Kevin Parton interviews Ali M. Qureshi, founder of SideDrawer. They explore Ali’s entrepreneurial journey and the evolution of his company, which has transformed the way people manage and share important documents. Kevin and Ali discuss the key challenges and milestones in the startup world, highlighting the significance of adaptability and innovation in business growth. Tune in to gain insights into Ali’s background and the experiences that led him to create a solution that addresses the complexities of digital document management. 

Podcast Highlights: 

• Explore the entrepreneurial spirit that drove Ali to start SideDrawer. 

• Discover the challenges and triumphs faced during the company’s growth. 

• Learn about the innovative solutions SideDrawer provides for document management.  

• Gain insights into the importance of adaptability in the startup landscape. 

 

About the Guest – Ali M. Qureshi 

Ali Qureshi is the Co-Founder of SideDrawer, an idea born out of a personal need for him and his family. The fear of his family not knowing where the insurance policies, investments, banking information in an increasingly digital world, was the catalyst behind the idea. The platform now is being used by financial services firms ranging in size from independent advisors to Tier1 banks to securely exchange and collaborate on sensitive information. Prior to joining SideDrawer, Ali was the Executive Director and Deputy Head of International Equities, for CIBC Global Markets, as well as UBS Securities Canada Inc, and KPMG LLP. Ali has also been involved in helping corporates raise equity, debt and convertible debt financing across a variety of industries. Ali has both CA, CPA and CFA designations, and graduated from Trinity College at the University of Toronto with an Honours in Business Communication. Ali lives in Toronto with his wife and three young children. 

To learn more, visit Ali and SideDrawer on LinkedIn:  

• Ali Qureshi: https://www.linkedin.com/in/alimbqureshi 

• SideDrawer: https://www.linkedin.com/company/sidedrawer/
   

About the Host – Kevin Parton 

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin diligently concentrates on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page. 

The episode is also available on:

  

  

 

The Podcast Transcript: 

Kevin Parton: 

Welcome to the Polestar Podcast by VELA Wealth, where we bring together financial experts, visionary entrepreneurs and passionate philanthropists who share not only their expertise but also their personal stories, reflecting on some of the remarkable experiences and offering inspirational insights. I’m Kevin Parton and I’m your host for this episode. I’m really excited for our guests today, welcome and thank you for being here, Ali. 

  

Ali Qureshi: 

Thank you so much for having me, Kevin. Super excited to be part of this. 

  

Kevin Parton: 

Amazing. So, I have a personal relationship with you that lasts a little bit longer than my time here at VELA. I met you about five years ago, in the early stages of SideDrawer. Which has been fun getting to see how it’s evolved since then. A lot of what we talk about on this podcast is focused on the growth and development of startups and how companies grow. There’s a lot I want to go over in the next little bit of how SideDrawer came to be and how it’s grown and what that’s felt like for you. But I think everyone’s always a bit interested in who starts a company and how they became the person they are. So, I’d love to get a bit of a bio on you. Kind of what life was like for you up until the start of SideDrawer and also learn what life experiences created, Ali – the founder of the company. 

  

Ali Qureshi: 

That is an awesome question. I think I’ve always had a very entrepreneurial spirit, which I believe is one of the reasons you and I bonded so much, because you were always of that same caliber, and you wanted to be your own and drive your own destiny. It’s interesting, because even though I had a finance job for 20 years, the sector that I was in was the most entrepreneurial sector of finance. I was in equity research and equity sales. Those jobs lend themselves to people who are very entrepreneurial, resourceful and will do whatever it takes to help the client, help themselves and help their teams grow, and so on. It was a really interesting position to be in, and I feel very fortunate about it. Then if I go back prior to my career in finance, I was an accountant. And even before that when I was a kid, I was a hustling salesperson selling shirts or selling gas contracts or selling perfume bottles or things like that. So, I always had that drive to want to try to grow and control the outcomes for myself. And that history is basically what led me to shaping the path and getting to a point where I was fortunate enough to find some amazing partners and a team that were able to put this project together. 

  

Kevin Parton: 

You do have some interesting stories of growing up. Before we dive into that, could you share where you grew up first of all? 

  

Ali Qureshi: 

So, I grew up in the Middle East up until Grade 11. We moved to Halifax in 1993 and I did finished Grade 11 and 12 there. And really when you grow up in the Middle East, you only really hear of the University of Toronto, Queens and McGill University. Those are the only schools you think there are in Canada. And so, when we moved here, I applied for the University of Toronto, because Queens was in a smaller city and for McGill, I didn’t speak French. So, it was natural to apply to the University of Toronto and when I got into the accounting program, we moved to Toronto from Halifax. 

  

Kevin Parton: 

Okay. From an entrepreneurial side, you’ve shared a story with me before from your childhood, about your uncle who sold shirts wholesale to Walmart. I found that story really interesting for a lot of entrepreneurial reasons. Can you retell that story? 

  

Ali Qureshi: 

For sure. So, my uncle had a contract to manufacture dress shirts. The kind of $20-30 shirts that you would find at Walmart or Costco or those types of big box stores essentially. He would make them in the Middle East and typically, you get a bulk order for 100,000 shirts for example. There were always some extra leftovers, either by accident or by design, I’m not really sure, but there was always extra inventory. And with that, was an opportunity to sell this extra inventory at large exhibition centers where you set up your stall, which might be 15 feet wide, and you have all these shirts on display there. During the event you’re negotiating with other people who are trying to buy them for smaller local stores. So, I was about 9 or 10 years old, and he invited me to come and be the salesperson at this event. I was super excited because they were always late at night. So, the day started at 7 or 8:00 PM at night and normally I’d be getting ready for bed in a couple hours, but I’m now going to work as a 9- or 10-year-old at that point. I’m basically engaging with all these people who are trying to buy these extra shirts wholesale for their own stores and distribute them.  

It was a great opportunity because not only did I engage in sales activity, I was counting hundreds and thousands of dollars at the end of the night and doing inventory check. This gave me exposure to accounting basically, which was a nerdy obsession of mine, from back in the day. Not something that you want to publicly admit necessarily, but I did end up becoming an accountant. So, I guess those were the roots for it. So, I was doing inventory checks, cash balances and then he paid me at the end of the night with a kidney shawarma, which was one of my favorite sandwiches at the time and it tasted really good. And that’s how I got paid! It was exciting because I was there from 7:00 or 8:00 PM until probably midnight for 3-4 nights in a row. 

  

Kevin Parton: 

So not necessarily the standard 8- or 9-year-old lifestyle that you would experience today. You had mentioned as well when we were talking that you were reading the Wall Street Journal at 8 years old and were looking at stocks. How did reading prices of stocks in the Wall Street Journal at 8 years old inform the evolution of your life to graduating from university and getting into finance? 

  

Ali Qureshi: 

I think it goes back to my obsession with numbers and balancing things. But even though I love math, I was never actually good at it at a university level. It was one of those things where I had to default to something else that was numbers oriented but was a bit easier. So that’s how accounting came in. But my obsession was mostly that I liked learning about new businesses, and in the Middle East you always had the Wall Street Journal section at the end of the newspaper and it had the market update as well as the different stock prices. I followed the companies that I knew at the time, Nike, Dell, Microsoft, and those types of companies. And I used to watch the prices of the stocks and convince my dad to make some trades. He had a broker, and he ended up doing it.  

And so, when we moved to North America, my dad opened a trading account for me at RBC and I used to call in between classes in grade 11 and put in trades. And we learned the hard way, the lesson about the CRA, that they’ll always come after you. So, my dad got a call about six or seven years later saying that he didn’t pay any taxes on his capital gains that he had. It wasn’t a lot of money, as a 15-year-old, I made about 6-7 hundred dollars every year. So, I used to call in trades and that got me really excited. It was something where I was constantly learning. I learned about new companies and how the movement of the stocks was very dynamic, I think that’s what got me really interested in the sector because things were fast moving, things could change at any moment, and there was opportunity for risk for losing money but also there was opportunity to make money and that was very exciting and thrilling. That’s what paved the path to get into finance in the future. 

  

Kevin Parton: 

So, you got the young experience with the entrepreneurial hustling, you’ve got the affinity for the stock market and finance. You graduate, you get into the job market and you’re in the banking sector in a position where it’s a large corporate environment but very much sort of eat what you kill, so you still have that little bit of hustle. What was the moment you decided, “I’m going to leave this environment and I’m going to start something new”. What occurred in your life where you realized this was the thing to jump ship for? 

  

Ali Qureshi: 

It’s a good question. I think from my perspective, the finance sector changed in the last 10 years, where there were some technological changes that occurred in the industry. The introduction of high frequency trading started to impact the relationship between the service provider and the client, and I found that that dynamic shift started to be the beginning of the end, let’s say, for the equities relationship. It’s still a decent business, but it wasn’t the business that I grew up in and so I wanted the opportunity to keep learning and keep growing and be in control of my own destiny. I think that’s the best way to pinpoint where that shift started. And then when you have that thought, you’re always thinking, well, what’s going to be the catalyst for me to make this change? What’s going to be the point where the risk/reward makes sense. I think that assessment is what took a long time, because there’s always opportunities, it’s just which ones are the right ones, which one makes sense for you and your family, your children and so on. It’s never the right time, but there is a point where you just have to make a decision, and I think that decision was made for me when I found a phenomenal Co-founder, Gaston. He came in to get the business going, and then at that opportunity, when we started to see the business grow is when I decided to end up joining full-time. 

  

Kevin Parton: 

Okay. So, we got the opportunity to learn about the origination of SideDrawer, where it came from. What made you decide on “SideDrawer” as the name? 

  

Ali Qureshi: 

So, the original idea came to me when I was on a flight and I thought, if my plane was to crash, my wife would have no idea where any of our important documents were. I was the accountant and the “CFO” let’s say in the household and I was responsible for managing that stuff. But because life is so busy, it’s not something that we have a normal conversation about on a regular basis. Like “Hey, babe, just so you know, all the stuff is here.” When in reality, “here” was spread across 800 files in my Google Drive, Dropbox, my iCloud drives, my various laptops that we’ve had over the years, so we couldn’t really keep track of all those important documents. And as we got older, we had more children, we started to accumulate more things and you just have to keep track of those important documents, and we just didn’t, and I found that most people don’t either. So, I had the idea of creating something simple to keep it all in one spot, and the initial idea the name was called “DeathFile” and so when I started sharing that with people, I’d said, “Hey, I’ve got this great idea for something called DeathFile.” People would respond with, “Are you nuts? No one’s ever going to use something called DeathFile.” So, we thought okay that’s probably right, that’s not going to work. So, we were sitting around in the house and my wife was upstairs and, like most people, we have a side table, and it’s just full of junk. Like all of my old passports, even the ones that they give back to you with a holepunch in it, I still hold on to those and they’re sitting in my drawer with things like batteries, iPhone chargers or whatever. And she was looking for something the other day and had to go through my drawers. And she just shouted from the top of the stairs saying, “Ali, can you please clean out your side drawer!” And I thought, Oh man, that’s really interesting because it’s such a great name. It’s right on the spot. All your important stuff is in your side drawer! And it’s always messy. So the idea was to flip that and say, hey, you can actually have an organized side drawer. So that’s where the name came from and it seems to stick now and when we’re having conversations with people, they get it. When Gaston came in, he made the comparison to a filing cabinet, which really works because you’ve got a filing cabinet, you open it up and there’s a drawer inside and you start going from there. The name has actually worked really well for what we’re trying to accomplish and for the business. 

  

Kevin Parton: 

Which is always fun when there’s a good history behind the name. It gives a little bit of life and character. I like that it evolved from DeathFile, because as cool as that sounds, I don’t know if it has quite the scalability as SideDrawer. One of the reasons I like SideDrawer so much is because in wealth management and estate planning, this is where we become removed from our clients. Often in this area we work with other professionals, with lawyers, accountants, specialists and there’s all these documents and so ultimately clients are left to their own devices to keep them all in an organized place. And so, this became this kind of mechanism, where we could collaborate more and add value but also create the opportunity for an individual to store all their important documents somewhere and access them. 

How did you find the implementation of that as an idea into reality? Did you start going directly to individuals and is that what you’re doing now or is it straight to businesses or to large organizations? What does the model look like now that the business has grown? 

  

Ali Qureshi: 

That’s a good question. Because as any business evolves, you always pivot, and I know that it’s usually attributed to startups because they have to figure out what the product market fit is. But every business has to pivot at some point. Even Tim Hortons, they never used to do lunch, and then they started serving lunch as well, right? But from our business perspective, when we first launched, it was a little bit more B2C oriented. Actually I would now call our model a B2B2C – Business to Business to Consumer. Where we’ll go to an advisor and say, your client would really like this and the advisor would say yes, you’re right. Then they would offer it out to their clients. The challenge with that model, and I joke and say that there is a graveyard of tech companies trying to create digital vault solutions and if you go back over the last 10-15 years, there are companies that have tried to do that, and they don’t really work because the reality is that individuals and customers are lazy. I am lazy. That’s why I had this problem. I have 1,520 files spread across – everything. I’m lazy. People are lazy. They’ll do it when that thought or the fear comes to them. And you’ll sit there and you do it, but then you won’t do it until you have to again. Which might be six months, or it might be two years, maybe even five years later, and then you’ve had all this gap in between, where nothing was updated and now you have to essentially start from scratch. That effort was for nothing. So, what we found was that’s the behavior from the end customer perspective – and I’m exaggerating because you always have a bell curve – but it definitely is the tendency in that direction. If you have a product that caters to the advisors, so that advisors can actually engage with their customer on a more regular basis with their most important documents, which today would be flying around via e-mail attachments or file sharing links or something like that – which leads to more disorganization and complete chaos. But if you give the advisor the platform to be able to do that, that’s where that efficiency comes in for the advisor. And then also for the end client, the benefit is that their SideDrawer ends up becoming populated with all of those important documents, so you don’t have to sit there and do it two years later. It’s on a live basis being updated. That’s the nut that we ended up cracking. And that’s what’s driven the success that we’ve had because from there it becomes extremely scalable.  

Because now we can sell to individuals, advisors, to teams of advisors, to wealth management firms, to banks that run wealth management platforms or to national wealth management firms. It’s all based on the advisor-client relationship which you want to promote, but then also meeting the compliance, governance and oversight from the organizational perspective, which we provide and that’s been a game changer for us. 

  

Kevin Parton: 

I mean it’s huge because that’s something that I experienced as well. A tool is only as good as the ability to be used and be used well. And so, finding ways to make that stick and solving the problem like you said.  It’s super cool, I think in the same way that Willful has made wills more accessible, this sort of technology of integrating into the financial space and making it accessible is incredible.  

I want to switch gears and talk about some milestones that you might’ve reached within the years the company has been around. How old is the company now? 

  

Ali Qureshi: 

2018 is when we incorporated. 

  

Kevin Parton: 

Great. So, what’s the biggest milestone you’ve hit as far as scaling the company to date? The biggest celebratory moment, if you will. 

  

Ali Qureshi: 

Well, because you’re always pivoting, those milestones get bigger, and those milestones also change in terms of the future of what we’re looking forward to. But in the past, I would say obviously for anyone that’s starting a technology platform to sell to the biggest enterprises is a huge validation of what you’re doing from a number of perspectives. So, I think signing with TD Bank was big for us. They have a press release out there that they’ve issued on our relationship and I think that was a huge milestone moment for us. where, TD is the 6th or 7th largest bank in North America and to be able to meet their security requirements, their governance requirements, their technology requirements, infrastructure requirements, all of those other requirements that go along with that, was a great milestone for us. We felt extremely proud to be able to do it. It gave us a lot of validation for our business concept as well as the way that the business was architected. On a side note, if you and I wanted to start a vault company, we could probably do it over a weekend by spending about $50,000 and getting something going. But the reality is that it would be completely insecure, and would likely fall.  

There’s all kinds of things that can happen when you have a company and a product–you have to make sure that all the checks and balances are in place, and that the protocols are being followed. It takes a lot of effort to plan–we had to do a lot of that up-front. No one’s going to buy your product and say, “I hope you get there.” It has to “be” there. You have to show people it’s there and then they’ll buy. So, we had to have a lot of patient partners as we were building that capability out and infrastructure. So, to see it all come together with a large customer like TD was a great feeling. 

  

Kevin Parton: 

That’s huge. I’m sure there’s lots of companies that aspire to have that happen at some point in their 20- or 30-year business cycle, but to get there in 7 years from 2018, it feels like pretty rapid growth.  

I mean, I was in Toronto a couple years ago having lunch with you, and I think it was still dreams of this maybe happening. It’s so cool to see it happen in real time.  

So, I think where some real value can come from is in year one, if you look at the day you jumped into this, what is the biggest piece of advice you could give somebody in year one of starting a business based on your experience. 

  

Ali Qureshi: 

It’s going to be way harder than you think it’s going to be. Even though I’ve always been somewhat entrepreneurial and involved in the stock market, etc., I’m generally a risk averse person and I think that’s where my accountant training comes in, I try to have my risk reward ratio balanced, let’s say. But I think when you come and you look at the seat, you realize your relationships change. When you’re a certain title in a large organization, people will go out of their way to reach out, respond back to you, connect with you, etc. But when you are an unheard-of company, nobody knows. The interest level is not there in the same way, and you realize you have to make it on your own terms and drive value to people to engage with you. Those are the things that you learn when the wall hits right away. I think the second thing is, because you have to go through rounds of fundraising, there are client conversations that you must have. All those conversations require a lot of juggling, and you never really know which ones you should necessarily spend your time on and which ones you should avoid. I think it is difficult to know right off the bat. You just have to go through the motions to realize and recognize those patterns and then tell yourself this type of engagement is going to go nowhere–I should focus here instead. So time management is a really big aspect of that startup life. You do only have a finite amount of time, and it’s very, very precious in those early days. 

  

Kevin Parton: 

That’s super helpful because I think a lot of times, at least in my experience, when you move from a place that you’re comfortable into a new place, you oftentimes forget what it was like to be brand new to something. And even if it’s a similar line of work, you’re starting something new and so you feel like you’re floundering and that can be a very uncomfortable feeling. But I think what’s really important is, no matter what you do, if you start something up, it’s going to be harder than you think it is. And you’re going to be fully engulfed in learning. 

What did you do to mentally, physically, emotionally navigate the start-up phase? Because there’s a lot of people who might crumble under that pressure. I mean, we’ve talked about a graveyard of tech vault start-ups but there is also an entrepreneurial graveyard of people who start and then realize, “Oh, this is way harder than I thought.” And then they don’t see it through. What does someone have to do to be able to see it through those tough times? 

  

Ali Qureshi: 

I think having the right people around you that you can have those conversations with and check yourself with is key. It’s easy to go down negative spirals and become completely destructive and start to think that it’s going to be a disaster scenario if this doesn’t happen, or this sale doesn’t go through etc. So, you need to have coaches around you where you can bounce those ideas off of and they can guide you and make sure that you are actually checking yourself and being realistic about the scenarios and how they might play out. One advantage that I had, I suppose, was when I was in finance, being in equity research and  equity sales, you’re dealing with a fire hose of information on a daily basis. You’re constantly juggling so many different news items that you then have to process, make decisions on, and think about how you’re going to support your clients through that. So having that experience allowed me to juggle all the different things that we were dealing with at any given point. But also having a great partner like Gaston, having our Advisory Board, who’ve done this many, many times before, having experienced staff, years of experience greater than mine or in life experience greater than mine, all this contribute to that mentorship model, right? I know that you’re very big on this because it’s something that you actively pursue. Is finding folks that can share experiences that can help you grow, and it’s the same concept when you’re going through these difficult moments, to have people that you can bounce ideas off.  

I found the toughest thing is just to make sure that you’re always focused. And most importantly, balancing family and making sure that you’re not giving up on that because ultimately, they’re going to be there for your support. So, making sure that some time is carved out to prioritize them is important.  You always look back and say, maybe I could have done more, but you never really know that at the time. So, carving out some time there and making sure that you are laser focused on what it is that you’re trying to accomplish.  

And everything that is weighing you down, think how realistic is this? Check with somebody, brush it off, put it in a box, tuck it away in your mind and then deal with it later and move on. Keep driving. 

  

Kevin Parton: 

I think a lot of people don’t necessarily realize what they’re getting into until they do. But having that mentorship, gaining perspective, surrounding yourself with people who’ve either done it before or just being part of a community so it doesn’t feel alone is important as well. That’s really good advice because you have the technical knowledge to know what you’re getting into, but also understand how your mind’s going to work, and how you handle adversity. Every successful entrepreneur has this struggle journey and a lot of times it’s consistent resilience and discipline that are the tools they use to get to success down the road. 

  

Ali Qureshi: 

Correct mentality is a lot of it. You can control it. If you feel like you’re going to get sick for five days straight, you will get sick. That’s the reality. It’s about how you think about situations and how you make sure that you’re not getting overly negative about them. 

  

Kevin Parton: 

Awesome. You talked about the significance of having good financial partners. So how did you go about getting investors or financial partners and what has that looked like now, over the last seven years since the company’s been founded? 

  

Ali Qureshi: 

I think it’s probably one of those make it or break it criteria for a business, because if you have poor relationships with your capital investors or you don’t have the right types of capital providers. It can really hamper your ability to do what you need to do. So, if I go back to one of the earlier comments about what we were building required a lot of upfront infrastructure, architectural work and technology work to make sure that we got it to a point that would attract the kinds of enterprises that were engaged with now. That work had to be done. So, when you go and pick somebody to invest and say, I have an idea for something, it’s going to cost a lot of money, I don’t know if it’s going to work, but we think it might, and our ideal clients are really large clients that take a really long time to decide to buy your product, that doesn’t sound like a good pitch, right?  

So, when you work through the motions and break that down to what it is that you’re trying to do, you must find folks that actually have that same, either thought process, patience, and also the vision of what you’re trying to accomplish. And so, we were really fortunate when we started raising early on, we went down the path of family office and Angel investors that had very successful businesses themselves. And businesses, as you know, take time to prove themselves out and you have to be patient as you’re building them and the folks that we ended up partnering with were amazing people. We would never have been here today, had we not had their support through the years. Because they understood the path that we were on and the struggles that we would face and the challenges in terms of getting these large customers. But they believed in what we were doing. And we had a milestone-based approach to our capital raising and we knew that if we didn’t meet certain milestones, we wouldn’t get the capital. We were fortunate that we hustled, and we met those milestones and were able to get to where we are today and we’re in a much better spot than we were obviously a few years ago and have many more enterprise customers and many more in our pipeline and many independent advisors and firms that we’re dealing with, and the business is maturing. 

  

Kevin Parton: 

Is it traditional that as  a business grows would have to go and get more additional financial partners or is this more the standard, that you find a few partners and it works well and keep them to a minimum? 

  

Ali Qureshi: 

It depends on the business to be honest. When I was on the other side and I was in capital markets, we saw businesses raise hundreds of millions of dollars because they could. They had a story that attracted that type capital, but that also comes with different kinds of handcuffs. In our situation, we found our objective was to grow and to build a sustainable business where our partners had influence over the direction of the business. That was something that was important to us and we wanted to make sure that we were going on a path that allowed us to do. Our capital partner decisions aligned with that vision.  

  

Kevin Parton: 

So, now you’ve got a relationship with TD, you’re into the big banking industry. What’s next in the predictable future? And then what are some aspirational goals for 5-10 years from now? 

  

  

Ali Qureshi: 

In the near term, we see ourselves working with more banks and national wealth management firms. The need has clearly been established from an advisor’s perspective as well as a client’s perspective. The engagement is extremely high when it’s deployed. That’s something that we’re working more with our clients to find the sweet spot. Every client is different in how they utilize the platform. So, there’s a number of different types of unique use cases. The aspirational dream is to make sure that everyone on a flight and scared about something happening would know that their families would be taken care of. The aspirational aspect is that can we help millions of people, Canadians, Americans, people around the world with making sure that their important information is organized in a secure place so that their loved ones, advisors or accountants can access that information when needed. That’s sort of an extension of the original dream. So, we’re definitely focused on that wealth angle, but we are seeing a huge need from individual use perspective as well. 

  

Kevin Parton: 

Another thing I wanted to ask is, I know that sometimes for people who start companies, the vision is the exit. To build something up until it’s large enough that it either becomes attractive and the goal is to sell, or in some cases, if you get too big in a space with big players, you don’t get a choice. You get bought and forced out.  

But in any case. What’s your goal like? Has there been discussion in the early days or even now about the idea of getting bought out? It is conceivable that a bank might want to make you just their product, or do you want to stay at the helm? Where do you sit at with that as one of the founders of the company? 

  

Ali Qureshi: 

It’s a good question. Naturally, because we have shareholders, we do get asked that question and the honest answer is that we have to do what’s right for our shareholders. But we’re having so much fun and the plane is starting to take off and we see a long runway ahead of us in terms of where we can take it and I’m obviously a shareholder, but I believe our shareholders would say the same thing that there’s a lot of room left in this. We’re really just starting to get going. Currently, we’re only in Canada and know that expanding into the United States is on the horizon. 

I also wonder if I did exit, what would I do?  You have to find something else that’s also fulfilling, right? You can’t just sit at home all day! 

My kids are too young, I know some people who say that after they had their exits, they started driving Ubers because it was something to keep themselves busy. Fortunately, I’m having a ton of fun still. I think my biggest driver is when my learning stops or slows down, that’s when things start to get a little boring. I also don’t know if I’ll be in full control of making that decision when the time comes. That decision may be made for us, like you said, or we’ll have to make the call on our side depending on how big we get. 

  

Kevin Parton: 

I think there’s the idea of selling and then the practicality of doing it. And sometimes you don’t get a choice, and you have to figure things out. I think that journey can be just as scary and harder as starting a business in the first place. Especially when you’ve been at the helm for so long, you identify as the person who operates the business. Now, who are you in the absence of the business? That’s another area we spend time talking to clients about. Selling the business is this goal, but then when you do, who are you and what you do identify with? And so, there’s a lot of components to selling a business, more so than is it saleable and does someone want to buy it? 

  

Ali Qureshi: 

Correct. Most folks that were working outside of their home and then had to start working at home during COVID got a harsh reality from their partners at that point that maybe it wasn’t the best thing to just work from home. I think that’s when reality hits you and says, hey, maybe I have to keep working and do something else. If you sell the business, you have to do something to occupy your time. And I know I can speak for Gaston on this as well, we just love tinkering. We love building something important–something new. But the thought of having to go through those same struggles in another 5 or 10 years is a lot of work. Your energy levels are different, health levels are completely different. Family obligations are different, so we have to see. I think knowing what the plan is, is very important.  

I was one of the co-heads at CIBC that ran Movember and one of the things that shifted was when they changed the marketing around November from prostate cancer to men’s mental health. That was in the second year that I was involved in it. I remember that my interest level completely shot up at that point because that’s a huge issue and a lot of times the stats showed that when men stepped away from their jobs or got downsized or quit, mental health issues became more evident. That’s when their mental health started to decline because their friend groups were all associated with the folks that they worked with. So that was something that I was keenly exposed to through the Movember organization. I very much liked being involved in a lot of the mental health issues that men face, and that’s something that’s always in the back of my mind that if we’re not doing this, we have to have something else that occupies the same amount of time so that you can be occupied mentally and physically in something otherwise. 

  

Kevin Parton: 

Totally. Having passions, community outside of work is important. And it can also be exciting. Instead of it being a scared about “what’s going on in the next chapter”, it’s “I get to paint on a blank canvas”.  

I want to wrap this up with getting SideDrawer in the hands of everybody. If someone’s listening to this, who is an individual and wants to get access, how do they find you? 

  

Ali Qureshi: 

Easy! Sidedrawer.com, click on the top right where it says “Sign Up” and it will take you down that path. If you’re an individual that wants to use it for your family, it’s free to use. That’s the whole idea of serving everybody. If you’re an advisor or professional like an accountant, lawyer or somebody like that, and you want to use it for your business, you can also go down that path and sign up. 

  

Kevin Parton: 

Great. And if you work at a big bank and you want your bank to adopt this so that you’re not lagging behind TD, can they just reach out to you as well? Do they find you? 

  

Ali Qureshi: 

That’s right. Or even through our SideDrawer contact page. We welcome those calls, and we’ll help you navigate through the digital transformation journey, which is typically what we end up being a part of, which is awesome. 

  

Kevin Parton: 

The more we integrate this technology to create a better experience for clients, the more value we have. Well Ali, it’s been an absolute pleasure to speak to you today, from meeting through a friend introduction five years ago, to seeing the company grow and to witness you realize the success you are doing, is something that I feel equally passionate about. Thank you so much for coming on and sharing your story. 

  

Ali Qureshi: 

Thanks for having me, Kevin. You have such a dynamic personality, and you completely got what we were doing and were completely on board from day one and I’m really glad to have met you.  

All the best. 

 

In this episode, Kevin Parton and Keith Allan, Portfolio Manager with Harness Investment Management, discuss the recent market volatility, media-driven panic, and how client portfolios are actually performing in contrast to alarming headlines. Despite major indices like the S&P 500 and NASDAQ experiencing corrections, most client portfolios remain positive year-to-date due to a disciplined investment strategy.

 

 

Key highlights of this episode:

• Market Reality vs. Headlines
• Long-Term Investment Discipline
• Hedging Against Volatility
• Political Uncertainty & Markets
• Investor Psychology Matters

 

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. To learn more, please visit Harness Investment Management team page.

 

 

About the Host – Kevin Parton

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin is diligently concentrating on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

Disclaimer

The information provided in the podcast transcript 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 episode of the Polestar Podcast by VELA Wealth, host Kevin Parton interviews Krista Simon, an Estate Litigation Lawyer and Partner at Hammerco Lawyers. In this conversation, they discuss the intricacies and challenges within estate litigation and what can be done to avoid complications. Krista outlines some current trends that often lead to litigation, such as blended families, estrangement and stale-dated wills and explains how these complex issues can lead to legal battles. Listen in to be captivated by stories that illustrate the importance of creating wills and estate plans that are both comprehensive and just. Krista also highlights how the Wills, Estates and Succession Act (WESA) plays a crucial role in protecting beneficiaries and families from unfair estate plans. 

 

 

Key highlights of this episode:

• Learn about essential considerations for building your estate plan and gain insights into the key trends that lead to estate litigation. 

• Discover WESA, its significance, and its purpose in BC. You will also hear compelling stories of how this Act has been enforced and the outcomes of these proceedings. 

• Gain insight into navigating the challenging waters of estate litigation and learn what to do if you find yourself in this situation. 

• Explore Krista’s approach to law, where she prioritizes compassion, understanding and fairness in all her work. Discover how this approach has proven invaluable in building her cases and helped her to support her clients effectively. 

About the Guest – Krista Simon 

  

Krista Simon is a Partner at Hammerco Lawyers specializing in Estate Litigation, Sexual & Elder Abuse and Personal Injury. Krista has 20 years of experience in civil litigation and joined Hammerco in 2004. She was also the first woman to join the partnership team. 

Krista is a lawyer who does not shy away from a challenge. She is both strategic and engaging and gets involved in every stage of a claim and manages the litigation process – from investigating and coordinating rehabilitation and medical benefits, to consulting with executors and beneficiaries. For Krista, legal strategy and solutions are always top of mind. 

A formidable litigator, Krista understands that not all cases require an adversarial approach that ends in a trial. She is also highly skilled in alternative dispute resolution, believing that mediation is often the best way to transform challenges into the best outcomes for her clients. 

Learn more about Krista at Hammerco Lawyers LLP and get in touch with her via email, ksimon@hammerco.ca. 

 

 

About the Host – Kevin Parton 

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin diligently concentrates on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page. 

 

The episode is also available on:

  

  

The Podcast Transcript: 

 

Kevin Parton: 

Hello and welcome to the Polestar Podcast where we bring together financial experts, visionary entrepreneurs and passionate philanthropists who share not just their expertise but also their personal stories, reflecting on remarkable experiences and offering some inspirational insights. I am Kevin Parton, and your host for this episode and I am really excited for our guest today.  

Welcome and thank you for being here, Krista Simon. 

  

Krista Simon: 

Thank you so much for the invitation. 

  

Kevin Parton: 

I have the privilege of knowing one of your business partners, Morgyn Chandler. She was on our podcast late last year and initially the intention had been to dive into estate litigation, one of the spaces your law firm fills. And then we got excited about her journey as a lawyer and as a female entrepreneur that we barely scratched the surface of estate litigation. She then kindly suggested that you could come on the podcast, and we could dive more deeply into the subject. 

Before we do that, I would love to get to know you a little bit. Would you be able to share a little bit about your journey into law, all the way up to where you are now? 

  

Krista Simon: 

Oh goodness. I’ll try to distill this in just a few minutes. 

Again, thanks for the invitation. I do always appreciate the opportunity to speak to other professionals in this ecosystem. You are one of the professionals that my client is hopefully working with, so I’m happy to answer what might be frequently asked questions from your own clients in terms of my journey.  

I am one of those funny lawyers who always wanted to be a lawyer from a young age. I saw lawyers as helpers. And that was a very simple way of thinking about it as a child. But then I think I really took that on. And as a helper, or a lawyer in a helping profession, I really see myself as amplifying the voices of people who are facing challenges.  

It’s not giving a voice to the voiceless, it’s amplifying and lifting people up, being an advocate. And I think estate litigation is an extension and a progression of all the things that I’ve done in my career; pushing for what is right, defending the rights of people who are being challenged, protecting what is rightfully belonging to my clients.  

I practice personal injury and that encompasses also some sexual assault and abuse litigation. And so, it’s very natural for me to be an advocate for people who are unexpectedly in a position to have to fight or to defend something. And as a lawyer, I’ve always represented individuals. And whether or not those individuals present as vulnerable people, people in litigation have all kinds of vulnerabilities and estate litigation is about families and peeling back the layers of family stories and family histories.  

I’ve been with HammerCo for over 20 years. I started as a young lawyer in an associate position and I’ve been a partner for more than 10 years. And so, given my longevity with the firm and my leadership role as a partner, I feel like I’ve had considerable input into how we’ve grown and built our team and our brand to this point. And I think, Morgyn may have said that she found her people. I think we all gravitated towards each other and our partner group right now is a very strong and united group.  

In terms of myself, I consider myself to be very solutions focused. I try not to get stuck in the dispute. I want to find a way through it and passed it. Long, protracted litigation is rarely beneficial to anyone. And I think this also aligns or arises from my deeply held sense of fairness. And so, I think when even when I was a young child and I wanted to be a helper and I saw lawyers as helpers, I think that’s where my sense of fairness was really percolating. I earned my law degree almost 23 years ago. I then practiced for almost 20 years and then I went back to school, and I earned a Master of Law with a focus on dispute resolution. Up to that point, I had done some additional coursework at the Harvard program on negotiation and Pepperdine Strauss before that, I’d really focused on mediation and negotiation. And so, my master’s program was really a culmination of that focus on solutions.  

I think there is a misconception that litigators are all about the fight, but I really think that misses the point. But I should say I’m a very proud trial lawyer; I’ve done probably almost 40 trials over the course of my career in front of judges and juries. And so, when it’s time to go before the judge and tell the story and argue the law, I am prepared to do that, and I enjoy that part of my job. But more often than not, it’s really about negotiating. It’s about finding a way through the dispute to the solution. I also think protracted litigation doesn’t always serve my clients’ interests.  

And so, as an estate litigation lawyer, and in all the other areas of my practice, I have to be really people focused. If you lose sight of the people and their best interests and only focus on the law and who’s right and wrong, I think the real intent of the law, the legislation itself, is really lost. 

  

Kevin Parton: 

To pick up from that point you mentioned, I feel like where there may be conflict in litigation is where there’s the idea that there is a winner and a loser, or it’s perceived that way. 

And like you said, sometimes there’s ego in there and sometimes there’s sort of a desire to be right. And the objective truth may not necessarily be there or there’s nuance, as I’m sure you’ve learned through the process of negotiation, that it’s not necessarily a 0-sum game, but it can be treated as a 0-sum game. If there’s emotions involved especially, there’s the feeling that in order for someone to win, the other must lose. So obviously with all that nuance and all of the emotion involved, estate litigation is an exciting area of law to practice, I would imagine.  

So one of the things I’m excited about this episode is, as you mentioned, to hear your take on some of the common questions that come up, but also to be able to hear stories and gain more understanding of this area. Because it is an area that we spend a lot of our time working in, in the wealth management space. And one of the areas that we wanted to start is, we refer to it, as estate planning. You and I have had a couple of conversations now where I refer to it as such and you’re very clear to point out that you are not in an estate planning law firm, you work in an estate litigation law firm. So maybe that’s a good place for us to start.  

In the experience that you have, where does estate planning serve as a major benefit, or have you seen cases where a lack of estate planning has led to complicated estate litigation? 

  

Krista Simon: 

So, I’m going to take a step back. I know you’ve got a very direct question but let me set the stage for you. I did a presentation last year and I entitled it; When there’s a will, there’s a way? Because notwithstanding all the best planning or even good planning, there can still be disputes and challenges. Because even a will or plan, that on the face of it seems very fair and equal, can still give rise to a dispute. And I think to understand where planning and litigation intersect, it is important to understand some of the drivers and the trends that are sort of front and center in estate litigation. So, throughout our conversation, maybe just keep these things in mind because these are the motivators, this is what’s driving people. 

We are now amid the largest wealth transfer in modern history, so there’s a lot of money there, a lot of assets out there. People are living longer, our elders are more vulnerable in their later years, but beneficiaries are also older and, in some cases, can have financial needs that are almost in line with their parents, who are still living. High property values, especially in Metro Vancouver, are adding to expectations of inheritance. The high cost of living is another factor, the younger generation now are not as financially successful as their parents. And so, some people are planning on the basis of their inheritance. Families are living apart, children don’t see their parents as often. That’s a problem when you’ve got new friends and new companions and new caregivers who family members have never met before. And again, elderly people are very vulnerable to suggestion.  

We’ve got blended families, we’ve got evolving societal norms with respect to religion, sexual orientation, financial planning, and all other life choices. And then on top of that, you’ve got really easy access to information about legal rights. So, people have more information, and that sets up expectations. It can set up some misinformation as well.  

So, in terms of planning, you’ve got all of those things in the works. I think also estate planning, like financial planning, is a very personal thing. But when that estate plan comes into action, it becomes a more public thing among the beneficiaries and the family members. And so, in terms of planning, the best plans are plans that are communicated and revisited over time to meet the needs of the will maker, but also perhaps to meet the needs or the expectations of the potential beneficiaries. 

  

Kevin Parton:

So, lots there. Which gives us a whole bunch of places to start. Maybe we’ll start at the most basic sense. How often should people review their estate plan? Should the review be regular? Or only after specific triggers? When do you think warrants a review of the plan?

  

Krista Simon: 

Again, I’m not an estate planning lawyer. And so, a solicitor, an accountant or a financial planner might have different views. But I think revisiting an estate plan, at least every three to five years, even if there are no changes or triggers for that review. Just to take it out, have a look at it and make sure it still reflects your intentions.  

But in terms of particular triggers; any change in life, marriage, divorce, additional children, an inheritance of your own, acquiring a new business, selling a business, acquiring any new assets. Maybe your wealth has grown, and you want to consider a more complex plan for tax planning purposes. I think having a plan is great and that’s step one, but if your plan sits in a cupboard for 10 or 20 years, it has become stale-dated in most cases. 

  

Kevin Parton: 

It’s really interesting because planning and litigation are two different sides of the same coin. I think where the value in this conversation can be found is a lot of times from a planning perspective, you don’t necessarily see what happens on the other side. You can say, well, let’s meet regularly. But it’s really important, because on the litigation side, you made a will, it wasn’t reviewed enough, and we know that because now we’re in litigation and had it been reviewed more frequently, perhaps it would result in a different outcome. But I think you get to see where the gaps in the planning process exist, because that’s where they’re getting poked. 

  

Krista Simon: 

Yes, and it’s really nuanced. Some of these cases hinge on something very specific to a particular family or a relationship within a family. It’s not a black and white analysis. I very much live in a gray area. And there’s lots of misconceptions about estate planning.  

People think it’s only for the wealthy; it’s only for older people, they assume their family knows what they want and will do the right thing, whatever that means, people think it’s too expensive. They think they have designated beneficiaries in some of their investments, and so that speaks for what they want done with their estate. People also assume that an estate plan is only will. But of course, there are a number of different investment vehicles and insurance products that go into an estate plan. So, there are a lot of misconceptions, but also there is a fear of talking about death and dying, that’s still a bit of a taboo subject. 

Also, among very wealthy individuals, oftentimes they don’t discuss these things with their children because they don’t want to demotivate them from working hard over the course of their adult life and accumulating their own wealth and assets. 

  

Kevin Parton: 

Communication is huge, and it’s difficult to articulate what one’s wishes are. And it might be helpful to take the time and space to communicate while you’re here and let people know what you would like to happen. That in and of itself isn’t something that many people are trained to do or have the experience doing or want to address. 

What I want to jump into now is discussing some of the major trends you’ve seen. What are some major trends in estate disputes that you’ve noticed over the years? 

  

Krista Simon: 

The most common claims in estate litigation arise from probably three different areas.  

One is challenging the validity of the will. So that’s where the claim is essentially to toss out the will. And the result is either you revert to a prior version of the will, or if there was no will or no prior valid will then it becomes an intestacy, meaning a case where there was no will. Then we follow the legislation. And the governing legislation is the Wills, Estates and Succession Act; which I’ll be referring to as WESA.  

WESA also permits wills variation claims. So that’s also a very common area of litigation and that’s not where you’re challenging the validity of the will. We accept the will is valid, but it must be modified or rebalanced so that the distributions are fairer or more adequate or include someone who has been left out.  

And then there are disputes arising from estate assets. So, the question is what are the assets of the estate? That often arises from jointly held bank accounts or property that’s held in a joint tenancy. And the question is, who’s the real owner? And a legal question becomes whether there is a constructive or resulting trust, or whether the remaining or surviving joint owner is really the legal and the beneficial owner. 

Within those categories, the two main ways to challenge the validity of a will is through proving a claim of undue influence or lack of capacity in a will’s variation claim. There are a number of ways to attack the distribution. Before my next point, I should say with respect to wills variation claims, it’s very unique to British Columbia. There really is no other jurisdiction in Canada that has such a claim, WESA is provincial legislation. So, when we talk about estate litigation, it really goes province by province in terms of what a person’s right is to challenge the will or the estate plan. Will’s variation claims can only be brought by spouses or biological or adopted children, and those claims must be brought within 180 days of the grant of probate. That’s not six months, that’s exactly 180 days, so you have to count very carefully. 

  

Kevin Parton: 

Do you find that 180 day mark ends up posing problems in cases whereby people are unaware of that time frame and a claim isn’t brought up in the right amount of time because of a misunderstanding? 

  

Krista Simon: 

Sometimes. I think more and more people are better informed. And they know that there’s a problem, and oftentimes we’re consulted even before the grant of probate has been issued. So, it’s still a challenge but like I said, people have better access to information now.  

In terms of those different claims, that’s where we see those very interesting cases about who is a spouse, and even if you can have multiple spouses. And then that’s also where we see claims of children who have been left out, cases on estrangement, cases where there’s a favorite son or a favorite daughter, or where cultural norms come into play, where sons are preferred over daughters. And it really gives some insight into how families are functioning and how our courts are recognizing changing societal norms. And notwithstanding the fact there are some ideas within families or with individuals about what is fair and what is adequate, our court is there to correct those views, whether it’s a cultural norm that’s outdated or whether it’s estrangement, that’s not the fault of the child who’s claiming the variation. 

  

Kevin Parton: 

When it comes to estate planning, for instance, in those complicated situations, such as blended families or non-traditional relationships. How much can be addressed in advance and how much uncertainty remains that cannot be avoided, potentially leading to litigation? 

  

Krista Simon: 

I think there’s never any guarantees, but it’s not often that you could ever exclude your spouse completely from your estate. And it’s not often that you can exclude a child from an estate. It would have to be fairly extreme circumstances. And we still see this happening where people are leaving children out of their wills and sometimes, they give a reason, sometimes that reason is valid and sometimes it’s not.  

There was a case from last year, I’ll give you an example.  

The deceased passed away and he had three daughters. They were a family that originated from out of country. And they had three daughters in different times of their life and at different stages of financial security. One of the daughters was given away to an aunt and uncle to be raised. She had a lot of confusion about this, even into adulthood, having felt abandoned. And that situation turned out not to be great, there was some domestic violence in the home. But the other two girls grew up with a relationship with their father. Some had been sent away and came back again and for them, the family dynamics were different. The daughter, who had been given away to be raised by an aunt, in the will she was described as a niece and was given a very small specific gift. And the two other daughters were given larger gifts. So, she challenged the will. And initially, the other two daughters denied she was a daughter and said she was a niece, and that argument was abandoned later on.  

Ultimately, the judge decided that each of the daughters should inherit equally, and if there was an estrangement throughout the course of their life and if they didn’t have relationships with each other or with the parents or the father, it wasn’t her fault. That there was a responsibility on the parent to have a relationship, to create or forge relationships among all of the sisters. And it was really unfortunate and quite sad that it ended up the way it did. 

That’s a really specific case. But the principles that arise from it, I think we are instructive when people come for a consultation because it’s helpful in asking questions and recognizing the nuances of every single different case. 

  

Kevin Parton: 

That’s actually an interesting point. When someone comes from a consultation, at what point are they in this process when they are walking through your door? What happened up to that point and where are they seeking advice going forward? 

  

Krista Simon: 

At every point in the process, we are sometimes consulted even before a person has died. Because a beneficiary or potential beneficiary has found out about what is in the will, and they think it is unfair.  

It might be at the point where they are advised that the person has died and that there’s an application for probate and they get the will, and they read the will and they’re very confused by why they are treated as they have been.  

It could be after the grant of probate. We are consulted not only with people who are looking to challenge a will, but also defendants. So, people who were satisfied with their gift under the will and now they are left to defend it. Or we’re consulted by executors, who must also defend claims. Now when I say defend claims, sometimes families can come together, and they can recognize that something unfair has happened.  

There are folks that come to us and say, “Look, we’ve read the will, and we think it’s unfair and we think it should be an equal distribution. Or we think it should be a little bit more over here. Can you help us document this agreement? Can you help us navigate just getting to a place where we feel comfortable?” Not all families are battling it out. Some families recognize that a parent has been unfair for no good reason, and they can work it out.  

On the other hand, that’s a smaller percentage of the people who are consulting with us. Sometimes there are people who challenge a will, and they shouldn’t be successful. There is another case last year where there were multiple children and grandchildren that were named in a will and the claimant was a son who felt he should get more because his financial situation was more precarious than the other children. And sometimes that is a valid reason for varying a will. However, in this case, it’s unfortunate that all your dirty laundry is aired, so you can read it in a public manner. But in this case, the court found that the claimant’s poor or precarious financial situation was of his own doing. There was mention of him going to Vegas and blowing a bunch of money. And so, the court said, “Look, in this case, this was your own doing. The will is fair.”  

There would be other cases where someone would come and say “Look, my brother is a very successful neurosurgeon, and I have health issues and I’m just receiving a disability pension. This isn’t fair.” And in those cases, the court may very well rebalance the distribution under the estate. 

  

Kevin Parton: 

So, this is my curiosity comes. In part of the consultation process, if someone is preparing their own estate plan and they’re looking to preemptively figure out where holes can be poked in it, would they come to you and ask what might arise and then use that to go back and reassess?  

I’m thinking of cases in which I’ve heard people have been creative to move things outside of the estate, to circumvent WESA and the rules that exist. As far as a preemptive planning process, would you consult on that? And perhaps it’s not done in a negative way to say someone is trying to leave someone out of the will. But if someone’s saying they want to avoid estate litigation as much as possible, they understand the nuance and the emotions involved, how can they structure things so that once they’re gone, there aren’t things that are that are brought to light that they didn’t intend. 

  

Krista Simon: 

So, we sometimes get calls from people about that but that’s absolutely in the lane of an estate planning lawyer. Because part of their training and their knowledge and their experience is to plan good and sound plans and they will advise someone, if they want to cut a child out of their estate. I would expect that a good estate planning lawyer would say “Look, this is going to be a problem. Just so you know.” And maybe they attach a letter, maybe there’s some explanation for it, but it’s probably still going to be a problem.  

And depending on the nature of the estate, there are some very sound estate planning tools; alter ego trusts, putting money into life insurance policies. There are definitely ways, but those are expensive things to do. As I said, sometimes people do transfer their property into a joint tenancy. One could be to avoid probate fees, or certain taxes. Or it could be to avoid your least favorite child from inheriting. But you have to do that correctly. You must document the gift properly. Otherwise, the assumption is it’s held on a resulting or constructive trust, and it will form a part of the estate. 

  

Kevin Parton: 

Okay. Well, maybe that’s for another episode. We could have an estate planning lawyer on here to look at that different angle. Let’s get back to the other side then. Estate disputes often involve deep emotions. And as you mentioned there’s a technical and formal side, but then there’s the human side of things. How are you helping clients manage these emotions, and how do you differentiate between the law and understanding human behavior? 

  

Krista Simon: 

One of the things that I try to do, is allow my clients to tell their story. And oftentimes their family story goes back generations. And it’s not just the siblings that are in a dispute now, but it’s parents, aunts and uncles, grandparents. It’s, in some cases, their immigrant story, and that’s connects to why certain assets are so important. So I think allowing people to tell their story, to validate that there is a deep hurt that goes along with either being disinherited or that feeling that they’re being treated unfairly. Being an executor is a difficult job while you’re grieving. And often times an executor is either a spouse, it’s one of the children, sometimes it’s co-executors, which I would not recommend to anyone. 

  

Kevin Parton:

And why may that be the case?

  

Krista Simon: 

Because co-executors have to be on the same page, they cannot diverge in how they want to handle the estate. 

  

Kevin Parton: 

Okay. 

  

Krista Simon: 

Sometimes there are exercises of discretion, and if siblings don’t get along. That’s not something that happened in the last five years that happened because “Sally stole Bobby’s Tonka truck, when he was 10.” They’re really deep seated emotions. But I also remind my clients that I am their professional advisor. And when I look at their family story, I’m also trying to give them some advice to cut through the emotion. And that’s a really important role for me.  

I want to be empathetic, as I said, my practice is very people focused, solutions focused. And so, I analyze the dispute from all of the polar opposite perspectives and then I’ll do a cost benefit analysis. And compromise doesn’t have to be a dirty word. Risk is a real thing when it comes to going to trial. I’ve read so many cases where I thought the opposite result was going to occur or I saw in so many other cases, a different result. but there’s one fact that tilts the scale. It’s again, the nuances of a family story and the family dynamics. Sometimes going to a mediation is helpful. Sometimes we allow our clients to engage in what I call “productive venting”. Just get it all out, let’s not be afraid. But let’s also allow the dust to settle and make some reasonable and emotion-free decisions.  

Because at the end of the day, two things: this is about money, but it’s also about relationships. And you may wish to preserve relationships with your family members. But maybe siblings don’t, but there’s another generation of cousins who will have an opportunity to have family relationships and sort of carry on. And I think people need to be mindful of that as well. 

  

Kevin Parton: 

I guess that raises the point. You talked about executors and recommending against having co-executors because they may not agree on everything. From a cost benefit analysis or just an organizational analysis, does it make more sense to have a person, a spouse, or a child as an executor? Or would it make more sense to have a firm be the executor and sort of outsource that?  

I see very frequently this assumption that someone I love is going to want to execute my estate, or it’s easier to do that, without thinking of some major considerations; The time that goes into it, the emotional component of it, and oftentimes the complexity.  

So, the question is, does it make sense to have a legal third party execute the will or the estate? 

  

Krista Simon: 

I think there are a couple of things in there. I would recommend that executors always have a lawyer to assist them with probate and maybe even to assist them beyond probate with the distributions under the will. Sometimes I see people just have a lawyer to get them to the point of grant of probate and they say thank you very much, now I will deal with everything else. Actually, I think you’re probably well served having that legal guidance throughout. In making sure you have an accountant, that tax returns are filed, there’s a clearance certificate from CRA and just helping to navigate some of the reporting and the accounting requirements because there is a duty to the beneficiaries to provide them with information. I think a different solution is to have a trust company, for instance, be the executor and that’s something different than whether or not to work with a lawyer. It’s actually handing over the administration of the estate to a company. It really depends on the value of the estate. Companies probably will charge more of a fee than an executor will. Not always will a family member executor charge a fee to the estate, especially if they’re a beneficiary. So, I think there are some financial considerations. If it’s a large estate and it’s a really tangly dispute, sometimes the executor is a beneficiary and so for them to just step aside and hand it over to somebody who is neutral is a really good option. 

  

Kevin Parton: 

So just to summarize that. In almost all cases, it’s advisable for the executor of an estate to seek legal guidance throughout the whole process so they’re not left trying to figure it out on their own. And in more complex estates, it may actually be prudent to get a trust company to do it for complexity’s sake and just to absolve yourself of the responsibility, if you are also a beneficiary. 

  

Krista Simon: 

Yes. I think that’s fair. 

  

Kevin Parton: 

Okay. Moving onto cost benefit analysis of litigation. For a lot of people, as you said, one of the misconceptions is that it’s expensive. But compared to what? How does that process work? How are you helping clients navigate through the expectations or understanding what their expectation is. And when in the process do you advise to proceed or not to proceed with litigation or to find resolution and compromise? 

  

Krista Simon: 

It’s all over the place. There is no cookie cutter approach, I will say. Firstly we try to make our legal services accessible, so our consultations are free of charge, and we have different fee structures available depending on the nature of the case.  

I work with a team of lawyers, we all have a range of experience and we try to make our services cost effective. We understand that most people don’t have a litigation budget and so this is all new. Whether you are unexpectedly challenging a will or an estate or you unexpectedly find yourself in a defensive position. Where possible, we do offer contingency fee arrangements, which is a percentage arrangement, it’s a deferred fee. But often it is a traditional retainer and hourly fee-based arrangement.  

So we have those financial discussions right from day one. One of the most important questions is what is the value of the estate? Is this a $1 million estate or $10 million estate or is it a 100,000-dollar estate. And we want to give our clients perspective right out of the gate. What are you fighting about and is it worth it?  

Because if your upside is an extra $20,000, I don’t want to diminish that amount of money in the hands of any person. When you start factoring in the emotional investment, the financial investment, the time investment, maybe it’s not worth the challenge. Maybe you take the money, you invest what you get, and you make it grow instead of risking it with litigation. On the other hand, if it is a very valuable estate, if it’s an obvious case of unfairness. Then you know, we’ll put the pedal right to the gas.  

We don’t always start out with full on litigation because of the timelines. So, for wills variation claims, it’s 180 days from the grant of probate. Sometimes people are not coming to us until a month or two or three before that limitation. So, we need to be mindful of that and we commence litigation. But that doesn’t mean that we have to go in guns a blazing. I’m still keeping my eye on a potential solution and it might take time, it might come in steps and stages, but most often we are able to craft some kind of a resolution and a solution.  

On the other hand, for some clients it really is a 0-sum, and it is a win or lose. And it’s important for them to proceed and to go to document discovery, stage examinations, court applications and then ultimately a trial if necessary. 

  

Kevin Parton:

So, it’s incredibly nuanced, there is no cookie cutter answer, everything is very unique. Which I guess further emphasizes the point that you need to be speaking to someone who knows what they’re doing and has been in this arena for a while to give you that guidance. I think one of the benefits from talking to someone with 20 years of experience and sometime in this area is hearing some of the stories.

Do you have some highlights of cases that you’ve read about or that you’ve actually been part of where you learn something really interesting or you think would be important for our listeners to hear so that they could get a better idea of exactly what it is that you do or where estate litigation plays such a meaningful role. 

  

Krista Simon: 

It’s hard to know where to start, frankly. When it comes to telling stories. I think as an overarching theme, it’s really important to get the stories and to ask clients about the family history. I think families are fascinating, people’s family histories are fascinating.  

I’ll avoid talking about my cases to mainly protect the privacy of my clients. But there are some cases that people typically find really interesting. There’s a case of dual spouses and a lot of people may have seen this in the news a few years ago.  

A husband dies, he dies without a will. And you would think that where there is no will and you have to abide by the intestacy provisions of WESA, it would be easy. There’s a formula; if there’s a spouse and no children, it’s this formula. If there’s a spouse and children, it’s that formula. ‘Easy peasy’.  

I have actually been involved in cases where it isn’t that simple. It can be very complex, especially if there are children that are secret children or secret families. And so, I’ve been involved in these types of cases. But let me talk about one that’s in the public venue. So a husband dies and he has a wife and two children. But it then comes to light that he has another family that he has been living with. He’s got another spouse or woman who claims to be a spouse, has another two children, they have a home. So, he has one family in the lower mainland and another family in the island. 

And so, notwithstanding the fact that really his estate should be administered under the provisions of WESA, where there is no will. The first question is; who are the beneficiaries of the estate? Who is his spouse? And so, the court ultimately found that WESA recognizes multiple spouses. He was legally married to one woman, but he was carrying on a marriage-like relationship for purposes of WESA, with another woman. And one of them I think knew about the other, but the other didn’t know about one.  

And so it’s actually a sad story. One, it was quite shocking to some people that the legislation recognized two wives. Now that’s for the purposes of division of family assets. There was no question about the children, the children would be recognized no matter what. But it’s a very sad situation because you now have two women who presumably are grieving, they’re angry, there is uncertainty about their financial situation, they’ve got young children who are likely confused by all of this too. So that part of the litigation was very public.  

We don’t know how all of this was sorted out. We don’t know the value of his estate. We know he was involved with some criminal activity so who knows if there were assets. There were the two homes that he was keeping. But it just goes to show that you never know. There’s always room for interpretation in the law. And so, if you have an unusual or a unique circumstance, you may not feel like you obviously fit. But this is an area of law that is ever expanding to meet the needs of society. 

  

Kevin Parton:  

Yes. Which seems to be changing at a rapid pace. I want to sort of see if we can get one story on WESA and how that’s unfolded. Are there any higher profile cases in the last couple years as it relates to WESA, where we could hear what kind of outcome an estate litigation dispute ended up being resolved as? 

  

Krista Simon: 

So, I’ve given you a couple of examples earlier: The three daughters, one of whom was estranged. The husband with two spouses. There was another case of estrangement that I think was an interesting case, where it was twin daughters.  

And they were in their 30s and they brought a wills variation claim. Their father died and they didn’t really have a relationship with him. And he left all of his estate to some friends.  

So, the case outlined their family history and it was very, very sad. The twins were the product of a short relationship between the deceased and the twins mother. Shortly after the twins were born, they may have been one or two years old, the mum passed away.  

The dad then engages in what sounds like a very aggressive custody battle with the maternal grandmother, who ultimately won custody of the twins and raised them in Nova Scotia. Following that, the court found that the father became quite bitter about the whole thing and basically did not want to have a relationship with these girls over the course of their life, notwithstanding the fact they reached out to multiple times.  

And so, at the end of the day, the court said, look this is estrangement that is the fault of the father and shame on him. He focused his anger and blamed the outcome on the two girls rather than just dealing with it as an adult. And in terms of what the court did, they recognized, still, the independence of the testator. So, the will maker gets to have some say, even if he’s acting unfair. So the court said “Look, these friends were important people to the deceased. We’re not going to cut them out.” But I think ultimately the twins shared in 80 or 85% of the estate and the friends then shared in the remainder.  

And I think the cases on estrangement are top of mind because I have several of these cases right now where our clients are adult children who never had the opportunity to have relationships with their stepsiblings because they didn’t know about them. And they were kept secret, and parents who were in and out of their life and didn’t help in raising them and things like that. And ultimately are cutting them out of their estate. Again, for no good reason seeming to penalize them. 

  

Kevin Parton: 

Okay. Well, I realize we’ve covered a ton as I get to the end of end of this. There is also quite a bit that we didn’t even tap into. What I’d like to do as we tie things up, if you could give a couple key pointers of what would be the most valuable thing for our listeners to take away from this episode based on your experience? 

  

Krista Simon: 

Estate disputes are family disputes. And they can be emotional due to the complexities involved. And on top of that emotion, are financial and legal complexities. We didn’t talk directly about blended families, but that certainly adds a layer of complexity to any estate dispute. So proper planning is really important. If I was to give some advice on ways to avoid disputes, I would say it’s essential to be proactive in the planning stage.  

Again, going back to basics, clearly communicate your wishes and your intentions. I would suggest that people don’t see estate planning as something so private to the extent they’re not sharing any of the details with the people it’s important to share them with. I think having open conversations can minimize misunderstandings. Ensure your estate plan is comprehensive, up to date, and it’s something that you are reviewing and taking stock of your changing life circumstances.  

I would suggest appointing a trusted executor who you know will carry out their duties honorably and encourage them to have legal advice and accounting advice and other financial advice along the way. I think on the other end of things, I would encourage people to work with a lawyer and other advisors on the litigation stage and the probate end of things and not try to do it yourself. The court forms are available online, but these court cases are very complicated. 

And as soon as you have questions or concerns or there’s rumblings among beneficiaries, I would advise anyone to reach out and just have a consultation with a lawyer. It’s complementary to our firm, but also, it’s confidential. So, none of the other beneficiaries or the executor needs to know, nobody needs to know that you’ve sought out advice and have asked questions of a legal adviser. But at least you can make fully informed decisions. You can be proactive rather than reactive. And you can make your decisions in a timely manner and not when you feel like you’re under the gun. 

  

Kevin Parton: 

Yes. I think it’s hugely important. Knowing that they can reach out and knowing that wherever it leads, at least they’re informed. And regardless of the approach, it sounds like communication is so paramount. Communicating within the family, communicating to the beneficiaries or executor. And sometimes it’s the other way, sometimes you have to initiate that conversation with your parents or grandparents and knowing that it’s better to have the conversation in advance, however difficult it may seem, than to do it afterwards.  

Thank you very much for your time, Krista. This is obviously a very deep subject, but I really appreciate your input and all the time you’ve put into sharing some of this information. 

  

Krista Simon: 

You’re welcome, my pleasure. I’m always happy to talk about estate litigation and all of the fun facts involved. And again, this is a people focused practice. So, everyone at Hammerco, no matter what our practice area may be, we’re really focused on our clients. And you may have heard our mantra “People first, lawyers second”. We really wear that as a badge of honor.  

  

Kevin Parton: 

Well, I’m knowing you better and I’ve known Morgyn for a decade, and I know many other lawyers at the firm, and I love the way you work and how you approach the business and it’s been exciting to have you on here.  

Thank you again, 

Take care. 

  

Krista Simon: 

Thank you. 

In this episode, Rob Wallis sits down with Keith Allan, Portfolio Manager at Harness, to discuss the latest economic shifts, market volatility, and how investors can stay ahead. From the impact of U.S. tariffs and interest rates to the future of Canadian markets, Keith shares insights on asset allocation, inflation risks, and why staying the course matters. Tune in for expert strategies on portfolio resilience and making informed investment decisions in unpredictable times.

If you have any questions, please reach out to Rob at rob@bellawealth.com or Keith at keith@bellawealth.com.

 

This episode highlights: 

• Navigating market uncertainty
• Tariffs, trade & Canada’s economy
• Bullish opportunities in the U.S. market
• Strategies to protect your portfolio
• The importance of common sense over panic

 

About the Guest – Keith Allan

Keith Allan is a Portfolio Manager at 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. To learn more, please visit the Harness Investment Management team page. 

About the Host – Rob Wallis

Rob has been providing expert planning and strategic advice for nearly 20 years, and has been with VELA Wealth since 2016. Rob excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. A methodical and analytical thinker, Rob compassionately navigates clients through the complexities of a thorough financial planning process ensuring that they feel understood and supported throughout. To read more, please visit the VELA team page. 

 

The episode is also available on:

  

  

 

 

Disclaimer

The information provided in the podcast transcript 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 first Polestar Podcast of 2025, Kevin Parton and portfolio manager Keith Allan recap 2024’s market performance, driven by tech giants like NVIDIA and Microsoft, powered by AI innovation. Unlike past bubbles, this growth was built on strong fundamentals.

Looking ahead to 2025, with interest rates and inflation cooling, portfolio strategies may shift from cash to fixed income and alternatives. With Trump’s return to office, U.S. equities are poised for potential gains, while Canadian markets face uncertainties from trade tensions.

 

 

Key highlights of this episode:

• How tech giants like NVIDIA and Microsoft drove explosive market growth in 2024.
• Debunking myths about speculative growth and highlighting the solid fundamentals behind last year’s success.
• What interest rates drop mean for your portfolio—and why cash might no longer be king.
• How the new political landscape could shape opportunities in U.S. and Canadian equities.
• Practical tips for balancing risk, seizing opportunities, and staying aligned with your financial goals.

 

 

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. To learn more, please visit Harness Investment Management team page.

 

About the Host – Kevin Parton

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin is diligently concentrating on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

Disclaimer

The information provided in the podcast transcript 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.

 

The Podcast Transcript:

Kevin Parton:
I’m Kevin Parton, a Partner and Financial Advisor at VELA Wealth. This is our regular segment of Polestar Podcast – quarterly Market Update—the first of 2025. I’m here, as always, with portfolio manager Keith Allan. How are you doing today, Keith?

 

Keith Allan:
Hey Kevin, I’m doing well. Thanks a lot for having me.

 

Kevin Parton:
Always good to have you on here. I’m excited because this is the first quarterly update I’ve been part of since joining the firm. It’s a great opportunity to reflect on how the last year went, what we anticipated for 2024, where we ended up, and what things look like moving forward. That will guide the flow of our conversation today. So, let’s start right at the top—how did markets perform in 2024, and what were the key drivers behind those results?

 

Keith Allan:
Well, overall, risky assets performed quite well. If you were long equities, particularly U.S. equities, you likely did very well in 2024. That’s not to say Canadian equities didn’t perform well—they also had a strong year.

Looking at specific indexes like the S&P 500 and the NASDAQ, these were the ultimate market drivers. Much of that can be attributed to big tech companies like Microsoft, NVIDIA, Amazon, and Google. These heavyweights really propelled the market forward, which is why the NASDAQ performed exceptionally well, delivering close to a 30% return for the year.

Overall, anyone invested in North American equities likely did well. There were several factors contributing to this, which we can dive into later, but to answer your question succinctly—markets performed very nicely.

 

Kevin Parton:
Awesome. That clearly ended up being the case. I was listening to the Q1 podcast we recorded back in March 2024, and one of the key topics was whether we were in a bubble. At the time, it felt like a very timely and relevant discussion. What did we observe throughout 2024 in the tech sector that addressed those concerns about being in a bubble?

 

Keith Allan:
Anytime you talk about a bubble, it implies there’s no real reason or solid foundation behind the growth—no clear fundamentals driving the market or sector performance.

It’s like the game “Telephone,” where kids sit in a circle and pass a message along. By the time it gets back to the original person, the message is completely distorted. Similarly, in a bubble, information gets cascaded and distorted, often without any foundational truth. People start buying into the hype based on speculation rather than earnings, revenues, or fundamentals.

But in 2024, the situation was different. Tech companies weren’t just taking off arbitrarily—they had real earnings and revenues to back them up. Take NVIDIA, for example, which benefited from the rise of artificial intelligence. AI became the new wave, offering a tangible, foundational driver of growth.

That’s not to say the growth wasn’t stretched in some cases, but it wasn’t baseless speculation or “pixie dust,” as we saw during the tech bubble of 2000. Back then, there was no foundation to justify valuations—it was pure speculation.

In 2024, we also had favorable conditions like low interest rates. Companies could borrow at better rates, reinvest in growth, and strengthen their foundations. On top of that, Trump’s pro-business stance, especially regarding corporate America and the tech sector, likely contributed to this momentum.

For example, Elon Musk—arguably the biggest tech entrepreneur in the U.S.—riding alongside Trump in his private jet says something. It signals a favorable environment for tech companies. This alignment of factors helped drive the NASDAQ to nearly 30% returns and the S&P 500 to around 25%.

So that’s where we ended up—a strong year for equities, particularly in the tech sector.

 

Kevin Parton:
So, end of the year—strong equities. It seems like anyone who stayed invested throughout 2024 did quite well. We’ve now seen two consecutive strong years, 2023 and 2024. If we look back further to 2020 and 2021, we’ve had five out of the last six years deliver incredibly strong performance from an equity perspective.

At the beginning of each of those years, predictions were flying around. That brings me to an interesting point: everyone is incentivized to make a prediction. But how many of those predictions have been accurate over the past five years? What were people saying at the beginning of 2024 that turned out differently than expected?

 

Keith Allan:
One thing I’ve noticed is that a lot of people who make predictions are natural hedgers. It’s easy to come out and say, “I think the market will sell off” or “I think we’re in a bubble.” Let’s be honest—this is Behavioral Finance 101.

If you make a bearish prediction and the market does sell off, you look like a genius. If the market doesn’t sell off, people aren’t too upset because their portfolios have gone up. No one is turning around saying, “What an idiot you are!” Instead, they’re happy with their returns, even if the forecast was wrong.

On the flip side, if you predict the market will do really well and it doesn’t, people get upset. Not only are they frustrated that they’ve lost money, but they’re also pointing fingers, saying, “What a dummy you are for getting it wrong!”

That’s why we tend to see more bearish forecasts at the start of the year, especially from people in the media, like those on BNN, MSNBC, or in financial publications. I don’t blame them; no one wants to look foolish or admit they were wrong.

For me, though, I focus less on bold predictions and more on where we’re at right now. It’s a bit cliché to say, but I take it day by day. What are the fundamentals? What are the facts in front of us? What has happened leading up to this point, and how does that inform what’s likely to come next? That’s how I approach forecasting. Does that make sense?

 

Kevin Parton:
It does, and I think that approach resonates. That’s why I like going back to review what was said at the start of the year, what we were talking about, and what actually came to fruition. It removes the illusion of a crystal ball.

As you said, it’s about focusing on the fundamentals—understanding what makes sense in the moment. Sometimes that’s about investment selection, other times asset allocation. The key is recognizing that no one knows more than anyone else when it comes to predicting the future. It’s all about managing the things you can control.

Speaking of fundamentals, you mentioned that inflation came down last year, as did interest rates. We’ve already discussed the equity market boom, but what happened in the bond markets as a result of decreased inflation and interest rates? Was there any correlation?

 

Keith Allan:
Yes, absolutely. As we’ve discussed before, most people understand the relationship between interest rates and fixed-income assets. When interest rates drop, the value of fixed-income assets typically rises. This is because existing assets with higher rates become more attractive compared to newly issued ones at lower rates.

That said, in 2024, cash was yielding around 5% in high-interest savings accounts. It became a fixed-income substitute for many investors since it provided a decent yield with virtually no risk. With fixed income, there’s always some level of risk, so the question became: why take on extra risk when cash is offering such favorable returns?

That was the strategy we promoted to clients in 2024. However, I’m inclined to move away from that mindset in 2025. As interest rates begin to come down, I think there will be a higher appetite for traditional fixed-income investments over cash in client portfolios.

That doesn’t mean the transition will be straightforward. For example, the duration of fixed-income assets—how sensitive they are to rate changes—may not behave in the typical lockstep manner. There are still other factors at play, such as inflation and currency dynamics, particularly the strength of the Canadian dollar.

If demand for the Canadian dollar drops, it could create inflationary pressures that further complicate the fixed-income environment. So while dropping interest rates would normally signal a move to go long on bonds, it’s not that simple right now.

Overall, there are a lot of variables to consider for fixed income in 2025. It’s a more complex landscape than simply reacting to interest rate movements, and that’s where our focus is this year.

 

Kevin Parton:
Well, we’ll use that as a segue into looking ahead. Stocks performed well last year. Fixed income was a solid option, particularly when it offered better yields in recent history. Cash, too, was yielding quite high, and we were recommending or placing people into cash positions for liquidity and good returns. That dynamic, however, may be changing as we move forward.

Now, as we approach a new political chapter with the inauguration of President Trump just seven days away, let’s consider how the political and economic landscape might evolve. Historically, the Republican Party has been pro-business, which impacts the markets. Trump is a businessman who’s had four years to reflect. In many respects, he’s coming into this term as a different figure. When you think about market predictions and potential economic shifts, what are some of the things being discussed in portfolio management circles about Trump’s return to office and its potential implications?

 

Keith Allan:
We touched on this during our intro call last week when we outlined the topics for this podcast. I mentioned then that I don’t approach Trump’s presidency in terms of Republican versus Democrat dynamics. Let’s be honest—he isn’t a traditional Republican president. He’s a businessman, first and foremost, and his actions reflect that identity more than party lines.

Yes, he represents the Republican Party, but that’s more by process of elimination. His focus has always been on self-interest and the interests of those close to him. That’s who America elected, and voters had every right to make that choice. I don’t want to turn this into a political discussion, but the fact is, Donald Trump is a businessman who’s made—and lost—billions of dollars throughout his career.

It would be naïve to think he’ll leave this presidency with capital markets in worse shape than when he started. His ego and self-serving nature mean he’ll do everything he can to showcase a thriving economy. He’ll want to point to strong metrics and say, “Look what I’ve accomplished—corporate America has never been healthier.”

I’m bullish on the U.S. stock market for the next two to three years. That’s not to say there won’t be challenges. For instance, the S&P 500 currently has a price-to-earnings ratio of over 30—an all-time high—which might suggest a pullback is imminent. A short-term sell-off wouldn’t surprise me, but that could create buying opportunities for investors.

I’m less bullish on Canadian markets, especially if Trump’s proposed tariffs and trade restrictions materialize. These could significantly impact Canada’s economy, particularly if we’re operating with a weaker dollar, say at 69 cents. Tariffs of 25% on exports to the U.S. would hurt both countries, but as Canada is often in the shadow of the U.S., we’d feel the impact deeply.

Economically, tariffs don’t benefit anyone—they hurt both parties. My hope is that these are merely rhetorical bargaining tactics on Trump’s part. If so, perhaps cooler heads will prevail, and we’ll avoid long-term economic strain. Overall, I remain more bullish on U.S. equities than Canadian ones, though I anticipate potential pullbacks, especially in the first or second quarter of 2025. These could present opportunities to deploy the higher-than-usual cash reserves we’ve held in client portfolios.

 

Kevin Parton:
That makes sense. It’s helpful to have a clear picture of where portfolios stand, with cash on hand to take advantage of any pullbacks. If Trump’s focus is on leaving office with a stronger economy, corporate America seems poised to benefit. When someone is highly self-interested, you can usually trust them to align with their goals—and those who share those goals may see favorable outcomes.

So, looking at 2025, what strategic moves might you make within portfolios? Are there adjustments in equity or fixed income allocations you’re considering?

 

Keith Allan:
Building on what I mentioned earlier, we’re considering tilting portfolios more toward U.S. equities within our equity allocation. For example, we run U.S. Dividend and Canadian Dividend portfolios, as well as Core Income and Diversified Income portfolios, which include Canadian equity components. Within these, we operate within specific allocation bands.

Given the potential for stronger growth in U.S. equities, we may adjust those bands to increase U.S. exposure in portfolios like Core Income and Diversified Income. For portfolios that are currency-specific, such as Canadian- or U.S.-centric portfolios, allocations will remain consistent within those currencies.

On the fixed income side, things are less clear. While interest rates are dropping, the yield curve may not return to a traditional shape where long-term rates exceed short-term rates. Factors like inflation, currency values, and potential trade restrictions create uncertainty in the fixed income market.

That said, as cash yields decline, there could be an opportunity to reallocate from cash to shorter-duration fixed income assets. If rates drop further, the value of these assets might increase, providing attractive returns.

Finally, we’re also exploring alternative assets to diversify portfolios beyond equities and fixed income. While crypto remains outside our core strategy, we’re looking at commodities, options, and private assets like private equity and private debt. We hope to add private real estate to client portfolios this year as well. These alternatives can help clients achieve meaningful returns while reducing reliance on traditional markets.

That’s how we’re approaching portfolio management as we enter the first quarter of 2025.

 

Kevin Parton:
We’ll see how things start panning out and whether any changes occur. But just to summarize quickly: we talked about last year being a strong year for markets, driven primarily by tech and AI, as evidenced by the performance of the NASDAQ and S&P indexes. Some of the big seven tech companies delivered truly astronomical returns.

We’re now seeing inflation and interest rates start to come down. Cash was a great position for liquidity and yield last year, but that dynamic is beginning to shift. Looking ahead, we may need to consider repositioning portfolios. Based on our discussion, the “America First” mandate and the U.S. government’s approach to corporate America might make American positions in a portfolio more favorable for long-term results.

As you mentioned, this is a day-to-day process. What makes sense now might not hold true in a week, two months, or even three months. However, what always makes sense is ensuring your portfolio’s mix of fixed income, cash, and alternatives aligns with your goals, timeline, and comfort level. Ultimately, the market’s movements don’t matter as much as making sure your portfolio is suited to your needs.

This has been a really informative and enjoyable conversation. On that note, we’ll wrap up this quarter’s discussion. Thank you so much for your insights again, Keith. I’ll check back in with you in a few months.

 

Keith Allan:
Thanks a lot for having me, Kevin. It’s always enjoyable.

 

Kevin Parton:
OK, cheers.

 

Disclaimer

The information provided in the podcast transcript 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 episode of the Polestar Podcast by VELA Wealth, host Kevin Parton interviews Morgyn Chandler, a distinguished lawyer and Managing Partner at Hammerco Lawyers. They explore Morgyn’s legal career from its inception to the present, highlighting pivotal moments that she faced as challenges, which were transformed into opportunities for success. Morgyn emphasizes a human-first approach in her legal practice, fundamentally reshaping her firm’s operations by prioritizing empathy and compassion in client interactions. Her experiences illustrate the critical importance of adaptability—both professionally and personally—demonstrating how such flexibility can significantly influence success for entrepreneurs and business owners.

 

 

Podcast Highlights:

• Learn how the 2008 financial crash catapulted Morgyn to make an unexpected career move, ultimately transforming her into the outstanding lawyer she is today.
• Discover how a significant legislative change in 2019 regarding ICBC personal injury claims drastically reduced the firm’s business.
• Explore how Morgyn and her team champion an empathy-first approach to law, leveraging their understanding of human connection.
• Get inspired by Morgyn’s ability to pivot quickly, focus on the future, and find solutions to challenging problems.

 

About the Guest – Morgyn Chandler

Morgyn Chandler is the Managing Partner at Hammerco Lawyers and leads the firm’s civil sexual assault group. She is a forceful advocate with a successful track record of winning exceptional results for her clients.

With over a decade of litigation experience, Morgyn has a reputation for successful resolution based on persuasive and astute legal strategies. She believes that establishing and maintaining open, honest, and ongoing communication with her clients is critical to ensuring the best possible outcome. In addition to practicing in the areas of personal injury and estate litigation, Morgyn is the practice lead for Hammerco’s civil sexual assault group. She acts on behalf of survivors of sexual assault and is a powerful advocate for her clients against both individual and institutional defendants.  Morgyn believes that survivors deserve to be heard, and respected, and deserve the opportunity to hold perpetrators accountable.

Morgyn is a sought-after speaker in her field and has been named for her work in Personal Injury Litigation by Best Lawyers in Canada since 2020. Learn more about Morgyn at Hammerco Lawyers LLP and get in touch with her on LinkedIn, Morgyn Chandler.

 

About the Host – Kevin Parton

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin is diligently concentrating on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

The Podcast Transcript:

Kevin Parton:

Welcome to the VELA Wealth Polestar Podcast, where we bring together financial experts, visionary entrepreneurs and passionate philanthropists who share not just their expertise but also their personal stories, reflecting on remarkable experiences and offering inspirational insights. I am Kevin Parton, your host for this episode and I’m very excited to introduce our guest and friend of mine, Morgyn Chandler.

I met Morgan nearly a decade ago as part of a business networking group. Over these last 10 years, I’ve grown to know Morgyn as a friend, confidant, entrepreneur and a leader at her firm, as well as within the legal industry. Morgyn is now the managing partner at Hammerco Lawyers, where she’s built a reputation as one of the most dynamic and dedicated legal professionals in the field, and that’s not just my humble opinion. Her journey in law began with a passion for advocacy and a strong commitment to justice, and throughout her career, she has represented clients in a wide range of cases, from personal injury and estate litigation to some more intricate areas of law, ensuring that her clients receive the best possible outcomes. Her expertise and legal acumen have not only earned her many successful verdicts, but also made her a trusted advisor to individuals and businesses. While in the role of managing partner, the firm has expanded its reach and impact, pivoting from the firm’s decades-long focus on personal injury, to a more robust focus on providing top-tier legal services across various practice areas, while navigating changes in the BC insurance laws that have proved to be insurmountable for many other lawyers and law firms to navigate. In addition to her impressive legal career, Morgyn is deeply involved in the community. She’s committed to giving back, whether through pro bono work or by supporting various charitable initiatives. I’ve always viewed Morgyn as a trailblazer and inspiration for women, lawyers, entrepreneurs and high achievers. With that being said, welcome and thank you for being here, Morgan.

 

Morgyn Chandler:

Thank you, Kevin. It’s so wonderful to be here. I cannot believe it’s been a decade since we met.

 

Kevin Parton:

It’s pretty maddening. I’m going to first start by saying I think everyone should practice writing a bio intro for their friends because as part of preparation for this, I got to go through your history and all of the things you’ve done, and over the years, I’ve formed my own internal opinion of how much I admire you. But going through the details is a pretty exciting experience. So, if you or anybody else wants the opportunity to feel grateful for people in their lives, write their bio for them.

 

Morgyn Chandler:

I will write your bio anytime, Kevin.

 

Kevin Parton:

Fantastic. I want to jump into the journey of where you started. We’ll get to how you built up to being the managing partner, and how you navigated pivoting the firm during a challenging time when BC Laws were changing, and we’ll also get to discuss some interesting stories about the importance of estate planning. But for now, I want to start with the beginning. What inspired you to pursue a career in law?

 

Morgyn Chandler:

Looking back, I don’t think that I ever consciously thought I wanted to be a lawyer. But now it seems like such an inevitable outcome and a natural fit for me. But growing up, I knew I wanted to do something interesting, and I knew I wanted to work with people. I came from a family of teachers and social workers and didn’t really know any entrepreneurs or lawyers. Then I got into undergrad, and I was casting around thinking what am I going to do? And thought “Oh well, I’ll write the LSAT and I’ll apply to law school and that’ll open some doors. Sure, why not?”

Then I got into law school and found it interesting, but again, still didn’t really have a concept of what a lawyer did. So, I found myself thinking, “Oh well, I’ll join one of these big firms and I’ll work on these deals with major corporations, and I’ll go that route.” And so I found myself articling at a firm in downtown Vancouver. And each day was more and more mystified by why people would actually do this type of work until I got onto my litigation rotation.

So, when you article at a law firm, they send you around to the different departments, and litigation was not an area that I had ever thought was all that interesting. I sort of thought it was like all the lawyers on TV and didn’t really know what they did. But then I found myself working with trial lawyers, doing trials and it felt like coming home. I thought, this is my place, these are my people. So, then it was about figuring out if I wanted to be in the courtroom, and what kind of work do I want to do? I had a little bit of exposure to criminal defense, but that was not an area that I wanted to pursue. I really admire the people who work in that area. I think it’s incredibly challenging and rewarding, but it wasn’t for me.

I also knew that I didn’t really want to go into family litigation. So, I found myself thinking well, what’s left? Of course, I was articling in 2008 and there may have been a major worldwide financial crisis at the time. So, it was challenging to get hired back by the firm that I was articling with because they didn’t hire anybody back. In fact, across the city, nobody was getting hired back. Then I found myself on the open job market with every other law student in Vancouver looking for a very small number of jobs. I was very fortunate to interview with, as it was called then, Hammerberg Altman, Beaten, and Maglio.

 

Kevin Parton:

Very traditional name.

 

Morgyn Chandler:

Very traditional name. And it was mostly a personal injury firm and, in the interview, I found myself talking about my passion for personal injury. Well, my inner voice was saying, “Just give me a job.” But it was honestly the best thing that could have happened to me. It really was the best place I could have landed. Because I realized very quickly that personal injury encompasses a wide range of areas, it gives you a ton of courtroom experience. It sounds trite to say, but you get to work directly with people, and you get to help them at some of the worst moments of their lives and actually make a true difference in their lives. So that set me on the path, and I haven’t really looked back.

 

Kevin Parton:

Well, I’m sure everyone has a unique story getting into it. If you had predicted where you’d end up before you started, you wouldn’t have guessed it. But like you said, you’re happy where you are. The first thing that comes to mind when you tell that story is; well, I’ve talked to many, many lawyers, and some of them have become maybe a little bit jaded about the profession or the work they do or disengaged. And you mentioned that working directly with people has been a saving grace for you. Do you think that might be why some people become less passionate about the profession? Because you lose that human interaction?

 

Morgyn Chandler:

I think it comes down ultimately to whether there’s a real values alignment and whether you have a purpose in what you do. I do see that disengagement. It is common in our profession as it is in many other professions. Ultimately, I do think that it is a function of people not checking in with themselves, not asking the questions: “Why am I doing this? What drives me? What do I find fulfilling about this? Is this serving me and my purpose?”

I’ve had to check in a number of times over the years to make sure it is in fact still driving me and still aligned with my personal goals and values. And I’ve found over the years that it is and it’s evolved. I evolved from a broad personal injury practice where I worked with people who primarily were involved in car accidents and that type of thing, and my practice now is mostly working in civil sexual assault claims. So, I work with survivors of sexual violence and bring claims against the individuals and institutions that have been complicit in abusing them.

That very much speaks to me and my values and the people that I find myself working with are often vulnerable individuals who haven’t had a voice, maybe they were children at the time, they didn’t have the ability to speak out. Now they’re looking for some accountability. And so, I would never have envisioned myself doing this type of work. But over the last 5-7 years that I’ve been doing it, it really speaks to me, and I’ve found a new passion for the law and for what it can do for people. I think that’s a rarity.

More often than not, people don’t have the agency and autonomy in their careers. Because law, like many professions, is one where it’s easy to get shuttled around into different positions and not have a voice for yourself and think about what you really want to be using your expertise for.

 

Kevin Parton:

I think it sounds like there’s enough areas in law to start with. If someone feels like they’re disengaged and then you say check in with your values and make sure there’s value alignment. I think for many, the fear is in the question, “Should I be a lawyer? Should I do the thing?” That in itself can be confronting. But maybe, that introspection can mean maybe you’re just practicing in the wrong area. You want to be a lawyer, you want to do this, but maybe redirect yourself somewhere within your field, and so it’s not such a drastic change to the point that you have to reinvent yourself 10-15 years down the road. Or if you were pursuing things for the wrong reasons, be it security or more immediate income, and it puts you in a certain direction that’s not feeding the soul.

But it sounds like you’ve started off on the right foot inadvertently. And now, years later, are really aligning both the professional side of doing well financially and running a firm, but also, doing that while practicing in an area of law that means the most to you. That’s something that can evolve over time too.

 

Morgyn Chandler:

That is absolutely true, and I think for a lot of people it’s a scary proposition to think, “I’ve invested eight years of my life of school and articles and the financial commitment of doing that. And now to think I don’t want to do this, and I have to start from scratch.” That’s a really scary thought for a lot of people, but there are so many different areas you can practice in. You can also have a law degree and not practice law, and it still opens the door to so many different careers. You can be a lawyer and apply to be a member of a tribunal that makes decisions about residential tenancy issues or human rights issues or strata issues. There are so many different areas that people can go into, but I think fear holds a lot of people back.

More often than not, lawyers do not have the mind of an entrepreneur. They don’t think about reinvention. They don’t think about the next stage in their career. Beyond the thought of, I’m an associate, then I’m a partner, and that’s that. And that’s a shame, because you have so many wonderful people who maybe have these incredible skills that they could be applying but are a little bit stuck. So that’s one of the things that speaks to me in terms of mentoring younger lawyers, is making sure that they’re aware of all of the opportunities that are available to them and thinking outside the box in terms of what their skills mean? You have critical thinking skills, interpersonal skills, public speaking skills, so let’s look at that, instead of just slapping a label on it.

 

Kevin Parton:

Which I think is huge. Especially the longer you’re in a particular field, the more you start to connect the skills with that field and start to think, I’m only good at this thing versus how are these skills transferable? Then the longer you don’t make massive change, the more you don’t have a story that tells you, you can succeed in that environment, which tends to be why a lot of people don’t change unless some big event occurs that forces change upon them, and then they learn.

I want to start at the beginning now of when you started at a law firm. What was the journey from being an articling student or an associate lawyer to becoming a partner and how did you manage the two different roles? One is a lawyer at a firm doing lawyer stuff and the other, being on the partner track. Where did the entrepreneurial journey fit in there? Because I think those are two very separate tracks. In my experience as an advisor, but also partner at a firm, one is operating a business, the other is operating a practice. So, what did that look like for you and how did it evolve?

 

Morgyn Chandler:

I was so fortunate in landing at the firm that I landed at, primarily because of the people who were there. The people who were there were already operating from a very entrepreneurial mindset, from a growth mindset. To become a partner at that particular firm, you had to build a book of business. You had to build a practice that became profitable not just for yourself, but for other lawyers within the firm so that you could support the growth of the firm. For me, that just made sense. I’m a self-starter, I’m motivated by a lot of different things, I’m ambitious, I’m driven, and so putting that kind of goal in front of me meant okay immediately that’s motivating. I need to develop my skills. I need to become a great lawyer. But now I also have this opportunity, and this opportunity is entirely within my own power. And that for me, was so motivating. It wasn’t like I have to hit these milestones, and I have to do all these legal things. It was like I can get there as fast as I want to and I’m going to get there fast, and faster than anybody else because I had the ability right away to say okay, I need to become a good lawyer so that I can sell myself. So, then I’m going out and selling myself and I’m really good at that. I’m good at talking to people and I’m good at getting them to trust me and I have an unbreakable mentality of ‘I will get that business’, and I don’t know where that confidence came from.

 

Kevin Parton:

Just run with it!

 

Morgyn Chandler:

I ran with it! I had a great mentor and sponsor as well, who was saying from day one “This is what I did, here’s how I did it, but find your own path. You can do it.” Then I was a magpie, going around, picking and choosing what I liked from the various lawyers at the firm and thinking that style doesn’t work for me, but this does, I like how that person’s doing this thing, I like how that person’s built that practice.

A lot of law firms don’t think of building practices the way we did. It’s very much, you’re working with institutional clients, the expectation is that those will get handed down over the years as one lawyer retires. So, you’re trying to woo these institutions and companies, but you’re not out there hustling for your own practice. And I liked the hustle. So, I found myself right away joining organizations that would help me become a better businessperson because I was focusing on law, I knew how to do that, and I had the resources for that. But I had to figure out how to sell myself. What am I selling, what’s my brand, etc. I didn’t have language for it then but that’s what I was doing. So, I had these two parallel tracks where I was learning how to be an excellent lawyer and also building my own book of business so that I could become a partner. At that time, partnership was the ultimate goal.

I never really thought about running the firm. I didn’t know what that was about and I thought that wasn’t for me. But I’m going to be a partner and that’s my goal. So, that’s what I did. And in six years of practice, I built up my skills as a trial lawyer. I also built a practice that was profitable enough that I was invited to the partnership. That was great in terms of meeting that goal. It was so motivating for me for the future. But then, I found after I became a partner and I built this practice that was self-sustaining, I did find myself thinking, “Okay what now? What next?” And I didn’t necessarily have an answer for that question.

Then we were confronted with pretty major changes to the nature of our business and that was an opportunity. Scary for sure at the time, it was very scary, but it was an opportunity.

What happened is, essentially a lot of our business in personal injury was dependent on motor vehicle accident claims and making claims through ICBC. But then the government changed the rules and basically said, “We’re not doing that anymore. We’re moving to a no-fault system”, which means no lawyers are involved. You can’t make claims for damages or compensation. It’s more of a Work Safe BC model where we’ll give you the treatment and care that you need and get you back on your feet, but we’re cutting lawyers out of the system. So, at that point, we’re looking at it and thinking, okay 90% of our revenue right now is coming from the work that we do helping people with ICBC claims. So now what do we do?

 

Kevin Parton:

That’s a huge number.

 

Morgyn Chandler:

It’s a huge number!

 

Kevin Parton:

We’ve talked about this before, where that number probably wasn’t dissimilar for many lawyers or many law firms, there was an entire segment of the market focused on this. What I found incredibly interesting, which I think is also an entrepreneurial trait, is those who have a strong sense of “why” tend to be able to persevere in the face of something like that.

It’s very easy to say no, I don’t care enough or it’s too much work, or I was passionate when it was easy and the money was good, but now things are going to change. So, it can be hard to find that drive if you don’t have a strong sense of “why”. That’s what makes this story exciting. In the face of 90% of revenue coming from a particular area and that well is dry; to say we’re going to pivot an entire firm and navigate other areas of law and become new in those areas of law, is incredible.

So, I’m sorry to cut you off there, but I’m really excited about this having happened and seeing you on the other side. Let’s dive into that now. What was the process of deciding that we’re going to push forward? Was there ever any conversation about throwing in the towel? And building on that, how has it been over the last few years?

 

Morgyn Chandler:

Yes, it’s exciting now that it’s been five years in the rearview mirror.

 

Kevin Parton:

Sure is. Post talk. In the moment, I’m sure it was traumatic.

 

Morgyn Chandler:

Yes, at the time it was traumatic. I think there was a collective moment of silence where everyone in the firm had to take stock personally and say, “Okay what do I want? What’s my next chapter?” Because some of our partners had made their money and they were ready to retire, and they were doing it because they enjoyed it, but they didn’t have to do it. Some of us, who were younger in our mid-30s, and early-40s, got years and years of work ahead of us and we’re thinking, “Where do I go now?”

So, there was that personal stock-taking and then there was a moment as a group, as partners, where we said, “Put it all on the table. Do we fold? Do we run it out and get rid of the files that we’ve got? Do we make money on those and then fold up their tent and go home? Or do we reinvent ourselves?” Collectively, we decided to reinvent ourselves. That was the moment that I was voted in as Managing Partner as well. Which, looking back, was it a vote of confidence or something else?

 

Kevin Parton:

Totally was, for sure.

 

Morgyn Chandler:

It certainly was, but I didn’t know what I was getting into at the time, at all. I will tell you right now that building a book of business and building a successful legal practice is very different from running a firm and a lot of people find themselves in the situation that I was in where you’re really good at what you do, so let’s promote you. It doesn’t work like that. Those skills are not always transferable.

Fortunately for me, I was able to make that shift, and I found myself reinvigorated by that. That was the time in my life when my enthusiasm was waning and I was a little bit unsure of what was next, and now all of a sudden, I’ve got this major challenge. I’m basically reinventing a law firm with my partners, but I’m at the helm of this and I have to think where do I start? So, we had a lot of strategic planning sessions together as a partnership and we decided what we needed to do and that was everything; from the types of law that we wanted to practice, to the changes we need to make to our technology infrastructure, to the rebranding that we needed to go through, we were essentially starting a new law firm now.

We were very fortunate because we had the capital and the infrastructure from our existing firm, which was fantastic, but we had to totally reinvent ourselves from the ground up. One of the things that we did was an analysis of what we had and what we do with it. What we had were skilled trial lawyers, absolutely. Then we identified how that translates to a new sector. Just because you’re a personal injury lawyer, doesn’t mean that’s all you can do. So, we started looking around and thinking what is our purpose. We want to help people. We want to make sure that we are providing assistance to people who would otherwise have a lot of difficulty navigating the system.  I think people have an idea of what that means and the sort of vulnerable individuals who may have difficulties.

But the law is really challenging and accessing the legal system is a privilege for people. There are business owners, entrepreneurs and other individuals who are highly successful in other areas of their life and are doing well financially, but then they get into a legal mess and all of a sudden, it’s overwhelming and they don’t know where to turn. They don’t know what to do or who to rely on. So, you do need to have a lawyer to help you navigate through that. But you need to have somebody who can also understand what you’re going through.

I think that was what we brought to the table– an empathy and a compassion. We always say, we’re human first, lawyer second. We are excellent lawyers (that goes without saying) but more importantly, we’re people who understand that another person is going through a really challenging time, and we’re going to help with that. That means finding the most efficient resolution to the problem.

The other thing we brought to the table, in addition to our skills as trial lawyers, was creativity around billing. We had never been tied to the traditional hourly rate billing model that a lot of lawyers are tied to. Because we did personal injury, we were more often than not on a contingency which means we get paid if we’re successful. If we’re not successful, we don’t get paid. So, we had to think how we could apply that to other areas of law. We found that there was this gap in the market where other areas of law, like commercial litigation and estate litigation lend themselves really well to contingency litigation as opposed to an hourly billing model. We had the resources to be able to do that and to understand that the law firm is taking a risk because they could be doing work for sometimes five years and not getting paid. Not a lot of firms can do that, and we had the infrastructure where we could. So that was a shift that we could make right away. We also saw that class action work tied very much into our values and was a similar billing model in the sense that you have to be prepared to work on these files for maybe 10 years and not see a dime.

 

Kevin Parton:

I was going to say, those are long cases.

 

Morgyn Chandler:

Yes, they are. And not only are you not getting paid on those files for 5 to 10 years, but you’re also carrying the costs of maybe hiring experts, forensic accountants, experts that come with a price tag of sometimes six figures. So, you have to be able to invest in that and not get paid for a long, long time. That’s a challenging undertaking for a lot of lawyers and law firms. We thought, if we do it now we have the ability to take that on. And so, we did. I think the key was not wasting any time. We didn’t sit and think, well maybe it’ll change. This change was thrust upon us, but we embraced it right away. I think that’s a real lesson for people in terms of how you react to change. You can cope with it, meaning you live with it, but you’re sort of fighting it the whole time. There’s still this push/pull and hoping it’ll revert back somehow, or you can absolutely accept it and say this is our new reality. Forget about the past. It’s gone. It’s done. We can’t change it. What do we do with this? And that was very much the mindset that we took.

I think that has been a major reason for our success. This happened in 2019, so we were already embarking on this journey when the pandemic hit. We were already in position to see it as just one more thing – a global pandemic. Throw it on. We got this.

That mindset really helped, because through that time we had changed our name, moved, rebranded, and we undertook learning these new areas of law and hiring practitioners who could teach us. We also purchased a firm on the island. We needed to extend our runway in terms of capital. We knew we needed to invest and one of the investments we could make was in lawyers (and firms) who saw these same changes and chose to retire. We were able to acquire their files that we could see through to conclusion. It was win-win. We were able to extend our reach and allow us to build these other practice areas and get comfortable with those.

 

Kevin Parton:

That’s exactly right. You talked about how when change happens, you can spend so much time fighting the change, and the coping is oftentimes not being willing to accept that a life or a future you thought was going to happen is no longer going to exist. I had this conversation with somebody the other day. I said you effectively mourn the death of a life that you lived, because if you’ve predicted the future in your mind, you’ve lived it, and now all of a sudden that’s not there. So, you’re mourning the death of something, and it stands true when people die as well. There are some who live in denial.

And I think there’s two parts to that. One is, mourn it, it’s okay to be devastated by something that didn’t happen. But if you’re going to let that determine the rest of your life, it’s not going to get better. And there’s a saying I heard that was just that, “Opportunity sometimes comes in the form of change we didn’t predict”. And you’ve got a certain amount of energy, and if you use the energy fighting the change, instead of leaning into the change, you don’t have energy for the other. So, I think the sooner you can say this is the new reality and take all of that energy that would be put into fighting, and lean in, you could start to create something. Like you said, now five years out, it was tough at the moment, but where you are now isn’t where you would have predicted six or seven years ago. But I would argue it’s a much better place than you thought you would be.

 

Morgyn Chandler:

I would agree with that wholeheartedly. I think my partners would as well. All of us find ourselves reinvigorated by the work that we’re doing by the expansion of our skills into different areas. It’s a much more dynamic and interesting time to be a member of our firm and to be practicing. There’s not one of us who would say we wanted to go back. But that doesn’t mean we didn’t spend some time mourning. It’s distracting, but there’s a period where you have to go through that process and understand that the reality that you had envisioned is not going to happen. That doesn’t mean that you won’t get to a similar place or get the end result. It means you’ve got to take a different path to get there. I think that for some people, they just get stuck in that and aren’t able to make the shift and move on.

That’s what we’re seeing now in the in the legal world, we’re seeing that there are firms who didn’t make any shift. They are now realizing that the end is here. You don’t have any more work coming from ICBC if you were dependent on that. There’s not some sort of magic reversal that’s happening. So, you have to deal with it and if you’re dealing with it now, you’re five years too late. Because it took us a long time to do it and to get here. I’m not saying it’s impossible, but you’ve made it much more challenging on yourself. So, I think fighting off change and that resistance doesn’t serve you in the long run, but that’s a hard lesson to learn and I do think you have to go through it to learn it.

 

Kevin Parton:

Totally. And you said something which I think comes only from having to reinvent yourself or pivot. Like I said before, a lot of times this comes from people who experience a traumatic event in their life. When you have to reinvent yourself, you start to learn that your skills are transferable. You’re not just the personal injury lawyer, you’re someone with resilience. Then you trust that whatever future you create is going to be a good one because you’re no longer trying to create a future you can predict. You’re being the best version of yourself today and one day you will get somewhere that you’re proud to be. It seems that it only comes through having to prove to yourself that you can reinvent yourself.

I’m going to jump ahead a little bit, because there’s been two moments in your life where what you thought would happen and what did happen were different. And those are quite pivotal. One is where you thought you might work at a large corporate law firm, and then 2008 happened. The second one being when BC Insurance law changed and then we had the pandemic, and all of a sudden you are reinventing yourself again. So, it seems like a bit of serendipitous circumstance, but like I said, many people get presented with those pivots and they choose the opposite. They cower, or they take whatever the safe route is. I think, going back to you being voted as managing partner of the firm, there’s something about where you see these challenges and think, yes it sucks but how are we going to get through this? You think first of the solution versus the problem.

 

Morgyn Chandler:

Absolutely, it is 100% your mindset and that is something that I’ve learned. When I look back, those are the two pivotal moments of my career that I absolutely credit with where I am now and I’m so happy with where I am now. But it is 100% about mindset and I think you have to be willing to set aside your ego to recognize that what you thought was going to happen, what you worked for is not going to happen. But you can either sit down and cry about it or you can get up and do something about it and find an opportunity and that mindset makes all the difference.

 

Kevin Parton:

There was a lunch that we went to where I was able to leverage you having gone through this for a time in my life where I was in that same boat, I wasn’t necessarily willing to let go of a future I thought I was going to have and was in a little bit of self-pity mode. So, maybe some advice I would give if you’re in a moment like that is seeking out someone who’s walked the path before, who can shine a little bit of light and can be that voice of reason when things seem dark. That was really helpful for me and maybe that will be the case for you.

 

Morgyn Chandler:

Yes. A little bit of self-pity is allowed. Everyone’s allowed a little bit, but it is what you do with it, and I think the difference with you is that even though you were going through that, first of all you have the self-awareness and introspection to recognize it and think, “Ok am I mourning the future that I thought I would have or am I mourning something else?” Asking people about their own journeys and their own struggles helps a lot, but you have to put your ego aside, be willing to listen and to see how other people have gone through it and how that might be the situation that you’re faced with. I think that’s the difference. Having a willingness to engage in a discussion at a difficult time when a lot of people just want to sort of go away and not talk to anybody and deal with it on their own. But you have to be willing to engage and to listen, because that’s probably the biggest thing that can pull you out of those moments.

 

Kevin Parton:

Totally. Well, you did pivot, and you got into estate litigation as a particular area of law. And this is kind of where the podcast focusing on financial areas and what you do in law intertwines most wholeheartedly. What are some areas that you find would be wise to prepare for, in your experience? And what are some stories of what can happen if they don’t? And maybe lead into that with how was your foray into the world of estate planning and what have you learned through that process?

 

Morgyn Chandler:

It’s interesting because estate litigation is, on the one hand, highly technical. You’re dealing with trusts, you’re dealing with tax implications, it’s a highly technical area of law. On the other hand, it’s so personal, because at the end of the day you’re dealing with people. And yes, you’re dealing with an estate and there is money and there is property and there are assets. But the key is you’re dealing with a family and you’re dealing with the family dynamics that have led up to that moment. So, when we talk about money, really, we’re not talking about the money. We’re talking about the family dynamics and everything that led up to that moment.

So, it was a great marriage between our technical legal skills and the empathy and compassion that we were able to bring from having worked with people going through really tough times in their lives looking for compensation because of injuries. For estate litigation, we’re dealing with people at a very difficult time in their life. Someone they love has passed away, so first of all, they’re grieving. They’re dealing with that, but they’re also dealing with the family that is left behind and the disputes over what should happen to the estate. So, there’s a lot of feelings, but you also are dealing with all this technical stuff. Having the background of knowing the law, and being excellent trial lawyers and having dispute resolution skills, was a perfect marriage.

So, that’s how we got into it and my partner, Krista Simon, who now leads our estate litigation. That had been an area that she was thinking of moving into and exploring for a few years before we did. Again, the impetus for that change was the change to our industry that was thrust upon us, and it was the push that she needed to make that move. We’ve all talked about this at the firm. It goes to show that comfort is the enemy of growth, right?

If you have no need to make a move, well, why would you? Everything’s fine. You’re good. And then along comes the challenge or the opportunity that you need, and it pushes you out of your comfort zone. As lawyers, we have a certain level of comfort with the law but still, running your first estate trial is very different, even though you’ve run 50 trials before. That was a challenge, but it was a great area for us to move into and very much aligned with our values and our purpose.

Estate litigation has proved to be an interesting area in the province of BC in particular because we have this unique ecosystem. We have WESA, the Wills, Estate and Succession Act, which sort of governs everything to do with wills and estates. That is a statute that has some peculiarities particular to BC – for example, allowing biological children or spouses to challenge a will. This comes up in the media a lot because at the end of the day, a person should be allowed to do what they want with their estate. It is their property, their business that they built. If they want to give it all to one child and disinherit the rest, well, why can’t they do that? WESA seems to suggest that you can’t, that in fact you need to provide some compelling reason as to why you would do that, or the court can actually step in and say, “Never mind that you wanted 100% to go to, for example, your son, we’re actually going to split it between all four of your children.” The court can do whatever they want.

I think some people feel like this is that an overreach. But at the end of the day, it doesn’t mean you can’t do it. It means that you have to put some thought into planning. I think that’s where our discussion is really important about what are the misconceptions about estate planning and what are the mistakes that people make.

I think number one is people don’t think about it, or they don’t think about it until it’s too late. It’s having to face your own mortality, which is a challenging thing for anyone. But it is our reality. All of us are going to die. We need to think about it now so that we can prepare for what happens. What I found really shocking is the number of high-net-worth individuals with complex corporate structures with multiple properties and developments and everything else, who have no estate planning. They just don’t have any.

 

Kevin Parton:

Do you suppose this is one of those things where comfort is the enemy of change? I hear the story time and time again, and I’ve experienced it, where especially if you’ve got a complex structure, you’re busy and you’ve got a million different things calling on your attention, so it’s really easy to say I’ll get to that later. That doesn’t diminish how important it is, but it makes time management a very justifiable reason to push it off. Unless someone dies in your life where you realize what can happen if you’re not prepared, the first time you’re going to be impacted by not preparing properly is when you die, and your family is then fighting over what’s left…

 

Morgyn Chandler:

…and they’re having to clean up. While I don’t do planning, speaking to my colleagues who do, they indicate anecdotally that a number one impetus for people coming to them and saying, “I need to talk to you about my will/I need to get a will done”, is because someone in their life has died – usually someone who is younger,  a surprise, nobody knew what was happening and all of a sudden, your mortality is very much confronting you. But for some people, that is exactly it. They don’t see it as a high enough priority to make the time. It’s one of those things that you put off until you can’t put it off any longer. But people need to think of it as a fundamental part of the human experience. You go to the doctor, you go to the dentist, you get your estate in order, because if you don’t, then the government dictates what will happen to it and that doesn’t sit well with a lot of people.

 

Kevin Parton:

I don’t think people like the government telling them what they can and can’t do for many things, let alone what they can do with your stuff when you’re not around to help.

 

Morgyn Chandler:

Sometimes, we have clarity at least on what happens if you have no estate plan. But I think an even worse thing that can happen sometimes is that people don’t update their estate plan. That’s a very common issue that we grapple with, is perhaps an individual was married, they had kids in that first marriage, then they got married again. Maybe they had more kids, maybe not. But they don’t update their estate plan, and that includes updating things like the beneficiaries of insurance policies and the like.

So, all of a sudden, you now have a subsequent spouse or subsequent children who are looking at this and saying, “Well, wait a second, that shouldn’t stand, that’s outdated. He did that plan before he even met my mom.” Or whatever it is, and yet you now have to engage in this very expensive and lengthy legal battle to try to set that aside or to prove intentions were different.

Look, I realize like I’m preaching and I don’t necessarily do this, but a will is something that you should be looking at once a year. You should diarize that and note down any changes. Do we have any new corporate entities? Do we have any new properties? Do I have a new spouse? Do we have any new children? Has our executor passed away, or are they no longer comfortable or competent to take on this role?

The choice of executor is a really important one, because first of all, it’s a very involved job. And yes, there is some compensation that they can receive for doing that job. But so often people say, “Well, I’ll just name, one of my kids, or maybe all of my kids, because that’s fair.” Well, that’s a mistake. You need your executor to be able to act and to be able to be nimble in that situation. And if you said, “Well, I’m going to name all three of my kids as joint executors because I want it to be fair.”, then you’re just creating so many difficulties for them after you’ve passed away. And the resentment sets in pretty quickly. All of these factors are things to consider.

I think absolutely at a minimum, once a year, you should be asking yourself if you need to update anything, and if yes, make the time to meet with your lawyer or whoever it may be to help you update your estate plan. That is probably the single biggest mistake that we see is people failing to update their estate plan.

 

Kevin Parton:

You raised a good point there. For those who do get a will, in many cases their circumstances are fairly basic. They may have a job, keep that job for 20 or 30 years. There’s less that might change on a year over year basis. And if that’s the case that you’re using to justify not doing it, or not updating it regularly – understandable. But if your situation is different (if we just look at business owners for example) there are a number of things that can change year-over-year. We see this with planning. You make projections and goals and then the next year, 15 things are different. Having a regular process by which you’re sitting down, and taking the time to review all of the moving parts is important so that you can go back to your otherwise busy life and focus on all the other things.

I realize we’re short on time here and we should have another conversation very specific to some of these stories, because I’d love to get into them, but I want to wrap this up in the way that I’m doing this now, which is circling back to advice for entrepreneurs.

You mentioned something early on about purpose, which is something that I really try and focus on. The more you can align yourself with a purpose or your values, the more the journey of entrepreneurship becomes both enjoyable and not dependent on a particular outcome. So, for people striving to find purpose, what have you done in your life to take stock and make sure that your decisions are being led by purpose or your values?

 

Morgyn Chandler:

That’s a great question. I think when I started truly thinking about it, I was always aware that people talked about values and purpose, and to me it was sort of buzzwords in the background and I thought, “Okay, sure.” But I think when you reach a certain age or a milestone, you get to a point where you have more self-awareness. You have more ability to be introspective and you do start to think about what drives me and what my purpose is. But first of all, it’s realizing you don’t need to overcomplicate it. Your purpose and your values can be really simple things, and they are very personal to you. But spending some time doing some reading or talking to people about their own values can be very helpful. Kevin, you and I have talked about this and had lunches where we will sit for too many hours and think about all of these things, but it’s so important.

I also think surrounding yourself with people who share that desire and that curiosity to think about and spend time on these things is really important because just naming and identifying your values is such a huge starting point and then reevaluating that as well. We’ve talked about a lot of re-evaluating, but just like your estate plan, it is important to look at it and say, “These are my values” that I set out. Maybe you’ve written them down, maybe you just have them in your head, whatever it may be, but they do change over time. They change with you. I don’t have kids, but a lot of my friends do, and I know that when you become a parent there is a change in how you see the world and how you approach things. As you get older, maybe you put importance on things when you were younger that you don’t put importance on anymore. One of the things that we had to look at when we were going through this reinvention of Hammerco is putting labels aside because labels aren’t serving anybody. Look truly at the function of what we do and for us, that was very much about wanting to help people. We want to give people a voice. Now that drives what we do and that drives our purpose. I think spending time on that analysis and giving yourself the freedom to think about your purpose and recognizing that this is equally important to your work as everything else that you do.

 

Kevin Parton:

I think that’s great advice, especially coming from someone who thought they were all cliche terms once upon a time.

The last question from an entrepreneurial perspective, maybe technical, maybe otherwise. What’s the most valuable advice you would share with leaders or entrepreneurs based on your experience now looking back on everything that’s happened in your life and the decisions you’ve made and the lessons you’ve learned?

 

Morgyn Chandler:

The greatest thing that I can offer is to listen. That is the key. That’s the secret – certainly it has been for me. That is the secret to my success because truly listening means you’re accessing all this information that you wouldn’t otherwise. It can be listening to your stakeholders, your clients, your employees, but you should be listening to everybody because they’re offering different perspectives which is so important. So, you don’t get stuck in an echo chamber. Listen to those offering insight into how we can be doing things differently. I think it’s a natural human inclination if something works to think, why change it? But people from the outside may be looking at that and saying, “Man, there’s a better way to do that”,  and you’re never going to know if you’re not listening and you’re not asking those questions.

As a business owner, so much valuable advice can come from your customers and your clients. They’ve seen it-they’ve been on the other side. That was true for me as a lawyer, and it’s still rings very true for me as a Managing Partner. To ask people in the community: What do you think of us? What are we doing that you like? What are we doing that you don’t like? How can we do better?

Our mantra is “Continuous Improvement” – getting better 1% every day, and that is largely because we listen. Then we take what we hear seriously. We think about how we can implement feedback. There’s lots of other things that go along with this, including embracing change and not being rigid, but truly listening is so important. I won’t say it’s a lost skill, but I think it’s really hard to do. It’s really hard to do in this environment where you’ve got so much coming at you all the time. It’s hard to carve out space with no distractions and listen truly and get that feedback and then think about what can I do with that. That is the key to so many great changes that we’ve made.

 

Kevin Parton:

Alright, make space to listen and actually listen. Great advice there. So, before we wind up for anybody who is listening and might want to get in touch for proactive or reactive reasons, where do they find you and how do they go about getting in touch?

 

Morgyn Chandler

Yes, absolutely. I love having conversations just like this, so please don’t hesitate to reach out. So hammerco.ca is our website and you can find my contact information there. You can send me an e-mail, you can give me a call. You can also find me on LinkedIn, Morgyn Chandler.

 

Kevin Parton:

Fantastic, Morgyn. Thank you so much for making the time today. I get the selfish privilege of having lunch with you once in a while and doing this, but I love that we were able to record this and share some of your story with everybody else.

 

Morgyn Chandler:

Thank you, Kevin. That was great.

 

In this quarter’s Polestar Podcast by VELA Wealth, Kevin Parton and Keith Allan unpack the highs, lows, and surprises of Q3, setting the stage for what to expect in Q4. From interest rate cuts that could spark a holiday spending spree to the skyrocketing appeal of gold amid inflation worries, they dive into trends that matter. Also, they discuss TD Bank’s $3 billion fine in the U.S. for money laundering—how will this impact one of Canada’s largest banks?

Keith also shares valuable insights on modern portfolio strategies, moving beyond traditional approaches to include non-traditional assets that offer a fresh edge in today’s unpredictable market. This episode is full of timely insights for those looking to stay ahead in the investing world. Don’t miss it!

 

Kevin Parton and Keith Allan cover the latest in financial markets with some compelling highlights:

• Q3 Market Trends: How did the typically quiet summer months shape up, and what might that mean for Q4?
• Interest Rate Shifts: With new cuts in Canada and the U.S., they discuss the potential impact on holiday spending and the broader economy.
• TD Bank’s Record Fine: A major headline in finance—how will this affect TD’s reputation and future growth?
• Gold’s Unusual Surge: Gold’s standout performance this year prompts a closer look at its role in portfolios.

 

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. To learn more, please visit Harness Investment Management team page.

 

About the Host – Kevin Parton

Kevin Parton, CFP professional, specializes in personal and business financial planning, tax reduction, and estate planning. Kevin is diligently concentrating on client education as a powerful strategy for building financial certainty. As no financial situation is the same, Kevin and his team monitor clients’ plans and implement personalized strategies to reduce their personal and corporate taxes, and protect their income, assets, and loved ones against the financial consequences of a serious illness, injury or death, ensuring clients maintain financial certainty and peace of mind. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

Disclaimer

The information provided in the podcast transcript 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.

 

The Podcast Transcript:

Kevin Parton:

Hello, I’m Kevin Parton, Partner and Senior Advisor at VELA Wealth, and this is the Polestar Podcast. I’m here with Keith Allen, Portfolio Manager with Harness Investment Management and Portfolio Manager at VELA Wealth. Hello and welcome back, Keith.

 

Keith Allan:

Hi, Kevin. Thanks for having me.

 

Kevin Parton:

Well, we like to connect every quarter to discuss what happened in the markets and look at some forecasts for the upcoming quarter, and anything exciting that has happened over the last three months. So let’s start there. When we last talked, we were talking about what was going to happen, what we predicted might happen, if you will in Q3. Some of that revolved around Q3, historically the sleepy quarter; people like to take the summer off, go on vacation. That’s not just specific to people who like to spend money and are not necessarily shopping, but hedge fund managers who would otherwise increase the volume of trades are maybe also not at their desks. Now that we’ve gone through Q3, how did that pan out? What happened in the last three months that aligned with that or maybe didn’t?

 

Keith Allan:

I think for the most part, the summer months kind of followed suit and we saw pretty much a steady to flat market throughout the summer coming out of the summer into the beginning part of fall sort of end of August into September. We did see some strength in the market. I mean we saw the TSX reached an all-time high. This was early last week and there was some momentum coming out of the summer months into September back to school, back to work. But as we’ve kind of approached October and head into October, you could definitely say that we’re starting to lose some momentum in the market and that’s not uncommon, but certainly, as I’ve said in the past, typically the Q4 months are traditionally quite strong. So we’ll see what happens. To your point, Q3 sort of hummed along the summer months, with not a lot going on and this year was much of the same.

 

Kevin Parton:

Well, there’s a few things that happened that I want to bring up and get your take on that happened over Q3 that were interesting. I just want to get your take on them and then we’ll take a look at some forecast for Q4 and some of the things that have happened recently that might influence that. One of the things that I want to cover is interest rate cuts. I was just listening to our last conversation and Canada had been the first country to cut rates, and US hadn’t followed suit well since then. Now the US has cut rates. So, what does that look like as it relates to the market in sort of immediate sense and how do you see this sort of new trend of rate cutting impacting the market?

 

Keith Allan:

Well, last week we saw that the Bank of Canada also cut interest rates by 50 basis points. So, we went from, I believe 4.25 the overnight rate to 3.75. So, they are kind of following suit there and that wasn’t unexpected. I think the consensus amongst most people was that there was going to be a rate cut and it was probably going to be larger. Their typical cut rate is a 25 basis point rate, so 50 basis points was somewhat expected and in fact I heard a lot of people talking about maybe a 75-basis point rate cut, which didn’t come to fruition. That being said, I do have a fair amount of confidence that the next time we will see an additional rate cut and possibly an additional 50 basis point cut. I think there’s more to come on that. What it means is that we have seen the market lose a little bit of momentum; unemployment numbers are creeping up, they’re the lack of GDP growth and just overall growth itself in the economy. Canada has slowed down a little bit and I think a lot of that is the impetus for the Big Canada to cut rates now and look to be cutting rates moving forward into 2025.  I think when we do see a cutting interest rate, the idea is that it will stimulate the economy, provide initiative for consumers to spend and borrow, and try and stimulate that growth within the consumer sector. As I’ve said many times on here, Q4 traditionally has that spending momentum, if you will, when you factor in all the upcoming holidays, the Black Friday, the Cyber Monday and Amazon Prime days, the Boxing Day in December; so, people traditionally like to spend during these fall months. So, we’ll see lower interest rates, lower borrowing costs, more access to liquidity, and more access to money and that should sort of help in that respect.

 

Kevin Parton:

Move things along, which is the idea and so I think it’s like I said, it’s it can spur business growth, which is exciting. It can also increase spending as people are spending money on debt and one of the other things that I would think happened and it’s come up in conversation is as well as interest rates go down, yields in sort of the fixed income or cash space go down and to where a lot of money was parked, getting a decent return, that return decreases that money is looking for somewhere to go now. Something worth mentioning is gold as an asset is coming close to 40% this year and there’s lots of conversation around it. People always hold some amount of gold in their portfolio for a haven. But historically, it’s kind of barely kept up with inflation. And this year it’s kind of on a tear. How much of that do you think has to do with the current economic environment versus how much of it has to do with geopolitical uncertainty? So, you think that with interest rates coming down, that gold stops being appealing? Is there a correlation between gold safety and people feeling stressed in the market and the economy?

 

Keith Allan:

Yeah, it’s actually a really good question, Kevin. I was at an investment management conference last week, and they talked a lot about alternative assets, nontraditional assets, and how to structure portfolios in today’s environment. The last session of the day was on commodities, alternative assets, crypto, real assets, and infrastructure, and the fellow that was speaking put an interesting quote up on the big screen from Warren Buffett, who you know is probably the most sophisticated, best value investor of our generation and has obviously done quite well, but notoriously is not being very bullish on gold. The quote says, “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” We spend all this time taking it out of the ground, melting it down, putting it in the safety deposit boxes, paying these people to guard it for their lives, and it serves no functional utility in society, right? We have this fascination with it, and he can’t understand it. And he’s right. If somebody who didn’t know anything about human beings or planet Earth or how we function in the economy was watching us do this, they’d be like, “What is the big appeal?” So, he’s right in the sense that it has no functional utility. If you were to go to buy a car tomorrow or some furniture, you’re not going to take a bunch of stack of bricks of gold and pay for it. So, what is our fascination with it? I think the biggest thing is that it is a store of value, it is a natural hedge against inflation because gold holds its value and it has shown that throughout time now. To Warren Buffett’s point, and I’ve said this before, it does not provide any cash flow, it is a non-yielding asset class. So, you hear people that are super, super bullish on gold like you got to own gold, you got to own silver – that’s great, but it’s not providing you any meaningful cash flow, all it’s doing is holding its value. So, at some point in time, presumably, you’re going to trade it in for something else. You’re not just going to hold it until the day you die. It’s going to hold its value, and you’re going to exchange it for presumably cash at some point to buy things. So, do I think that there’s a place for it in everybody’s portfolio? Yes, I do think there’s a place for it because it is a diversifier. It’s a hedge against inflation. It holds its value. Am I super bullish on it like everybody else? No, because, again, it doesn’t provide that needed ongoing cash flow that most people need in their portfolio. To your point, Kevin, yes, it’s done incredibly well this year. You could say the same about other alternative assets. In 2020 Crypto did incredibly well, is there a place for it in your portfolio? I’ve gone on record saying that I’m not a huge crypto guy, I still I’m not necessarily a believer in it and I think there are a lot of holes in its functionality, but yes, if you’d like to have it in the portfolio, sure, as a diversifier. Same thing with the gold. I think the biggest reason why it’s done so well is because people are afraid of inflation, and traditionally gold has been a hedge against inflation. So, people drive the price up because more people are buying into it, because they think it’s going to hold its value. So, if all of a sudden there is a recession, I’ve got this gold that’s held its value and now I can get what it’s worth. We’ll see.

 

Kevin Parton:

It will be interesting to see if gold is this sort of thing that stays at this value or do the majority of the people who have invested in gold which is then driven up the value of the commodity, do not see inflation is coming down, interest rates are coming down and need to capitalize on the growth and then the market gets flooded. With gold, and now all of a sudden the value of gold comes back down, it will be interesting to see, and like you said, when there isn’t an underlying value to it, it’s not producing dividends. There isn’t a business you live and die by the price of gold. If you own gold today and then own gold in a year and it’s worth half as much, well, it didn’t matter that it was the highest it’s ever been today. You still hold it and it’s not pumping out dividends. So, it’s interesting how it fits in and again, given that it’s spiked this year, but has been a lagging sort of asset historically. I just want to mention it now because we’ll see in the next few quarters go on, if there does seem to be a correlation between the people’s propensity to buy gold and a high-interest rate environment, a poor economy, and if that changes, people then start to pivot, and we see gold maybe come down in value while other market segments spike.

 

Keith Allan:

Yee, and don’t forget, we’re talking about gold as an asset class now. You can own gold through instruments such as ETFs and gold stocks of gold-producing companies, and there are all types of assets, or you can hold and own physical gold which a lot of people do. There is a tangible aspect for people that do hold physical gold, you can see it, you can touch it, you can hold it, you can feel it. You have it. And that goes a long way with people, and that’s a whole other podcast we can talk about behavioral finance and the feeling of actually being able to touch and hold something, whereas like with the traditional stock. Back in the 1920s, you would have a stock certificate that you would put away in your safety deposit box, but everything’s electronic now. So, there’s no tangible aspect of it. You can hold 100 shares of Apple, but you don’t hold it. You don’t see it, you don’t touch it, it’s on a computer screen. So, for some people, that tangible aspect of holding gold is real. It is part of the fascination with it. I think a lot of people like that aspect of it.

 

Kevin Parton:

I get that. I have comments from people all the time.

 

Keith Allan:

Same as real estate – you can hold it; you can touch it. I see the house I live in. I own this piece of land; I can see it.

 

Kevin Parton:

I was just going to mention that. They understand people need to live in homes and it’s a lack of understanding of what ownership in a company means. What is a share? Well, that’s where people get spooked. The market could go to 0. That’s only said by someone who doesn’t understand what makes up the market. So, it’s a lack of understanding.

Something interesting happened in the last quarter that I wanted to talk to you about, which is the TD Bank. TD Bank got fined for a big money laundering scandal and they were fined $3 billion, which to my knowledge, is the largest fine in history of any. What happened? What do you expect to happen going forward and in the aftereffects of that, where does TD sit in the landscape of trustworthiness and reliability for Canadians?

 

Keith Allan:

Yes, pretty big news. I think it was about 2 weeks ago. That came out in the United States. It’s important that we get our facts straight. So, it was the US arm of TD Bank and over the last several years, TD has made a conscious effort to expand their business operations in the United States, particularly in the Southern United States. They were found guilty of money laundering effectively like funding some pretty shady individuals, cartels, drug trade, and things of that nature and we don’t need to go into the specifics of what, but the reality is that there was a pretty high-level cover-up and it was a kind of a no in secret amongst the regulators and the big industry that had been on this for a while. So, here they are with the largest fine. I think was over $3 billion along with some pretty heavy sanctions against it moving forward. Again, this was in the United States, not here in Canada. So, it’s important we differentiate between the two.

So, reputationally, TD Bank is taking a hit now. I’ll go on record as saying, I still have my mortgage with TD, and my wife and I bank there. I’m not about to pack up and move to another bank because as banks operate, they’re people overseeing different divisions and while the bank itself is one name brand, there is a separation of the arms and how this kind of came down the pipeline and where it was affected. So, it’s important to keep that in mind now, but it did cost the CEO of TD his job. Effectively, he stepped down or was asked to leave, or whether he knew about it or not, it happened on his watch. So,  the safeguards weren’t in effect. It happened on his watch and someone had to take the fall and he did.

We had a portfolio managers meeting last week and we actually have decided to add it to our portfolios at these price levels for a number of reasons, but most notably because although reputationally it has taken a hit, we still feel that fundamentally it is a very sound business. This happened and it doesn’t look great, but TD has been open in Canada for decades and is still sort of a staple in the Canadian financial industry, and a place where people entrust their money, their savings, their mortgages, their loans, and their business accounts. We don’t feel that’s going to change moving forward. I do feel and we as a portfolio management team feel that this is going to perhaps stall their growth in the United States with these sanctions coming down and some of the measures that the US regulators have thrown at them in terms of their ability to expand and grow in the United States, that’s obviously going to affect their balance sheet moving forward. But still, at these prices, we feel it’s attractive. As far as you know, things that are important to investors are their dividend. Based on our research, we feel like this isn’t going to impact, they increase their dividend year over year, and we feel that’s going to be the same going forward. Is it going to increase as much next?  Maybe. Maybe not. But that shouldn’t be impacted and it’s at a pricing level that we feel is very, very attractive from a ratio analysis and just looking at the fundamental aspects of the company.

So, well, let’s call a spade a spade; it’s not a good look for TD regarding what happened. It sounds like they’ve taken the necessary steps toward addressing the people involved, who have obviously been punished, and they have implemented the necessary measures to prevent this from happening again. I think it’s important, again, to differentiate between what happened down in the United States and TD’s operations here in Canada, as they are two separate entities, although they all fall under the TD brand

 

Kevin Parton:

Totally. Well, I wanted to bring it up as I had a number of conversations last year when Silicon Valley Bank went under as well as a couple of other private banks. People were viewing a bank going under as like an entire banking industry recession. There were very big differences between segmented banks and US banks and Canadian banks and what would happen over there in regulation. So, seeing TD, what does this mean?

 

Kevin Parton:

So, how does the U.S. branch differ from the Canadian branch? What does that mean? Was this just an internal issue that didn’t go well and is now tarnishing the brand, without really changing how the bank operates? It’s not the first time, after all. You need to look these things up—it’s par for the course in this industry. It wasn’t that long ago that we were talking about the Panama Papers with RBC, the largest bank in Canada. You have to google to remember exactly what that was. You don’t want to see it, but it happens.

I think what’s important, like you said, is what is the bank doing now to kind of fix that. Are they removing the people who are involved? Are they putting systems and processes in place and are they looking out the front window? Seeing how can we continue to grow and rebuild that brand going forward, and seems at least in the early days.

 

Kevin Parton:

They are two more things that I wanted to get to before we are able to wrap this up today. In the next couple of weeks, we’ve got an election coming up. By we, I mean, we as humanity. It’s happening in the States. What have elections meant for markets in short term? Is there sort of a forecast on what happens to the market over the next couple of quarters if it goes Democrat versus what happens if it goes Republican?

 

Keith Allan:

Well, we saw the last time that Donald Trump ran for and won in November 2016. The short-term effects of a Republican win were positive for capital markets, right? It’s no secret that Trump is a capitalist. He is very pro-business and pro-U.S. business. So, this means lower corporate tax rates and more profits in the pockets of big companies, which should lead to higher earnings and, hopefully, higher payouts. Not always, but higher earnings typically result in more money invested back into the business, which, in turn, should lead to an increased stock price. As anyone knows, the price of a stock is the discounted future value of any cash flows, and if those cash flows are forecasted to be larger moving forward, that will ultimately increase the current stock price. So, in the short term, that’s what it could mean.

Now, in the medium to long term, there are a lot more unknowns. Again, it’s no secret that he has a very protectionist view of the U.S. economy. Tariffs, such as “pro-U.S.” and “buy U.S.,” along with keeping everything sort of closed and in-house, do not lend themselves nicely to overall growth in terms of the U.S. and what it means globally. Many companies in the U.S. rely on global trade and attracting global customers. So, if trade slows down suddenly due to protectionist views and tariffs, that may be detrimental to the growth of the economy in the long term.

As for the overall global economy, typically, as I said, in the short term, if we see a Republican win the election, we can expect some stimulus in the capital markets and potentially an extended bull rally. Democrats are sort of the reverse. Right now, I think the Democratic view has been a little more right-leaning than traditionally, in terms of some of their economic views. But, like I said, if you’re just looking at it as blue versus red, Democrat versus Republican, traditionally, a Republican government has led to more growth in capital markets in the short term than a Democratic win. So, we shall see.

 

Kevin Parton:

Well, it will be exciting to see, nonetheless. The things that continue to come up as we have these conversations—and as I’ve looked at the markets for 15 years—are that the forecasts are great, but a lot of it is really unpredictable. Timing seems to be something that no one can get consistently right. So, there are two things I want to finish off with. One is portfolio management strategy. When you’re looking at the markets as a whole and having conversations with your team, what has happened over the last quarter that impacted how you might be designing a portfolio, and what are some of the things that you’ve changed? This way, people who are listening can understand what is happening within a portfolio. Then I want to move to asset allocation because I think those are two distinctly separate things. One is what’s in the portfolio, and the other is what percentage of your assets are in different types of portfolios. So, we’ll start with portfolio management: what’s happened in the last quarter that you and your team are looking at, and how does this change how you design a portfolio?

 

Keith Allan:

That’s a really good question. As part of the seminar conference that I attended last week, we were discussing ways to be nimble and pivot in terms of how we build out portfolios for our clients. As I’ve said in previous podcasts, the typical 60/40 or 70/30 portfolio is kind of antiquated, right? We don’t look at investing in clients the way we did 2-3 decades ago. You can’t really achieve true alpha in a portfolio nowadays by doing that. So, what can we do? How can we be elastic? How can we be flexible? How can we build our portfolios by mitigating our risk, staying within our risk tolerances, and ensuring we’re not taking undue risk in a client’s portfolio to achieve that alpha, while also diversifying enough to fulfill our responsibilities as portfolio managers? We are not going to act as if, “Hey, I don’t care what this client’s risk appetite is.” You can’t build a portfolio that way, right?

So, what are we doing? We’re looking at other ways to build value and diversify. Whether it’s nontraditional fixed-income solutions—we talked a lot last week about using corporate debt from other countries, such as global debt from South America, Europe, or emerging markets—to find alternatives beyond traditional U.S. corporate bonds. Can we find value in debt from other countries where we may not have previously looked? There may be uncovered value.

We discussed a little bit about gold; can we use commodities, real assets, gold, energy, infrastructure, or farmland to build out portfolios in a non-traditional asset class that would hedge against volatility in equity markets by utilizing private assets? Private equity, private debt, and private real estate carry some risk every time you invest in them, but they also act as a hedge against traditional equity markets and can uncover meaningful value for clients in private assets if they’re willing to accept the parameters that come with it, where your capital is tied up for several years and there’s not a lot of yield there necessarily, but there’s potential for capital growth. It hedges against traditional asset classes, so it’s uncorrelated.

Then there’s the use of derivatives, right? Put-call options. Are you able to write puts and calls and collect the premium on them, and hedge against them if you’re in or out of the money, depending on whether you’re long or short the option? These are ways where you have to become, I wouldn’t necessarily want to say creative, but you need to think outside the box to try to add value from an asset allocation standpoint and diversify what we’re doing for clients, rather than just saying 60% equity, 40% corporate and government bonds, and then washing your hands of it and being done. No, that’s not going to work.

 

Kevin Parton:

Totally. Well, it’s good to hear because I think it’s really helpful that there are multiple parts to building a portfolio if one is to have one or is working with someone to do that. What makes up the equity component? What makes up the fixed income component? What makes up alternatives and cash, and how is that being managed on an ongoing basis to not only be advantageous now but to change with the times in a meaningful way that happens over time?

The other aspect is asset allocation. So, you, as the person who’s investing, need to know how much of your money should be in that equity component versus that fixed income, and that has everything to do with your time frame and your goals—what’s important to you and your appetite for risk. You don’t want to be in a position where you’re so concerned about what’s happening with interest rates—wondering, does that mean I need to get out or stay in? We built this model for you based on your time frame. So, if you have short-term goals, you have enough in short-term reserves. If you’re a long-term growth investor, you’re in the markets, and prices will go up and down.

Even more importantly, I think the significant reason that market returns, portfolio returns, and real investor returns are often so far apart on average is that people behave in ways that contradict the outcomes they want. So, you can have a great portfolio and the right asset allocation. If you don’t have the ability to stay focused on the ‘why’—the end game—and you’re not working with a partner who can help you talk you off the ledge or invest when the opportunities are there, those are kind of the three major ingredients to a recipe for success within the markets. So many people don’t get all three of them right and are left in a worse situation, with a sour taste in their mouths.

I like to end this conversation by focusing on the fact that portfolio construction is really, really important. That’s what you and your team are doing. Asset allocation is also key. Talking and figuring out where your money should be, and then having meetings regularly: Why am I invested? Why does this portfolio make up part of my overall assets? How does it make sense? Why should I stay invested? Why should I invest more? And then coming back to it on a regular basis.

So, I’ll end on that note. Thank you again, Keith, for taking the time. I love going over what happened in the last quarter, and with each quarter having more interesting developments, I’m really looking forward to talking to you in the new year.

 

Keith Allan:

Of course. Thanks for having me, Kevin.

 

Kevin Parton:

Cheers.