As 2017 draws to a close, it will be four years that I’ve been President & CEO of CWB McLean & Partners. As we’re half-way through the last month of the year, this strikes me as a good time to reflect on the past, share the present, and look to the future.
Since CWB McLean & Partners was founded in June of 1999, the one thing that hasn’t changed is placing our clients at the heart of everything we do. When Canadian Western Bank (CWB) made a majority purchase in April 2013, one of my priorities was to work with CWB to evolve our research team and process so that we were providing consistent value-added returns for our clients. We redefined our research process and investment philosophy. We added additional investment talent to the team—today we are at eight professionals, the largest it’s been in our history. Most importantly, we developed a foundation of trust, collaboration, and learning within our team. The team we have built today continues to be committed to life-long learning and improving, with the ultimate goal of being better stewards of capital for our clients.
Challenges to our industry have been prevalent as we face constant and unrelenting change. These changes are empowering investors and forcing players in our industry to adapt or face an erosion of their business. I highlight three key ones below:
- Transparency in Value: Regulatory change (CRM2) forced increased transparency to better equip investors on truly understanding the investments they are in and the full suite of costs they are incurring. This means a lot of questions were and are being raised on the real value of advisors. We agreed with and embraced what this new regulation stood for – more well-informed investors. Prior to CRM2 coming into play, we were already proactively disclosing our fees and the value that our clients were paying us for.
- Explosion of Passive Investment Strategies: These investment styles, driven by the explosion of ETF mandates, are challenging the value of traditional active management – so the mindset then is ‘if you can’t beat it, why not match it?’ Here lies the reason why passive investing has experienced meteoric growth recently, as investors abandon active management. In select markets, the US in particular, the majority of active large cap managers have underperformed the S&P 500 benchmark index on a 5- and 10-year basis. As we have mentioned before it is important not to extrapolate the past into the future, and studies from Morningstar indicate this is definitely not the case across all markets, especially global and international markets. Our belief is that while investment strategies fall in and out of favor, the value we add in helping our clients make their world better will not waiver.
- Information Overload: We’re living in a digital age where news, information, and data is at the click of our fingertips. With the abundance of and exposure to all this information that was once only accessible to investment advisors and managers, many are under the assumption they are now able to manage wealth on their own and navigate markets armed with a firehose of daily noise and information. Our clients come to us to cut through the noise and for our disciplined team to obsessively focus on the fundamentals, while executing on our investment process and philosophy. They come to us to weather fleeting storms and chart a steady course through uncertain times.
As we evolved our investment engine and navigate through industry changes, it is also important to evolve how we communicate with our clients and to the world at large. We had to ask ourselves; who are we as a firm, what are our core beliefs, and how do these beliefs make us different? This seems like a tall order, but we soon recognized that the building blocks were all there – at our core. Our commitment to putting our clients first, to really understanding what their investments mean to them, and to growing their wealth by researching and following the fundamentals of businesses—not the knee-jerk fluctuations of stock prices – this was already baked into our DNA.
We put together a video that I hope speaks to you as it does to us. It conveys our story on why we exist and has elements of the foundation of our past, refinements of the present, and an evolution of the future. We believe our clients come to us for “ears that are open, hands that are stable, and eyes that are fixed on the destination – not the bumps in the road”. By listening to our clients, learning and adapting to change within our industry, and sticking to the fundamentals, we believe we have an edge in serving our clients well. We are excited to embrace the present and look to the future as a proud part of CWB Wealth Management, where we have access to resources and solutions that benefit our clients, and combined we can take advantage of synergies that make the CWB Wealth Management group stronger.
I am proud of the message this video communicates, and most importantly, of our current team that brings it to life and gives it meaning. I hope this goes some way to illustrating the unshakeable philosophy and determination that pervades CWB McLean & Partners today.