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How small investment firms have mobilized amid the COVID-19 crisis – The Globe and Mail



For small dealers such as Odlum Brown, PWL Capital and Belay Wealth, the COVID-19 crisis has been a test of their business-continuity plans, and they have had mostly positive results.

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The COVID-19 pandemic has been an adjustment for most financial advisors, who have had to work from home and meet with clients virtually amid extreme market volatility, but the experience has been a bit different for those at smaller firms.

Accessing resources to work out of the office, such as additional computers, telephones and extra internet bandwidth, has been a challenge for smaller firms – especially when competing with bigger counterparts seeking the same equipment and services.

But for smaller firms and their advisors, this size has allowed them to be more nimble when it comes to helping clients find solutions and cope with the fallout from the pandemic. The COVID-19 crisis has also been a test of these firms’ business-continuity plans, with mostly positive results.

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“When you’re smaller, it’s much easier to mobilize,” says Debra Hewson, president and chief executive officer of Vancouver-based investment management firm Odlum Brown Ltd., which has about 100 advisors across five offices in British Columbia overseeing about $15-billion in client assets.

Odlum Brown has invested heavily in its remote access platform over the past 18 months, ensuring it was accessible and secure. The inspiration, in part, was an increasingly mobile workforce – as well as the possibility of an event that could force staff to work away from the office, such as a power outage or earthquake.

“We did it for business continuity reasons,” Ms. Hewson says. “We certainly didn’t plan on a pandemic, but when COVID-19 hit, we were fortunate to be able to mobilize our people to work from home really quickly. When they turned on their computers at home, they had the same experience, technology-wise, as if they were in the office. That was really helpful.”

She says the client experience was relatively seamless, except for the inability to meet in person due to physical distancing requirements, which was difficult for some during the market meltdown in March.

During that volatile period, in particular, the firm spent a lot of time communicating with each other and with clients through different channels including e-mail, telephone and video calls, “because everyone takes information differently,” Ms. Hewson says.

“I’d like to say it was business as usual for us, just a bit more frequent. I’m quite proud of that. It’s not like we had to come up with a new way of doing things. A lot of this we were already doing, we just ramped up the regularity,” she says.

One of Odlum Brown’s biggest challenges was finding computer equipment for advisors who suddenly found themselves working from home, in particular monitors to use as second screens. It turns out many companies, across many sectors, were looking to buy the same products.

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“The challenge was finding stores that still had them in stock,” she says, adding that they were able to source a large supply of monitors through an advisor’s connection.

For Montreal-based PWL Capital Inc., which has 26 advisors across four offices managing more than $4-billion in client assets, a challenge at the start of the pandemic was getting its telecommunications provider to boost its internet bandwidth to enable employees uninterrupted access to its virtual private network.

Telecom networks were under a huge strain when the pandemic first hit as so many companies were relying on remote access to support their at-home workforces.

“We’re not the Royal Bank, saying, ‘Improve our VPN.’” says Brenda Bartlett, PWL’s president and CEO. “Being a smaller firm, we don’t always get the telecom provider’s attention right away.”

It took a couple of weeks before their connection was smooth, “which seems like an eternity,” especially amid the market upheaval at the time.

PWL itself was well prepared for the pandemic, Ms. Bartlett says, having made a significant investment in its technology and infrastructure three years ago, including beefing up its remote access capabilities for advisors.

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“We did it to ensure that our client-facing teams could go out and meet clients and be fully functional … and didn’t have to be nailed down to a chair at the office to get anything done,” she says.

“When COVID-19 hit, it was the best test of our business continuity plan. If it happened three years ago, I don’t think I could’ve made that statement. … I’m very proud of my team who mobilized to do everything to make it work,” she says. “From a client experience, it has been virtually seamless.”

Meanwhile, Dahlin Sabey, founder and CEO of Calgary-based Belay Wealth Inc., a mutual fund dealer with about 30 advisors across Canada who manage about $750-million in client assets, says the pandemic hasn’t had much of an impact on his firm’s operations. In part, that’s because Belay Wealth was created in late 2018 as a mostly digital firm relying on its own proprietary software platform to run client accounts.

“When COVID-19 hit, it didn’t actually change our operations at all [because] we were already 100 per cent online,” he says.

In addition, having a small team meant the firm didn’t need to implement blanket protocols. Instead, the dealer worked with advisors individually to come up with their own ways to do business safely.

For example, one advisor in Victoria purchased plexiglass screens to put between him and clients who still wanted to meet in person.

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“Being a smaller firm, we know our advisors and what they need … instead of just sending out a memo to everyone to saying, ‘These are our rules,’” Mr. Sabey says.

He points out that these small-firm advantages have attracted more interest from outside advisors during the pandemic.

In normal times, Mr. Sabey says he’d receive about five calls a week from advisors potentially interested in joining his firm.

“Now, we’re fielding about 40 calls a week,” he says, many of which have been unhappy with how their larger firms have handled the pandemic.

Smaller firms can be more flexible and agile, including during times of crisis, he says. “That’s how we compete [with the bigger firms].”

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Singh: New measures should be seen as an investment in Canadians | Watch News Videos Online –



NDP Leader Jagmeet Singh talks to West Block host Mercedes Stephenson about the deal he struck with the Liberals to support the throne speech and avert an election after the government agreed to expand access to paid sick days amid the coronavirus pandemic.

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1 Must-Have Investment If You're Worried About a Stock Market Crash – Motley Fool



After a devastating crash earlier this year, the stock market made a stunning recovery in the months that followed.

However, the last few weeks have been rough on the market. The S&P 500, the Dow Jones Industrial Average, and the Nasdaq have all slid into correction territory, each dropping by roughly 10% since early September.

While nobody knows for certain whether a bear market is around the corner or not, it’s wise to prepare for a market crash anyway. And there’s one investment that will give your savings the best shot at recovering from even the worst market downturn: S&P 500 index funds.

Image source: Getty Images.

S&P 500 index funds boast two major advantages: They provide instant diversification, and they’re extremely likely to bounce back from market downturns. Both of these perks can play in your favor if the market continues its downhill slide.

1. Instant diversification

When you invest in an S&P 500 index fund, you’re actually investing in 500 of the country’s largest companies at once. These organizations have a proven track record of success, making them more likely to survive tough economic times.

In addition, spreading your money across hundreds of different stocks can limit your risk substantially if the market continues to fall. Even if a few companies within the S&P 500 take a nosedive, it won’t cause your entire portfolio to plummet.

Of course, the S&P 500 itself could take a turn for the worse, and the index has already experienced a decline over the last few weeks. However, no matter what the market does, S&P 500 index funds are among the investments most likely to recover from a crash.

2. Almost guaranteed recovery

Nothing is ever guaranteed when it comes to the stock market, but S&P 500 index funds are about as close as you can get to guaranteed recovery after a market crash.

As their name implies, S&P 500 index funds track the S&P 500 — so whatever the S&P 500 does, the index fund will mimic it. Historically, the S&P 500 has always recovered from every downturn it’s ever faced. Even after the Great Recession in 2008, as well as the unprecedented crash earlier this year, the S&P 500 managed to bounce back stronger than ever.

^SPX Chart

^SPX data by YCharts

Again, nobody knows whether the current market downturn will get worse in the coming weeks or months, but even if it does, there’s a very good chance the S&P 500 will recover. There will always be ups and downs over the years, but in general, the S&P 500 has experienced a strong upward trend over time. That means even if the market crashes, it’s extremely likely your index funds will recover.

Is it the right time to invest?

S&P 500 index funds are long-term investments, and there’s never necessarily a bad time to invest for the long term. In fact, market downturns are one of the best opportunities to invest, because stock prices are lower, so you can get more for your money.

The key is to make sure you can leave your money alone for years or even decades after you invest. S&P 500 index funds do see positive returns over time, but like any investment, they are subject to volatility in the short term. So to make the most of your money, your best bet is to invest and then sit back and wait.

A market crash may be looming, but that doesn’t have to be a scary thought. By investing in the right places and taking advantage of S&P 500 index funds, you can give your money the best shot possible at surviving a market downturn.

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Former blockbuster investment funds fall from grace – Financial Times



Blockbuster funds that previously ranked as the largest in Europe have undergone a spectacular downfall over the past decade.

Former star funds managed by investment groups including Standard Life Aberdeen, BlackRock and Franklin Templeton have shrunk to a fraction of their former size after losing favour with investors as quickly as they earned it.

SLA’s well-known Gars fund, a multi-asset strategy that ranked as Europe’s largest fund as recently as 2017, when it managed a combined €38.6bn, now has just €4.5bn in assets, according to Morningstar, the data provider.

Franklin Templeton’s Global Bond fund, run by veteran fixed income investor Michael Hasenstab, has had a similarly pronounced fall. After dominating the investment industry in 2014, when it had €30.2bn in assets, the fund now stands at just €7.7bn.

BlackRock’s Global Allocation fund has shrunk from €35.8bn to €12bn in just three years, and Carmignac Patrimoine, run by veteran French investor Edouard Carmignac, stands at just €10.8bn, down from €30bn at its peak.

The trend underscores how popular funds’ sharp growth can also lead to their undoing. Investors pile in when managers perform well, but when funds grow to a large size, their returns tend to drop off, resulting in outflows.

“Large funds are vulnerable to boom and bust dynamics,” said Morningstar’s Ali Masarwah, who carried out the research. Not only do giant funds drive up the valuations of the securities they buy, which makes future outperformance more unlikely, they are also less flexible than smaller funds due to liquidity risk considerations, he added.

Just one out of eight former blockbusters analysed by Morningstar beat its benchmark in the period immediately after ranking as Europe’s biggest fund. The data excluded money market funds.

Separate research from data company Broadridge found that only a quarter of the 100 best-selling active funds in Europe continued to attract positive investor flows three years after peaking in size. “Today’s flow winner is tomorrow’s loser,” said Chris Chancellor, senior director at Broadridge.

The findings come after Pimco’s €57bn Income fund lost its place as Europe’s largest fund last month after taking a hit during the market sell-off sparked by the coronavirus pandemic.

The fixed income product run by Dan Ivascyn, the “bond prince” who replaced Bill Gross at Pimco, lost €22bn in March because of a mixture of negative market movements and investor outflows.

Pimco Income now ranks behind Swedish equity fund AP7, which took the top spot after being boosted by the rally in global stock markets during the second quarter.

The Pimco fund’s performance has improved in recent months but investors have not piled back in at the same rate as before the March rout, said Mr Masarwah. He suggested that some investors were diversifying away from the fund because of concerns over its large size.

“Big is not always beautiful,” said Mr Masarwah. “Letting funds grow too large may be in the interests of fund companies but it is not in investors’ interests.”

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