Delivering best-in-class solutions for successful Canadians

James: Hello everyone and welcome to this WPTV special. My name is James Burton, managing editor of Wealth Professional Canada, and today I'm delighted to welcome Chad Larson, senior portfolio manager and founder of MLD Wealth Management Group at Canaccord Genuity Wealth Management. Chad, welcome. 

Chad: Thanks for having me. 

James: Now, Chad was recently named one of WP's top 50 advisors for the fifth consecutive year. So huge congratulations to him and his team. And what better opportunity then to find out more about what has propelled his success and how he views the year ahead. So, again, congrats, Chad, on your recognition there. What do you think has enabled you to stand out? 

Chad: Sure. It's a great question. When I look back at my career and how far how far we've come as a group and we've asked this question a lot, I think, and you can answer it in many different parts, whether it be respect to personal drive and kind of how I've approached this business from my own interests, my team, the industry, the firms that I've worked with and and the firm that I'm currently working with, and is a combination of all of those, all of those things. I've been incredibly fortunate. I've been in a partnership and for 19 years in this business and we have built one of the most affiliated multi-family offices in Canada. And we have a great reputation. And so the success snowball is really just getting going and it's with great honor that we're occulated by organizations like yourselves and our industry or peer groups, etc.. But if I had to boil it down to one thing, it's an endless and endless kind of passion and drive to constantly improve, develop and change this industry. The marketplace our clients needs, they continue to evolve. They continue to change with demography, age, taxation, economic conditions. And I think the always putting ourselves in the right position for success is is not it's not luck, it's by design. We work closely and we invest heavily in our people, in our processes, and it's anchored within that philosophy that I share and drive with my partners at delivering best in class results and solutions for successful Canadians. So it's drive and passion. 

James: Excellent. Yeah. Key word. Thanks, Chad. So how did you manage to enhance your business, grow your business, as you've just described last year, which was a particularly tough year, of course. 

Chad: Sure, sure. Yeah, We had phenomenal growth last year in a very challenging environment. So just paraphrasing what you said, I literally just finished presenting to our team our 2023 goals outlook. KPIs that we as partners and have defined as key points that we want to focus on for success into this year. And they're all really anchored on driving more successful client outcomes. The years where there's incredible amount of volatility in the markets are very tough. Truly separates the best from the rest. And we use those opportunities, our positioning strategies in the marketplace with how we approach the management of capital during risk. Risk management is a word that's sloshed around this industry pretty loosely that came to roost. And so as tide's gone out, it was very quick to see who didn't have any pants on. And we were very fortunate to be very well positioned. And so we saw additional consolidation from our clients and kind of the we work our cycle of how we work with entrepreneurs, business owners, C-suite executives. It's not overnight. We don't sell things and we don't even sell concepts and ideas. We have people buy into that process and the people anchored by philosophy. So what? It was just a natural progression that during a period of heightened volatility, it was a call to action for, for many people to, to consolidate with what's working. And we work well. 

James: Thanks, Chad. Now, looking forward, you said you mentioned that you've set out your goals for the year. With that in mind, what do you see as being the biggest challenges that 2023 is going to bring and crucially, where the opportunities are for you? 

Chad: Yeah, sure. The the challenges that I see in front of us are self-imposed. I think like anything and maybe sometimes to a fault, we're always looking at how do we improve, how do we change, how do we get in front of things. So a lot of the challenges that we face are self-imposed because status quo is, I think, where the average goes to die. So I think one of the biggest challenges that we face and I've been semi-public on this in the past is staffing. Like, we're growing. We want to hire additional people. We've got roles. We do have an office now in Toronto and in Calgary looking to expand both. I spend a significant amount of my time on both sides of the country and and we're going to need people. And there's I don't want to say talent drain by any stretch of the means. But as we have a clearly defined multi-family office, we want to continue to invest in people to service the growing client base, but we won't sacrifice the service and results that we give to our clients. And so we have to invest in people ahead of that to to solve for the growth that we see in front of us. And that in itself is the opportunity. So you never waste a good crisis and with challenges is the self imposed challenges are to meet the opportunities that we see very clearly in front of us. 

James: Great. Now, I wonder if you would mind giving us a little glimpse. Lift up the hood somewhat on your investment strategy, then, for the year ahead. Sure. Have you changed anything in particular? Maybe asset allocation or certain focuses on sectors or anything? Maybe you could give us a little glimpse into your thinking portfolio level? 

Chad: Yeah, sure. I always try to stay really high level and talk about the business more than on it. But understandably, we ha ve to get you know, got to get down to the turkey, so to speak. And I think maybe if you were hinting at that, some of that during the opportunities and challenges, the marketplace continues to always throw challenges in front of advisors. And in those challenges are the opportunities. We were very successful last year by kind of ahead of 2022, being underweight tech and being overweight energy, maintaining our place within within the fixed income realm because of the scale and scope of our business and the relationships that we've cultivated with some of the best credit managers and across the globe. We didn't suffer the drawdown that was was achieved by the conventional 6040 advisor or advisors that were caught long. A lot of equity and a lot of tech, especially this year. We we we're sitting in an enviable position still with an incredible amount of liquidity and cash. The risk free rate of return is such that you have to you know, the opportunities really have to be good to kind of pry that cash out of our hands right now. The deployment, we have made a call on duration. It's early, but the worst is over. So very recently we've added long duration, if and when, and eventually rates will start to come down. That place that really crucified investors over the last year and a bit, that was the fastest rate hike we've seen in modern history. So anyone caught with long duration, you really got hurt. That's going to create an opportunity for us On the rebound. Metals and materials, I think will drive us forward through phase three of the economic cycle. We're already seeing investors that have a meaningful gold weighting have an incredible start already to January. And so I think the the large cap gold's are going to do great. Oil feels iffy right now. It was, it performed so well over the last 12 and 18 months. It was a place to harvest, I think, in December for a lot of people that needed to window dress and put some gains on the books. But we're seeing a lot of smart money starting to build. I think there's there's some trepidations. There's two sides of the coin that are very loud with what's going to happen with the demand picture and whether China maintains their zero COVID policy and demand ramps back up. But valuations remain such that we remain exposed to the pace space. And listen, even revisiting some of the not all tech created equally, there's some phenomenal companies with recurring revenue with credible balance sheets where valuations have been halved and more that are free cash flow generating. Not talking about the unicorns at a billion times earnings and no tangible path to profitability. There's I think I saw statistic. It's in the neighborhood of over $3 trillion of dry powder in buyout private equity funds and they're hunting tech companies right now, profitable tech companies. So I think there's going to be opportunity there as well. And so stick handling duration on the fixed income, I think there's going to be actual money to be made in that in that space. And then really looking at sector allocations, I saw another statistic yesterday. This was from a I can't remember who, so I don't want to quote it so we don't get fact checked, but I believe like an equal weighted S&P ETF as now over the course of five or ten years beat 99% of active managers in US equity. You know, not getting caught and not going to getting our job is not our clients are wealthy. Our job is not to be the rightest in the room. We don't need to find the next Facebook and make our clients into debt and send to millionaires. They are already. Our job is to preserve and protect their wealth and earn a fair share of market return. And I think I love markets like this because there's phenomenal deep value dividend paying stocks, trading at single turns and under double digit returns of earnings that that make a lot of sense. I think there's going to be a really fun year. That being said, I did give an outlook in January. We do expect the front half of the year to be very choppy. You know, the bull market is not here yet, but I believe that into the back half of the year, the market will start to discount 2024 and we're going to have a strong year. 

James: Fantastic. Great answer. Finally, Chad. And you've alluded to this throughout today's interview, but where to next? What ambitions do you have personally and as a business? 

Chad: Yeah, that's great. You know, I think I'll probably touch on it with some. Call it the fuffy stuff first. We really want I personally want to continue to be a great business partner, a great husband, a great father. All of those things you know, keeping, being mindful, being spiritual, and making sure that we're the the pace at which we operate this business, the pace of which capital markets unfold, the pace of which things happen can very quickly distract you from your kind of core principles. So your personal goals are always around being a high quality person and and being able to be mindful of my own body and self within our business. Whether I look it or not, I feel like I'm only mid-career. I'm 42 years old. I have a lot of runway in front and I think things have just they've gained so much traction. And I'm so excited about expanding and continuing to helping our clients and and growing the business. There's many, many years down the road where I before I have to look at slowing down and so just really excited. The ambition is to continue to maintain the caliber and quality of which MLD operates at and continue to help more and more people achieve positive outcomes. 

James: Great. What a fantastic way to finish it off there. And that wraps up another WP TV special. Thanks so much, Chad, for joining us and for sharing your insights. 

Chad: Thank you for having me. Always a pleasure. 

James: Thanks, James. You can find more information on Chad and his team at mywealthmanagement.ca And don't forget to check wealthprofessional.com for all the latest news and views on the industry. And if you haven't already, please sign up to our free daily newsletter. I'm James Burton. Until next time.