Hands-on, customized approach to exclusive client base

James: Hello everyone and welcome to this WP TV special. My name is James Burton, managing editor of Wealth Professional Canada. And today I'm delighted to welcome Thane Stenner, senior portfolio Manager and senior wealth Advisor of Standard Wealth Partners, plus CG Wealth Management. Thane, thanks for joining us. 

Thane: A pleasure. Absolutely. Thanks, James. 

James: Now, Thane was recently named in WP's Top 50 Advisors for 2022. So a huge congratulations to both him and his team. What better time than to pick his brains and find out a little bit about what makes him tick and a little bit about what has driven his success in the business. So, Thane, again, congrats on being named a Top 50 advisor. What do you think has enabled you to stand out? 

Thane: Probably comes down to three or four really important focuses, and one is always keeping the client's interests in mind first and foremost. So whether it's investing on their behalf or how we service them from a perspective of response and accuracy and timeliness of those responses. At the end of the day, we are in a service business and in our particular practice we've got 45 clients from across Canada. In the US, they're typically 25 million plus net worth up to over a billion dollar net worth. So they expect very high attention detail and a very sharp group that they want to be dealing with. So I'd have to say that you have to be intensely focused on the service model and try to proactively always being ahead of the curve from point of view what what they might be needing. 

James: Thanks, Thane. Now, you don't need me to tell you that last year was a bear market and a tough one for many investors. So how did your discretionary portfolios perform? 

Thane: Fortunate and blessed to actually be flat, which is one of those years I've been in the industry 33, 34 years now, and I think our team probably worked harder than it's ever worked and was very tactic and active in kind of moving things around. And we came up with a flat performance, which relatively speaking is great, but I don't think we've ever run that hard, but still so happy happy. But it was a lot of work to kind of get that result. 

James: Yeah, given what you've just explained there, how did you still manage to grow and enhance your business given those challenges were obviously put in front of your team. 

Thane: Yeah. So well I think again, first focus is, focus on your clients before you focus on new clients. And I think because of that, our existing clients, through word of mouth and introductions, introduced us to other people. And when bear markets happen, which I think I've been through five now in the last 33 years, you learn that unfortunately a lot of advisors kind of put maybe put their head under the desk when things get tough, whereas I love bear markets, quite candidly, because it allows us to step forward and stand out. So I think because of that, we're very, very fortunate. I think our assets this last year were up over 50% alone. So, so very blessed when that came about from about six or seven new clients, we only take on maybe eight clients, new clients a year because it's a very exclusive practice. 

James: You have some great insights there, Thane. Thanks so much. Now, there's been a lot written about 2023 and the year ahead, much of it doom and gloom. And the word recession has obviously been mentioned regularly. So but from your perspective, what are the biggest challenges and opportunities for you over the next 12 months? 

Thane: Well, we we believe we're only partway through this bear market. It wouldn't surprise me if it lasts another. Tend to 18 months, quite candidly. So we've got a shopping list, well researched, where we're kind of knowing the things we want to buy at cheaper levels. Currently, right now on our discretionary portfolio, we're 55% cash, which is unusually high for us. So that clearly telegraphs that we're extremely defensive right now. And I think the reality is what you don't want to be doing as an investor or advisor is. Trying to do research during panic phases. That's too late. You kind of need to know in advance what you want to own. Before we get to that kind of panic phase, we're not we're not even close to yet, in my opinion. Markets are down, let's call it 18, 20% in the US and over 30% in the Nasdaq and bond market had a brutal year last year. So what we want to basically do is be very ready and tactical and opportunistic when things get to what I summarize as a non technical phrase to the puke phase. We're not at the puke phase yet. Puke phase is when fear is really high. So, yes, there is a lot of talk about recession. I do believe there's going to be a recession tail at some point technically in 2023, and it may even bleed over into 2024. But it's people are still, I think, a little bit too casual about it. I think earnings are going to disappoint here. Corporate earnings, I think over the course of the next 6 to 9 months, I think that's going to give us another really strong buying opportunity. 

James: Really interesting about your cash allocation there. I think a lot of advisors will find that really intriguing sort of building on that and what you've just said about your sort of an investment strategy for 2023 lifting under the hood, a little bit of that. You know, what can you tell us about what you are doing for your portfolios heading into the rest of year? 

Thane: Excellent question. So I would say, James, where first of all, for the first time in a long time, we've bought long bonds, very long bonds in the last month or so. And the reason for that is if we are going into recession, long term yields will drop and the long term bonds will go up. So that's one area. Secondly, interest rates, short term interest rates look like they're likely to peak here in the next 3 to 6 months in that type of environment. The US dollar will probably weaken and in that type of environment, gold miners, silver miners, commodities should actually do really, really well. So we've got some exposure there. And again, 55% cash or at least we're getting close to 5% yield on that money, whereas that would have been very difficult to do two years ago, for example, when interest rates were basically pennies on short term cash. So as far as the areas that we're going to be looking into, tech stocks, in my opinion, would have to get a lot cheaper before we step in. But they might they might go down another 20 to 30% and then we'll get really interested. Another area that we're getting ready to step into is REITs, publicly traded REITs. Just to give you an example, publicly traded REITs right now are trading at anywhere from 20 to 50% discounts off their net asset value. As opposed to private REITs, which we don't think have been marked down enough. So I think this is one of those scenarios where if rates are peaking starting to come down, you've got public REITs that actually could be a pretty strong buy. So we're pretty close to pulling the trigger in that area as well. 

James: That's great insights. Thanks Thane. or those who don't know much about your practice, going to dive in a little bit in terms of your type of clientele. So you have a team of 16 professionals that service exclusive clientele from across Canada dealing exclusively with the top 1/10 of 1% of all investors in the marketplace. And typically correct me if I'm wrong, but these investors tend to have at least 10 million in investment capital and net worths of at least 25 million to 1 billion. Now, this is pretty rare in the wealth management space in North America. So just to dig a little deeper into into that into some of those details. How many clients does your team serve? 

Thane: Yes, we serve 45 clients from across Canada and a few in the US. So we have 16 people. So our our staff to client ratio is 1 to 3. So we're very hands on. All 16 of us have a customized service plan that we put into place for each household and we proactively reach out to every single client, typically on a weekly basis, whether it's via email, phone call, Zoom meetings, et cetera, etc.. So and that doesn't include them reaching out to us for questions around the portfolio. So if we had 400 clients, there's no way we could do that, right? You simply couldn't be that hands on. So we're very proud. There's lots of great, successful people in our industry that do great business, that have some of the top people in Canada have 2000 clients. We've just chosen to go really deep, very narrow in our focus and the types of clients we want to deal with. 

James: Yes, we're interesting. You obviously described high level of number of touch points there. What types of clients are they? 

Thane: Two types. Mainly highly entrepreneurial. So business owners that either own successful businesses or have gone through liquidity events. And secondly, family offices, we deal with a number of pretty sophisticated family office groups across Canada as well. So those are the two primary ones. 

James: You alluded to this earlier, but how many clients do you typically engage with each year as you're growing? 

Thane: Yeah. So again, not taking our eyes off, serving our existing clients. So basically we'll on board anywhere eight, six, 6 to 8 clients a year. We talk to a lot of people, were introduced to a lot of people and we build relationships gradually. So I think that seems to work well for us. And obviously how can I put this? But obviously there has to be a mutual fit. So from an ideal client perspective, we're not just looking for how much capital they have. We're also looking for personality fit and also just values fit, quite candidly. So we love dealing with entrepreneurs and we love dealing with family office groups because they're dealing with some pretty sophisticated and successful people. So at the end of the day, it kind of comes back to we want to deal with really wealthy people, but we also want to deal with people that are really good, nice people kind of family oriented. So, yeah. 

James: That's great. Thane, thanks so much. You talked earlier about the ratio of team members to clients and the number of touch points that you're able to provide to clients. Is there anything else you can tell us about the way you service this, the high net worth individual that you have on your books that maybe others who are trying to do this similar thing don't do? 

Thane: Well, I think, first of all, we have very proactive approach. So when we. Meet prospective clients or existing clients. We try to map out a game plan for them. And so whether it's wealth, estate planning, whether it's philanthropic services or planning for the family, a lot of these families are very philanthropic. And recently in the last year or so, we've helped families facilitate efficiently and strategically over $80 million worth of capital to charities and foundations and things close to their heart and their communities. So interesting conversations. So one of the things I find is instead of kind of coming with. You know, suggested solutions to them all the time. What we've learned to do is ask really good questions first. So if you do that, they'll tell you what they want. And so whether it's estate planning, wealth management, investment management, tax optimization of the portfolios risk assessment on different investments, due diligence on things that they're seeing from us and other other channels, it's kind of a very holistic perspective as to how we serve these clients. So at the end of the day, we want to develop, become and build that trust to be the trusted advisor to the family. So one of the things, for example, we've done I think a really good job of is a lot of our clients have gone through liquidity events, they've sold their businesses. So because of that, we tend to try to get in early to try to strategically help them figure out how to do that. And then when the offers come in, we actually help them to assess the offers. And then there's different there's different ways of trying to minimize taxes, for example, on significant business sales. So there's a lot of that and a lot of the entrepreneurs, you know, they're passionate about their business first and foremost, investing. The truth be said. Yeah, it's a necessary evil, actually, in their eyes. They don't they're not necessarily passionate about it. They're curious. They want to do well, of course, But it's not. It's not really the thing that gets them energized up each day. They want us to be passionate about it so they can kind of do other things in their life that they can really enjoy. 

James: Thanks. Now, final question, where to next? What ambitions do you have both personally and, of course, as a business? 

Thane: A great question. So I would say over the next ten years, our team's probably going to grow from 16 to 20 5 to 30 professionals. We're looking to kind of triple our revenues and basically grow our client base to about 100 very exclusively. So keep it very exclusive. Again, that's three three clients or so per professional on our team and just continue to service our clients really well. But I've been in the business 30 years now and. When you get to kind of this point in the career, I find you want to try to, in essence, build a legacy business that can kind of go on when when I ultimately retire ten, 15 years down the road, that kind of has a has a systems in place, the people in place that the relationships are already in place. So that's candidly, that's my number one of my number one objectives to accomplish for the next decade. 

James: And that's a great way to end. And that wraps up another WP TV special. Thanks so much for joining us and sharing your insights. 

Thane: Thanks, James. 

James: Now you can find out more information on Thane and his team at stennerwealthpartners.com. And don't forget of course to check wealthprofessional.ca 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.