As chair of the CFA Institute’s board of governors, Beth Hamilton-Keen is seeking a higher level of professional competency and ethics for the industry
Gaining the esteem and respect of our peers is something we all aspire to in our professional lives, and 2015 proved to be particularly memorable on that front for Beth Hamilton-Keen. Not only was she selected as one of Canada’s 100 Most Powerful Women by the Women’s Executive Network, but the CFA Institute also came calling for her expertise when she was named chair of its board of governors last September.
The CFA Institute has more than 135,000 members worldwide across 150 countries or territories, so it’s quite the accolade for Hamilton-Keen. Not surprisingly, she holds the organization and its remit in high regard, especially in these times of regulatory upheaval. As she explains, the many changes ongoing in the industry are entirely necessary.
“There are a number of changes that will make improvements right across the board,” she says. “A good starting place is commissions; that is an archaic business model. It doesn’t always align the clients’ best interests with advisors’.”
In making the switch toward a fee-based system, she believes technology will allow the transition to play out much more smoothly.
“I think there is a lot of opportunity with Fintech to improve efficiency,” she says. “If you think back to manual trading with pink and blue tickets, we have come a long way since then.”
As the tools advisors use to do their jobs continue to evolve, so too should the job itself, in Hamilton-Keen’s view.
“Administrative work is not where advisors can add value for clients,” she says. “They add value with trade effectiveness and efficiency using Fintech and the other technological advances.”
As the international body that sets the bar for professional standards in the investment industry, the CFA Institute has been at the forefront of ridding the business of some of the unsavoury practices that were commonplace in the past. Its reach is truly global – and it’s spreading away from the traditional financial centres of New York and London.
“We have a growing candidate base that is very multinational,” Hamilton-Keen says. “This is the first year that candidates in China and India outnumber [those in] North America and Western Europe. That bodes well because our candidates and members are all singing from the same song sheet as it relates to doing investment work for the benefit of clients first. Putting clients first is a core mantra of our organization.”
The day job
Aside from Hamilton-Keen’s work with the CFA Institute, there’s also the not-so-small matter of her position as director of investment counselling at independent firm Mawer Investment Management. Her clients range from ultra-high-net-worth individuals to families searching for solid investment opportunities in Canada or, more increasingly, abroad.
“Generally, when clients choose us, it’s for our global equity approach,” Hamilton-Keen says. “We take the approach of not being constrained by borders in looking to create the best portfolio for our clients. We look for companies that can give a return that is greater than the cost of capital, that we believe are trading below their intrinsic value, and companies that can weather economic cycles because we don’t want to just trade in and out due to market movement.”
Another important part of her business is the nonprofit sector. As she explains, dedication to one’s client goes without saying, but in these cases, satisfaction with her work is enhanced.
“There are two sub-segments of not-forprofit,” she says. “One is traditional charities or community foundations that have [raised funds] and need that money managed for their long-term interests. That’s an area we have consciously wanted to support in Canada; if we support them with their asset management, then they can continue to do more of their good work.
“The other side of not-for-profit,” she continues, “is with the ultra-high-net-worth and family office segment where many families create their own foundations. That’s so they can give back to the communities and causes they are supportive of. The same general principle applies there. If we can steward their assets, then they can do much more with their charitable work.”
Economic outlook
While predicting the economy has become something of a fool’s errand in recent times, there are signs that Canada could be headed for a sustained upward trajectory after a miserable 2015. Of course, giving the fragility of its recovery so far, there’s still plenty of negative sentiment to go around too.
In her position at Mawer, identifying the companies that will fuel Canada’s economy moving forward is a major part of Hamilton-Keen’s job description – and she does see reasons for optimism.
“There are a number of sectors that are improving,” she says. “The East is definitely catching more of the US economy’s growth. When you look globally, you can see that Canada is doing fairly well relative to other countries. It definitely still has an energy hangover, and that will be a drag, but we are not any different from other countries, like Australia, that have a commodity base. As much as energy and commodities have a significant impact on our stock market, from an economic base, there is diversity, certainly in Ontario, Quebec and much of the East.”
That diversity is reflected in Hamilton-Keen’s own portfolio, which follows some strict criteria on potential returns and good governance.
“Manufacturing certainly is one area that can lead domestic growth – businesses that are more diverse and less dependent on the cyclical aspect of things,” she says. “We are cautious about financials, but in an interest-rate-increasing environment, we think insurance companies could do better. We’ll wait and see, but if we have growth projections that lead to higher rates, then insurance companies can definitely do better. We like the more defensive companies, basic stuff like movie theatre chains with a good return on capital, good management and a good business model.”
The CFA Institute has more than 135,000 members worldwide across 150 countries or territories, so it’s quite the accolade for Hamilton-Keen. Not surprisingly, she holds the organization and its remit in high regard, especially in these times of regulatory upheaval. As she explains, the many changes ongoing in the industry are entirely necessary.
“There are a number of changes that will make improvements right across the board,” she says. “A good starting place is commissions; that is an archaic business model. It doesn’t always align the clients’ best interests with advisors’.”
In making the switch toward a fee-based system, she believes technology will allow the transition to play out much more smoothly.
“I think there is a lot of opportunity with Fintech to improve efficiency,” she says. “If you think back to manual trading with pink and blue tickets, we have come a long way since then.”
As the tools advisors use to do their jobs continue to evolve, so too should the job itself, in Hamilton-Keen’s view.
“Administrative work is not where advisors can add value for clients,” she says. “They add value with trade effectiveness and efficiency using Fintech and the other technological advances.”
As the international body that sets the bar for professional standards in the investment industry, the CFA Institute has been at the forefront of ridding the business of some of the unsavoury practices that were commonplace in the past. Its reach is truly global – and it’s spreading away from the traditional financial centres of New York and London.
“We have a growing candidate base that is very multinational,” Hamilton-Keen says. “This is the first year that candidates in China and India outnumber [those in] North America and Western Europe. That bodes well because our candidates and members are all singing from the same song sheet as it relates to doing investment work for the benefit of clients first. Putting clients first is a core mantra of our organization.”
The day job
Aside from Hamilton-Keen’s work with the CFA Institute, there’s also the not-so-small matter of her position as director of investment counselling at independent firm Mawer Investment Management. Her clients range from ultra-high-net-worth individuals to families searching for solid investment opportunities in Canada or, more increasingly, abroad.
“Generally, when clients choose us, it’s for our global equity approach,” Hamilton-Keen says. “We take the approach of not being constrained by borders in looking to create the best portfolio for our clients. We look for companies that can give a return that is greater than the cost of capital, that we believe are trading below their intrinsic value, and companies that can weather economic cycles because we don’t want to just trade in and out due to market movement.”
Another important part of her business is the nonprofit sector. As she explains, dedication to one’s client goes without saying, but in these cases, satisfaction with her work is enhanced.
“There are two sub-segments of not-forprofit,” she says. “One is traditional charities or community foundations that have [raised funds] and need that money managed for their long-term interests. That’s an area we have consciously wanted to support in Canada; if we support them with their asset management, then they can continue to do more of their good work.
“The other side of not-for-profit,” she continues, “is with the ultra-high-net-worth and family office segment where many families create their own foundations. That’s so they can give back to the communities and causes they are supportive of. The same general principle applies there. If we can steward their assets, then they can do much more with their charitable work.”
Economic outlook
While predicting the economy has become something of a fool’s errand in recent times, there are signs that Canada could be headed for a sustained upward trajectory after a miserable 2015. Of course, giving the fragility of its recovery so far, there’s still plenty of negative sentiment to go around too.
In her position at Mawer, identifying the companies that will fuel Canada’s economy moving forward is a major part of Hamilton-Keen’s job description – and she does see reasons for optimism.
“There are a number of sectors that are improving,” she says. “The East is definitely catching more of the US economy’s growth. When you look globally, you can see that Canada is doing fairly well relative to other countries. It definitely still has an energy hangover, and that will be a drag, but we are not any different from other countries, like Australia, that have a commodity base. As much as energy and commodities have a significant impact on our stock market, from an economic base, there is diversity, certainly in Ontario, Quebec and much of the East.”
That diversity is reflected in Hamilton-Keen’s own portfolio, which follows some strict criteria on potential returns and good governance.
“Manufacturing certainly is one area that can lead domestic growth – businesses that are more diverse and less dependent on the cyclical aspect of things,” she says. “We are cautious about financials, but in an interest-rate-increasing environment, we think insurance companies could do better. We’ll wait and see, but if we have growth projections that lead to higher rates, then insurance companies can definitely do better. We like the more defensive companies, basic stuff like movie theatre chains with a good return on capital, good management and a good business model.”
