Advisor with an ace up his alternative sleeve

How money manager rose from the ashes after family business burnt down

Advisor with an ace up his alternative sleeve

Steven Furtado’s family business cash cow was there one day and gone the next. The restaurant business, which had enabled him to save and invest in stocks at just 15, burnt down and its future hinged on the insurance verdict.

Rather than leave his fate to others, Furtado asked himself if he had the chance to pursue any career right now, what would it be? The answer was obvious: investment.

He said: “I could have waited to see what the insurance was going to determine; whether or not we were going to be able to reopen or whether we were going to be getting a lump sum payout and then have to walk away. The future was very bleak and very undetermined but I didn’t want to wait for the insurance to make that decision for me.”

The Montreal-based investment advisor at Peak Securities already had an interest in investing, having bought his first piece of real estate in his early 20s. When his family’s Chez Cora – now just Cora - franchise was ruined by a neighbouring bar’s fire, Furtado completed his studies and started at Ocram Capital, trading futures.

After a successful year, and with a wife, child and by then multiple mortgages to support, he noticed people were coming to him for investment advice. That was his cue to move into advisory and planning before gaining his IIROC licence and incorporating insurance into the business as well.

At just 31, and into only his third year, Furtado’s business has grown rapidly and he is carving out an impressive niche in the industry. His approach is now based on a holistic, long-term approach and said his business model has shifted from return orientated to more of a planning focus.

However, he said the real ace up his alternative sleeve is his experience and knowledge of real estate. “It has given me an edge,” he said. “Those are the conversations that are opening the most doors for me today.”

He added that clients’ interest is piqued by sectors and areas that are completely uncorrelated to market noise. And when Furtado shows them how this protects against the effects of, for example, the 2008-09 crash or the volatility in February, he knows he has them engaged.

He said: “Even though we are greedy and we know the market is going up and we want to partake in that, deep down we all know this is just a balancing act, and in the end something is going to give and we are going to have that necessary pullback.

“So to offer someone a solution that has survived the test of time, and you can see there is no correlation, that’s where the emphasis is. If I can shift my focus to tax planning and where I can save the money elsewhere, I’m getting away from the conversation of returns.”

He added: “What I’ve noticed is my most affluent clients, they care about the returns, but they are more intrigued by the planning in the alternatives.”

Furtado discovered early that the generic medical professional client was not a good fit for him. His clientele quickly evolved to young start-ups or business owners, many of whom are in technology and of a similar age. Other clients know he is friends with their children and trust him to handle future generational wealth transfer.

In terms of investing in stocks, he prefers to follow managers rather than companies who bombard him with promotional material boasting about the latest Lipper award they have won.

He said: “I know active management will beat out the benchmark in certain sectors like small and mid-caps. Typically, it will win in the long run so I try to disregard the company and follow the managers I believe have the strongest mandate and who I can relate to with their investment style.

“I integrate ETFs on a large-cap basis because I can buy them on sale. Right now, like everyone else, I believe the market is due for a pullback, although I’ve been wrong for about two years. But if I can, my ideal model is to have large caps and ETFs in those positions because most managers won’t beat the index so I’d rather have a cost-effective solution for my clients in that regard.”


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