An independent firm has tapped into Calgary’s entrepreneurial spirit to find success with its target clients.
Fifteen years ago, Milestone Asset Management, part of Canaccord Genuity Wealth Management, realized it could help small business owners in its community and shifted focus to offer planning and tax solutions to clients that were going through similar things it was.
Steve Booker, investment advisor and branch manager, told WP that the move to assist independent business owners happened naturally.
He said: “Calgary, by nature, is very entrepreneurial. I didn’t really appreciate it until I had the chance to work and travel around the world. When I returned, I really noticed it. It is not uncommon for a few people who are working in the oil patch to pull out of that business and start an entirely new one.”
Milestone, which recently celebrated its 25th anniversary, took this onboard and had a light bulb moment. Many of its clients were business owners, just like them, going through the same issues.
Booker said that Milestone spends a lot of time on the financial planning process, something many of their clients identified as critical.
“We really have a panoramic view. We created an S-Curve Formula that is based on business owners and their lifestyle. It focuses on the different phases of a business: from aspiration and growth, through to maturity. The S-Curve Formula walks the entrepreneur through one or more of these business life cycles, depending on if at the end they sell the business and retire or reinvest into another business.”
Milestone tries to take a different approach to creating portfolios. Booker recalled that in the beginning they, like many other practices, tried to be all things to all people. The wake-up call arrived when the dot com bubble popped. The company quickly realised they needed to be more consistent in their portfolio management.
Booker added: “We scoured the globe to see who was doing it the best and arrived at the Yale endowment fund. It is really one of the best in the world but no one talks about it. They are leaders in private investments and asset classes that other managers just don’t use. We took their model, unpacked it and Canadianized it to make it retail friendly. There are eight wedges in the pie that can be customized based on risk tolerance. The products remain largely the same but the weighting differs.”
One of the big challenges for Milestone, working with small business owners, is managing tax structure so that clients keep as much of their money as possible. It was something they began working on well before new regulations were passed on passive income in the 2018 federal budget.
“Two years prior we designed specific portfolios that minimized tax leakage,” Booker said. “It is like a standard risk/return graph, but incorporates tax leakage that affects the long-term performance. Passive income tax can be as high as 50.67% so we try to help owners avoid that and transition to something that pays dividends or capital gains. We really work to educate business owners to rethink how they invest their money.”
By being an independent, Booker said this has helped them address those challenges. “The two large benefits of being independent are running our business how we want and being able to choose the products we use.
“Canaccord Genuity Wealth Management has been great to work with because they are supportive of our value proposition, they don’t tell us what kind of business to run. It is great on the product side too because we are under no obligation to use any specific product, so the relationship has worked out really well. Our clients like that we are not associated with a bank and are not under pressure to cross-sell them products.”
In addition to their day-to-day business, the Milestone team is very hands-on in giving back to their community. Four years ago they began working with a local high school on a film festival fundraiser.
“We approached the school, and the historic Globe Cinema to create a gala. We charge admission, have a silent auction, all of the students’ movies get shown on the big screen and 100% of proceeds go back to the school. It has been a really fun way to give back.”
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