Also popular: Succession on Sharbot Lake

Venerable northern Ontario firm W.A. Robinson has built a practice that employs 30; they've been planning this for years.

This past July 1st, Canada Day, Ontario wealth management firm W. A. Robinson Asset Management Ltd. announced that Matthew J. Robinson will be the new chief executive officer. Matthew takes over from the firm's founder, his father, Wayne Robinson, who will continue to act as senior counsel.

The story of how it is the firm carried out a successful succession is a lesson in how to do the kind of patient, conservatively-administered business planning the firm has become famous for.

A prosperous, family business, the Robinson group of companies operate from a compound on the shore of Sharbot Lake in the beautiful lake district of northeastern Ontario. Wayne Robinson first incorporated the group in 1980. He began offering independent financial counsel in 1985. In 1986 it was managed mortgage-based investments. "He has a love for counselling people.  He was one of the first financial planners, before the big banks took over. It wasn't institutional. He had some clients, started out; he had a rapport with these people," says Matthew Robinson in an interview with WP. 

In the '90s those with some money to invest were skeptical of everything, including real estate. But this would turn out to be the niche for Robinson. Wayne began offering mortgages to those who didn't qualify at one of the big banks. Since then group of companies have grown. Pillar Financial Services specializes in mortgages to individuals and businesses that require on-the-ground due diligence and decision-making through a broker network. The company offers mortgages Schedule A banks do not service, such as loans on homes that are under construction or large loans for renovations, or mortgages to self-employed people or people with distant credit problems. The company also offers mortgages on second homes and rural properties with wells and septic systems that can be difficult to cover.  A private mortgage lender in these niche markets, the company is able to charge higher interest rates than the Schedule A banks, but still satisfy what Robinson calls the "four Cs" of credit: “character, credit, collateral and capital.”  "There's a niche there," he says

Another Robinson company, Frontenac Mortgage Investment Corporation, packages mortgages into a security that offers steady streams of income from a portfolio of stable loans. Frontenac has existed in one form or another for more than 25 years and has grown to include more than $123 million in assets while earning a 10-year annualized return of 6.04%. The fund is the only prospectus sold MIC not listed on TSX. The supremely conservative approach--there is no leverage in the fund--has offered investors a steady 6.5% return for years on end. "There is a certain pace of growth that is necessary. We could have grown just to grow. But that’s where you lose your focus. If you look at our line, it's a nice straight line. 20% a year. The Sharpe ratio is nice. It puts the rate of return at 5-7%,” says Robinson.  “And we've seen a few cycles over thirty years." 

Steady growth, prudent underwriting practices and active management of our mortgage portfolio, what's not to love? The fund is sold as a production that can provide a strong foundation for RRSPs and RRIFs. A predictable, conservative and deliberate approach to wealth management. It’s the Robinson way. "From a discretionary point of view, the book is good, very conservative. We just need to keep to doing what we say we do. We preserve capital and generate a little yield....we don't promise the world. It's about managing expectations. On the other hand, we're satisfying a niche that's been growing. CMHC is tightening up on mortgages, and that's opening up space for us. Same with banks....they’re tightening up, and that’s opening up deals. Really good deals. We have a really strong network of advisors," says Robinson. 

Today, W.A. Robinson Asset Management Ltd., is an investment fund and portfolio management company that acts for high net worth clients. Another company, Lake District Realty is a specialty service designed specifically to meet the needs of sellers and buyers of waterfront properties. All in there are 30 employees now, as well as several hundred shareholders. That is, there are many lives wrapped up in the companies and the people the family considers extended family. And now the next generation takes over. 

Coming tomorrow: How Robinson planned and pulled off the succession.