Episode 14 - Market Mindsets with Brennan CarsonFeb 28, 2023
Dr. Kevin Mailo and Dr. Wing Lim welcome Brennan Carson, CFA Head - Solution Wealth Portfolio Manager, to the podcast to talk about market mindsets and mentalities. Brennan’s goal is to always build diversified portfolios that deliver consistent returns for his clients and he discusses how that works in the markets with Wing and Kevin.
Brennan addresses the change between 2022 and what is forecast for 2023 and how interest rates drive much of what happens in financial markets. He differentiates between the public and private markets, how much greater the wealth in the private market space is, and discusses how many different aspects of market investments are available. It isn’t just what stocks are publicly traded, and Brennan has advice on themes for portfolios and what to look for in terms of stability.
In this episode, Kevin Mailo and Wing Lim discuss with guest Brennan Carson the benefit of index funds, why a focused concentrated portfolio is advisable, and how Brennan and his team approach new clients. Brennan shares how the discovery document is vital to client understanding and details how he approaches each client individually based on their needs. This episode highlights how having the right investment quarterback to manage a team of specialists enhances wealth plans overall.
About Brennan Carson
Brennan Carson has spent almost 20 years in the financial industry preparing for the unique opportunity to provide wealth management service and advice to clients with the simple goal of doing it right. His team calls themselves Solution Wealth Management (a division of eQuaTe Asset Management Inc.).
Over the last two decades, Brennan has had the good fortune to work hands-on with individual clients, investment advisors, and institutional investors. Each experience gave him more insight and knowledge on how to help turn financial goals into reality. Now he applies this experience to offer his clients a comprehensive approach to wealth management.
His investment objective is to build diversified portfolios for his clients that deliver stable and consistent returns and lower volatility. This approach generates more consistent long-term performance and fewer worries. His team’s investment platform provides access to five unique asset classes, each with its own return & risk benefit: stocks, private equity, real estate, income funds, and real return portfolios.
Resources Discussed in this Episode:
Kevin Mailo: [00:00:00] Hi, I'm Dr. Kevin Mailo and you're listening to the Physician Empowerment Podcast. At Physician Empowerment we're focused on transforming the lives of Canadian physicians through education in finance, practice transformation, wellness and leadership. After you've listened to today's episode, I encourage you to visit us at PhysEmpowerment.ca - that's P H Y S Empowerment dot ca - to learn more about the many resources we have to help you make that change in your own life, practice and personal finances. Now on to today's episode.
Kevin Mailo: [00:00:34] Hi, everyone. We are so glad to have you out tonight. I'm Kevin Mailo, one of the co-founders of Physician Empowerment and it's Wing and I tonight on a Friday evening here in December as Christmas approaches, but Wing and I on the webinar and it's been a while since we've both been together here. Now I'm going to just say that for those of us on the webinar who are attending, it was supposed to be Dr. Dimitre Ranev, who teaches alongside us at Physician Empowerment, who was supposed to be talking about market mindsets. Because of a scheduling issue, he's not able to make it. But we are very, very excited to have portfolio manager Brennan Carson speaking with us tonight about market mindsets and Wing is going to be conducting the interview. So why don't I let you go, Wing, and I'll just step back.
Wing Lim: [00:01:21] Sure. So good to see you guys and some of you know me. I hope we have met. Anyways, so we're co-host, co-founders of Physician Empowerment. And so market mindsets, so of course, Dimitre would have had a unique twist based on his personal experience. And when there was a conflicting time scheduling conflict, I thought, who would we want to interview for market mindsets? How about somebody who does it on a full time basis, right? In this world of - and I'm going to introduce Brennan in a minute - but in this world of DIY, everybody want a nickel and dime and DIY themselves to suns like wealth land.
Kevin Mailo: [00:02:02] Oh yeah.
Wing Lim: [00:02:03] So sunset and everything is going to be fine until they do some crypto and hit a few colleges.
Kevin Mailo: [00:02:10] So they have a 2022.
Wing Lim: [00:02:13] Yeah, exactly. So there's a lot of market corrections and it's not for the faint of heart. And I happen to follow a lot of economists and a lot of people in the know, and this is not an easy path. That's why in a master class, which I'm putting in a plug in, we talk about all these jungles where the jungles - that the DRAT - the risk jungle, which is what we're going to talk about next Wednesday. Get navigating the risk jungle, there's the asset jungle, there's the tax jungle and asset jungle. So I would like quickly pass the mic to Brennan, and we're going to actually go back and forth and the three of us is going to have a really informal chat about market mentalities. But Brennan is a full time portfolio manager who actually picks and chooses stocks and other than stocks, bonds and other public and actually private assets. And he's the mandate to do that for his clients and he has a unique practice that he doesn't sell a specific fund to you and he's trying to create a tailor made thing called bespoke kind of practice, which is what we would like at Physician Empowerment and empowerment office. So I come to know Brennan and I really, really come to respect him for what he does and what he believes in. And so let's start with, Brennan, maybe you can say hello to everybody. Where are you from and what's your family like?
Brennan Carson: [00:03:36] Thanks, Wing. Thanks, Kevin. Yeah, it's great, it's great to do this, absolutely. I think in your comment about sort of what's happened in 2022, it's a great opportunity to really talk about those risk elements and those, that sort of that investment trajectory. I am based outside of Toronto, but I have to tell you, when I redid my business card about three months ago, I took my address off my business card because I have clients in every prairie and B.C. Province out west, and I've got clients throughout Ontario, so I kind of feel like I don't really have a home office. My office is really wherever my clients are. So it's actually kind of that's the fun. You talk about what I do for fun, my fun part of the job is that I get to see a lot of Canada all the time, and I get a chance to see clients and travel to different cities around Canada and really talk about what's going on. And I think it's also what makes it interesting is that when you are in, when I'm in Saskatchewan and everybody's talking about farming, when I'm in Alberta and everybody's talking about oil and gas, when I'm in B.C. and everybody's talking about immigration and sort of the metropolitan-ization of that area, it's different conversations. So that's the fun part of my job. So yeah, I'm here outside of Toronto and I have three young adult children.
Wing Lim: [00:04:57] Same here. Yeah, right on. So you deal with a lot of professionals, I'm sure you deal with physicians. So there's a lot of mentalities out there that we can just, you know, just dibble dabble and then we'll be wealthy. And of course, now this is really testing the hypothesis, right? So can you give us kind of a gut feel that the market has, where the market has been and where the market is going to go? Of course, nobody has the crystal ball. But can you give us a kind of a lowdown grade eight level synopsis?
Brennan Carson: [00:05:32] Well, I'll tell you this. If you think back, if we all go back in our heads, go back 12 months, the biggest factor that was driving markets - all markets, public markets, private markets, assets, fixed income - were low interest rates. We were really leveraging everything: people's personal debt, corporate debt, government debt, asset valuations, cost of capital, was all inextricably linked to low rates. One of the most valuable education sessions I ever did was a two week hedge fund course in New York City in 2006 / 2007. And, you know, say what you will about hedge funds, it's kind of this, it's sort of been whitewashed, the concept of a hedge fund. Some people think of it as the risky guys. I think of it as hedging away risk in certain investment classes. That's the way it should be done properly. But ultimately, a really good hedge fund understands the driving risk behind an investment. And so if we go back and think about personal residential real estate, if we think about the fixed income market, we think about technology stocks, which are classified as long duration, which is I got revenue now, but really I'm banking on that company being worth more down the road. Everything was connected to low interest rates. So when you get a situation of a whole bunch of printed money, and the velocity of money - which is a key metric for the economy - so when the the velocity of money slows down, the volume of money goes up. Everything is tied to low interest rates. So the greatest risk management tool that we applied to client portfolios a year ago was to say, all right, interest rates are going up. We don't know whether this is going to be a meteoric rise or a slow and steady rise, although I think we all could have realized that they held rates too low, too long. How do we mitigate our exposure to low interest rates changing into more of a normalization of interest rates? So really, you think of everything that's happened in 2022. Stocks are down, I mean, the US market's down 16, 17, 18%. Canadian Bond Index, which was supposed to be a hedge against equity risk, is down 9, 10% and everybody's house in Canada is down somewhere between 5 and 15%. It's all linked to one thing. And so that really is the theme going into 2023, which is how are we going to now adjust to where rates are? How is it going to affect different businesses? How is it going to affect different assets?
Wing Lim: [00:08:31] Mm hmm. Well, that's really a good recap. So based on the interest rate, of course, we just went up to overnight rate of 4.7% now, more like to what it was normal. But for every everyday Joe Schmo mom and pop with some portfolio in the public markets, so how is that going to impact everybody's performance, stocks versus bonds, fixed income versus all that?
Brennan Carson: [00:08:58] Well, let's just talk about, let's talk about stocks in general. And I don't necessarily even want to talk about stocks per se. Let's talk about operating businesses, because as a colleague of mine wrote a great paper and it was posted on LinkedIn a couple of weeks ago, he said the market is not the public stock market. The market is operating businesses, it's the economy. So whether you're investing in a private business, a startup, a publicly traded company, if you're investing in the economy, you're investing in operating businesses, things that generate GDP. So when I think about 2023 and this sort of adjustment to higher interest rates and I think about how it's going to affect operating companies, I think let's think about some of the inputs into net earnings, profit margins of an operating company. So cost of capital. All right, so if I'm doing a balance sheet analysis on a company, I got to think, all right, what kind of debt are they carrying on that? What interest coverage do they have? Do they have cash flow to meet their debt? Is their debt structured as short term floating or long term fixed? So even how they build their balance sheet and how they manage their liabilities. That's going to be a factor when we start thinking about those that would have an ability to adjust to higher rates better than others. Think about wage inflation. It isn't just inflation like the goods cost more, which of course is related to trade, it's related to a lot of other issues. Think about wage inflation, and I'm just going to pick on UPS or Starbucks. UPS and Starbucks are both facing significant rebirth of a unionization push, safety of employment wages. Well, all of a sudden, if you now your human resource input into your PNL now goes up 25 or 30% because you have wage inflation, it dynamically changes your ability to have profits at the bottom line. I was talking with actually with a client today and, you know, runs an operating business, manufacturing, pretty blue collar, you know, 40 people, not a big operation. And he says, my wage expense just went up 25 to 30%. So all of a sudden, if your margins were 35, they're now 5. Right? That, I mean, that's your biggest input cost in a lot of these operating companies and I'm not even beginning to touch the input cost due to trade issues and the sort of decentralization of of manufacturing and labor and trade, but just wage inflation. So when I look at 2023. I think there's going to be a pretty good split between winners and losers. So, you know, if you think about the concept of owning an index fund, you know, I own the S&P 500. I own 500 operating businesses in the SNP in the US. 500 biggest, most well established public companies. So the index itself, it may go up 5, 8, 10% next year. I certainly don't think we're in for the most dramatic rebound to a bull market in the history. I don't sort of see that in the cards. What I see is there are going to be 200 of those companies that can pass inflation through to their customers, that can manage their margins, they can manage their cost of capital, their debt. They can continue to generate free cash flow, which is the bee's knees of running an operating company, and they'll be just fine. And then there will be 200 on the other side that don't. So next year, in my mind, it's, I really believe this is a year of quality over quantity. Find those that are driving free cash flow, paying dividends, maintaining margins. I'm going to stick with those businesses for the next 2 or 3 years, all day, every day.
Wing Lim: [00:13:11] Right on. So even this, when you talk about input cost of, let's say, wage and all that, it applies to medical business. A lot of clinics in Alberta are actually folding and doctors are quitting in a record number because everything's going up, the wages ceiling and actually crashing down. And so it's not just Alberta phenomenon, right, it applies to everybody. So it's going into 2023, I agree. Some will make it, a lot won't. So for a lot of people who want to pick and choose, would it be if people have no time, I just want to pick an index fund, would that be? What would be your advice for those stocks?
Brennan Carson: [00:13:48] Look, I mean, people choose an index fund for two reasons. One, it's very accessible, low cost. I can literally pick an index on my phone and be done with it in about 5 seconds. So very accessible, very easy, very inexpensive. Number two, the statistics are not going to lie. 80 to 90% of actively managed US equity portfolios, mutual funds or pooled funds of any kind tend to underperform over a cycle of the market three, four or five years. So if I want my odds of at least matching the index and making it easy on myself, I'm going to buy an ETF. So really, there's two ways to generate Alpha, the concept of outperforming an index, in my mind. This is this is 23 years of being an analyst and being a portfolio manager. Number one, you run a more focused portfolio. One of the reasons mathematically, and I won't get into the math, although, you know, my colleagues and I all come from calculus and physics backgrounds, so we love this kind of stuff. I mean, literally, you know, on a Friday night pulling out an Excel spreadsheet. I know that sounds weird, but that sounds fun to us. If you do the math of running a 80 to 100 stock equity portfolio, just by the math of the amount of stocks that you're trying to trade, that you're trying to follow and the amount you're putting into each individual stock, just in it's, just in its mathematical composition, very hard to outperform an index just by that math alone. So I've always believed if you want to generate outperformance, you have a focused portfolio. So for me, that's, you know, 20 to 35 stocks. Number two, you should have a specific style to that portfolio. And this is generally what I find the weakness in a Do It Yourselfer, is I own some oil and gas, I own some blue chip, I own some utilities, I own some speculative, I own some tech. What's the style of that portfolio? I get it, there's some diversification, you're in different industries. You've got sort of different profile of kind of companies that you're buying. But you're just going to end up in the middle. You know, if you add five different vertices together, you end up in the middle. So in my mind, a focus portfolio with a specific style. And in my mind, that style going through the next couple of years is more of a value dividend quality than it is betting on technology and more speculative long duration companies. You know, everybody rushed in to cloud storage because, well, we all need the cloud. Okay, well, we don't need 32 companies with cloud services. Some of those aren't going to survive. You know, you talk about businesses that aren't going to survive. It's just too many players. I'm not even getting into the 3000 people offering crypto. Right? It becomes a crowded space where really maybe there wasn't room for any to begin with. So that to me, that to me is both a philosophy, regardless of what market condition we're in, right? Focused concentrated portfolio with a very specific style. That's the way to generate outperformance if you are going to choose something other than buying the index. But as I said, my view of the index is we'll probably have a decently positive return in 2023. But you're going to be weighed down by the fact that half the stocks you own have deteriorating profit margins. And so I would prefer, in a market like, that to cut out the stuff where I know - and again, we have we're more of a data focused firm, I track profit margins. I can, at a snap of a finger, I can look at the profit margins of 2500 US stocks - I'm not going to bother with those next year. Why bother? I don't need to own those. If I can choose to not own them, I'm not going to own them.
Wing Lim: [00:18:07] That's a great perspective. So, Kevin, you have a question?
Kevin Mailo: [00:18:09] Yeah. Yeah. So I can tell you already, Brennan, I definitely feel like we're just going to keep asking you tons and tons of questions and which what I'm really getting at is we got to get you back on for another webinar or a podcast episode for sure, because we're loving it. And I know those of us out there who are listening to this are, like, going to be all ears on this sort of perspective when it comes to the market. So I want to shift a little bit. So Physician Empowerment is more than just money. It's about building better lives for our physician clients, right? And that's also behind why we founded the Empowerment Office Corp as well, is to build better lives for physicians. And a lot of physicians, I think, struggle with micromanaging. And they work 70, 80 hours in a workweek and then they step in and try to manage their portfolio. And I see it done poorly in a lot of cases. I've got colleagues, we've got physician clients who who've lost. And so can you give us some insight into your client base? And why they might choose you besides just the numbers, right? Because, again, one of the things that we talk about in Physician Empowerment is learning to delegate. Not abdicate, as Wing says, but learning to delegate to quality professionals who, it's not just about making money it's also about building a better life. Right? Because as the market slides or goes through its ups and downs, you know, do you really want to be watching your phone go off at 11:00 at night, worried about your portfolio, your ability to retire, that sort of thing? So do you want to just provide some insights into your clients and why they go with a portfolio manager? And share as much as you as you feel comfortable in terms of net worth or geographic spread or background, whether they're business owners or professionals or whatever. I would personally love to hear a little bit more about who chooses a high level portfolio manager such as yourself.
Brennan Carson: [00:20:06] All right. So as you're asking that multifaceted question...
Kevin Mailo: [00:20:08] Yes, I just keep going, which is why we're going to have to get you back on.
Brennan Carson: [00:20:11] I quickly jotted down five points. So I will address those five points. Number one. The most important tool we have when we work with clients is the discovery document. There's no close second to the importance of a discovery document. So just to give you some perspective, I have clients that charge me with the responsibility of just finding them specific investment solutions, public or private market. I have some people call me up, Brennan, I'm looking for this. Can you get me into that? Yes. And that's another point, which is access. But we can circle around back to that. And I've got clients who say, Brennan, you're literally my family's CFO. I want you to talk about tax, estate planning, insurance, financial planning, risks, intergenerational wealth issues, even holistic wealth concepts, charitable giving. And we really run the gamut all the way through. But that starts with that discovery document. And to your point, Kevin, and this is what I've always appreciated about the platform that you and Wing are building, which is it is so much more than just, Hey, let's make a dollar on a dollar.
Kevin Mailo: [00:21:25] Oh, without question. Without question.
Brennan Carson: [00:21:27] So the beautiful thing about a properly constructed discovery process is you really invariably unearth the strengths, the weaknesses and the risks that exist within an individual sort of wealth profile. Sometimes it's emotional risk, sometimes it's financial risk. You have family issues, you have succession issues, you have health issues. So that, to me is, you know, that is the sort of the gold standard of establishing a strong roadmap. And that to me is, again, that's, the discovery document is the input. The roadmap is the outcome. And that document allows you to establish a much deeper and stronger relationship with that - I'll call it a wealth quarterback - than anything else. So this isn't about, Hey, my performance is great, or Hey, I've got a really nice marketing campaign. In fact, the research is compelling. People do not fire an adviser for performance. It is the fourth ranked reason why people fire or hire an adviser. Trust, communication and transparency are one, two and three. So that should always be the most important inputs into the equation of working with someone who you really want to both empower, to use your word and to engage and trust into that relationship of someone that, yes, you can collaborate with that person. I do have some clients who say, Brennan, here's my dollar, invest it. Tell me in a year how I'm doing. And they're very hands off and that's fine. But I don't let my clients get off easy. It's not just, Hey, Brennan, trust, you know, I trust you. Go with that dollar. I get into situations where I'm meeting with a couple. One person has been primarily responsible for the finances. I want both partners of that couple to be involved in that discovery process and to know who I am and what I'm doing and why I'm doing it. I don't want to have, as I have in the past, that conversation with a widowed spouse who does not know where to start. Who doesn't know where the will is, who doesn't know anything about finance, doesn't know how the bills are being paid. That's not really a great partnership.
Kevin Mailo: [00:23:57] Yeah, sorry to interrupt, but yeah, that's exactly what we say at Physician Empowerment, wealth creation is a team sport. And we've got our annual national conference coming up in May, and we really encourage the non physician spouse to come. And understand physician finance at the same level as the doctor in the household. So I just, I just wanted to tell you, I'm loving what you're saying. Keep going. Keep going.
Brennan Carson: [00:24:19] So the second part of that, so discovery document really building a strong plan and a roadmap. And I think that's something that that makes people sleep better at night. I mean, that's, at the end of the day, the emotional risk often trumps the financial risk. And frankly, if you're a high income earner, that should be as important as the financial objective. It's the emotional, which is I sleep better knowing that somebody is taking care of my tax, somebody is taking care of my insurance needs, somebody taking care of my family. Really in sort of a broad context, someone's really working with me on that. Then the other part of it is really looking at wealth, Kevin. It's, look, nobody - very few, I won't say nobody - very few people get wealthy picking stocks, you know, like, well, Warren Buffett is worth whatever, gazillion dollars. Warren Buffett invests in businesses that are well-run that he's going to hold for a long time. There's no flipping stocks. Right? So just about everybody, if you've built wealth, you've owned great assets, you own great real estate, you own a great business. So wealth is really, I think it becomes, I think we get so inundated with fund performance and stock news. As I said, the private equity market in this world is ten times the size of the public market.
Kevin Mailo: [00:25:44] Yeah, I know. I know. And people don't realize that, right?
Brennan Carson: [00:25:48] There's close to - it depends on the day - but, you know, 70 or $80 trillion in the public market. And there is ten times that, the value of the operating businesses that don't trade on the market.
Kevin Mailo: [00:26:02] Yeah, they don't have an IPO or a real estate project or whatever. Absolutely. Absolutely. This is going to be another, I'm just, there's going to be another thing we're going to be talking about at the conference is trying to open positions up to a much bigger world that goes beyond public markets.
Brennan Carson: [00:26:18] Yeah. So we get it, we get fooled into this, Literally, my wealth is dictated by how the TSX and the S&P 500 do. That's, I mean, there's just, you know, I can say this because I'm a portfolio manager and I don't sell equity funds for a living. You know, it's just, that's just not the way wealth is managed. And so the byproduct of that discovery document is understanding all the elements of wealth. And one little tiny sliver of it is maybe an exposure that you have to the public markets. But again, your real estate, your health, your insurance, all those other elements all plug into that. And so that is so important. And that's, again, a big part of the practice. So I manage, I manage about 60 families, high net worth families myself. Probably the average client is 2 to 2 and a half million. And with a lot of those, it is far more than just, hey, manage my money. It is so much more about building all of this. So that's, I know I said five, five points. We're kind of two or three into it. So the other one really, then, again through that discovery document, is the risk component. We've touched on that a little bit already. You know, I have a client who's a general contractor. He runs an extremely good business. You know, as you probably all imagine, it's been a great environment. People have stayed home. They want their houses renovated. And I looked at him and I said, you know what your greatest risk is? I said, it's not whether I make you 5% or 8% or 2%. It's your health.
Kevin Mailo: [00:28:00] Yeah, you are your business.
Brennan Carson: [00:28:02] If you can't use your hands and you're not on site, all of your goodwill equity is gone. You're, you know, that's it.
Kevin Mailo: [00:28:10] Physicians are no different. Physicians are no different. You are your most important investment. It's something we teach. Absolutely. Absolutely.
Brennan Carson: [00:28:18] So take care of that and take care of that isn't just making sure you have a safe work environment or that you get good rest, your site is good, all those kind of things. But it's also all right, do you have insurance to cover what happens if something happens to you? So all of those elements and I think, you know, you talk about the fact that why people do or don't work with an advisor. I think they work with an advisor who realizes that A, the best interest is the best interest of the client. That's really what's driving decision making. And B, that they care about something beyond whether you're going to buy whatever fund you want to stick in front of them. I'm really, I'm proud that my team is built as an independent. And this is not to throw shade on on the banks or the big mutual fund companies. But it's really important to maintain that independent, objective viewpoint in order to effectively address your client needs.
Wing Lim: [00:29:21] So two points I want to respond to Brennan's comments. Number one, it's no different than medicine. People like to Google, consult Dr. Google, and piecemeal their health. Right. We're in primary care, we understand that, how important it is to have that family physician. Right? So having that trusted figure that is your quarterback, you're using finance term, trying to piece everything together. Second thing is, that's what we started Empowerment Office corp, is that we believe in this whole process - we call it the roadmap process - and we help people break down all the facet of that for each aspect of it to customize it for everyone. So this is awesome. Now, sorry, I have a hard stop, so I'll leave and Kevin would continue. All right.
Brennan Carson: [00:30:06] All right. Thanks, Wing.
Wing Lim: [00:30:08] Thank you, guys.
Kevin Mailo: [00:30:09] All right, so Wing's going to sign off, but I absolutely love this topic because you're getting on all the right points, Brennan, in terms of looking holistically at our lives. One of the things that I often reflect on is that real wealth is peace of mind. And I think that, at least for some people, portfolio management offers that in addition to all the other things we outsource in our lives, whether it's property management, clinic management, great lawyers or accountants, people who manage us, who are the people you work with to build wealth for your clients?
Brennan Carson: [00:30:41] You mean in terms of the, kind of the--
Kevin Mailo: [00:30:44] Yeah. Explain it, right, or explain your process, if you will, if you have time to just go into it, because there are going to be a lot of physicians listening to this whom this is going to be very new for. Right. It's just, you know, how do you sit down... because they have their own network. Maybe they have an accountant or a tax lawyer. They have insurance policies already. Who do you work with? How do you coordinate? Do you do a lot of tax planning?
Brennan Carson: [00:31:08] So in terms of sort of that broader wealth concept, Kevin, in terms of kind of putting that team together, I had a great mentor in this space who was a wealth manager for a number of, you know, wealthy families, and they said, you know, don't try to push someone on someone. You know, in other words, Oh, I've got an estate lawyer, you have to work with them, you know, fire whoever you've been working with. So first of all, you do have to have a quarterback. Doesn't have to be me, but there has to be someone that is that central resource to access and have the ability to coordinate the team and the documents and the roadmap. So that's important. You have to have that. And obviously that's a huge part of what you guys are trying to do in terms of really focusing that broader concept of bringing that together. But my approach has always been, I may be the hub, but the spokes are specialists, people who are really good at what they do. And I say that in the wealth space and I say that in the investment space. I may have 23 years of managing equities and some alternatives, but if I'm looking for a private debt portfolio, a mortgage portfolio, an international long shore hedge fund, I don't do that. But I can bring my clients those professionals who are laser focused in that particular solution. So I think of myself on a wealth management point of view as a generalist. I'm an investment specialist, but I'm a wealth generalist. So I can uncover tax deficiencies, I can understand, I can uncover insurance shortcomings, talk about generational wealth issues. In my first life, I actually worked in the not for profit sector. So I, I actually have a background in charitable giving and charitable planning as well. And I still do quite a bit of that work as a volunteer and a board member now. So again, it's if someone comes to the table and they say, look, I've had a, I've had a tax accountant working with me for 20 years, I trust them. They're an important part of my planning. That's great. That's great. So let's not get into an arguing match about who's right or who's wrong about things. Let's set down at the table. I think you want your team to be open minded that we're better together than we are all trying to yap in our client's ear about what they should do. That's really ultimately ends up being the worst of all situations. Well my accountant says I should take out an insurance policy, my investment guy says I shouldn't. You know, my neighbor, my golf buddy, says that I should like, No.
Kevin Mailo: [00:33:54] Oh, it's a mess. I mean, it's not it's not going to work for somebody's health either. You know what I mean?
Brennan Carson: [00:34:00] Yeah, well, I'm sure. Look, I'm not in your business, but I'm sure the notion of Googling what's wrong with my sore right eye or my...
Kevin Mailo: [00:34:07] I am deciding whether to take out my colon or not.
Brennan Carson: [00:34:12] Yeah, I just heard that we should all be putting Head and Shoulders on our face to cure acne the other day. So, yeah, you know, like--
Kevin Mailo: [00:34:19] You know what I mean? It's not useful if it's 100 different answers.
Brennan Carson: [00:34:23] Right. So, absolutely. The only thing I really stress in that situation, I used to survey my clients about who their professionals were, not to really, not to really judge one or the other, but the greatest partners we work with in that well space, whether they're a tax person, a financial management person, insurance person, estate lawyer, is are they proactive and strategic? I don't need someone to file my taxes. I don't need someone who files my medical professional corp papers. I need someone that says, Okay, Dr. Jones - sorry, I always use that example.
Kevin Mailo: [00:35:04] No, that's fine.
Brennan Carson: [00:35:04] I love Indiana Jones. Dr. Jones, okay, what's your tax advisor telling you? Are they are they telling you to do a strip or are they telling you to do a freeze or are they telling you to add your kids in? Are they suggesting you do, you know, an IFA to create an insurance solution to lever more money, you know, money coming out of the corp? And look, I see this a lot. I see - and in fact, I had breakfast with a a medical doctor who's a client of mine this morning - and she, like so many physicians, get to that stage in her career, she's in her mid-late fifties, where almost all of her investable assets are in tax deferred vehicles. They're in her PC and they're in her RSP. And so when I do a wealth analysis, they say, Oh, by the way, you owe the government $1,000,000. Don't pretend that you have 3 million because you don't. The government owns a million of that 3 million sitting in your tax deferred vehicles. So this is a bit of a circuitous way to answer your question, Kevin, but you want to meet the team. You want to make sure the team wants to work together and can work together. And you want to have members of that team that aren't just going to just kind of rinse and repeat. They are going to bring solutions to the table. So, and I think that's that conversation. And if there's a sub out and a sub in, again, I don't have a hidden agenda to push any professional or any strategy onto anybody. But if my clients are going to be well taken care of, I want them to be working with great people who care as passionately about them and their and their future as I do.
Kevin Mailo: [00:36:47] Absolutely. Listen, I can't believe we've come up on nearly 40 minutes. We should probably wrap up and move to the question portion.
Brennan Carson: [00:36:57] I'm going to add one more thing, Kevin.
Kevin Mailo: [00:36:59] Go, go, go, go. No, no, I love it. Go.
Brennan Carson: [00:37:00] I'm going to add one more thing.
Kevin Mailo: [00:37:01] I'm loving it all. Go.
Brennan Carson: [00:37:02] You talk about - sorry, part of your question was why would you work with a professional portfolio manager? Why would you - so besides discovery, risk analysis, proactive, strategic, all that things - when it comes to not just investments, but this is certainly more in the investment space than it is in sort of the other wealth space, is access. If I go to Wealthsimple, I cannot buy a private debt portfolio. I cannot get a private real estate portfolio. I can't get private equity. So if we're all trying to aspire to, I mean, you think about CPP or Ontario teachers, some of the best managed pension funds in the world, aren't we really all aspiring to have this portfolio that just keeps making 7 and a half or 8% every year with very little volatility? Well, that portfolio looks very different than I can get on my do it yourself platform. So I put, when I launched, when I left and I built my own independent practice four years ago, the first thing I wrote in my notebook - and I am a note taker exceptional - is the democratization of diversification. Let's break down the barriers of who has access to some of these really incredible portfolios that add value, both in return and in risk management to clients.
Kevin Mailo: [00:38:35] I love that. I love that. Brennan, I just want to thank you for coming on like you did tonight, especially on such short notice. This was just amazing, right? I mean, these are the insights that people need to hear. I certainly needed to hear this. And it was eye opening for me just hearing about how the private markets are ten times larger than the public ones. And yet everybody's following what the public markets are doing. So I want to thank you, Brennan, for being here tonight and for those of you that have questions, by all means, reach out to us and we're definitely going to be getting Brennan back on to the show. So with that being said, we're going to wrap up and step into a couple of questions because we do have some people here who joined the live webinar.
Kevin Mailo: [00:39:19] Thank you so much for listening to the Physician Empowerment Podcast. If you're ready to take those next steps in transforming your practice, finances or personal well-being, then come and join us at PhysEmpowerment.ca - P H Y S Empowerment dot ca - to learn more about how we can help. If today's episode resonated with you, I'd really appreciate it if you would share our podcast with a colleague or friend and head over to Apple Podcasts to give us a five star rating and review. If you've got feedback, questions, or suggestions for future episode topics, we'd love to hear from you. If you want to join us and be interviewed and share some of your story, we'd absolutely love that as well. Please send me an email at [email protected]. Thank you again for listening. Bye.