By Gary Brent & Mark Barnicutt, MBA, FCSI, CFA
We co-founded HighView Financial Group in November 2005. Like all new business ventures, we’ve gone through a natural evolutionary process since our inception as we found our unique market niche as an Outsourced Chief Investment Officer. The purpose of this article is to provide an overview of our journey to date, the issues that we see facing the Canadian wealth management industry and to highlight how we believe that HighView is uniquely positioned to serve our clients.
Wealth Management Industry Observations
In November 2005, HighView Financial Group was created as a broad-based consulting business to the Canadian wealth management industry, according to three client segments: Investment Advisory Firms, Affluent Families and Institutions such as Foundations, Endowments & Pension Plans. Core to our beliefs was that the historical foundation and future sustainability of the entire Global Wealth Management Industry will always be based upon earning and keeping the confidence and trust of investor clients. As a result, independence and objectivity of advice to investor clients will always be highly sought-after services. At the time, in the midst of a well-entrenched bull market, this trust and confidence was at risk of being eroded by our industry as it continued to push ever increasingly sophisticated and complex investment products with the promise of unbelievable returns. The industry was further compounding the problem as it moved along the managed asset continuum with poorly designed investment portfolios using efficient frontier methodologies that ultimately proved to be misaligned with the investor clients’ journey in life.
Our Consulting Beginnings
As a result, our initial form of HighView was organized along discrete service segments that addressed core professional practice areas such as multiple manager asset management, goals-based investment/wealth planning and investment governance. Given our backgrounds in leading successful wealth management firms, we also had many opportunities to consult on other strategic “pain points” for wealth organizations that included business strategy, strategic human resource issues as well as wealth management firm merger & acquisition matters. Along the way, though, we listened and learned from our clients, and subsequently began to realize that what clients were truly seeking from us was an integrated set of our core consulting services that were ‘asset based’ as compared to our discrete, traditional consulting business model. In other words, clients were telling us that they valued our advice as “wealth architects”.
The Global Financial Crisis
At that same time, though, the global financial crisis of 2008/2009 had a serious impact on investors and their advisors that finally caused them to realize that investing was much more than simply “returns”……..the notion of investment risk – and loss – was very real! During that time period, investors not only experienced serious market value declines in their portfolios but many alternative investment strategies – which had been the “darlings” of the previous decade – literally collapsed in a truly panicked market that then craved liquidity. Additionally, we all witnessed the loss and destruction of wealth through various frauds and Ponzi Schemes such as Bernie Madoff, Earl Jones and Allen Stanford. As a result, HighView put a strategic plan in place two years ago to become an asset management firm that was more than just simply “selecting investment managers” but addressed the core issues of:
- Comprehensive and objective asset management practices that have a broad range of solutions which avoid conflicts of interest,
- Integrated goals‐based investor profiling using an asset‐liability approach to crafting client portfolios, and
- Stewardship – or the oversight of how client wealth is managed – with a fiduciary mindset.
Return To Our Investment Counselling Roots
Central to this business strategy was the acquisition of Dan Hallett & Associates Inc, which not only provided HighView with an enhanced investment manager research capability but also a registered Portfolio Management securities firm that would enable us to provide fully discretionary investment management services to our existing and future multiple manager/asset consulting clients.
The root issue for investors at this time, though, especially as global capital markets stabilized and then emerged from the financial chaos of 2008/2009, became “How Do We Make Our Wealth Sustainable?”. In other words, investors realized that “making money” wasn’t as easy as it had appeared during the first decade of the 21st Century. The accumulation of wealth requires patience, perseverance and hard work, and investors – whether family or institutional — didn’t want to create their wealth twice! This issue of “wealth sustainability” remains a core issue for clients today, and for demographic and global capital market reasons, will remain a central concern for investor clients over the next few decades.
The Outsourced Chief Investment Officer
As a result, HighView has evolved into a unique outsourced asset management service. We provide an “Outsourced Chief Investment Officer” solution in which we design, implement and help manage tailored investment portfolios for affluent families, the pension & investable assets of their businesses and the foundations & endowments which they support. The term “Outsourced Chief Investment Officer” service is also known as a “Fiduciary Manager“.
In doing so, we take a “back to basics” prudent approach to wealth management. Our sound long-term strategies (“hitting a series of singles” rather than “hitting one ball out of the park”) have been proven to be a key differentiator in our clients’ success. We focus on the preservation of capital with responsible growth.
Its About Wealth Sustainability
From our years of experience successfully managing client wealth in asset management firms, we have designed the HighView Wealth Sustainability Process™, a proven, three-phased approach to create and sustain wealth: effective Stewardship, goals-based Investor Profiling and objective Asset Management.
HighView’s approach is very much aligned with clients who are seeking to make their wealth sustainable because:
1. We have a fiduciary responsibility for our clients’ assets.
- 2. We are only compensated through client fees for objective & experienced advice.
- 3. Client assets are strictly held by third-party respected institutions; never by us.
The journey of the past five years has been exciting. We have had the good fortune of attracting and serving a distinguished and select group of clients as well as assembling an experienced and talented team of industry professionals to ensure that we are in a position to provide our clients with relevant advice that meets each client’s unique set of circumstances.
We’d like to thank all of our valued clients, partners and employees who have supported our business success to date and look forward to the next many years in our journey!
