If one of our first clients happened to slip into a 28-year slumber, they would not recognize the firm we have become today.
New beginnings
Cosmetically, with our move into lighter and brighter offices, the look and feel of the firm have dramatically changed. But things are also very different under the hood. Accelerated by the pandemic, the three Ps of business, “People, Process and Products” have all undergone a massive revolution at Foster & Associates.
The People certainly have changed. With my father’s retirement more than five years ago, there is not a single employee that saw the dawn of the firm in the early 1990s.
Process is where the firm has made the greatest strides. Gone are the typewriters, filing cabinets, fax machines, and trade tickets. These have all been replaced with digital processes, cloud document storage and web-based client services. Even this letter, which as little as two years ago might have come in a paper Quarterly report, is coming to you now by email or social media.
Product is where the firm has seen less of a revolution than a continued evolution. There was a time when an investment dealer was judged by the strength of its stock picks. Benefitting from there being very few securities to pick from, clients were much more highly attuned to the fates of individual securities. Now, worldwide, there are more than 50,000 stocks available for purchase, and nearly as many mutual funds. Being intimately familiar with even a fraction of these instruments is close to impossible. Instead, clients are now focused more on overall portfolio performance, portfolio construction and costs. This is where Foster & Associates has been working hardest.
Portfolio construction may sound geeky, but the best way we can add value for our clients is to build portfolios that allow them to keep their investment plan on track and spare them the gut-wrenching volatility that seems to be more and more normal. One way to do that is to present clients with opportunities to diversify beyond the household names they know at the mall or on Amazon. That means exposure to small-capitalization companies or European or Asian ETFs, all of which can help avoid the high concentration in home-grown names that has been the downfall of Canadian investors over the years. And, of course, this has meant embracing Alternative Investments.
Over the past year, Alternatives have been a savior in our Family Office Group portfolios, helping us dramatically limit losses as stock markets have dropped double-digits. Our Private Equity and Private Real Estate holdings in particular have performed very nicely despite the upheavals elsewhere. I hope that by being an early adopter of these instruments, the firm will become thought leaders in the space and be able to quickly and capably evaluate new Alternative Investments as they present themselves, all for the benefit of our clients.
Some things never change
Despite all the changes the firm has seen over nearly three decades, it is my fervent hope that our values will never change.
Passionate independence and a strong disavowal of the conflicts of interest that bedevil the industry remain central to our corporate strategy. But so is the sensitivity to client costs. I believe that, in general, the fees our bank-owned competitors charge are egregious. Accordingly, part of my mission is communicating the message that when Foster & Associates charges a fee it had better be reasonable – and you should be confident we will work hard to earn it.
Disclaimer: This article is for general information purposes only, and is not legal, financial, or tax planning advice. Everyone’s situation is unique, and this article cannot apply to every person. The reader should not take any action, or refrain from taking any action, as a result of this article without first obtaining legal or professional advice.
