Investment Advisor, First Vice-President
Toll Free: +1 (888) 335-0339
Fax: (416) 594-7859
"Forward motion cures all," says Bay Street athlete
By Jade Hemeon
Brian Culbert is an investment advisor who thrives on endurance mountain bike racing and marathon running. He abides by a motto that has carried him through all kinds of challenges: "Forward motion cures all."
"It's a motto for life," says Culbert, 49, first vice president with CIBC Wood Gundy Inc. in Toronto. "Some races test limits of physical endurance, and you learn a lot about dealing with anxiety and self-doubt. I have been on the cusp of giving up, but have found if you just put one foot in front of the other, you can pull out of a slump and go on to win the race."
With many clients feeling anxious and uncertain given the economy and plunging markets, Culbert is using lessons gleaned from his athletic endeavours to help his clients feel more confident and give them the inner strength to stay the course with their financial plans.
"Many clients are scared and, as their advisor, I can help by being empathetic and putting things in context," says Culbert, whose lean and muscular frame is a sign of the rigorous training he undertakes to survive 24-hour bike races and other physical challenges. "Fear is basic to human nature and comes from a lack of understanding and a sense of loss of control."
Culbert shares his practice in a downtown branch with partner Bruce Moore, and the two split revenue and profits down the middle, often working on accounts together. While Culbert is a chartered accountant as well as an IA, Moore is licensed to sell insurance as well as securities. So, in this way the pair provide a "holistic" financial planning experience for their clients.
The average age of the pair's clients is 56, which means about half are already in retirement and drawing upon their assets for income. Portfolios are diversified across blue-chip common stocks, bonds, preferred shares, income trusts, corporate bonds and treasury bills, with the mix depending on each client's income needs and risk tolerance.
Culbert applies his accounting background in analyzing the financial statements of individual companies and in seeking out individual Canadian and U.S. stocks for client portfolios. He relies on mutual funds and exchange-traded funds for investments in small-capitalization stocks, preferred shares and corporate bonds.
Culbert views himself as a "quarterback." If clients already have relationships with tax lawyers, insurance agents or accountants, he is happy to work co-operatively with those experts. But his goal is to bring all the areas of financial planning — including wealth creation, tax, insurance and estate planning — into his stable.
"Operating in silos is never an effective way of seeing the whole picture," Culbert says. "Our goal is not to usurp existing relationships if they are satisfactory. But over time, the tendency of the client is to streamline and consolidate, and we are the beneficiary of that concept."
With total assets under administration of $500 million, the average account size is $1.7 million. But Culbert has no minimum asset level. It is more important, he says, that the client be a good fit in terms of temperament.
"If we see potential because of where a person's career is heading, we will work with that person in the early stages," Culbert says. "If you treat someone [as] a high net-worth client when [that person is] just starting out, it builds a strong bond that stays in place when the capital comes along. The trust is already established."
Culbert's largest client, a $12-million account, started with a $10,000 RRSP 15 years ago.
He believes it's important for clients to understand the concept of risk, and that risk is more than the tendency of financial markets to fluctuate in value. Many people feel safe in government bonds, he says. But it is a false sense of security, as the most "insidious" risk to a portfolio is inflation or erosion of buying power. Clients must have a portfolio that contains the necessary equities to address that risk.
"Whatever the consumer price index is saying, it's rare that the cost of living goes down," Culbert says. "When was the last time you paid less for food, property taxes or a child's tuition fees? Clients are geared to a certain affluent lifestyle, and no one wants to give it up."
To help clients stomach the volatility in equities, he spends a lot of time educating them on market history, showing them how bear markets may have tested investors' patience in the past, but those who waited it out in quality companies were rewarded.
"Most people's vision of the future is a reflection of their most recent experience," he says. "Our role as advisors is to provide context for current events. Projecting a media headline into the future is a perilous way to manage finances."
Culbert also seeks investment income, which he views as a form of return as well as a portfolio stabilizer. His clients have seen their investment cash flow increase in absolute terms this year, even though portfolio values are down.
"For 18 months, you couldn't find a healthy yield on anything," he says. "Now, you can find it on everything. If a client puts money into high-yield stocks or corporate bonds at current prices, it can have a hugely positive impact on income flow."
During the recent market turmoil, Culbert has frequently taken the initiative to contact clients and have quick conversations; that's in addition to regular quarterly and semi-annual reviews. If there's news relating to a security held in client portfolios, this is another good excuse to call. He also has frequent conversations with high-profile fund managers and relays the highlights to clients.
Keeping clients informed of his charitable 24-hour mountain-bike races and marathon runs is also a way for Culbert to deepen relationships. He's planning an 893-kilometre team run of the entire Bruce Trail — which follows Ontario's Niagara Escarpment from Tobermory to Queenston — in September. He and a partner will do a relay, each running 70 kilometres a day. The pair hopes the event will raise $1 million to support a global health-care initiative of Toronto's Hospital for Sick Children, that is designed to improve children's health in selected African countries.