In 2008, Audrey Robinson joined multifamily wealth-management firm the WaterStreet Group Inc., the only firm of its kind with a national presence. Her assignment, as chief investment officer, was to build out an investment program for the business, and it was perhaps the most inauspicious time for such an undertaking, especially after what she calls “the go-go years” of the 1980s and 1990s, “when it was almost like shooting fish in a barrel in terms of making money.”
“Investor expectations were that markets just went up,” she says. “Then came 2001, followed by 2008, and people were reminded that markets not only go up but they also go down—and can do so pretty significantly, substantially, and painfully.” Robinson’s primary role since the economy’s collapse has been to build the firm’s investment-management platform using an open-architecture approach, meaning that the business doesn’t manage money itself but instead uses external managers. The change has helped the firm rebound and has even led to new partnerships.
“I had a client say to me once, ‘Audrey, I don’t want to have to get rich twice,’ and that really resonated with me,” Robinson says. “It really informed how I think about managing private-client money.” Starting after the financial crisis, she and WaterStreet began spending time on the front end, reflecting on whether more traditional approaches really help to protect and preserve capital for private clients. The firm experimented with new ventures such as farmland investing, which has a long history in the US but was relatively new in Canada at the time, and when clients responded enthusiastically, the firm realized that alternative strategies had to have a place in its program.
Facts & Figures
Assets under management (AUM) by WaterStreet
Average AUM of WaterStreet’s top 20 clients
Increase in the number of employees over the past six years
Years of experience that Audrey Robinson has in the Canadian investment field
The year that Robinson joined WaterStreet—and the year the economy took its largest hit in decades
Robinson and WaterStreet also consulted with a number of other multifamily wealth-management offices in Canada and the US, which led to the development of the firm’s risk-based approach to investing. It’s a fairly straightforward method that categorizes investment strategies by their volatility. “It made sense to me, and it certainly resonated with our clients,” Robinson says. “What we do is categorize every investment strategy into … risk categories: cash-like risk, lower-equity-like risk, higher-equity-like risk, and private investments. We tailor every client portfolio across that risk spectrum. That’s our risk-based approach.”
WaterStreet is unique in that the firm is integrated and multidisciplinary, with all the core disciplines of a family office in-house, including accountants, tax specialists, and lawyers. “I tell people that I know enough about taxes to be dangerous while my tax colleagues know enough about investments to be well informed, and that’s important to us,” Robinson says. “When I am the investment counsellor or the portfolio manager on a client team, I want and need to know exactly what’s happening in terms of estate planning, tax planning, and risk management. I need to know and understand everything that we’re doing for the client because I need to make sure that all of the teams’ activities are fully integrated. My colleagues on the planning side need to know and understand all of the investment strategies in case there are any tax ramifications. Where is the asset located? Is there a trust, a foundation, etc.?” Overall, that’s the WaterStreet approach: the integration of a multidisciplinary group of professionals.
In part thanks to Robinson’s efforts, Scotiabank, Canada’s leading international bank, purchased WaterStreet in 2010, raising the firm’s profile considerably. It had been growing organically, and Scotiabank, recognizing the growth of high-worth and ultra-high-worth clients in Canada, took the company in to be its distribution platform for ultra-high-net-worth clients, initially in Canada. The bank appreciated WaterStreet’s core group of services and individuals and the value of its objective advice across investments, planning, tax, and more. “That’s really important to our clientele, and Scotiabank understands and respects that,” Robinson says. “We are very different in that we truly are a multifamily office, and I think that’s very important to emphasize. I’ve worked in another financial institution where the attempt was to create a family office in-house, and it just didn’t work. They just couldn’t break down the silos.”