How Duncan Ross Associates builds long-standing relationships

A step-by-step look at how the firm, and yours, can remain vibrant after 25 years

1. Commit to your investment philosophy

Many boutique investment firms say they preserve capital and produce above-average returns, but Duncan Ross Associates Ltd. does it in an unusual way. The firm offers two private pooled funds (the Pooled Trust, founded in 1988, and the Equity Fund, founded in 1994) as well as segregated accounts. What differentiates the firm is its value-driven investment philosophy, focused on investing in undervalued companies with solid business fundamentals, and an emphasis on long-term absolute performance rather than quarterly relative performance. “The value-investing philosophy is one that has worked well over time,” says Mariel Hamou, marketing and communications. “Our investment style is kind of boring; it allows us to sleep at night, and it allows our clients to sleep at night as well. It is something that hasn’t changed and never will. Our motto is ‘Slow and steady wins the race,’ and we’re committed to it.”

2. Market through word of mouth

The first clients of Duncan Ross Associates were people in the community of founder Robert Duncan Ross: family, friends, and business associates. Since then, the firm’s client base has grown organically through word of mouth. “We believe that if you’re doing your job well and your clients are happy, they’ll recommend your services to their friends and families,” says Mariel Hamou, marketing and communications.

3. Ensure clients are a good fit

“We often refer to a David Ogilvy quote: ‘Avoid clients whose ethos is incompatible with yours,’” says Sophie Dynbort, marketing and communications. To that end, the firm seeks to ensure all clients are a good fit in terms of their investment time horizon, goals, and risk tolerance. “It’s particularly important because our philosophy is long term, and our portfolios are concentrated,” Dynbort says. “We focus on quality rather than quantity, so it’s very important for clients to recognize how their expectations fit within the realities of our investment philosophy. We can normally tell that within the first couple of meetings through a series of interviews and questionnaires. In the early stages of courtship, we discuss risk tolerance and other factors to ensure suitability—but it’s only when faced with a downturn that human nature reveals itself.”

4. Educate clients

Duncan Ross Associates considers its clients as partners, and seeks to educate them about the firm’s investment philosophy. The firm’s quarterly reports are a good example. These reports, called letters, seldom discuss the economy or markets, and don’t focus on short-term performance. Instead, they tell a story that highlights an aspect of the firm’s value investing philosophy. “We see our quarterly letters as an opportunity to educate clients about our way of thinking,” Dynbort says. “We believe that allowing our clients to understand and share our way of thinking, as opposed to just simply reporting our every move, has allowed them to feel more confident and trusting in our decision-making. We’re really building partnerships with our clients.”

For a firm that has not actively sought clients in a traditional manner, Duncan Ross Associates is doing a pretty good job. The boutique investment firm, which is celebrating its 25th anniversary, has built long-term relationships with hundreds of prominent Canadian businesspeople and philanthropists, many of whom remain committed clients for life. How the firm does it, says marketing team Sophie Dynbort and Mariel Hamou, is about more than consistent returns.

5. Reinforce your vision

Good customer service, say Hamou and Dynbort, doesn’t involve being everything to everyone; it’s about doing what’s best for the client. To that end, the firm discourages short-term thinking. “Every once in a while, we get a nervous flyer, especially the way the markets have been the past few years, but we’re not going to perpetuate that fear,” Hamou says. “During these times, we reinforce our conviction in our investment philosophy and like to remind our clients of a familiar quote by Warren Buffett: ‘Be fearful when others are greedy, and be greedy only when others are fearful.’”

6. Adapt

Although Duncan Ross Associates has not needed to actively grow its client base, it recognizes that there’s a natural life cycle in the investment business. “We’ve lost a few clients along the way, and getting the next generation on board with our investment philosophy is not as simple as it seems,” Dynbort says. “Younger people don’t necessarily have the patience and temperament that’s required to weather the ups and downs of the market; they tend to have a short-term mind-set.” The firm has opened an office in Montréal and is gently expanding into the local community. “We’ve met many interesting people in nontraditional ways—mainly due to our involvement in the equestrian, contemporary-art, and aviation communities,” Dynbort says, “and our corporate culture is a lot more colourful because of it.”