Andrew Auerbach (00:02) Well, hello everybody. I am delighted to welcome Patrick Keely to the Beyond the Bank podcast. Really appreciate Patrick joining us. What I thought I would do is give a little bit of a bio on Patrick. He has had a storied career in wealth management and continues to do really interesting things in the industry. And then looking forward to a great conversation with him.

Patrick brings over 30 years of experience in the industry. He's been managing high net worth businesses and client portfolios throughout his career. He began as an advisor, actually, as an investment advisor at Nesbitt Burns in 1993. He had great success as an advisor and then moved to leadership, became a national sales manager at Charles Schwab Canada. He was the president of BMO's

a full service brokerage firm in Chicago. And he was the head of the U S sales force for Beemos private client group in 2005. He was appointed the president of RBC private council and then later became co -president of RBC Phillips Hager and North investment council. He served as the managing director of Gleskin chef before joining. and I'm really looking forward to hearing this pivot.

Patrick Keeley (01:12) .

Andrew Auerbach (01:23) before joining a boutique firm in Ikshuk Capital Management as president. In August, Patrick acquired Seven Hills Capital, which is a values -based, high net worth boutique. Patrick is very active in the community with a number of philanthropic efforts, which we'll hear about as well. And so Patrick, delighted to welcome you to the podcast.

Patrick Keeley (01:47) Thank you, Andrew. It's a pleasure to be here.

Andrew Auerbach (01:49) Well, before we get started, listen, you're a very interesting, interesting person with a lot of interests. And before we get into the work side, why don't you tell us a little bit about what you do for fun?

Patrick Keeley (02:03) For fun, well, I would say I'm happiest when I'm outdoors. So, and I'm with family and friends. Those would be the things that are most important to me, but I'm fairly active physically. I like to stay fit and do things to keep my mind sharp and healthy. And relationships are very important to me. So spending time with people that I enjoy spending time with is also very important.

Andrew Auerbach (02:29) One thing I've always found interesting, I've known you for a number of years, Patrick, is you have a very clear view of the intersection of personal health and work. Maybe you can kind of give us a little bit of that background and the reason why you see these things so intertwined.

Patrick Keeley (02:48) Sure, well, I I think like a lot of things in life, sometimes you need to have adversity to move forward and to learn and to evolve. And like many people in our industry, I have at times in the past put work ahead of just about everything else. And that has affected relationships. It's affected my own physical health, mental, spiritual health. So having matured and evolved in life, I've come to realize that everything is connected.

And if I'm not healthy mentally or spiritually, then I can't expect to be healthy physically. I really don't think it's possible to have health in isolation. So to me, it's kind of like in golf when you hit the ball on the sweet spot or in tennis, when you hit it, the ball in the center of the racket, you kind of know when you've made good contact. To me, when I go to bed at night, if all things are firing and I've been productive at work, I have good relationships with the people around me and...

and I'm at peace, then I think that that leads to a good next day, hopefully. So that's really what I focus on is an integrated level of health.

Andrew Auerbach (03:55) You also take that approach with your clients as well. I've noticed that you seem to really promote wellness as a concept beyond a portfolio. Maybe you can tell us a bit about that as well.

Patrick Keeley (03:59) .

Sure, well, I mean, I think the cover of the Toronto Life magazine this month is about wellness and just the level of commitment and awareness, I would say. So there's probably greater awareness around wellness than there's ever been at any point that I remember in the past. And as awareness rises, so do people's interest and level of commitment in trying to achieve wellness in their life. So I find for me to be of value to the people

that I work with, I need to lead by example in some cases, but I also need to be empathetic to some of their struggles and their challenges. And if I can stay with some level of credibility that I have made progress in some of those things, then I think I can be of service to my clients. And that's really what I believe my role to be, whether it be in leadership or in working with clients individually and just in life in general is to be of service.

Andrew Auerbach (05:06) That's amazing and such a unique kind of perspective. You've had a fascinating career. You've moved from being an individual producer to being a leader of very large businesses to creating firms on your own. And there's not a lot of people in our industry that have traveled that way. Maybe you can kind of just walk us through from your perspective.

how that happens because it is sort of an unlikely trajectory.

Patrick Keeley (05:39) Yeah, I guess when you get into the business as an advisor, the way I did, you are effectively becoming your own business person. So to succeed and to differentiate yourself in the world of advice, and there's many of us out there giving it, you have to have some kind of edge or value proposition. So I learned early on having joined Nesbit right out of school that there needed to be some way for me to

to gain clients, especially as a young person. So that was the first chance I had to test myself and learn whether or not I could build a business. But having had a lot of experience in my earlier stages in life with team sports and student organizations and having been fortunate enough to served in leadership roles in some of those areas.

I knew that I enjoyed working with people and trying to help motivate and inspire people. So I was given an opportunity early on in my career to be the sales manager of a downtown Toronto branch, which was the first taste I had in being in management. then as you outlined earlier in this call, I went on to have some leadership roles, which again, allowed me to evolve and expand and make some mistakes along the way that you learn from. So.

I think I was able and very fortunate to be given the opportunity to understand and learn what leadership meant, what sales meant, and what some of the key success factors were in each of those areas. And what I learned early on in life is that I liked both. I like managing, I like growing, I like building.

but most importantly like being of service. So that means helping people accomplish goals, whether they be employees or partners or teammates, but also people who've entrusted us to, in my case, manage money on their behalf.

Andrew Auerbach (07:39) And so that pivot, sounds like you have that expression of being a natural leader. It sounds like you've had leadership roles, you know, in sports, doing other things like that. But that first sales manager position, you must have been a pretty young guy when they gave you that sales manager role. How have you found that transition? In other words, a lot of advisors are so fiercely independent minded.

Patrick Keeley (07:56) Mm -hmm.

Andrew Auerbach (08:08) They pride themselves on being their own snowflake. They all want different things from the leader. How did you find that as sort of a young guy pivoting from colleague to boss?

Patrick Keeley (08:14) Hmm.

Well, it's funny because at my stage of life now, I think it would be a little bit unnatural for me to have a 24 or 25 year old person telling me how to run my business. But that was the responsibility I was given at around that age. fortunately, I don't think I was asked to be a boss per se, but more to help organize people.

Andrew Auerbach (08:31) You

Patrick Keeley (08:51) around ideas and best practices and ideally lead by example. And at that point, I had a fair bit of traction as a salesperson. So in that case, I think that it was an appropriate role for me and I think people accepted me. But obviously as you get older, you learn some things along the way and humility is one of them because you might at least in my case, there were.

times where I thought I had things figured out only to look back now and go, what the heck was I thinking at that time? And the fact that I was telling people to do things the way I thought at the time seems a little bit ironic. again, what I've learned at this stage in life is that, you sometimes it takes friction to smooth the edges of our natural born talents. And we may all be born with talents that need refinement and experience is the way to get there. So I've been very fortunate in my life that people have trusted me and given me opportunity and

Andrew Auerbach (09:23) You

Patrick Keeley (09:43) And I've learned along the way and I feel very fortunate to have been able to evolve.

Andrew Auerbach (09:47) And so in terms of that evolution, know, I often think about this in terms of rules and positions I've had along the way is you could, you know, jump in that time capsule and the Patrick of today gets to see that 24 year old kid. What, what, what advice would you give the 24 year old Patrick embarking on leadership? Clearly you've been successful, so there's probably not a whole lot of regrets, but, but I have a

Strong sense, probably there are some tips that you would provide.

Patrick Keeley (10:21) Yeah, I think whether it was the way I was raised or just naturally evolved as an individual, I don't think I've ever kind of lived with the belief that I have all the answers. So I've always been open minded and interested in other people's perspectives. In fact, I quite enjoy other people's perspectives. I don't only want to think in my own echo chamber.

I think I've been pretty good at engaging people and making people feel a part of the things that we're working on together and in collaboration. fortunately, I think for whatever reason, I've just kind of naturally had a level of wisdom that maybe was advanced at certain stages of my life. Maybe it being the eldest of three boys, I grew up faster than some people. don't know. was very

attuned to my father and my grandfather and older people around me. So there may have been some ways that came from that. I think that being open minded and humble and knowing that you don't have all the answers and there are people around you who can be of assistance in helping you evolve and refine your thoughts. If ever we lose sight of that or fall into the belief that we don't need other people, then I think that's a mistake. I would say that to anybody at any point in life.

Andrew Auerbach (11:43) Earlier, you also mentioned though, a little bit of the prioritization regret that there were times when career sort of trumped other things. Do you think you would look at the prioritization differently? Or do you think that's simply a point in time reality of big jobs?

Patrick Keeley (12:03) I think it's a bit of both. When I went down to Chicago with Bank of Montreal, I was given a lot of responsibility and probably more than I was ready for in some respects. And by that, I also mean my ability to deal with stress. so, you know, ultimately, as you know, the time that I spent there,

ended because of a health crisis for me. And I believe that the health crisis was triggered in large part because of stress. don't, you there's no way of knowing that for sure, but ultimately, as you know, I had cancer. And I just, when I think back to that period of time, I was so focused on growing businesses and on trying to make other people happy, including my boss, that I lost sight of what was really most important in life. And that is

and relationships and they're connected. So I think I kind of threw everything by the wayside, whether if it had to, it meant not exercising for long periods of time, that was okay, because ultimately what was most important to me, at least so I thought at that time was my job and the people I worked with and the people who needed me. So I devoted a lot more time than I should have and both my children were born during that time. So that was a busy time in life. And I think I let stress get the better of me. I've learned.

coping skills and understanding that work's not the only thing that matters in life, obviously. So I think it's very important for people at all stages of life to learn how to manage stress.

Andrew Auerbach (13:36) That's amazing. And being a cancer survivor, you've done so much on the charitable side. Maybe you could just take a couple of minutes and, you know, talk about pretty well that's carried on your entire life. You've been active, I know, with a number of causes you care deeply about and have frankly raised a lot of money for them. So we'd love to hear that.

Patrick Keeley (13:57) Well, you know, when I was diagnosed with cancer, I was in Chicago and my initial treatment was done at Northwestern Hospital in Chicago, which as a Canadian living in Chicago, I felt pretty fortunate to have such a great hospital with great doctors. But ultimately, we made the decision to move back to Canada to be closer to home because the was fairly dire at the time.

In doing so, I reached out to some contacts in Toronto and determined where I was going to be treated. Ultimately, we decided to go to Princess Margaret. And when I told the doctors at Northwestern that I was going to Princess Margaret and the doctor who's going to treat me, they were like, wow, you're good for you. Like, that's a step up from where you are right now. They really viewed it as a superior program for me in the situation that I was in. So that was a real aha for me. I didn't expect as a Canadian for a US based hospital, a big name like that too.

have such admiration for Princess Margaret and the doctors there. So ultimately I was treated there and I spent months at the hospitals and inpatient going through a variety of different ordeals to get healthy. And I just, the care I got, the nurses who were so kind, the doctors who took such an interest and ultimately to the point where they cured me from something that at the time seemed like a real long shot.

I, how can I not be indebted to an organization and to the people who allowed me to be here today and have this call with you? So I will forever be indebted and I will always do what I can to help the hospital, you know, and the organization itself. But I also, since that time, I don't think there's ever been a moment in time where I didn't have friends or somebody I knew well, who was, was dealing with cancer themselves or someone in their family. So that has put me in a position where

Having had the experiences I've had, I've been able to be of service to those people in the community and people around me. But also, just given how hard the hospital worked on my behalf, I feel like it's the least I can do is to leverage my network and my willingness to raise money to help them continue to help other people.

Andrew Auerbach (16:07) Wow, that's really inspiring and encouraging, you know, at a time when I think all of us feel the strain that the healthcare professionals are feeling right now and we can be very self -critical. That's pretty encouraging to hear your experiences. And I certainly know from clients and myself, we do have world -class healthcare in Canada, and we sometimes, I think, lose sight of it.

Patrick Keeley (16:29) Mm -hmm.

Yeah, I think that's true.

Andrew Auerbach (16:34) That's incredible. So let's, let's pivot a little bit. If you don't mind, Patrick, I really want to get your perspectives given. you've got such a unique lens, between the brokerage world, the investment counseling world, the bank owned world and the boutique world. And all of these worlds have a wonderful advisors and professionals in them. They are different and they're distinct. And so I can't think of anybody better to

Kind of give us your perspectives of the Just just give us a bit of a travel through all of those different areas Given you know, you've been successful in all

Patrick Keeley (17:15) Well, thank you. I I feel lucky to have had the experiences I've had. And I think that that's one of the things that for me anyways, has enriched my life is experiences of all kinds. so having grown up in this business and with family who were in the business, I knew from a very early, very early on in life that I wanted to be a stockbroker as I thought back in those days, I referred to them today. And, you know, had my first

sort of trip it, when we were kids, my parents lived in Burlington. So I remember when I was about 10 years old, my dad taking me on the train with him to work one day and sitting in his office where he was a broker. And at that time they had quote machines that they shared with pods of people and ticker tapes and various things that seem very dated today. at the time he gave me a whole pile of annual reports to take home and review. And I ended up choosing a couple of different

stocks through that process that I invested in when I was 10 and continued to get my dividend checks for years later. And that was kind of when I knew I was hooked and wanted to be in the business. starting it and I actually, when I joined Nesbitt Burns, it was still Nesbitt Thompson, which kind of dates me it was in late late part of 92. And it still felt like a brokerage firm more of a boutique kind of brokerage firm. And at the time, there was a fair bit of discomfort and

mystery around what the bank was going to do to this brokerage culture we were all a part of. And that was so early, it didn't really matter to me one way or the other. But for people who'd been around for a while, the bank acquiring the brokerage firms was of concern to them. But for me, I loved it. I thought it was great to be part of a larger organization, to have an established training program, to work with people who'd been around for long time. I spent some time on the bond desk. And I still think that the banks are wonderful places for people to learn.

and there's tons and tons of opportunities. So I was very lucky to have some great mentors and people to learn from. But then as I was given the opportunity to help Schwab start in Canada, and that was a brief leave of absence from Bank of Montreal before I came back, but Schwab wasn't in Canada very long, but I was one of the first dozen employees and we went on to have 120 or so before it was sold.

That was an interesting experience building something which I really enjoy and watching the firm get incrementally bigger with every employee versus, you know, in a large organization, don't really notice one or two people at a time. So there was something there that interested me. And then when I was given the opportunity to go down to Chicago for Bank of Montreal and start a business for them that didn't exist from scratch, that kind of tapped into that bug for me that entrepreneurs must feel because working in a bank, I didn't really consider myself so much of an entrepreneur, but

It felt a lot more like that experience when I was in Chicago. But ultimately, it was still a bank. You're still doing it with the bank's money. You're not really a shareholder per se, but it was a great experience. then when I was at RBC and running RBC Private Council, it was very evident to me that the people who worked in the investment counseling business viewed themselves as part of a smaller group that was part of a larger group.

and they wanted to focus primarily on the culture of the smaller firm within the big group. when the bank itself kind of lent too far into their world, that caused some angst for them. And so that was an interesting observation for me and coming in as the president at that time. I think the first thing I needed to do is to reassure them that I understood the unique differences and the priorities they had that might not have necessarily been the same with the bank.

I appreciated the fact that there was a lot of people took ownership for the overall organization. And that was what attracted me to Gluskin Chef, which was a very storied brand, as you know. And I really enjoyed that period of my career. came in at the same time as a guy named Dave Rosenberg, who I think is pretty well known in this industry and had seven great years with Dave traveling around the world.

trying to help grow our brand outside of Canada. And we were successful in doing that in the US and Europe. And to me, that was a very different experience than any I'd had in the past because at Glassken Chef, it was, we were all working for the firm. We were all in the boat rowing together. We may have had individual roles, we were successful or not together as a team. And I like that kind of culture. I think that's a really attractive feature for me. And so as...

Gluskin Chef changed and ultimately doesn't exist today. My brother who started in a wealth management firm, you know, having left, Nesbitt Burns, was looking for some help. So I went and joined him to help him build up his firm. And that was a very different experience again, because instead of having the pedigree and experience of 30 years that Gluskin Chef had when I joined, it was a brand new firm.

Nobody had heard the brand and you're really kind of now in pure entrepreneurialism as you know and are now experiencing. you know, there are differences along the way, but for me, what I like most about it and where I see the biggest difference between counseling businesses like the ultra high net worth business that we're in today versus call it the brokerage model of the banks is that we have an institutionalized way of doing things. It's very difficult to say to a broker,

any one of the bank firms that this is the way we do things and you're going to represent it that way. We know what the response would be to most brokers if we were to give them that kind of sales pitch. So they live within certain restrictions and that's a good sales feature for us at an independent firm because we're not pushing proprietary products and we don't have sales goals to meet. We're not trying to qualify for a cruise or a trip or something like that. And I think that, you know, the

the buyers of these services are becoming more aware of that. So I like the fact that at this stage of my life, I've developed a strong understanding of what's important to me, what I think is important to the people I'm in service of, and I want to be able to represent that in the purest form I possibly can. And to me, that's sort of the distinct feature of a high net worth business that's independently owned versus a bank, for example.

Andrew Auerbach (23:47) Yeah, it's such a good walkthrough. I've got a few questions along the way in you taking us on that journey. If we go back to Nesbitt Thompson to start with, the one theme that seems to be a constant, Patrick, is the importance of culture. And I think the brokerage firms, the Nesbitt Thompson's, Burns Fries, Wood Gundy's, these firms all had a very strong sense of culture while

also had a very strong sense of individual, which you've talked about as a very pervasive part of the brokerage world. There's no prescription. There's not a one size fits all. People can be very successful and be entirely different people in terms of their approach to business development, the types of clients they have, et cetera. Can you go back and describe maybe if we start there, particularly because you sound like the kid that was destined for a Wall Street career.

You you fell in love early with the markets. You had role models clearly along your journey. Tell us a little bit about that culture back in that day.

Patrick Keeley (24:58) Yeah, it really changed. There's some really interesting characters in my branch. And I shared a quote machine with the guy in the cubicle next to me when I started in the exchange tower. And there were some, I call them old school brokers who still had, you know, paper copies of chart books that they were reviewing and, getting the ruler out and connecting dots and all the rest of it. And there were some people who were very opposed to the ownership.

the bank ownership of these firms. That was at the time that the pillars were coming down in Canada and banks were buying insurance companies and brokerage firms. And I think that when I look back at my experience in the brokerage business, and it's probably still true to this day, but maybe to a lesser degree, brokerage firms are the sum of parts. what I consider the culture in the investment counseling

space is we're the parts of the sum. So it's, we decide as a business what our priorities are, what is our value proposition? How do we differentiate ourselves in the marketplace? And we will attract people who are like -minded and we will attract clients who are like -minded. Whereas at Mesbit or any one of the brokerage firms, it's a numbers game to some degree. The more

the more people you have. And in some cases, it's better to have people who are uniquely different because they might tap into different cultural communities or various different interest groups that give the bank more breadth. and that makes sense if you're doing things at that scale. But for us in our space today, and you and I am referring to, I believe we need to begin with stating what, who we are, what's our why, what's important to us.

and what can we truly deliver to clients. We begin with that and then clients make decisions on that basis as do employees that we hope to hire and bring on to our teams because it will break the model if we're attracting the wrong kinds of people as we know. And in the brokerage business with the numbers of people you have in these sales forces, it's impossible to have one way of doing things. So the only way the banks can manage that is by controlling the process and the products and the services to some degree.

So that's kind of solution -based versus cultural -based. And I think that what we establish in our business is a culture, is a way of doing things that's beyond just here's the model portfolio that we use at RBC Dominion Securities. It's saying here's the why. This is what it means to be a client of our firm and you have to be pure in the way you deliver that. So to me, that is sort of the defining difference between the larger scale distribution models and the ones

like the ones we run today.

Andrew Auerbach (27:46) parts of the sum, that's really brilliant. That's a great way of articulating a team -based philosophy and mindset and carving out a value that can be very distinct and unique. It doesn't have to be great for every client that's high net worth in Canada. It could be for a subset of clients with a very specific approach and a value proposition that works. And it takes me, Patrick, our journeys have been fairly similar.

Patrick Keeley (28:06) Mm -hmm.

Andrew Auerbach (28:13) You know, we've both kind of done big corporate jobs. We've both done entrepreneurial things. You and I have had this conversation offline a number of times, but from your perspective, why are there only 300 or so investment counseling firms in Canada relative to call it 20 ,000, you know, boutique RIA firms in the U .S.?

Patrick Keeley (28:14) Yes.

I think it's the barriers to entry and it's not necessarily all financial or regulatory. It's also about confidence and fear. look at the stage of life we're at as we begin our entrepreneurial careers. We've done the big jobs. We've been part of those organizations. And I think that that helps us. gives us a vantage point that will help us be empathetic to people who are coming from a variety of different

business models, both employees and clients. But I really think that when I was a broker, I remember thinking it would be great if this was my very own business and I was doing this on my own, but I could never replicate the infrastructure that was around me. I wouldn't even know where to have begun, you know, earlier on in my life as to how to set out to do these things. There were people who did them. I have friends today who

you know, were either part of or did establish their own firms earlier on in life and they can be very financially rewarding and some of them gone on to build great brands. But I think the, the, the, the, the person, the average person that contemplates such a change, there's a lot of things that, that, are barriers that, that come from a place of fear. think for the most part, I really think that that's what it is. It's just taking that plunge. It's a level of security that you give up or perceive security. Perhaps we perceive the security of the bank more than we should.

And I, what I'm coming to realize now as well, there's no guaranteed paycheck when you're an entrepreneur. I think that there's almost more stability, more potential for stability because you're in control of your own destiny. And if you have confidence and conviction in what it is you're trying to do, then to me that creates more stability than wondering whether or not there will be a sea change at the bank and leadership or direction or whatever it may be.

Andrew Auerbach (30:27) So if you look forward, then do you see a catalyst event where we could see a thousand boutique firms as opposed to 300? The parallel I would draw Patrick is, know, I talked to somebody in the U S who reminded me that the explosion of boutique firms in the U S the R I A market really got started as a result of the financial crisis that

there was a loss of confidence in banks and wirehouses at that time. And as a result, a lot of breakaways, client expectation, advisor expectation, and that was a bit of the seed. Whereas as we know, Canada did exceptionally well through the financial crisis and it was a bit more, it didn't really cause any kind of a sea change per se, this fear factor and sense of security within the banks.

Patrick Keeley (31:24) Yeah, think that that's an interesting point. I think in the US there were a number of very large financial institutions that, you know, nobody would have imagined would have gone down the way they did not long before the financial crisis. the fact that that happened to household names and clients would have been impacted by that quite dramatically, it probably was almost a defensive

response for people who were established to create their own firms to distance themselves from the wreckage of some of those larger financial institutions. Whereas in Canada, you could almost argue that there was a reverse phenomenon, that the Canadian banks fared so well through the financial crisis that there was some argument for wanting to be part of a Canadian bank, for saying, have the stability of a Canadian bank, as if ever there was a true test of safety and security, that was it.

And I was at Gluskin Chef through the financial crisis or shortly after. And one of the things that helped our cause in business development outside of Canada was the fact that we were from Canada. So I remember the perception and just the, you know, it amounted to people wanting to move to Canada in some cases, but certainly do business with Canadian institutions because of that perceived stability. But, you know, as that becomes more of a distant memory for all of us, I think that

You you look at, I know it probably took you quite a bit of time to go through the OSC and the process to get licensed to build your own firm today. That time is growing longer and longer. So there obviously are more and more people taking this leap. And like everything, I think the pendulum will swing far in one direction and then probably back. But I mean, when I was in Chicago, I can't remember the exact number, but there were tens of thousands of banks in the U .S. Even since that time, there has been a fair bit of consolidation.

And in the US and the RIA model, which you and I both study and think that's kind of the way of the future in Canada, you're starting to see consolidation there as well. So I think there's probably room for and probably a good argument to be made that there could be some people who find themselves with like -minded objectives and like -minded people that can come together and perhaps one plus one equals three in the investment counseling space. But the thing that I think we all cherish and value about our business model is that it has a

is size. mean, at least from my perspective, I don't want to be a huge firm where I don't know everybody at the firm and I don't know what we're doing. And there's a million different ways of doing it. Like to me, if you're going to, this is about building a brand, the brand has to stand for something and everything that happens below that brand has to be consistent. Otherwise the brand is no longer a value. so the challenge in consolidation or &A in our space is we all feel pretty passionately about our brand. So unless you find people who have the same vision, it's hard to bring things together.

Andrew Auerbach (34:11) Yeah, I think that's an excellent observation. And you know, that's certainly what we've seen as well. When you have 300 or so independent firms, they've all grown up differently. They're all very regional, right? They're they're in a specific market. They've run money a certain way. And they haven't necessarily done the big organization piece before of how do you retain elements of your culture while getting bigger?

Patrick Keeley (34:25) you

Andrew Auerbach (34:38) these kinds of things. But I also think you hit it on the head that we, and I know you and I share this view, Patrick, we have a responsibility to spread the word, which is to let people know that it is doable to establish a firm. And frankly, having more boutique firms is good for the entire industry. It's good for clients, and it's certainly good for the boutique wealth management space that we're operating in.

to see more successful firms doing things in a unique way. That unique value that you described earlier to have a point of view of what you're bringing to the table. Why do you wanna set this firm up? And your comment about the backlog is a good one, that it takes a long time to set up a firm. It's a heavy lift. There's a lot to it. It's certainly not for the faint of heart. However, these obstacles

Patrick Keeley (35:09) Mm

Andrew Auerbach (35:32) have really been overcome in the US where just to put it in perspective, it's probably about three months to establish a firm in the US and probably about a year in Canada right now.

Patrick Keeley (35:41) Wow.

Andrew Auerbach (35:46) would be by, by -

Patrick Keeley (35:46) Yeah, I'm hearing a I think it might be longer in Canada at the moment. But who knows depends on how successful you are with your application and how thorough you are. But you know, I my feeling is there's probably a lot of people who are at bank owned brokerage firms and other other platforms where they would desire greater independence. And probably many of them have thought about starting their own firms.

Andrew Auerbach (35:51) Yeah.

Patrick Keeley (36:13) and for whatever reason have been stopped in their tracks, whether it be an inquiry to the OSC to determine how long it's going to take or just not knowing even where to begin because people who are often successful in sales might not necessarily have the same skill set as somebody who is a strong administrator to go through the tedious amounts of paperwork and regulatory things that are required to set up a firm. So it is a lot of work. But I think that and it's probably a hope I have as well and I'm guessing you share it is that

For some of those people who might be on the sidelines and like the idea of independence, but don't know how to get there, there are a lot of good independent investment counseling firms like ours in Canada. mean, if 300 is number, that's quite a few to choose from. And maybe for those people, like kick some tires, go out and talk to the people who are in the independent space, because a lot of value can be created for those individuals, for their clients, and collectively for those of us.

in this space by finding the right people and growing our scale that way. I Glesk and Chef was a small farm at one point, it became a household name. There's a number that have done, Phillips Hager North was the same sort of thing. To me, that's the opportunity all of us have. for the people who are financially motivated, the principals of Phillips Hager North and Glesk and Chef both have had liquidity events and they were extremely meaningful for them. And in many cases, those guys just never changed jobs. They were in the same desk doing the same thing, but

a number of things happened around them that led to huge financial rewards. So I think we all know that that possibility exists. And for the people who are contemplating whether or not they want to be a part of it, it doesn't have to be an all or none solution. So if they're paralyzed with fear or just not sure whether or not they can do it, go out and talk to some of the people like you and I who are running businesses ourselves with very ambitious plans. And if the ideas or the culture that we're building

appeals to them, then they're a great opportunity. We want to talk to them and they should want to talk to us too.

Andrew Auerbach (38:12) Yeah, I think this is an excellent point. And you know, that has been my experience through launching Delisle is the openness of virtually every single firm we've approached to have a conversation, talk about what is working for them, the obstacles, and a strong encouragement for more like not just potentially join our firm, but set up your own firm. It's good for us. It's good for the industry.

Patrick Keeley (38:38) Mm -hmm. Yep.

Andrew Auerbach (38:39) to have just to have more independent boutique firms. And your point about the value of equity is an excellent one. You we've seen that phenomenon in the US, certainly where the valuation of these firms has been, you know, growing very, very quickly over the last decade, a lot of it due to the consolidation you mentioned earlier, but a lot of it is just understanding what is the value of equity and the difference of being an employee versus an owner.

Patrick Keeley (39:06) Mm -hmm.

Andrew Auerbach (39:09) is something that is important to understand. And then it might not be for everybody, but it certainly is something that you should be educated on. So let's shift a little bit. I'd love to talk about client expectations and where you see clients going. And I think a good way to start is for you to describe Seven Hills. It's kind of a new venture for you and maybe describe a little bit about what your approach is to the market.

Patrick Keeley (39:10) Mm -hmm.

Agreed.

Andrew Auerbach (39:38) And in there, let us know where you see clients going in the future.

Patrick Keeley (39:42) Well, I've come to realize over time that, again, our firm, Seven Hills, we have named the hills after seven core values that are very important to us that we all share and live by. And the first one and the one we emphasize the most is humility. So as an investor and as a portfolio manager, I've come to realize over time, it's very difficult to beat the benchmarks that we all measure ourselves against. So much so that

we're comfortable saying we want to own the benchmarks. We're not going to try to outperform them through our own active stock picking. That's just, I've been trying to do it my whole career and sometimes you're successful and other times you're not. But to run a diversified portfolio with good risk adjusted returns, I would rather own the market as the core of our equity portfolio. So what we use are ETFs almost exclusively.

And the core of our portfolios is generally the markets themselves. So the S &P 500, for example, would be a major core holding for us. And then we actively manage risk by having model portfolios. We have five at our firm. Most clients fit into one of those five. If there people who slip between them somewhere, then we customize a model for them. what we do is we actively manage risk through asset allocation.

through our PM committee that meets once a week to talk actively about markets. look at a number of quantifiable metrics and risk things that we focus on specifically. But rather than trying to pick stocks, we're using cost and tax -efficient ETFs, largely the indexes and subindexes to build portfolios. So that's where we started saying, we're gonna keep things simple. And this is not just a personal opinion, the facts support our approach.

As you know, almost no portfolio manager will outperform the markets over an extended period of time. It's possible that some will for short periods of time, but even in short periods of time, the majority of managers underperform the market. if I know that I can outperform the large majority of my competitors by owning the market, to me that's a pretty straightforward approach and our clients support that. So that hasn't been something where people have said, well, you're not adding value if you don't have the inside edge on oil and gas stocks, for example.

We begin with that. what our focus is, is the client experience. So where I really want to differentiate, and I think the people who have been working with us for some time would understand and advocate on our behalf is that we're trying to make them feel differently than they felt elsewhere. And part of that goes back to what we talked about earlier is taking an interest in actively partnering with them in more than just their financial needs. We truly believe that we can help them.

access healthcare that we can help them formulate goals that go beyond just their financial goals. And most people, they're astute enough to have been successful in business and make money, whether they're operationalizing things, there's probably a lot of things going on in their head that are goals related and many of them will go beyond just finances. to us, it's about delivering a client experience that allows us to focus on integrated success, on the success of their health and wealth management.

that's an area we've begun to delve into and we have very ambitious plans to expand it substantially. We do currently have a health ambassador who will work with our clients in developing a nutrition plan or personal training plans or just any recommendations. We have a number of clients who are health professionals that we can use. So like you guys, I know a very similar approach, whether it be on mental health as well, because it's equally important. To me, that's where we have an opportunity is to deliver

a client experience which is second to none and is unique. And even if it's not second to none, will be a client experience that suits the right kind of people. in our space, we don't need tens of thousands of clients, we need the right clients and we'll grow organically based on how successful we are in attracting the kind of people who are looking for our value proposition.

Andrew Auerbach (43:51) That's absolutely fantastic. And, you know, your comment about not outsmarting the markets, you know, is certainly proven the S and P and the SPIVA reports, I think, look at five countries. And the number is somewhere around 95%. I think of active managers don't, don't outperform the benchmark. Your notion of branching out into wellness, personal health,

is certainly something that resonates with us as well. And back to the uniqueness, it's something that in a scaled business like in the banks, it's very difficult to bring that level of tailored, more bespoke approaches to clients. And I think it's one of the advantages that if you do have a strong passion as you do, you're able to carve a firm. And I like your positioning that you don't need to have 10 ,000 clients.

You know, you need to have the right clients that will get a very unique experience through you. And I think that is something that you simply just can't do in a big, big organization. You can't move that nimbly.

Patrick Keeley (45:05) I mean, I can't even imagine what the compliance department of any one of the brokerage firms would say if we tried to market ourselves that way as IAs or even in any form of management. I mean, again, that's another benefit to having your own firm.

Andrew Auerbach (45:09) Right. Right.

Exactly.

Yeah. So going to the leadership side of things, you you have had a wonderful career, small firms and big firms. Can you distill any leadership advice you've received or offered in the past? I know it's something you and I both get approached on, which is, you know, how do I get that job or how do I, you know, achieve the goals that I'm setting out for myself?

Patrick Keeley (45:45) You know, it's cliche and we've all heard it many times, but leading by example, I think is a very important lesson for all of us to remember, probably the first thing all of us were taught. But to me, that really means showing people that you're willing to do the things that you expect of them. to zero in on that word for a moment, I've come to learn that expectations can be a very dangerous thing to have in life.

without good communication. So it's one thing to expect something, but if it's something you're expecting without communicating that to someone else, then expectations are just resentments under construction. They just end up being sources of, you know, cancerous dislike or agitation. So to me, communication is the most important skill any of us can have, whether it be in leadership or any other part of our lives. So I think communicating really, really well.

understanding whether or not you have expectations of yourself or others that are unreasonable and haven't been communicated. And really setting the tone for what you want the people around you to do and leading by example. And that doesn't mean telling people what to do. It means doing the things you want them to do. So they'll learn from your actions. Cause I think we all tend to respond more to things that we're attracted to.

versus things that we've been persuaded to do. that's really my feeling and what I've come to learn in life at the stage of my life is if I want people to follow my lead, then have them be attracted to it rather than banging them over the head and saying, is what you have to do. And if it's what I expect them to do, they better understand that that's what I expect them to do and vice versa, that that's what they expect of me as well. Because I'm not above other people's expectations as well, but again, communication is key.

Andrew Auerbach (47:31) Yeah, I think that's powerful advice. You know, I think back to our big corporate careers, Patrick, and the number of times people lost sight of that humility piece where the person who wants to repeatedly talk about themselves in their career and, you know, you're thinking to yourself, are they not aware of the five things that are raining down on us right now that we should be, you know, laser focused on? And this idea of just, you know,

Patrick Keeley (47:54) Mm -hmm.

Andrew Auerbach (47:58) being selfish, for lack of a better word, gets noticed, you know? And it's something that I think to your point, operating with humility is powerful. Your other point about communication though is such a good one. And I think it's a hard skill to develop, isn't it? I think a lot of it is our upbringing and you know, maybe it's a very Canadian way. We don't want to, you know, have the other person not like what we have to say or we tend to just keep it to our...

Patrick Keeley (48:03) Mm

Andrew Auerbach (48:28) to ourselves, how do you overcome that? So it seems like it's been quite natural for you. But you know, how do you how do you operationalize this notion of being a better communicator?

Patrick Keeley (48:41) I think for, you know, it's an ongoing effort for me anyhow, and probably for most people, but where I've been able to make some progress in my own personal development around these issues is learning to care less about what other people think. And by that, I don't mean being sort of like this hard -nosed person, take it or leave it. I just mean the things I believe in that are important to me, being prepared to communicate and explain why. So again, going back to communication.

being able to take risks by being vulnerable. I'd rather tell somebody my truth and have them not sign up for it or be opposed to it or just say that doesn't interest me than have them be attracted to something that's inauthentic. to me, authenticity is important, courage to be yourself and not be concerned about what other people's thoughts are because I believe that if we're ourselves and we're consistent to that,

then we will find the right place for ourselves. We'll find the right people. Again, for me, at this stage of my life, I realize it comes back to attraction rather than promotion. Bringing people to something or just letting it naturally happen, people find you based on who you are. And the only way people will know who you are is if you're honest about who you are and you're not fearful of people judging you.

It's okay if they don't like you. It's okay if they don't like me is what I'm saying. If you don't like what I'm saying or what I believe in, that's okay. I won't judge you for not liking me. Just don't judge me for who I am.

Andrew Auerbach (50:11) Yeah, that really resonates with me. As you're describing that I think back early in my career, the first the first kind of senior person I had to let go. And I went out, let the person go and the look of shock on their face. I still wear it, you know, and from that point forward, I was like, I will never find myself in that position. Again, that was not a feeling that I want to repeat and

it goes back to your overcoming that worry about what people think about what you have to say, and just being straightforward. And, you know, I think you need a few of those experiences where people are blindsided. And it's really your fault. They're blindsided because you did a poor job of just being straight. And, you know, people are very resilient. I'm sure you've seen that in your career. And I've certainly seen it. You know, the words, just put it out there. Like, don't worry too much about

how you say it or, you know, just say it. Just say what's on your mind and people are resilient. They'll appreciate knowing where they stand.

Patrick Keeley (51:13) Yeah.

think that might be a Canadian thing that we tend not to be as direct as maybe our friends south of the border. And there's something to be said for being direct and knowing where you stand with people and it becomes passive aggressive to not be straightforward and to not really speak your truth. And unfortunately, I just think that we're cautious about hurting people's feelings in Canada. And sometimes at least for me, I've learned that I'm much better off for my sake and the people around me to be

Andrew Auerbach (51:22) Mm -hmm.

Patrick Keeley (51:49) very honest about how I'm feeling and learning to get comfortable with being vulnerable. Like I really think empathy and love and compassion are things that have to become a bigger part of life for us. I think it became kind of uncool. It was almost like you weren't a macho man if you had feelings or you cracked a tear because you were broken up or emotional about something. I think it like, at least for me, I am an emotional person. What you see is what you get. And I'm okay with that now. There was times in my life where being me,

caused some people to feel uncomfortable because I might have been comfortable speaking about things that some people weren't. And then I would kind of get gun shy about how I could communicate and with whom. And now, whether it's just kind of, you you get older and eventually we become grumpy old people, don't know, hopefully not. But at least what I've learned is it's okay if people don't like me. I'm much happier in life for myself and the people around me if I'm truly authentic to who I am. And who I am is I have a big heart.

I'm quite capable and interested in loving people and getting to know them in intimate and empathetic ways. And that's the kind of culture we have as a firm. It's the kind of culture we have with our clients. We ask for their feedback. We want to know what their dreams are. We want them to help us build our business. in a letter that I drafted to clients earlier this week, I said that we consider our environment to be an open source environment where we're building a firm in service of them.

We have core principles and operating models that we've learned over the years, but we don't know what the future looks like for our firm and the future will be shaped based on the needs of the industry and the clients that we take on.

Andrew Auerbach (53:27) That's incredible. And I have no doubt Seven Hills is going to be very, successful. Before we close, Patrick, is there anything that we should build on in our conversation or anything we didn't cover?

Patrick Keeley (53:41) I think we covered a lot and I think it's great that you and I have shared backgrounds and shared visions and I'm sure we'll have plenty more of these conversations and do a lot more together. And I really think that both of us are onto something in terms of trying to broaden the value we add to clients, knowing what our place in all of it is as financial professionals. But it doesn't mean that we can't partner with our clients on things that we may not be trained to do, but bring them.

You know, as I used to say when I was at Nesbitt in the training program and I had some success early on, so I was asked to speak to the rookie classes and I would say to people like, be the person to your clients, the first person they go to when they have something that they think is unsolvable. If they want a dry, clean cardboard, you know the person who can do that. And that's the kind of partnership I want to have with our clients. It's not to say that we become medical specialists, but clients are sharing very intimate details about their lives with us. To go so far as to say,

How are you doing on your own personal goals? Are you sleeping well? Are you comfortable with how often you're exercising? Do you feel good about your weight? Ask any one of those questions and you'll get a very, very robust response from just about anybody has been my experience. And so it creates an opening to say, we help you? Are there people that we can help refer you to? And to me, why would we not do that? Like to me, health is wealth and without good health and what does having a lot of money do for you?

Andrew Auerbach (55:07) That's a perfect place to close. are a fascinating guy, Patrick. I've really enjoyed the conversation. And for those that were listening, I'm sure they've benefited from lots and lots of great perspectives and tips. And so we will close here. Thanks again, Patrick. Hope you all will continue to follow the podcast and we'll look forward to talking soon. Thanks, Patrick.

Patrick Keeley (55:15) Thank you guys.

Thank you, Andrew.

Thanks, Andy.