In this episode of The Trusted Adviser, host Rob Pyne sits down with Cameron Passmore, CEO and Portfolio Manager at PWL Capital and co-host of the Rational Reminder Podcast, to discuss the journey of PWL Capital, its commitment to evidence-based investing, and the firm’s recent OneDigital transaction. Cameron shares the key milestones that have shaped PWL’s success, from embracing a client-first philosophy and integrating financial planning with investment management to navigating industry shifts toward fee-based advice. He also delves into the importance of company culture, attracting top talent, and structuring a firm for long-term growth.
Key topics covered:
The evolution of PWL Capital from 1996 to today
Shifting to fee-based advice and embracing evidence-based investing
The power of team culture in financial planning firms
Lessons from content marketing and podcasting in growing an advice business
Insights into the OneDigital partnership and what it means for the future of PWL
Whether you’re a financial planner, business owner, or simply interested in what it takes to scale an advisory firm while staying true to core values, this episode is packed with actionable insights.
Listen now and gain valuable lessons from Cameron’s 30-year journey in financial advice!
LISTEN
SHOW NOTES
Topics discussed
The evolution of PWL Capital
- How PWL Capital transitioned from commission-based sales to a fee-based, fiduciary model
- The pivotal moments that shaped its growth, including a game-changing trip to Boston in 1995
- Early adoption of indexing and Dimensional Fund Advisors’ (DFA) philosophy
The culture of an evidence-based Firm
- Why humility is key in an advisory business
- How PWL built a collaborative team culture that attracts top talent
- Why the company moved toward a structured, process-driven advisory model
The power of content marketing in financial services
- How the Rational Reminder podcast helped attract clients and top-tier talent
- The unexpected benefits of content creation – from training new advisers to strengthening client education
- Why authenticity and long-term commitment to content marketing are crucial for success
The OneDigital transaction & the future of advisory firms
- Why PWL Capital partnered with OneDigital – and what this means for the firm’s future
- The importance of building scalable infrastructure in an independent advisory firm
- Predictions for the future of evidence-based investing and scaling financial advice
Quotes
- “If you’re doing what the market wants, they will show up.”
- “We don’t have ‘coin-operated’ advisers. We focus on people who truly want to make an impact.”
- “Growth isn’t about EBITDA—it’s about helping more people the right way.”
Resources
- Rational Reminder Podcast – Hosted by Cameron Passmore & Ben Felix
- PWL Capital – Independent Wealth Management Firm
- Dimensional Fund Advisors – Evidence-Based Investing Philosophy
- OneDigital – The Future of Integrated Financial Services
TRANSCRIPT
Welcome to The Trusted Adviser Podcast where you get a deep dive into the world of financial planning with industry leaders who shared their stories of winning and learning as they chartered their path to success. This podcast is for the curious, those of you that like to dig into the detail, if that sounds like you get ready to listen and learn.
Rob Pyne:
Rob, welcome. Cameron Passmore, to the trusted advisor Podcast. I’m so happy to be here. Rob, great to see you again. Great to see you. Now, Cam, it’s great to have you on the show. It was back in April 2019, before COVID, when I first heard the name PWL capital, we were both attending the dimensional fund advisors global conference in Sydney, and you took the stage and as a guest speaker to tell the advisor delegates about the fund you were having with podcasting. And nearly six years later, PWL Capital has continued to grow from strength to strength, and as has the rational reminder podcast, which you co-hosted with your colleague, Ben Felix, so as it was on your podcast a few weeks ago, now actually, that you shared the news of your recent transaction with one digital So this clearly marks a major milestone in your firm’s journey. I’d love to start by stepping back and exploring how PWL evolved to this point. So, can you share with us? How did PWLs capitals, vision, mission, and values evolve from its founding in 96? Were there key moments that refined or reinforced your vision of the business over that time?
Cameron Passmore:
It’s a great question. You mentioned values only. The values changed. The values have always been about helping people, doing the absolute best that we could do for clients, integrating Financial Planning and Investment Management together. There’s always been right from day one when the company was founded, actually, before I joined, back in 95 it was all about, you know, being as progressive as you could, be independent and highly responsive to client needs. And that’s what attracted me to join the company in 96, we had a small mutual fund dealership back in the day, and Canada was a world leader in commissions on mutual funds back then. So, we had a very small commission based back-end load, if you could believe it, where clients never charged up front, but they were charged if they left the fund within seven years. So we started selling back end low mutual funds in 1991 it just didn’t feel right, and I ended up at doing a due diligence trip in Boston for with fidelity, and had a chance to sit with some senior people at fidelity, and at lunch, they said, If you don’t go fee based, you’re dead in five years. This was 95, ‘Wow’. So, I came home and spoke to my partners and said that we have to make a change. So, we started looking around for a fee based, and this is pretty radical at the time, especially in a world where, you know, markets were going pretty good and lots of people were making lots of money off of commissions, but it just didn’t feel right. So, we met what became our partners at PWL back in 95/96 and when you switch from going from being compensated from commission to being paid a fee by clients, all of a sudden, your world opened up. And this is exactly when the index fund revolution was really getting going in North America. And we could look at index funds and Canada had the Canada was the birthplace of ETFs, for example. You could look at ETFs, and you can understand, like, what is this whole markets, work, philosophy, the philosophy that’s so close to, you know, to you guys and to us, and it was just this mind blowing, you know, realisation that you could do something great for clients and not get paid by the product, and people would be willing to pay you to take care of all of this for them. So, you build great portfolios, have a great client experience, do a great financial planning experience. Oh, and by the way, the fees were probably a third to a half of what was common in Canada at the time. It was an amazing and just by being wired to do what is best for clients, it became this natural evolution to take advantage of this information that was coming out to all of us so quickly, if you’re open enough to see the evidence that was there. And in hindsight, it’s so clear that it’s so hard to beat the markets. I mean, today is dead obvious. So many people know it today, even though Canada’s one of the lowest adoption rates on the planet of index funds. But it’s so dead obvious. But to have this realisation in 96 Rob 97 was just, it was so much fun, so much fun. So, I mean, that’d be one of the big events. Was the time in Boston meeting our partners at the time, then meeting, you know, once you get in this role of indexation and markets, work, philosophy, all rows lead to dimensional. Yeah. I mean, the people behind dimensional really are the founding called fathers. I don’t mean to be gender biased, but the founding people of this revolution, literally, the people in the room started this whole thing, and then you get to expose the dimensional. World and in terms of other, you know, big events of my career, you know, meeting Ben Felix, co-host on the podcast, just an amazingly talented, brilliant, fantastic communicator. And there’s another representation of someone who just always wants to do better, is driven to do better and about doing the best possible thing for the client. Other events are meeting, you know, the good people at Shopify. So, meeting them, I’m in Ottawa, Canada, that’s where Shopify was founded. So, we had this amazing experience in meeting these progressive, smart young people that were wildly successful. So that really enabled us to accelerate the growth of our business together. So, it’s coming together. A lot of this is luck, but luck is just for hard work and opportunity meets or something like that, indeed. So those the big events I would say over the past. Gosh, it’s almost 30 years, if you can believe it. Yeah,
Rob Pyne:
No, I can. I can hear just that. I mean, as you say, good fortune. But it clearly is. It’s, preparation, and commitment to make change. You were obviously early on in that revolutionary change to focus on what, how we deliver better service to clients. And is it didn’t feel right, so you were looking for something better and you went and obviously created a wildly successful business and podcast to go with it. So, we’ll get.
Cameron Passmore:
but isn’t that big a deal? Like back in the day, you we would sell a whatever amount of a mutual fund, and all of a sudden, the manufacturer the fund is dropping off a laptop as a thank you. None of that’s allowed anymore. This is crazy back then. Or you get a leather jacket, a leather jacket, for putting someone’s money in a portfolio. It’s crazy to think of in hindsight.
Rob Pyne:
Yeah, yeah. Do you think that move, that shift towards Evidence Based Investing and the way in which you focused on delivering a better outcome for clients was that sort of what bred the culture of the business, and culture is something you can’t really define, It’s sort of what happens in the room when you’re not there. But how did you? Did you? Was it a conscious choice to how to actually build a culture where people wanted to be a part of that sort of change, that transformation of a business that actually was moving in this evidence-based client first approach. And how did you reinforce that company culture with your team?
Cameron Passmore:
Yeah, I’ve long felt that indexing, you almost have to be egoless to promote indexing. I found so many people in our business get so wrapped up in having a value proposition that they can beat the market or pick the alternative fund or the hedge fund, or it’s all about, but we never had that kind of ego drive. It was always about doing the best thing for the client and not having a strong desire to be the smartest person in the room, and honestly, get lucky to meet such great, amazing talent, like amazing people, like, we have such an unbelievable team here, that the culture kind of just takes on a life of its own. And you’ll know pretty quick if someone’s not going to work out here, like, there’s a there’s addiction might be a strong word, but this drive to continue to we say, know what’s right, do what’s right like there’s just the right way to do things, in our opinion. And that drive shows up every single day when you get smart, young, talented people with that kind of culture, the freedom to experiment, to make mistakes. We’re not a paternalistic environment. We’re very much a shoulder to shoulder. Let’s figure it out together. Get out of people’s way. Help them find solutions. Kind of environment that’s the culture we have. It’s demanding. It’s hard, for sure. However, if you’re wired for that, it’s an unbelievable playground to have a great career.
Rob Pyne:
The thing that struck me, most of all listening to your podcast over the years. Is just, and I know you really, really enjoyed the book, Humbitious. It’s the it’s the success with the humility, and it’s the people that you’ve got that clearly are very talented and have driven your firm forward. But it’s maintaining that sense of humility the whole way thinking. You know, how do we serve people, how do we become better and never getting ahead of yourself or letting ego take over? So, can you talk a bit about that, that that’s clearly something you have recruited for and actually been able to build in your team, something that it’s hard to it’s hard to manage people that are highly talented if they aren’t also humble in the process, would you agree?
Cameron Passmore:
I would agree. There’s all kinds of talented profiles, for sure, but it’s how a team works together that really matters, right? How everyone interacts day in day out. How do they present problems to each other? How do they solve a problem? How do you define a problem? Because really, all of our businesses are about solving problems. We solve client problems, we solve business problems, operational problems. But if you have a strong ego and you think you’re right all the time, you’re not really fun to work with, plus you might not be open minded to other ideas that people have. So, we’re very deliberate and. In thinking about problems and to make sure we agree on what the problem is before someone comes in hot with the solution. Because often you’ve thought about something ahead of time, and you think you know what the solution is, so I call you up, Rob say, okay, we got this problem, we’ve got to do this. And you’re like, Whoa- I didn’t even know this was a problem. I’m not sure I agree with your take on the problem. So, you’re not going to necessarily respect when I come in hot with the solution, but you have to temper your ego in those kinds of situations in order to gain the respect of your colleagues, gain the input of your colleagues. And I think we’re very conscious about that, but it does take an enormous amount of respect for each other and to check your ego out the door. And that’s just the way I think our team is wired,
Rob Pyne:
And the proofs in the pudding and success that followed. So, tell me about more about your team. Cam, you’ve clearly had a great, successful period of growth, and you can’t do that without great team members. How do you structure up your team? There’s a lot of business models out there about how to run an advice business. There’s diamond teams, house teams. Can you talk a bit about how you structured yours, your advisors and your back-office team that support your advisors? How do you structure up your business to grow the bit, to grow it like you have?
Cameron Passmore:
Yeah, I think there’s a couple parts to that answer. One is, I assume your audience are kind of students of the business, so we were able to grow large enough to build out the full enterprise verticals of all the different parts of the business, from finance, compliance, operations, research, marketing, plus the advice team, which is the whole service delivery set. So, we’re very deliberate about building out each of those teams with great leaders in each of those teams. So, we now have that, and that’s one of the things that that One digital found appealing when we met them, specifically on the advice group, which you’re referring to, the diamond teams. We do follow the diamond team model, although it’s more like a diamond spider web, like we have the diamond team in place, but financial planning associates like to work with different advisory teams just to see different styles. And we really want a meshing of teams it creates collaboration and best practices, learn different styles, and also it allows for coverage when someone might be away a mat leave vacation, because we like to do our best that when people come back from a mat leave or a long vacation that they come back to inbox zero. So, when you got this fluidity of team members back and forth, we think that’s very important, so we do that quite deliberately.
Rob Pyne:
Yeah, so tell me a bit more about that in practice. So, let’s say you’ve got a senior advisor, you have a couple of service advisors, perhaps in the diamond, you’ve got an associate that’s supporting that group, ‘yep.’ How? How does that meshing work? Where you have maybe service advisors coming across into other teams or associates. Can you give me a bit more of a step by step as to how that works in practice? Because everyone wants to be able to go on holidays and not come back to a blizzard of work that they’ve had piling up while they’re away, and that that inbox zero would be a blessing to come back to after a holiday. So, can you? Can you give me a bit more of a deep dive on how that works in practice?
Cameron Passmore:
Sure. I mean, it’s quite simple. People just chip in, right? And we had, for example, one of our advisors was off on a one year mat leave, so a financial planning associate, another team, joined in, and they supported each other to meet with clients while, while that advisor is off, on leave, other people take three weeks’ vacation, perhaps, and the kind of the team fills in around, kind of like mercury, right? Kind of just fills in around while they’re away. Because very standardised processes and deliverables and how we take notes and all of our meeting prep is standardised, not to make the advisor a robot, but just to keep practices straightforward, so it’s easier to be prepared to go into a client meeting. So that’s all-very fluid. And another example is we set up what we call an emerging wealth team. So, we discovered last year that I forget the stats, but something like 40% of our households represented 4% of assets, like large client count, large average, because we don’t believe our value set is not to dump the bottom 10% of clients each year. So, we decided to build out a dedicated service to handle smaller, less complicated families, still very important to us, because there’s often interconnected to other clients. Sure. So now clients are shifted over to that emerging wealth group, great people, great advisors, talk to our people. Never been an issue. So, one thing we’ve learned through this is that clients are really because, for example, I hardly see any clients at all anymore, where I was the main advisor for so long, but clients have moved on to Ben and Jordan and Jaclyn and other people on the team. As long as you meet someone amazing and highly competent people, that doesn’t bother them, right? And we’ve had some clients have gone on from then onto another advisor, for example, to the emerging wealth. We had another advisor officer that retired. The transition was beautifully smooth, because she was such a great professional setting things up with her team, it was not an issue. So, we’ve learned that people long as you’re in front of someone great, qualified, and competent, they’re okay with, and they know it’s a team approach. We talk about the team you’re not working with, with Rob, you’re working with, you know, the team here.
Rob Pyne:
Yeah, you make a terrific point throughout that response, which is that you have to have a process to follow, and everyone has the same process, so that if you someone does step in, there is a way of things being things being done around here. So, there’s not a it’s not trying to pick it up and figure it out. It’s a very much follow the process. You know how this is done, different person that you don’t normally, typically deal with, but the same process, and it’s therefore easier.
Cameron Passmore:
The portfolios are the same. The way we talk about the portfolios and planning is the same. The planning tools are the same. Yes, their situation is different, and people must get up to speed on that Absolutely.
Rob Pyne:
Can you tell me how you’ve gone about attracting and retaining that top talent that you have in the team? What do you think’s made PWL, or capital, sort of really compelling place to work?
Cameron Passmore:
We’ve created a place where people can be really great at what they want to do. Now you have to define what they want to do, for example, the advisory side. It’s a great place to master the craft of being a financial planner, financial advisor. You don’t have to worry about employee contracts or the rent or operational type things. You have the beautiful ability to focus on the craft of financial planning and taking care of clients. It’s an amazing gift for someone who really wants to do that. Now if you’re a business builder, you want to be an entrepreneur. We’re not built for that profile of person, necessarily. And we’re large enough now that if you want to specialise in marketing inside a financial advisory services firm, we’ve got those specialties as well or be on the finance team or the compliance team. So, by being large, I’m now you can really get a place to master your craft. I think it’s an amazing opportunity for people who are of that profile, if you want to build your own book and maximise your payout and all that, we’re not the place for you. We’re a shoulder-to-shoulder team trying to make a material difference in the Canadian marketplace. That’s the goal. So, if you want to be part of a team, a balanced lifestyle, deliver a very high-quality product to really nice people that want to delegate to a phenomenal operation, that’s who we are.
Rob Pyne:
Yeah, great. That’s um, I mean, to build a business where you actually say, build up those verticals in marketing and compliance and finance and so on, clearly gives you a great, you know, support structure for any advisor who wants us to be a wonderful advisor and not have to distract themselves with any other operational issues. So, I’ve got two questions here, but I’ll start with one. The first one I’ve got is, do you remember what stages, you added those business lines, those, those, those back-office support functions, the marketing team, and what order they came? Was compliance first? Or was finance really the most important function initially that you were building out a dedicated person on that part of the business?
Cameron Passmore:
Yeah, so our world’s a little bit messy, because our business structure changed five years ago when we did a reorganisation. But on our team, specifically in 2017/18, we decided to get more aggressive with a content forward strategy. Angelica, who joined our marketing team and Brenda our leader, at the time, had said, this is the path forward. So, they came to Ben initially, to do content marketing. So that’s when Ben started his YouTube channel. And you got to start somewhere, and you look back and shortly after we started the rational, rational reminder podcast, it was pretty rough when we first started, right? Like once we did a lot of kinks to work out, and we just kept going, kept doing they said, do you want to get out whatever, 50 videos and 50 podcasts before you find out if f it, or whatever the number was, right? You have to make a commitment to doing it, which we did. Kept trying and experimenting. So that’s when we built out the marketing. And then concurrent to that, Brent was building out the Corporate Services team. So, we had to have compliance, because we’re a dealer in Canada. He needed a compliance team, and we needed some people in finance. But as we grew through, you know, 2020 2021, through the pandemic, Shopify had amazing performance on their share price, which lots of people move money over here, like we grew by a billion dollars or so in 2021 added at least 20 team members that year. So that was a huge year for us. So, all of a sudden you realise, oh my gosh, we’re on to something here. So really built out the advice team and built out all the other teams and it kind of all happened at the same time. But that’s always tough, right? Because these are, these are complicated roles, or not inexpensive roles, so you have to be able to keep on growing through this, right? The bigger you get, the more pressure you have to keep up. And we move from the era of hustle like you, and I can, or anyone. It’s not you and I specifically, but anyone can hustle their way to a good practice. It’s another thing. When you’ve got 50, 60, 70, people on your team, you now have to get into, you know, what we call institutionalised lead flow, and that’s a whole different game. It’s no longer Rob and Cameron going doing a presentation at the Lions Club on a Tuesday night, that doesn’t grow that kind of firm. So, it’s a different mentality. And we got lucky, we had great people to create content, push it out there, and it worked.
Rob Pyne:
Sounds like there Cam that, how you’ve related that is that the really deliberate focus on building out content and being very market forward as you say, marketing the business. Was that do you think instrumental in attracting your high-profile clients and the Shopify sort of connection?
Cameron Passmore:
No, no, we met them long before we did content. It enabled us to -because we had a bit of a not sure sphere, we wanted to make sure we weren’t a one trick pony with Shopify. They’re an unbelievable company, unbelievable people. We were so grateful. We wanted to make sure we took the rewards of that and made sure we got the message out. So that’s when we started the content marketing strategy, and that ended up being perfect timing and had many unintended consequences. Number one, it was a great platform to attract talent, which we desperately needed. Most of the 20 people we hired in 2021 came through the podcast. People wanted to be part of the vision, because once you listen and auditory connection is very powerful. So, people felt, and continue to feel, like they know us. So, it’s like, I want to work with these guys. That’s what we heard, that’s number one. Number two, it became an amazing training ground for the team, or a place where a question can answer. We get a question on the front line from one of the advisors. They’d pop it over to Ben-Ben would do a deep dive that I’m you’ve heard many of his deep dives, right? ‘Yeah,’ in my opinion, second to none. So, they become the definitive goal, standard deep dive, and all kinds of questions. Then number three, it became an amazing tool to use to explain concepts to clients. Oh? we got a question about whatever it might be-listen to episode X, from minute this to that. So just and those were not intended when we started at all.
Rob Pyne:
Sure, yeah, yeah, I have heard Ben’s deep dives. He’s an incredibly talented man he goes deep on a subject. I’ve got a similar individual in my business as well, and just giving him a bit of bandwidth to do his deep dives is something I’m working on. But yes, those sorts of people there, can bring light to a subject that many people wouldn’t just because they are so intent on getting to the bottom of it.
Cameron Passmore:
Well, there’s another illustration of why you need to grow, because we learned early on that Ben’s gift is in that. It is not in client meetings. He can do it of course, he’s exceptionally talented, but you give a guy like that the freedom to create content, it’s so powerful, but again, it’s got to grow.
Rob Pyne:
Indeed, how did how do you approach compensation? It’s always potentially a complex topic for any business. It’s something that comes up in many a forum. When we’re sitting around as a group of advisors, people are saying, how do you compensate your advisors? How do you compensate your team? How did you get that structure between fixed salaries, short term incentives, potential equity ownership? I know you have an employee share plan. What models worked best for you, keeping the team motivated and aligned with the business goals?
Cameron Passmore:
That is a very difficult question, and to date, we have been exclusively salary based. We don’t have any incentive plan in place now. I think that will have to change, but there is considerable pressure from the team to make sure we don’t do anything that changes the culture. The term coin operated comes to mind. We do not have, I believe, by and large, coin operated team members. It’s a term I’ve just heard talking about this before. We have people that literally want to work shoulder to shoulder. Make a difference. Now they’re not naive to compensation. Of course, I’m not suggesting that. I do think we have to find something a bit more progressive, but today, we’re all salary based, and it’s worked beautifully. They mentioned employee ownership. So, five years ago, we undertook a plan to deal with the succession issues. We put in place an annual marketplace where shares could be bought by the next generation from the original generation. And that was very, very successful. We actually- 22% of the firm ended up being purchased by the next generation over the past five years, up until the recent transaction with OneDigital so that worked out very well for everybody.
Rob Pyne:
I’m sure it did, and I’m sure they’d be grateful now, particularly given the OneDigital transaction, they were given the opportunity, to take a stake in the business as it was growing. So well done on that. Can you talk a little bit more about the Evidence Based Investing. We touched on with Dimensional, you built your reputation as being a business that is very much in that, in that, in that world as we are. Do you think it’s been the thing that’s really helped shape PWL’s significant growth? How has the partnership with dimensional influenced the business? Do you think, over the years?
Cameron Passmore:
Dimensional has certainly made us better advisors, the way they think about problems, the way they deeply consider all kinds of different angles before making a decision. I have never in my life, and we’re not paid by Dimensional neither are you. Yeah, I’ve never in my life interacted with a company as often at such a high level of quality as Dimensional period. I’ve been working with them for 23 years. It’s 22 years this year. They’re formally in Canada, but I had worked with them using some research before that. And every interaction, every time is always thoughtful, progressive, and well considered, always, every time. Now, having said that their brand is not part of our value proposition, necessarily to clients. So, we would never promote as having access to Dimensional, as being a valued proposition, and nor do they want us to have that as the valued proposition at all. No, we firmly believe markets work. Now, the factors have not been performing. So, you can’t go and say it’s the factor performance that’s driven leads for us, that’s just not true. But again, tracking error is not a- we spent a considerable amount of time educating people on expected returns, and you have to be aware of the tracking error. Tracking error in the past has worked with us. Sometimes it works against us. Lately, it’s been against us, as you know, but it has not been an issue. People believe in the philosophy. They believe in us. We have imminent trust in Dimensional. People have trust in us, and it works.
Rob Pyne:
Yeah, no, I can relate. We were 17 years working with Dimensional and the calibre of people is second to none in our experience. And as you say, they’re progressive and just good at problem solving, thinking of how to do things better, always focused on the client first.
Cameron Passmore:
Nothing trendy, nothing, it’s about doing the right thing. It’s not some product of the day. It’s not, you mean they’re, they’re, they’re so patient, they’re so consistent. There’s no flavour of the month at all, ever, never.
Rob Pyne:
It’s what gives you and I confidence, isn’t it, that we know we’re actually on a durable approach for investing, for clients we we’re actually-
Cameron Passmore:
But we’re in a confidence game. That’s all we have. Is trust and confidence.
Rob Pyne:
Speaking of which, obviously Dimensional and people who use Dimensional have been a big part of the rational reminder podcast over the years, talking about that evidence-based approach, the podcast that you and Ben have done now for a number of years has been instrumental in expanding your profile beyond Canada. You know, I’m here a long way away the other side of the world from you, but I’ve been a regular listener of all your episodes. Can you take us through its journey? Why? Why was it you started? What was the trigger, how it’s evolved over the time and the key milestones that turned it into such a widely respected platform.
Cameron Passmore:
It started simply in late 2017 as you got to start doing content. I had no desire to do anything. Was I shy? Nervous? I have no idea. Now we used to listen to Animal spirits, the guys at Ritholtz Wealth Management, Batnick and Carlson, two good guys. So, we listen to these podcasts, and we’re like, this is just two guys talking. We’re two guys. We can talk. So, we literally ordered the machines on Amazon or something. The recording machines. Got a couple of mics set up a studio here in our office, turned it on, and just started. We knew so little that we actually chucked our first recording because we didn’t know it recorded in mono. We just didn’t know it and say, well, it’s only one year. And we found that after that doesn’t matter, because the engineers after fix it up so we knew virtually nothing. And then we just started doing a weekly episode. Just keep doing it. No one’s listening. Anyways, it doesn’t really matter. And then we started, well, let’s have a guest. So, we had on some friends early on, like Larry Swedroe came on and get introduced to Rick Ferry. And then you just it became kind of a game, who could you get next? And I think the first major guest we got was Ken French, I believe he was first, which is an amazing experience, right? Like, and then we had, I think Cliff Asness came on before Ken, and that was a nerve-wracking experience, because Cliff Asness is personality larger than life, yeah, but you start getting okay, then Ben started doing more technical deep dives. So, Ben really found his passion, which is to dig into, as you know, Rob, there’s some shows that he will have dug into twenty-five different papers for a 30-minute presentation. It’s colossal amount of work for 30 minutes, right? And he’s, they’re beautiful. They’re works of art, in my opinion. Then we got into this week. One week could be us, one week we’d have a guest that started working, and then you just better guests get better guests. Then we had, you know, Professor Fama on which is unbelievable it was a good Friday interview. We had 61 questions with Gene which was, what an experience, right? What a career moment.
Rob Pyne:
And Nobel Prize winner on your podcast
Cameron Passmore:
And then Bob Merton, another Nobel Prize winner. Bob Merton kept apologising for talking so long. It’s like, Oh, my God, you’re Bob Merton, right? It mean, these are just incredible. Mac McQuown was on, you know, rest in peace. Mean, right at the birth of birthplace of index funds and David Booth, my long-time business hero. I mean, I just think the world of David, Dave Butler is another one that came on from Dimensional. So dimensional has been a great supporter of helping us with the podcast, and then then Ben just kind of some of the most fun guests we’ve had on are people you never even know. They’re so flattered that you reach out to them, and they’re incredible communicators, and those have been a blast, right? So, Ben really feeds off of kind of digging into the papers and finding the authors of the papers, and it just kind of went from there, and more people listened, and then we set up the community online, which went bananas with the members in the community, because finally, people are into this stuff. Have a place to talk,
Rob Pyne:
yeah. And you mentioned how it was instrumental in attracting talented people to join the firm, yeah. How has it impacted your business in a client, engagement sense? You mentioned there that people, I’m sure, listen to it and they feel like they know you, have you seen direct business benefits? I’m sure you have. But can you talk about that from the audience you’ve built? Has it? Has it directly benefited the business?
Cameron Passmore:
It’s certainly directly benefited it and in all kinds of different ways. Yes, you get leads from it, but that gets kind of messy because people might, you know, read a post on Reddit, and this is where this stuff gets embedded, right? There’ll be a post in Reddit on something, and then they’ll cut and paste one of Ben’s videos in there, or cut and paste one of the podcast episodes, or hear from a friend or so. It gets kind of messy where leads come from, but rational minder certainly is a large source of leads, and the stuff gets shared so widely. Never know where it’s going to go. You’ll be at lunch with a client, and they’ll mention something, oh, we had that person on the podcast, whatever, six months ago, so you can share that episode, and all of a sudden, they share it. You just never know where it’s going to go, like the unintended consequences. And we knew that going, I talk about this all the time, what you plan to be the outcome is often not what the outcome is going to be, yeah, right. I mean, I had this. It was an okay practice, but nothing great. Who knew I was going to get an email from the founder of Shopify, unintended consequence. You look back at our lives, right? So many unintended consequences happen, yeah? And you never know where they’re going to be. You just don’t know.
Rob Pyne:
Yeah. And one of those preps you might now speak about, which is the really. Significant transaction you just undertaken with OneDigital. There was clearly a time where you’d met the people from OneDigital you weren’t ready to talk about potentially merging. Can you talk a bit about how you explored mergers and acquisitions before as a strategy for your own growth and then perhaps talk a bit more about the OneDigital transaction and how that came about. So, were you doing anything in that space for yourselves? And then talk a bit about the OneDigital experience just of late.
Cameron Passmore:
Over my right shoulder here, there’s a number on the wall. You can’t see it because it’s fuzzed out, but the number is five, 587 so this wall was painted in my office in 2016 and the painters asked, how big is your business? I gave him this number, thinking that might be the curse. So, 587 million is the amount of assets we had under total not management, but administration. So, a lot of that is high interest savings, low fee stuff, custody securities. So today, we’re eight times that, right. And I’d say that because we had no idea how this movie would play out. And so, over the past couple years, we found ourselves kind of thinking like, what can we become in Canada? Because there’s really no scaled large, like, we’re a large, small firm. But we look at the Canadian marketplace, we are bank dominated something like, well, north of 80% of all long-term financial assets are in the banking or insurance industry somewhere. There’s a lot of independence, but they’re all mainly small, independent, wonderful people. But there hasn’t been a scaled independent firm in Canada. So, we’re kind of thinking like, what can we become like? How do we help more people? Young team. They want great careers, but they want to really help a lot more people. There’s no discussion of lifestyle business here at all. So, we started thinking about, well, what kind of capital would we need, and what could we do? And how do we do it, and like, what could we become? So, we started talking to people, losing some private equity partners, potential partners, and just kind of poking around and going to conferences. And then all of a sudden, the same time, this is two years ago or so, we were getting inbound inquiries from people looking to acquire US. I started feeling like, okay, we’re on to something, perhaps, but it kind of felt like we’re a tick box in firms, board meetings, you know, go to Canada. Tick box. Get into wealth management index funds. Tick box. Had that feel right, and a lot of them were phenomenal companies. Some were spreadsheet driven. It’s about the math. Like I received calls from a few firms saying, like, just think of how much money you can make. It’s like you didn’t ask if that’s my main motivation here. So, you meet these we met a handful of incredible companies, and then just had this call to speak with Mike Sullivan, co-founder of OneDigital and we hit it off. People, driven culture, driven impact, driven the economics. Take care of themselves. You and I both know that you don’t need to debate the economics, but it’s not about the economics that was a distant criteria. We want to make sure the team would be fulfilled and have a great opportunity, maybe great for clients. Those are the two main driving forces, and we were super slow in the process. We walked away a couple times, not, you know, out of any sort of animosity, just like, yeah, it might be great, but you’re doing great. We’re doing great. Let’s keep doing it separately. And then we decided last summer to well, let’s do a home and home visit see what might be possible. So, we went to Atlanta. They came and visited us, and I got to say, impressive collection of people, and that’s ultimately what did it people want to make a difference. People want to create something that doesn’t exist in the marketplace today. We all want to learn. Want to learn from each other. There is no playbook. There is no manual. Here’s how we do things around here. That’s not how OneDigital roles. So, we entered into due diligence on Labour Day and finished, finished all the paperwork on January 3 of this year.
Rob Pyne:
Yeah, yeah. It’s no small undertaking. As you’re saying. It took time, because these things do take time, don’t they, for such a significant moment in the career and your history of the business doing that. So, you know, in these types of transactions, retaining key people is critical. They were obviously very keen to retain all of the talent that you have in your team. Team. So, if you’re sharing some details, how did they structure the transaction to ensure continuity of the team and keeping everyone in their seat and growing this thing from where you are to something much bigger even. Yeah,
Cameron Passmore:
this is not a strategic acquisition, which is a fancy way of saying, acquire you and cut costs to expand EBITDA, which is kind of consultant speak. There’s none of that. There’s not a whiff of that. This is about we need all team members here. We all have great people. Let’s do something together. So, we had 41 shareholders out of 75 radio team members, and everyone’s given the option to roll a material part of their equity into OneDigital equity. So, all but a couple, did all of that, which is so we’re rolling forward in a material way like we’re in significantly, and we believe in this very much. So that’s an incentive, for sure, but the real drive is to create something together that doesn’t exist today, and that’s pretty cool, like we go to market with one service, offering, one philosophy, one value proposition. There is so much power and oneness, as opposed to, okay, Rob, you do your thing. I’ll do my thing. She’ll do her thing. He’ll do his thing. Yeah, we kind of cost share, and we kind of say we’re partners or something. But are you really? I want to be able to go on vacation and Rob can see my clients and have a good time with them, and they will learn and appreciate Rob. I want you to be able to be able to go away and I can meet your clients, and our team kind of shares best practices, and that’s what that’s what I want. That’s what we wanted. It’s a total blast. You bring in these young people, like our average advisor is 33 years old, so you’re bringing these young, talented people. It’s like a dream come true, right? Like you’re all working together, you’re all rallying around the great work that Ben does on research. You’re all rallying around all these principles and ideas that we’ve been taught by our friends at dementia and others for years. It’s a lot of fun, plus, you get a certain amount of confidence, as opposed to, I’m on my own by doing it the best I possibly can. And also, if you’re building the business, who’s actually running the business, right?
Rob Pyne:
Yeah, it sounds very much like PWL, and OneDigital, I guess, shared a vision there, because you’re really speaking about it, what it’s you know, you had a dream of what you might become, and you were looking for a partner that had that shared vision of what you could become as a business in Canada, the sort of impact you could have. Can you speak to that vision and what, what opportunities you see, let’s say, roll forward five years, and you look back five years from now, what would you say? Can would be the hallmarks of saying; we really made that work. This was, you know, five years you look back, what would have to have happened for you to say what an amazing experience. You’re already having a great time, by the sound of it clearly. But what would have to have happened over the five years, preceding in five years from now,
Cameron Passmore:
I just dream of what we can do. I think, like now we’re getting into organic digital marketing, we get leads now, 2020 500 leads per year. Roughly 40% of them become we call qualified, and roughly 25% of those become clients. So, we started to figure out this machinery of being able to help more people. That’s what this is all about, right? I think that we can significantly increase that, because we’ve got this line on finding great talent. It’s all about having enough talent trained and in place and time to help more people. So, we’re working on that recipe now. Hire ahead, advertise up, get the lead flow going, get the people trained up, so that that is a big focus of us right now, but I think we can look back in five years’ time, there’s not a it might be low chance, but there’s a material chance that we are five times the size, 10 times the size. And it’s not just about growth for growth’s sake. It’s not about EBITDA and all that that takes care of itself. It’s about helping more people. And I remember hearing Peter Mallouk from creative planning, who I’m I know you know of at Future Proof last year talked about, if you’re not growing day in, day out, the market is telling you something, right? If you’re doing what the market wants, they will show up. That is why growth becomes this great litmus test of how well the market wants what you’re doing well, I believe the market. Desperately needs what we and what you represent. Markets work, fiduciary fee based, integrated financial planning, investment planning and connecting other professionals in their lives in a place that actually gives a damn about the people. I couldn’t
Rob Pyne:
agree more, and I love talking to people that speak with the same passion about that real, mission driven approach to actually serving more people and giving them a better experience in the investment world. Excuse me, so can I just dig on dig into this issue about your structure, because I’m very personally curious about for our business as well, you talk about having these verticals of marketing, compliance, and finance and so on. So how does the executive team structure work? If you You’ve obviously got talented, you know, next generation leaders coming through. What does that executive team and leadership team structure look like? And how do you actually really embrace the ambition and opportunity for leadership inside the business, whilst maintaining sort of that executive team direction. If you can sort of shape that up for me, that’d be great.
Cameron Passmore:
Yes, we have a leadership team that meets every other week, so the lead of each one of those groups comes together. So, in that meeting is finance, operations, culture, research, technology and data marketing, as well as the advisor lead, and then Brenda is our president and myself. There’s 10 of us meet every other week, one hour. We’re a very high-end delegation culture. We don’t get in people’s way. So, we make the meetings very deliberate. Where you where we have, we use a program called fellow where people put in extensive notes of what’s happened since the last meeting. If it can be typed up, we don’t need to talk about it. If you have a question, go through the notes, and ask questions you might have. So, we’re really building that muscle. And as things come up, I’m trying to do my best, for example, to put in the notes, because you forget often. But stuff that needs to be shared across different parts of the firm are shared in there every other week. So, we won our meeting every other week, and then the other weeks we have a growth meeting which involves people directly involved in growth, which would be myself, Ben marketing, my advisor leads who takes care of sales. And so, we meet every other week just to talk about growth initiatives. You know what advisors have reached out that might be interested in joining us, what firms might be having us acquire them so M and A type work. What’s the organic growth strategies going on? What are our sales numbers looking like? That’s what we cover off in the growth means. That’s what’s working for us. But this is a continual process of tinkering with the model. And then during the week, there’s lots of cross pollination, of course, lots of meetings, yeah.
Rob Pyne:
And for these younger, ambitious people, you see average advisor, ages 33 how does their I mean, say your salary, but you’ve also got your employee share plan. Has that carried over into OneDigital and his pathway to equity ownership for the people coming through. And how does that connect people to their own? You know, future financial success,
Cameron Passmore:
that is something we are working on now. It will be different than in the past. However, equity ownership is important to both OneDigital and to our team, it has to be hammered out. That’s a project for this year, sure,
Rob Pyne:
and how do, if you don’t, you don’t need to go to detail. But how did OneDigital value? PWL, well, was it a multiple of EBIT? And you know, you able to share some details of how they applied an equity value to the business of PWL Well, which was obviously successful in its own right, and way above many others that are in this space, as you talk about, lot of businesses are out there that are smaller and looking for the scale that you’ve achieved, how did they go about looking at that valuation of the PWL business,
Cameron Passmore:
so, they would have only come to Canada. This is the first acquisition outside of North, outside of the US, the first non-US acquisition. Had we not been a platform with a fully formed leadership team and fully formed teams in each group, they never would have considered acquirements that they would never acquire practice. For example, it just wouldn’t make sense. They wanted to have a strong platform that other firms in our space could join, but also potentially other areas of business, like property and casualty insurance or group benefits or group retirement accounts, so we can. Become the anchor platform in terms of valuation, I can say they valued us as a platform. We’ve invested heavily in our platform, which, in business speak, means we had lower EBITDA than a typical firm. So that was all taken into account in the valuation. Obviously, we’re happy with how it was valued. We’re also happy about rolling into OneDigital equity. We’re excited about what we can all create. We’re excited about what they really have so many things figured out that we did not and would take it would have taken us a long time to figure out. For example, how do you do M and A How do you do a deal we did not have the balance sheet to do the kinds of opportunities that we’re now being presented with today. You know, the way the regulatory rules are in Canada for a dealer like ours is very tough for us. If a large, larger team came along, we couldn’t find afford to acquire US, for example. So, someone else largely came along. We just couldn’t. Right now, we can. So, all that becomes much, much easier. And to me, it’s a value, a compelling value proposition to someone who has a large business to say we’d rather own PWL equity or OneDigital equity. So, from a diversification standpoint, it’s a highly diversified financial services firm that has tremendous experience in growing across many different types of business in financial we were looking to bring more services to our clients. Will it be p and C insurance? Will it be group benefits? I don’t know. That’s gonna be part of the fun that we can now have these kinds of conversations. Again, if you dream it, anything’s possible.
Rob Pyne:
Yeah, there’s, there’s parallels there. On the M&A side, you talk about, would you rather have PWL equity or OneDigital equity, and the opportunities you being presented with now, the opportunities for growth and expanding your offer. So the same, excuse me, the same would be true, I would think, for smaller businesses along the way, where PWL had already grown to a substantial size in its own right, in the independent space, businesses looking at you and saying, well, would I rather have my own business where I can still make my own decisions, or whatever I part of PWL, because I can see the opportunity for growth is higher. Did you have people approaching you that were smaller practices than you looking at being a part of what you’d built, because they could actually then focus on just being advisors and really grow their equity more quickly with the business that had the scale to do that.
Cameron Passmore:
Loosely, but people knew we couldn’t clear the trade. So, people would jokingly say to me at conferences, you know when you’re going to buy us? Or are you ready to take like, then, and jokes are funny because they’re partially true, right? And we in Canada, in the Dimensional world, we’ve become, I think, one of the largest, if not the largest, Dimensional firm in Canada. And this is kind of the dream, right? Like, I know a lot of the people in this space in Canada, they’re wonderful professionals, wonderful firms, and I say to them, like, wouldn’t it be great if we’re all together? Yes, I’m quirky, Rob, you’re quirky. Let’s kind of check our quirks at the door and try to build something great together. And that is the hurdle, right? Because we all got our own twists. You might like an orange pie chart on page two of the financial plan. I might like a polka dot one on page four. Yeah. Well, we’re both successful, therefore, whether it’s orange or polka dot it doesn’t really matter. But we hang on to these beliefs that it’s got to be my way it doesn’t, so that’s why we’re trying to stay focused on the prize here. The prize is helping 1000s of more Canadian families, whether it’s orange or polka dot it doesn’t matter.
Rob Pyne:
Couldn’t agree. More. Cam, that’s a it’s a brilliant way to put it, because in reality, you have that in your own business, let alone bringing other business owners in, looking at, how do we do things? And they think everything they do is their special source that makes the difference. But ultimately, how do you help more people? Is the end game, and if everyone’s on board with that vision, you actually can do more together, clearly.
Cameron Passmore:
And the sauce does matter, though, because they’re going to market with their sauce, right? So, it gives them the energy to do it. I did it, I get it. I fully get it. But once you get into a certain scale and size, and I tell you, it’s super humbling. Where I had clients for 20 years, they went and worked with Ben Wilson, not an issue, of course, not an issue, because he’s phenomenal. That’s like, you don’t miss me a little bit, right? It’s all in our heads, like in Canada, for example. Talk about in your heads. In Canada, we use these one decision portfolios, asset allocation, funds, our most popular one is the 70/30 you know, Rob exactly what it looks like. Our value prop isn’t in picking securities. You. Whether you have $1,000 or $100 million we’ll go 70/30 or something like at 80/20, whatever. It doesn’t matter which one we’ve heard people say, oh, you can’t do a one decision portfolio for people, they’re gonna think you’re doing nothing. They will be proven that’s in your head.
Rob Pyne:
Well, I can say quite genuinely, can we do exactly the same as you we use the water allocation trust. It’s a one-line solution, and because it is such a it’s such a complex and comprehensive way of delivering the outcome for clients. And yet it looks very simple on the surface, and people struggle with that idea as advisors. What am I going to talk about? But I’ve listened to your podcast over the years and thought there’s such strong parallels between the way you think and why your business is run, and I can aspire to be as successful as you have been in your business. So being respectful of your time. It’s getting a little late over there, looking back on your journey with PWL capital, what would you say has been your biggest success? And then give me the flip side of what’s been the most important lessons that shape the firm into what it is today.
Cameron Passmore:
Biggest success depends on who you say is successful for, I guess. But I listened to Michael Kitz, as I’m sure you do, and there’s so much outcome bias everywhere. But to go from advisor like starving advisor back in 91 to advisor, a little bit of growth and success, to getting the chance to be part of this revolution with indexing and Dimensional and then meeting these phenomenal people, and then somehow being fortunate to have some modicum of ability to lead the lead. How are you to find lead these people? Because I don’t view it as necessary leadership, but my temperament is such that I’m a big delegator, big believer, big, trusting kind of person, but to have that profile with such wildly talented people, where, if I’d come in with a strong belief and a strong, controlling profile, these people would not have become what they’d become. I have no desire to be the smartest person in the room. Listening to this, you might realise that I rarely am the smartest. Person in the room, but we’ll leave that aside. But to have that come together at this time was just so phenomenal that my profile and their abilities just kind of came together with this unbelievable opportunity with Shopify, indexing, Dimensional podcasting in Canada at the right time, it’s just like this strike of lightning that was unbelievable to pull off. So that that, I think, is the most amazing thing that happened here, before
Rob Pyne:
you talk about the lessons you’ve learned along the way; I just want to point out that you’re a particularly humble man because you talk about intelligence like that. It’s one dimension, but as we are disciples of Dimensional’s approach, it’s more than one factor, isn’t it, that makes for intelligence. And what you display in every interaction we’ve had, and what I hear on your podcast is an incredible level of emotional intelligence, people intelligence, your ability to actually bring people on the journey and actually build people up and support them and champion people’s development. It’s what made, I think, just as an observer, looking from the outside in, is what may has made you so successful. Because if you were that controlling, autocratic style of business owner, then yes, you wouldn’t be where you are today. It’s that people intelligence, you clearly have it in spades, and it’s a wonderful thing to witness and a real treat to have a chat to you today. Cam, so as we finish then final question, what have been the most important lessons that you’ve learned along the way that shaped the firm into what it is today?
Cameron Passmore:
That is a hard question. Important lessons. I mean, I talked about unintended consequences. I rarely expect things to go as you may have planned. I always look forward to the surprises. The surprises are just incredible. So, I learned that I heard Josh brown on a podcast this morning talk about having a default assumption that things could go pretty good, instead of assuming things could go wrong. So, I think we’re a glass half full kind of organisation. The world is so complicated, there’s so much risk everywhere. There’s so many challenges that we all face, that having an optimistic bias seems to make sense.
Rob Pyne:
Can I add one there for you? I think because it speaks to what you did. Saying there it’s you actually believe the best in people. It seems like your default position is believing the best in people. And that’s a that’s an optimistic bias, not just in the outcomes that you might achieve as a business owner, but actually outcomes that are delivered by the team. The optimism you have in your team to actually become better than they were when they began with you and so that optimistic bias clearly has worked, and you are, you’ve achieved something tremendously successful as a business owner and now with the OneDigital transaction. Who knows where it might be in five years’ time, but I look forward to staying connected to what’s happening over there. Cam, it’s been a wild ride for you, and terrific to witness. So, any final thoughts that you want to share that before we wrap up here and again. Thank you so much for giving your time up this afternoon for you. Well,
Cameron Passmore:
you’re very kind, Rob. I appreciate the invitation. The future is bright, humanity, figure stuff out. There’s so many great things going on that are going to make what we do more important and better. Technology, AI, people’s education, awareness of how markets work. It’s just incredible time to be in this business, and more and more people that have our shared philosophy should be coming together to create something great for more people on this planet. This is a worldwide phenomenon, and the more that we have conversations like this, I think we can get more people into this, into this camp. But it’s been super fun to chat with you. I appreciate it, and I’m crazy about what we’re all doing together.
Rob Pyne:
Couldn’t agree more. Cam, and again, it’s wonderful to chat with you. Thanks so much for taking the time and joining us here today on the trust advisor podcast.
Cameron Passmore:
Thanks, and hopefully we’ll see you in Ottawa one day. I’d love to be very nice.
Rob Pyne:
Thanks, Cam, thanks. Bye.