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Jay Smith, first vice-president, senior portfolio manager and investment advisor at CIBC Wood Gundy in Toronto, was named the top advisor in SHOOK Research and The Globe and Mail’s inaugural edition of Canada’s Top Wealth Advisors.Handout

Veteran investment advisor Jay Smith says his background in philosophy helped him keep a cool head and earn market-beating returns coming out of the pandemic-driven market drop last year.

“There was a level of panic – and I’ve been through everything – that I’d never seen before,” says Dr. Smith, first vice-president and senior portfolio manager at CIBC Wood Gundy in Toronto, who has a Ph.D. in philosophy from the University of Toronto.

So, like any good academic, he did some research and found that in the past eight pandemics, the market bottomed at the top of the first wave and was significantly higher a year later.

“I said, ‘I doubt this will be any different. So, the worst thing you can do is sell,’” he recalls from that period in the early spring of 2020. “Plus, we have great companies with great growth and great earnings that aren’t going to fall apart. And they’re going to be around when the pandemic is gone.”

His call was correct and the market not only bounced back but rose higher.

For Dr. Smith, it wasn’t so much a market prediction, but more a rationalization of global events.

“That’s how philosophy comes in: I try to rationalize it. People want to bet possibilities. … I only bet probabilities. And I could see very clearly at that point what the probable outcome would be, even though I didn’t know what it would be,” says Dr. Smith, who manages about $4.6-billion in assets with a team of 10 people, including three other advisors.

His 12-month returns before fees, as of Sept. 30, range from 21 per cent in his Canadian balanced portfolio to 52.6 per cent in his global opportunities portfolio.

Globe Advisor spoke with Dr. Smith shortly after he was named the top advisor in SHOOK Research and The Globe and Mail’s inaugural edition of Canada’s Top Wealth Advisors. He spoke about how philosophy helps him do his job, what makes a good advisor, the best compliment he has received from a client, and how the investment industry is evolving.

What makes a good advisor, in your opinion?

I have this concept of altruistic self-interest because everybody, in some sense, acts in their self-interest. I’ve always felt that if I act in my clients’ best interest at all times – make them financially secure as they can and meet their needs – then, in the end, that’s the best way of meeting my own self-interest. I’m better off if they’re better off. So, I’ve always had this client-focused approach to my business. And I’m happy that the firm is aligned the same way.

How else has your background in philosophy helped you in your role?

Philosophy teaches you to think critically about things. In markets, it’s really important to try and get through all of the noise. Philosophy taught me to look at stuff structurally, think about the arguments being made, and try to get to the truth from all the noise and everything around it. It’s been a very good discipline because of that.

How do you provide value for advice for your clients?

At CIBC Wood Gundy, we have huge bench strength. We have people who do financial plans, who provide insurance, tax planning, financial planning – what people need well beyond just investments. I concentrate on investments and that has worked extremely well. I am the quarterback on their total financial relationship.

People also like service as well as returns. I don’t use voicemail. I expect someone on my team to answer the phone after the first ring. Basically, from 8:30 a.m. to 5:30 p.m. [Eastern time], you’re going to get a human being on the first ring. And then, other than that, our team is completely accessible by e-mail and text messaging. Our team is good with technology. We use it to the best of our ability.

What’s the nicest compliment(s) you’ve received from clients?

People have said, ‘I don’t know what I would do without you.’ I think that’s pretty nice. A recent one I got was from a client who said, ‘I’m making a lot more money now than when I was working. I don’t understand why I didn’t retire 10 years ago.’ Clients are terrified of retiring, but they sell their business and give me their capital, and all of a sudden, they’re making more money without having to do anything.

How do you think the advisor’s role will evolve in the future?

This notion that you trade for a commission will be long gone. And basically, you’ll get paid for the advice you give for structuring people’s affairs through your own advisors – financial planners, insurance people, estate planners, tax people – and managing the best possible portfolio you can in the interest of the client. The future will be all about the quality of the advice and the quality of the service and have nothing to do with transactions or execution.

How does it feel to be named the first top advisor in this new annual ranking?

I feel extremely honoured and I want to thank my team. The competition in the investment field today is fantastic, and I know many great investment advisors on and off this list that might have won.

This interview has been edited and condensed.

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