Welcome to Personally Invested. I'm Dave Richardson. I had the opportunity to sit down with someone is affectionately referred to as the $120 billion woman, Sarah Riopelle, who runs the largest portfolio investment program in Canada. With a chance to talk about a wide range of issues in terms of her own career, and the challenges of managing that much money for Canadian investors. I think you'll enjoy her insights.
So Sarah, welcome to the podcast. Personally investing I think takes on a whole new meaning for someone like you. It must be daunting: over $100 billion that you're responsible for, and not only that, it's the kind of solution, if were talking about the Canadian investment market, where you've got over a million people, in not that big a country, that are invested with you or you're responsible for their investment. So every day you get on the train to come into work and you look down the car and then and there is probably a couple of dozen people who's investment, their retirement, their child's education, you're responsible for.
The one's that don't know who I am, I'm OK with that!
Well, they may not. And there's like, I guess there's a plus to that but that's got to be an amazing responsibility and how do you deal with something like that, 100 billion plus dollars?
So it absolutely is an amazing responsibility, but I try not think about it. Because you don't want to, so it's extremely important for me to consider the fact that, you know, my parents and my children, and my cousin, and my next-door neighbor...
Because you're investing in this yourself, yeah.
Myself as well, are all investing in the funds, it's extremely important to consider. But I can't let it paralyze me in terms of being able to take action and manage the portfolios and make the right decision. So one of the keys to a solution like this is sort of, you know, individual investors have a lot of emotion when they are investing in behalf of themselves or their families. And sometimes that can lead them to make bad decisions. Because they let emotions sort of get the best of them. So me being a professional investor, I sort of take that view away, I take that emotion out of it, and that allows me to make better, more consistent decisions on a day-to-day basis, on behalf of those clients.
But how you do that? Because you are a human being, you have emotions, so what is it about your personality perhaps, or the discipline, as you've learned it over a number of years, that allows you to step back from the emotion of what's going on all around the world.
So I've been doing this for a long time, I've been through several market cycles and learned a lot from learn from that, learned from our mistakes, learned from our accomplishments. I really try to leverage the expertise that I have around me so it's not just me, looking at the portfolios by myself on a day-to-day basis.
I have a strong team that works with me, and I have access to expertise in all asset classes in areas of the market in around the world. And we have the asset mix committees, so it's not just me making decisions on asset mix on the portfolios.
It's the RBC investment policy committee, which is 10 colleagues of mine and I that get in a room and we, you know, debate what's going on in the economy and the markets to make decisions on the portfolios. If I go and look at what the positions are in the morning when I get in, and you know, that sort of thing, about cash to spend in that portfolio. If I have questions about where I might want to spend that cash, I have 20 people down the hall that I can go and chat with, and sort of say "what do you guys are seeing in the market right now?"
So it's really leveraging the expertise and the knowledge and the people around me to help me to manage the portfolios.
Yeah and I think that comes and gets to a really important point is, so if we're talking about the Canadian investment market and there's listeners from different parts of the world on this podcast, but it just to put in perspective for anyone who's not in Canada. You know someone could invest in one of your solutions with as little as $25 or they might have, you know, several million dollars invested.
And what a lot of critics would say and point to a portfolio solution like this where you are helping manage someone's bond holdings, their stock holdings and their holdings, not just in their home country but all around the world, that these are kind of simple products. These are kind of simple solutions. There's not a whole lot of sophistication to it. But what you're describing not only in terms of answering the way you manage your emotions, but the access to resources and expertise and how you pull that out altogether. That doesn't sound like something simple. It sounds like something really hard and really sophisticated.
I'm more than happy to have that debate that anybody that has that view, because I think that these products are probably some of the most sophisticated products available on the marketplace. In Canada in particular, but likely around the world and that's because we can leverage the resources of a large global asset management firm when we're putting these solutions together. We have 30 years of experience in building multi asset and bonds solutions, optimizing them, put in them together, maintaining them, rebalancing them and managing them on a day-to-day basis. I have access to 200+ strategies when I'm putting the solutions together. I have hundreds of portfolios managers and analysts that are available to me, when we're managing particular asset classes and strategies. I often talk about this when I'm doing presentations in front of clients.
There's probably hundreds of decisions that an individual needs to make when they're trying to put a portfolio together on their own, or trying to build an investment solution for themselves. And one individual cannot have the expertise to be able to answer to the hundreds of questions that they need to be able to answer. I have at my fingertips access to the people that know and understand all of those different aspects of investment management and can help me answer all of those questions on their behalf, so they don't have to.
And they are on speed dial and they answer your phone.
But I can walk down the hall, and yell at them.
That too, but you've got people that you're working with in Hong Kong and London all around the world.
Yes. In fact, I just got off the phone with Hong Kong, because we had some questions about some of the strategies in Asia, and like I said, just picked up the phone, and I called him on his cellphone while he was home with his children. But that's ok, he's more than happy to answer questions if I need to talk to him.
So it's a 24/7 world for you.
And how does that work in terms of balancing out the rest of your life?
So I hadn't answered a previous question that you asked me, that is how do I sort of manage the portfolios and take the emotions out of it. I think my personality really lends itself to this type of role because I am very methodical. I am very type-A personality, which means I'm very good at organizing things.
Managing my time, making lists to make sure things get done, and I make a very good use of every second of the day. So yes, it's a 24/7 job, but I'm able to juggle all of my responsibilities, between home and work, and make sure that I can commit the necessary time to each aspect of my life to be successful.
So does that mean that when I'm on vacation, that I have to have an iPad or a phone with me to be able to check stock markets or positions or check emails? Yes. But my family understands that, and they respect the fact that I have an important job, and I'm taking care of other people's investments, and that job doesn't end just because it happens to be a weekend or I'm on holidays.
And that speaks to one of the original parts of the discussion, which was why somebody doesn't recognize you necessarily on a train coming in for your commute to downtown Toronto every day. Which is because although - well I think you're honest with that - you're the lead manager...
This is a team that's working on this. This isn't just all about one person, although, you know, you just be fair, there is a reason why I believe
the buck stops here, as you know, when you talk to your family about performance but it is a team.
Absolutely! And I couldn't do it without having a strong team helping me and supporting me in managing the portfolios, because I recognize that this is not a job that an individual could do by themselves. I have to have access to all the resources that we have around here to be able to be successful in this role, and I'm more than happy to be behind the scenes kind of person, not be recognized on the train, but I do understand that somebody needs to go out there and speak to the benefits of the portfolios. So I can do that. I try avoid my time going to the bank branch. Because one of these days, when I walk into the bank branch, I see you on the big television in the branch all the time and I have yet to see myself on the big television and hoping it never happens. I rather not see myself on a big giant 60" television screen.
Yeah it's not very good, your kids will make fun of you if it ever happens to you and I'm sure, well, but let me talking beyond that, so the team is fantastic and allows you to manage not just the asset allocation from a strategic standpoint but tactically you're going to make moves on a regular basis and then down to the individual pieces that feed in to the portfolios and then within each of those individual pieces all of the individual holdings and you're able to look through that and work with the team, get all the information. So an incredibly complex process.
So there is a lot of different layers to look at. Because as you said, there's asset mix, so just stocks, bonds, cash. Below that, there's the different equity regions, different types of bonds investments, below that there's different types of funds, then you talk about look through it to be able to look through from a risk-management perspective. We need to be able to look through into the portfolios and figure out where our aggregate positions are in various countries or sectors, or credit quality or, you know, what's the duration of the portfolio in our aggregate, what's our style exposures to the portfolio in aggregate. So we have the ability with all of the tools that we have access to, to look into that detail into the portfolios and understand and monitor and manage all of the risks that are inherent in the portfolios.
So when you look at it, it's the ultimate, sophisticated solution that in one fell swoop, pulls together and gives investors diversification. But let me look beyond diversification, subset of that word diversity, right, and you know, I think one of the major evolutions in investment management, not just in Canada but all around the world, and I think still a step that this industry needs to take even further forward is diversity.
And I know you're a huge proponent of that and you see how that comes into play to make your solutions better every day. Maybe you can talk about diversity and your experience with diversity in this firm and what you're seeing across the industry.
Absolutely. I do, as you say, spend a lot of time focusing on diversity initiatives. I spend a lot of my time doing woman in investing type events talking to young women who are coming out of the university or in university. And talking them about opportunities that are available in the asset management industry. There's not just about female diversity, it's all types of diversity because I believe that building diverse teams leads to better overall decisions. And whether that diversity means male and female or a different nationality, different backgrounds, different educations. I think having the most diverse team possible is the one that's going to lead to the best decisions possible.
So there's a lot of different aspect of that, I spent a lot of time, I call them coffee dates so probably 2 or 3 times a week, I drink a lot of coffee. Some young person reaches out to me over LinkedIn, or because they have been recommended to me by somebody else. I take them to the coffee and we talk about, what you guys are studying in school, what type of role you are looking for. A lot of the times I'm sort of calming them down in terms of their expectations because sometimes their expectations for a career path are not particularly realistic. So I just sort of give them a little dose of realism.
Talking about opportunities in the asset management industry, how they can get their first job in this business, and also put them in contact with other people around in the industry that they can talk to about different opportunities. I also spent some time at the universities. My Alta mater in particular, doing some work there with the women in finance programs there.
Same kind of things, started backing it up and going to the university level and ultimately into the high school level and talking to young women in particular about what have they not considered finance as a degree university in and if they are in finance, why aren't they considering asset management as a career path when they graduate from university. So lots of work to do still.
So let me finish it off then with a critical question for me, for those listening it's the first day of school in Toronto, in Ontario where we live. So we both dropped our daughters off for their first day of high school. So what should I say to my daughter, what would you say to my daughter about a career in finance and investment management as she heads in the high school and hopefully on the University and I just want her to be interested in in something, and finance would be a great area for her.
There is so many different opportunities for everybody in finance, but for women in particular. Lots of jobs. I think they have, there is so many people around the organization here, strong women who have had successful careers and have also juggled that, you know, being mother, wife, having lot of charitable, taking part in charitable organization and giving back to their communities. It's definitely a struggle, but women are particularly well suited to do that. Because we are used to juggling multiple priorities.
So I don't want any women out there to not consider finance or asset management as a possibility, because 100% something that all women can inspire to, in your daughter in particular, I think she would be great at it.
Yes I think she would and I think you would be with someone who could play a feature, to be a great role model for either my daughters for that matter, because you've really achieved about as higher status as you can in this industry.
Maybe you should go and talk to my daughter, because she's less interested, but she's trying other things.
She'd like to start a podcast maybe!
Maybe she'd start a podcast. She is focusing on dance at the moment, so, she's more of the artistic type. My son is a little more like me, with the number side of things, so maybe I can still work with him.
Well I can't help her with dance.
Neither can I! My husband calls me the least coordinated person he has ever met.
Well, he needs to see me out on the dance floor. Sarah, thank you, thank you very much. That was a great discussion. You're very active on social media, LinkedIn in particular, so we'll post the information where people can see and read the different articles that you post because they are very interesting about asset management in general, but particularly what we've talked about with diversity and women getting in the finance so thanks for your time.
Yes I'm brainstorming new ideas for my next post so if you have any, let me know.
Dance! No I don't think so.
Thank you for listening to Personally Invested. If you have suggestions for future podcasts, please email us at RBCgampodcast@RBC.com.