The Steadyhand Diaries

Globe Investor Magazine, May 22, 2008

December 11, 2006

"Don't Fear the Bear" comes to life today. My furry, 1,600-pound friend Koda and I are starring in a series of video clips for our home page. The thought of me going into the ring with a grizzly amuses Neil to no end. Why did I insist on shooting this live?

Before we started, the trainer warned that Koda might try to check me out. "If he moves over and starts to nudge you, push back." Oh, right.

As it turned out, Koda and I got along fine. The bigger challenge was delivering my lines. "Okay, Tom-take 13."

December 19, 2006

What a loser. I fly all the way across the pond and get to spend one grey winter day in Edinburgh. No golf, no touring-nothing. It was worth it, though. We've got us a global manager: Edinburgh Partners.

It took a while. We did extensive data screening, numerous phone interviews and three on-site reviews-the final one being with Edinburgh Partners in Scotland. It was surprisingly hard to find a global equity manager that runs concentrated, non-benchmark-oriented portfolios. The firm is only four years old, but founder Sandy Nairn, formerly head of global research for Templeton, has put together a veteran team. And like Wil and CGOV, these people are all about investing. As Sandy said, "We wanted to get away from the bureaucracy and just manage money the way we wanted to."

January 18, 2007

Where did that come from? A week ago Monday we were wrapping up our morning huddle when I collapsed.out cold.three times in 10 minutes. After we realized I had a stomach full of blood, the ambulance hustled me off to surgery. I'm just home after 10 days in hospital and am getting stronger, but my life has changed-what was a manageable bilary condition is now advanced liver disease. No wonder my skiing and basketball have been so shitty!

"Do you still want to do this?" Neil asked. "It's not too late. We can pull the plug."

I'm not going to pull the plug. I'm not planning on dying and I'm not ready to retire. This will just make the first year or two a little more challenging.

February 13, 2007

It's official: We have five Steadyhand funds, prospectused and everything. To get there, we had to make decisions on some things that had been hanging. We settled on a minimum investment of $10,000 per fund. If we're going to keep our fees down, we can't afford to carry small accounts. Our lineup will have a fixed management expense ratio ranging from 0.65% to 1.7%.

We also put the pin in on electronic delivery: An investor can't buy a Steadyhand fund unless they have an e-mail address. After their welcome letter, our clients should never get another piece of paper from us besides a tax slip.

And we registered in five provinces-B.C. to Ontario. We can't justify the regulatory cost of operating anywhere else.

April 10, 2007

We're open for business. Neil and I cut the ribbon this morning in brilliant sunlight-I hope it's an omen. Tonight we'll do our first road-show presentation in Vancouver. Time to get out and sell.

April 16, 2007

It's a week past launch and the silence is deafening. A few clients are trickling in, but I can tell the team is disappointed. And our rollout events in Calgary and Winnipeg this week will be mostly friends and family. Man, it's tough putting bums in the seats. At this stage, we need to contact every potential attendee directly with a call or personal e-mail. I wish we had more family and friends!

May 15, 2007

Good news. As of today, I'm on the list for a liver transplant. I could get the call tomorrow or next year. The bad news is, I'm grounded.can't leave the province. That will limit our ability to get in front of prospective clients, which we need to do. But maybe it's a blessing-the beta blockers and my weakening condition have taken the strength out of my voice and slowed down what is already a deliberate presentation style. Yawn.

June 7, 2007

We must be doing something right. The website continues to get rave reviews. Scott and Neil nailed it. And today a couple of big clients signed on, including a Bay Street lawyer none of us knew. But TD Waterhouse also called to say they wouldn't be listing our funds. Apparently we're too small and we cause them too many operational problems. Translation: You need a trailer fee.

The TD news is a blow. We may be direct-to-client, but our business model still assumes that 25% to 30% of our clients' assets will be held through other dealers, mostly discount brokers. TD is the leader in that category. Fortunately, most of the other banks and dealers are signing on. In the meantime, we don't want to pay a trailer to a discount broker. An ongoing advice charge for no advice doesn't make sense.

July 9, 2007

The Mutual Fund Dealers Association is coming in to do an audit in two weeks-didn't they just leave? It's laughable how regulated mutual funds are compared to hedge funds and other structured products. I can't talk to Scott about the Seahawks game without documenting it and putting it in the file. The clients are ultimately paying for this. Are they any better off?