Library Room Article
Profile/Doug Macdonald, RFP
By Bridget McCrea
To call Doug Macdonald an industry pioneer would almost be shortchanging his contribution. Founding father might be a better description — after all, he got his feet wet in the Fee-Only financial planning pool back in 1972, long before NAPFA was even a twinkle in its own founding members’ eyes.
Today, as principal at
Macdonald, Shymko & Company Ltd. (MSC) in Vancouver, British Columbia,
Macdonald is still going strong. He says that convincing clients of the value of
his practice’s services has been relatively easy – even back in the early
days. Naturally averse to a hard sell, it turns out that Canadians – unlike
their neighbors to the south – don’t actually need much convincing to do
business with a Fee-Only advisor.
“The hard sell that some
commission-based planners use is much more accepted in the States,” explains
Macdonald. “It is less acceptable here. In fact, it’s a good way to lose a
MSC was founded in 1972 when
Macdonald and partner David Shymko, both in their early 20s, decided to pursue a
vision of a fee for service financial advice to individuals. One of the first
issues the pair faced, says Macdonald, was deciding what to call themselves.
“We settled on the term ‘Financial Advisors’ as we believed this captured
who we were,” explains Macdonald.
Macdonald says that the
fundamental principles upon which the firm was based 28 years ago are still
intact. However, some things have changed: His company’s first client was
charged an annual retainer of $15, plus $10 an hour.
In addition to fees, the
mechanics of the business and the business environment in which MSC operates
have changed significantly. For one thing, the firm isn’t alone in the
Fee-Only business any more. MSC has been involved in the start-up of Fee-Only
financial planning firms in Calgary, Winnipeg, and most recently in North
But first, the original firm
got bigger and more complex. By 1975, both Adrian Mastracci and Larry Jacobson
had joined MSC as principals, and by 1980, the firm had grown to 10 people.
Computerization followed soon thereafter and has been continuously updated ever
since. The firm experiments with new technology and has invested over $300,000
in such capital infrastructure over the years.
For example, the firm has a
program, which a small percentage of clients utilize, called S.A.M. (Strategic
Asset Monitoring), that reports quarterly on a client’s total portfolio and
relates the portfolio to the appropriate benchmarks. “This proprietary
software has been developed in-house, as was our mutual fund tracking analysis
model, which was first developed in the early ’80s,” says Macdonald.
Creating in-house software
has enabled the firm to watch clients’ money regardless of where it’s
invested — funds and trust units, individual securities, bonds, deposits, real
estate, limited partnerships, joint ventures, and mortgages. “We have no
particular bias toward no-load funds, as most loads can be negotiated away.
Therefore, we focus more on the consistent performance and investment style,”
NAPFA Opens Window to U.S.
Macdonald got involved in
NAPFA in the early ’90s when MSC was already a mature company. So although
NAPFA was not integral in the firm’s early stages, Macdonald says the
organization has instead been a steady source of information on how equally
experienced colleagues were handling a wide range of matters. “Sometimes this
was a foreshadowing of things to come in Canada, other times it had already
happened in Canada,” he says.
Meanwhile, MSC had already helped create the Canadian
Association of Financial Planners (CAFP). For 15 years, Macdonald served CAFP in
one capacity or another — local director and president, member of the national
board, president, and chairman.
“In 1978 a fee-only
association was created in Canada, but due to the limited number of fee-only
planners in Canada and the creation of CAFP in the early ’80s, it was decided
that the fee-only planning firm would support the CAFP and only meet
informally,” explains Macdonald. “It wasn’t until recently that the
membership of this Canadian association, which is called CAPFA, was increased
from the original six members.”
NAPFA, therefore, brings
Macdonald’s firm networking that still isn’t available in Canada. NAPFA's
closed e-mail system and the conferences, he says, continue to be valuable.
“The conventions allow me to network with many knowledgeable people and renew
acquaintances that have evolved over the last nine years,” he says. “In
addition, it has been of value to be able to access information, as MSC does
have a number of U.S. clients or Canadians now living in the U.S. or with U.S.
For example, Macdonald
recalls a recent conference at which U.S. planners asked him about Canada’s
RRSP retirement system. He, on the other hand, needed to learn more
about the Roth IRA. “I said, I can tell you everything you need to know in 20
minutes,” recalls Macdonald, “and I ended up explaining to four individuals
almost everything they needed to know. In turn they told me everything I needed
to know about the Roth IRA.”
Serving 300 Clients
Today, MSC serves over 300
clients, representing a wide spectrum, including about 30 percent
corporate-sponsored clients. “They range from business executives,
professionals, owner managers, and retirees, and they come from all walks of
life,” says Macdonald. “They all share a strong belief in the value of
planning and have a strong desire to deal with an advisor on a fee-for-service
Currently, the firm employs
17 people in its Vancouver office and 10 more in affiliate offices in North
Vancouver and Winnipeg to handle the work flow.
MSC prefers not to focus on
money under management, but concentrates instead on the achievement of client
goals. The firm’s investment philosophy hasn’t changed much since its
inception, though the focus sometimes shifted a bit. Currently, Macdonald
emphasizes fixed income and equities.
Also, MSC makes a
“significant commitment” to education and the introduction to the firm of
bright young minds. “In 1997, on our 25th anniversary, we set up the Macdonald, Shymko & Company Foundation to
provide a vehicle to give back to the community,” he says.
The future should bring
continued growth for his firm, says Macdonald, along with an expanded advisor
base and more individuals involved in the firm’s decision-making. “We have
always chosen to limit growth somewhat because of the management commitment that
it takes,” he adds.
When not working, Macdonald enjoys spending time with his wife Lynda and their two grown children, Hamish, 27, and Gina, 26, both of whom are involved in the business. He also owns an island on the Lake of the Woods in Ontario, where he visits for five weeks every year, and likes to golf and watch the NBA’s Vancouver Grizzlies.
Besides the financial rewards, Macdonald says the greatest benefit
of being a Fee-Only pioneer is the way he’s able to make a difference in his
clients’ lives while also forging long-term relationships with his partners
and various industry organizations. “Back in 1972, I identified a need and had
a vision on how to proceed,” he explains. “Then, I was just very fortunate
to find three other like-minded individuals who helped make it work and had fun