In high school, Kevin Burkett always looked forward to the 3:30 p.m. bell — because it meant he could leave for his father’s office at Deloitte Canada in downtown Victoria and hang out in the lunchroom.
“As much as it sounds strange for a high school student, I thought, ‘I really want to become an accountant and be like those [people],’” Burkett said. “They were kind of funny; they were older. And I thought this seemed like something maybe one day I wanted to be a part of.”
Today, Burkett is a partner with Burkett & Co. Chartered Professional Accountants, a firm his father Charles launched in 2000 after Deloitte’s Victoria location merged with KPMG. Burkett joined the accounting firm in 2013. Then, in May 2015, he founded his own firm, Burkett Asset Management Ltd., where he serves as portfolio manager. (Both firms are based in Victoria.)
At Burkett Asset Management, which is registered as an investment counsellor, the team builds portfolios that hold individual stocks and bonds.
“We don’t carry funds or hold out other firm’s products,” Burkett said. The firm manages slightly less than $200 million in institutional and private client assets. Burkett’s 100 or so clients are primarily business owners and wealthy families — sometimes spanning three generations.
Burkett followed in his father’s footsteps and worked for three years on the audit team at Deloitte in Vancouver following his graduation from the University of Calgary, where he earned a business degree. He then spent a few years in investment banking, first with Scotia Capital Inc. in London, U.K. and then Credit Suisse Group AG’s office in Calgary.
“Investment banking was sort of fun. It was almost like being a hockey fan and getting to play in the NHL for a few years,” Burkett said. “[However,] it wasn’t a sustainable career path because of the gruelling work hours. I knew, on the personal side, I wanted to do some things like have a family and [follow] non-professional pursuits.” Burkett is now married with two young sons.
Before Burkett launched the asset management firm, he spoke with successful business owners and industry professionals to understand what they liked and didn’t like about their investment- management relationships. He found people were open to speaking with him because of his background in the industry.
In Victoria, clients have a hard time finding investment advisors who directly manage portfolios, Burkett said. And representatives of firms who sell investment services rarely execute the investments locally.
The answers from Burkett’s interviews “became the blueprint for how I built the firm,” he said. When he returned to those business owners 16 months later, he pitched the concept of a firm built around the relationships the interviewees said they wanted: “That’s part of what got me so much traction so fast.”
Burkett’s clients emphasized they wanted “real advice” and “real planning” that was beyond “a blueprinted financial plan like the one you might get pushed across the table if you were at a bank branch,” he said.
Burkett said his firm goes beyond basic planning (such as just telling a client to top up their TFSA) and partners with the accounting firm to execute what he calls “heavy lift” projects. “A recent example included helping a client family establish a private foundation to achieve a philanthropic goal,” he said. “In another case, we’re working together with a client to ready a private business for eventual sale.”
By November 2016, a year and a half after launching, Burkett Asset Management had exceeded $100 million in assets under management. Since then, growth has come through word of mouth. In the firm’s 2020 client survey, 96% of survey participants said they’d recommend the firm to their friends.
The most challenging part of running a business, Burkett said, isn’t acquiring clients, managing their investments or keeping them happy. Rather, he found the act of building the firm itself most difficult: putting the operational and compliance framework in place and hiring a team of people who were motivated to build a culture together.
Burkett’s advice to anyone founding a firm is to ditch a defined plan and be open to input instead. “I would say this is true of any business,” he said.
“Start by having conversations with your clients, and understand them before you go build what you’re going to build. You’re going to learn a ton of things, and that’s an opportunity you have that none of your competitors have. The people you [listened to] are going to love it and there are going to be more people like the people you aspire to serve who are going to feel similarly.”
Burkett is careful to note that his respective firms provide different and specialized services. “I work in both practices. I can co-ordinate these services better than others, but the two firms are separated to ensure clarity [surrounding] the different services they provide,” he said.
Nonetheless, Burkett’s two roles can be a boon for clients with financially complex lives. “Clients tell us that when they work with us on the accounting firm and also as a client of our investment firm, they never worry that things might be missed between them,” Burkett said. “We believe that the more knowledge of a client’s financial situation you have, the better you can consider those aspects when you manage their portfolio.”
For example, if a client sits on the board of a public company, “we can [talk about] how to time exercises of options and sales of shares from a tax-planning perspective,” Burkett said. “In other cases, the knowledge we develop in the role of accountant for a client’s business informs how we might use a liquid portfolio of stocks and bonds to diversify by industry or geography.”
Hot markets mean proceeding with caution
Burkett Asset Management has a conservative investment philosophy and, these days, portfolio manager Kevin Burkett is reining in clients’ expectations for their returns.
“I think surging market returns are not sustainable,” Burkett said. But you need to be delicate with clients. “I see other firms with persistently negative commentary that scares their clients and other firms that hold permanently rosy outlooks. I think that wears on credibility.”
Taking a realistic view is table stakes for being successful in the long term, Burkett said: “We’ve seen so much reckless investor behaviour over the past 16 months go unpunished as more money pours in the markets and we see waves of monetary and fiscal policy announcements. An area where [our] team is concerned is whether low interest rates and fiscal stimulus injections are justifications for the elevated securities valuations we see today — or if they reflect maybe a more precarious time in the world. This is a market that demands caution.”