"Not only is the anxiety unpleasant, but the lack of stability can lead investors to make destructive financial decisions."
Danny Popescu is the founder and CEO of Harbourfront Group of Companies, parent company to a number of financial services businesses including Vancouver-based Harbourfront Wealth Management, an Investment Fund Manager that specializes in managing sub-advised alternative investment funds, and its U.S. company, Harbourfront Wealth America.
In 2013, with a personal investment of approximately $11 million, Danny launched the firm, and by 2022, its enterprise value grew to $425 million. Today, Harbourfront has roughly 300 employees across 28 branches in Canada and aims to reach a $1.5 billion enterprise value by 2027.
Danny is also the Founder and Director of the Harbourfront Gives Foundation, and so far, the foundation has donated over $450,000, supporting 65 charitable organizations in Canada and worldwide.
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Table of Contents
We are thrilled to have you join us today, welcome to ValiantCEO Magazine’s exclusive interview! Let’s start off with a little introduction. Tell our readers a bit about yourself and your company.
Danny Popescu: Sure and thank you for having me! Harbourfront Wealth Management is a Canadian financial institution which provides holistic wealth management services while specializing in retail friendly private securities.
There’s a huge hole in the Canadian landscape, where most institutions continue to limit their offerings to traditional asset classes, like stocks and bonds.
Since our founding in 2013, we’ve become one of Canada’s more innovative financial institutions. We’ve taken asset classes that are traditionally more suitable for institutions, like pension or endowment plans, and we’ve restructured them in such a way that they’re suitable for Canadian retail investors.
A second aspect that’s led to our growth is the fact that Harbourfront is employee-owned. Similar to that of a law firm, Harbourfront Wealth employees and advisors are partners in the organization, rather than just employees. That structure has created a number of benefits.
What makes your company different from others? What is its biggest strength?
Danny Popescu: I strongly believe that retail investors cannot stomach the volatility which exists in a traditional portfolio, which is limited to stocks and bonds. Not only is the anxiety unpleasant, but the lack of stability can lead investors to make destructive financial decisions.
We’ve built customized investment vehicles which consist of non-publicly traded securities with an aim to create portfolio stability for Canadians. Over 25% of our assets under management are held in private securities, which is just unheard of here in Canada.
We speak to advisors looking to join our firm daily and, unfortunately the vast majority of them have been unable to provide these types of solutions to their clients, which is why we’ve had so much success in growing our firm.
What do you intend on improving in the next phase of Harbourfront Wealth Management’s growth?
Danny Popescu: Running a firm like ours requires solid people across all our departments. Without top talent, it’s difficult to execute on a vision. I couldn’t be prouder of the team we have today, but it needs to continue to grow so that we can continue to scale our business.
We’re also continuing to build on our investment product shelf. Our approach has never been to imitate but rather continue to innovate which takes time and resources.
We recently hired Ipsos Canada to conduct a new study, which found that despite Canada’s pension funds being among the largest global players, 60% of Canadians are unfamiliar with private investments.
We believe Harbourfront’s access to private securities is an opportunity to better serve our clients. The study also found that 1 in 4 Canadians surveyed feel they are missing out on investment products they want. Nearly half of Canadians are open to switching advisors or financial institutions to gain better access to investments.
Our mission is to demonstrate value and enrich Canadians’ trust in the essential relationship between advisor and investor because that will help more Canadians achieve financial independence.
What do you think are the main challenges facing the wealth management industry right now?
Danny Popescu: In most countries around the world, investors invest at dedicated investment institutions, but in Canada, much of the portfolio wealth is still held at bank owned investment firms and other large heavily marketed conglomerates.
These institutions are slow to progress which ultimately holds back investors. The perception amongst many investors is that it’s safer to hold portfolios at large institutions but the reality is quite the opposite.
Large institutions continue to invest the old way – exclusively through publicly traded securities which are often overvalued and regularly experience significant drawdowns. I believe the independent firm avenue is the way of the future because it offers the best of both worlds.
The objectivity of an independent dealer with the stability of a major bank because most independent firms use big banks to custodian client assets.
In our case, by including a meaningful allocation to private securities to complement stocks and bonds, we aim to reduce portfolio volatility which in my mind is a lot safer than allocating 100% of your money in stocks and bonds.
“Adaptability” has become a common refrain among business leaders since the pandemic. How do you think businesses can thrive in 2023? What lessons have you learned and what advice would you share?
Danny Popescu: I can only speak to my industry and I said earlier, big conglomerates move very slowly. Many continue to have archaic technology and we know that during the pandemic, a lot of the big conglomerates in our industry really struggled. It’s the nature of entrepreneurs to constantly improve so we have leveraged technology since the day we opened our doors.
I think we have a similar mindset when it comes to constructing client portfolios. We know that markets are cyclical, so we believe it’s better to prepare rather than react and the way we do that is by complementing traditional asset classes, with Private Securities like private equity, private real estate and private credit.
What does “success” this year mean to you? It could be on a personal or business level. Please share your vision.
Danny Popescu: From a business point of view, our goal is to rinse and repeat. We’re recruiting aggressively and will likely acquire one or two companies this year as well.
On a personal level, I’m very proud of our philanthropic culture we’ve fostered by getting our employees involved with the Harbourfront Gives Foundation. We’re very fortunate to be in this industry meanwhile people around the world are suffering in so many ways. I don’t know how anyone in a healthy financial situation can ignore that.
Jerome Knyszewski, VIP Contributor to ValiantCEO and the host of this interview would like to thank Danny Popescu for taking the time to do this interview and share his knowledge and experience with our readers.
If you would like to get in touch with Danny Popescu or his company, you can do it through his – Linkedin Page
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