1) INTRODUCTION:
François Doyon La Rochelle:
You’re listening to Capital Topics, episode #87!
This is a monthly podcast about passive asset management and financial and tax planning ideas for the long-term investor.
Your hosts for this podcast are James Parkyn and me François Doyon La Rochelle, both portfolio In today’s episode, since PWL Capital is now celebrating its 30th anniversary we will discuss the history of PWL with James who is one of the co-founders.
Enjoy!
2) THE FUTURE OF WEALTH MANAGEMENT STARTED IN 1996: THE PWL CAPITAL STORY:
François Doyon La Rochelle:
Today, James, we are going to discuss the history of PWL Capital, which is celebrating its 30th anniversary. We thought the best way to tackle this topic was to do it in a Q&A format, with me asking you, James, a co-founder, questions about PWL's history.
The firm was founded in 1996. What was the vision for the firm at that time?
James Parkyn:
Well, Francois, we opened our doors in January 1996 with seven employees, including the founding partners. My two partners and I had a vision about delivering a new value proposition that we believed could reshape the wealth management industry in Canada.
What we set out to build was a new type of advisory firm—one without conflicts of interest and focused solely on clients.
To deliver this value proposition to clients, PWL would offer fee-based wealth management, with no commissions or in-house products. We also wanted to bring together money management and financial planning, creating a true one-stop shop designed to help clients reach their goals. This was the really big new idea, François. Combining the two, no one else in Canada was doing this. But this was the way of the future; the leading-edge firms in the U.S. had already moved in this direction. Key to this vision is that the Clients deserved better. With no conflicts, we could sit on the same side of the table as the people we served.
François Doyon La Rochelle:
At the time, James, these ideas were far from mainstream. My understanding is that the vast majority of wealth managers were compensated through commissions. Can you elaborate for our listeners?
James Parkyn:
Francois, Wealth Managers at that time were focused on selling products with commissions attached, and their incentives were often misaligned with those of clients. Financial planning and sound asset allocation were often given little more than lip service. So, although we felt the big revolution was integrated wealth management, the notion of being fee based was at that time in the marketplace perceived as the real innovation.
François Doyon La Rochelle:
It was a very idealistic vision. Wasn’t it?
James Parkyn:
Absolutely Francois. My partners Laurent Wermenlinger and Anthony Layton (the “W” and “L” in “PWL”) and I felt investors deserved better. We wanted to put our clients first. Our investing approach would be based on clients’ needs and disciplined long-term investing. PWL would hold itself to the highest standards of integrity, objectivity, and expertise.
François Doyon La Rochelle:
And I believe this was carried through to how you reported performance results to clients.
James Parkyn:
Indeed, Francois, this was a critical part of the PWL Capital story. We were committed to providing regular performance reporting to clients using pension plan standards. We adopted the standards of the Association for Investment Management and Research (AIMR, now the CFA Institute). This was virtually non-existent in the retail wealth management space in Canada at the time. It was about 20 years later that industry regulation required a form of performance reporting to clients.
François Doyon La Rochelle:
So PWL was really ahead of the industry on that one. Clients would easily be able to see how their investments were doing. But committing to pension standard performance reporting was also a double-edged sword. How did that work out?
James Parkyn:
We believed there was an investor appetite for such a new approach. It turns out, we were right. PWL Capital quickly had $7 million under management soon after we opened our doors in 1996.
Our pioneering approach was vindicated. This, however, didn’t mean easy sailing. Despite our early success, the first years were challenging and uncertain. After paying rent and salaries, we didn’t have enough left over to pay ourselves as partners for several years.
PWL grew quickly, but so did the costs of operating a fast-growing firm. We needed larger premises. We had to hire more staff. We knew we had to invest in our business, even though the payoff was not immediate. We knew we had to develop an internal business culture to make our long-term growth plan sustainable.
François Doyon La Rochelle:
After four years, we reached our first $100 million in assets under management. PWL took it’s first steps at expansion in 1997 with an office in Ottawa, then another in Toronto in 2003. I joined PWL in 2001. I saw firsthand how much effort this took.
James Parkyn:
You would recall I worked those first seven years non-stop, François. When I travelled across Canada and the U.S. for conferences, I thought of those trips as my “vacations.”
François Doyon La Rochelle:
James, we know from working with clients that the mindset of a founder/entrepreneur is that of a family steward. Can you explain what this means for you?
James Parkyn:
Absolutely. Employees are like family. We are in so many ways responsible for supporting their professional development. We are so proud of how so many have built rewarding careers, started families, and bought homes. This is an achievement that the leadership of PWL over the years can be very proud of.
François Doyon La Rochelle:
The financial markets brought their own set of challenges. The dot-com crash of 2000-2002 led to a drop in assets under management. But we learned from that experience as well. We saw something during the crash that shaped a new course for PWL: Active managers had failed to outperform. I believe that this turned out to be a big blessing. What can you say about that, James?
James Parkyn:
Well, Francois, as you know, active managers had failed to deliver on a major promise: “They failed to protect investors on the downside” when the Tech bubble burst. This revelation led us to review academic research looking for strategies that worked best for the long term. Reading William Sharpe’s famous article, The Arithmetic of Active Management, made it perfectly clear that passive investing was the best strategy for our clients for the long-term.
François Doyon La Rochelle:
Sometimes James in life, timing is everything. The investment industry was launching exchange-traded funds (ETFs) on a large scale.
James Parkyn:
Absolutely, these are low-fee, passively managed funds that replicate the holdings of various indexes instead of trying to beat them.
The idea was to own the entire stock market through index-based ETFs, which own all the stocks in a specific index, such as the S&P/TSX Composite Index. With the development of those ETFs, we now have the investment tools to easily implement globally diversified tax-efficient portfolios for our clients.
François Doyon La Rochelle:
While ETFs are well-known now, few investors had heard of them at the time. Many didn’t understand why we liked them.
James Parkyn:
That’s a really good point, Francois. Many felt like investing passively was doing nothing. They thought it was like giving up. From a marketing perspective, selling the idea of passive investing with ETFs was a bit like entering the Olympics 5,000-metre race with a weight tied around your ankle. Competitors were saying we aren’t doing anything by just buying the whole market.
François Doyon La Rochelle:
But academic evidence showed that stock picking and market timing were like gambling. These weren’t reliable ways to fully benefit from the market’s gains.
James Parkyn:
So, Francois, we embraced the bold idea that markets work. Our goal would be to deliver the expected returns that markets have to offer. But clients and prospects were sceptical. The Financial Services Industry’s mantra was ingrained in people’s minds: “We can forecast the future.”
François Doyon La Rochelle:
But as we often say in our podcast: No one can forecast the future. But once again, some good fortune helped us to evolve to the next level of what is now called evidence-based investing.
James Parkyn:
Our Partner Cameron Passmore in Ottawa had reached out to U.S. based author and thought leader Larry Swedroe, whom we quote often in our podcast. He recommended we reach out to Dimensional Fund Advisors to learn about the products they were developing in the U.S. to capture factor-based returns. These discussions culminated with Dimensional launching their funds in Canada in 2003, and we were lead investors. I would add that Francois was critically important in helping us hone our philosophy of passive investing and, significantly, to develop the messaging on how to sell this new value proposition to clients. Dimensional became a key strategic partner in supporting us to develop our company based on global industry best practices.
François Doyon La Rochelle:
I would add James that we have been working with Dimensional since 2003, and they have excelled at identifying academic findings that can be implemented in the products that we use in our clients’ portfolios.
Dimensional’s discipline in managing portfolios based on academic science is a critical component of how we implement our approach of “buy, hold, and rebalance.”
James Parkyn:
“Buy, hold, and rebalance is core to our success story and the long-term performance of clients' portfolios. Our regular listeners know that this approach is supported by academic research showing the value of diversification across asset classes and countries.
François Doyon La Rochelle:
As we often say, owning a well-diversified portfolio of stocks and bonds reduces risk and increases returns.
James Parkyn:
Our approach continues to be broadly invested and diversified regardless of any one market’s short-term ups and downs. This way, we give ourselves the best chances to capture the total market’s winners over the long run and enjoy the incredible long-term gains markets offer.
François Doyon La Rochelle:
The strategic decision after the Tech Bubble burst to reengineer our investment philosophy has been repeatedly validated by new research studies over the years. In recent Podcasts we have highlighted how one remarkable study found that just 4% of stocks accounted for all U.S. stock market wealth creation above a risk-free investment in Treasury bills from 1926 to 2023. A majority of stocks—51.6% to be exact—actually had negative compound returns. In other words, slightly more than half of stocks lost money over their life span.
James Parkyn:
No one could know ahead of time which companies would be among those successful 4%. So then owning the entire market is the best way to be sure you will capture their gains. By doing so, you give yourself the best possible chance of a successful investing experience.
François Doyon La Rochelle:
Yes, according to research from PWL’s Capital Senior Researcher Raymond Kerzeho, a dollar invested in a diversified international equity portfolio in 1970 would have grown to over $16 after inflation by 2024.
James Parkyn:
But Francois, I think that it is also fair to say that such amazing returns came at a price: volatility. This is the cost of entry for investing success. As Raymond found, the period since 1970 saw six bear markets (a 20%+ real decline). “Investors should hold on to their portfolio and expect bear markets as a normal part of investing,” he said. “These periods are the entry price to join the club of successful long-term investors.”
François Doyon La Rochelle:
As we often say, James, volatility is not a bug of the system; it’s normal. The research has also only gotten clearer about the comparatively poor performance of actively managed funds. Studies have repeatedly confirmed our view that most active funds underperform the markets. In 2025, the annual SPIVA report found that a whopping 89% of actively managed multi-cap funds underperformed the S&P 500 Composite Index over the last 20 years.
James Parkyn:
The long-term evidence is that only a small portion of stocks tends to deliver most of the wealth creation of the stock market. But as you know, Francois, there’s no way to know ahead of time which companies will be the winners.
We like to quote Warren Buffett in our podcast: “It’s harder than you would think to predict which companies will be the winners and losers. And those who tell you they know the answer are usually either self-delusional or snake-oil salesmen.”
François Doyon La Rochelle:
James, PWL offers more than portfolio management services. It is a means to a bigger end—whether it be supporting a client’s financial needs, giving to charity or community projects, or leaving a legacy for the next generation. So, James, over and above portfolio management, how does PWL Capital set itself apart in the industry?
James Parkyn:
Francois, I believe this is one of PWL’s major competitive advantages: Skilled advisors capable of delivering true integrated wealth management. Our first step with a new client is to sit with them to understand their overall goals, resources, and risk tolerance. We review everything from tax and estate planning to insurance needs and financial objectives. With this information, we develop an integrated plan, including any needed tax, estate, and insurance advice.
This process allows us to develop an investment plan to meet our clients’ life goals. The strategy includes setting an allocation of stocks and bonds to ensure they have a portfolio that lets them sleep at night during inevitable market selloffs.
François Doyon La Rochelle:
James, as you well know, this value proposition is easy to promise but hard to deliver on consistently. You need a firmwide culture to back it up. The original vision you had with your partners was that clients deserved better. How do you feel the firm has done over the past 30 years on this point?
James Parkyn:
Francois, we have always placed a strong emphasis on education. This really means acting as a coach for clients in investing, so they minimize behavioural mistakes. What we have learned is that once clients truly understand the long-term benefit of managing their emotions and staying the course, generated the best returns. This is a critical part of what PWL does by helping customers feel confident in their strategy and maintaining the discipline to staying the course through market volatility, while ignoring the noise from pundits and analysts.
François Doyon La Rochelle:
This approach to education is at the core of the PWL Culture. This approach, too, is borne out by evidence. A study by the investment firm Vanguard found that advisors who use wealth management best practices can add up to 3% or more in net annual returns for clients. That added value compounds significantly over many years.
James Parkyn:
Francois, the VANGUARD study found that an advisor’s most significant contributions are coaching investors. During market swings, fear and euphoria can push investors toward rash actions that undermine their plans. Our PWL Culture is to develop knowledgeable advisors who can help clients hold steady when markets fall and avoid overconfidence when they rise. Given our over 20-year track record with passive portfolios, we can demonstrate the long-term benefit of staying the course.
François Doyon La Rochelle:
Our approach resonated strongly with investors, and PWL grew rapidly. By 2007, we had $600 million in assets under management – nearly double the amount in 2003. Then the financial crisis of 07-09 unfolded, hitting both investors and the firm hard. Assets declined to $460 million at the time. James, can you explain to me how you dealt with the situation?
James Parkyn:
We tightened our belts, Francois and reduced our compensation, not wanting to let any of our team go. Our talent is invaluable for us—without our people, our capacity to serve our clients is rendered impossible. We’re proud that we were able to avoid layoffs and ride it out.
In a sense, we were putting our investment philosophy into business practice—remaining focused on the long term and navigating market volatility with discipline. We knew markets would recover and that our strong foundation positioned us well for what lay ahead.
François Doyon La Rochelle:
During financial crises, portfolio managers tend to spend more time than usual speaking with clients about the markets. We need to explain the rationale behind their portfolio and reassure them about the benefits of sticking with their long-term strategy. So James, how do we do this at PWL?
James Parkyn:
Well, Francois, because of our focus on education, long-standing clients have learned to tune out the noise of current market volatility. We spend time with newer clients, as you well know, Francois, clients learn their real risk tolerance when markets are very volatile.
On this front, the firm’s education mission has evolved after the Global Financial Crisis of 08-09. Some advisors at PWL decided to extend our education mission to the broader public. They saw a clear need for sharing our thinking about evidence-based investing amid a flood of poor advice and unreliable forecasts from these so-called experts.
François Doyon La Rochelle:
This is another example to me, James, of how PWL with our unique culture demonstrated industry leadership.
James Parkyn:
In the early 2010s, our portfolio manager colleagues Justin Bender and Dan Bortolotti started to write investor blogs. They were later joined by Cameron Passmore and Ben Felix with the Rational Reminder podcast. The latter became one of Canada’s most widely recognized financial education platforms and one of our most internationally successful podcasts on investing. Ben Felix also publishes a widely followed YouTube channel.
François Doyon La Rochelle:
We later jumped on the band wagon and contributed with our “Capital Topics” podcast and blog in English and Sujet Capital in French, which we started during the pandemic.
The PWL online content has reached millions of Canadians, positioned PWL as an industry leader, and helped investors navigate the complexities of investing and market turbulence. Many PWL team members have sought careers at PWL based on reading and following our online content.
James Parkyn:
Francois, I would add that our publicly available advice mirrors the coaching we give clients.
François Doyon La Rochelle:
We’re proud of our efforts to help investors stay the course and maintain a disciplined long-term view.
James Parkyn:
Francois, I couldn’t be more gratified or grateful when clients tell us they appreciate the PWL difference. We see the proof in our results. By 2014, we had our first $1 billion under management.
Assets under management grew to $2.5 billion in 2017 and $5.5 billion in 2025. That year, the Globe and Mail reported that PWL was one of Canada’s fastest-growing wealth management companies. Growth had averaged 17% annually over the previous decade, compared with an industry average of under 10%.
François Doyon La Rochelle:
It’s also gratifying to see the investing industry embrace our approach.
James Parkyn:
In 2025, we took a big step and partnered with Atlanta-based OneDigital. Under the agreement, PWL Capital remains a stand-alone unit with resources available to accelerate our growth. Together we’re creating a firm with broader reach, deeper expertise and a larger platform, while staying true to the principles that made us successful.
In keeping with this evolution, we rebranded in February as PWL Capital, A OneDigital Company.
Assets under management today stand at over $8 billion.
François Doyon La Rochelle:
James, can you summarize your biggest lessons learned over the last 30 years?
James Parkyn:
Play the long game: there is a famous saying, “We overestimate what we can achieve in one year and underestimate what we can do in 10”.
Be an Advisor, not a facilitator! Remain committed to ongoing education and learning. Integrated Wealth Management is hard to deliver, but it is truly the value proposition that clients deserve.
Buy, hold, and rebalance really works, but think of it over ten, twenty, thirty, or more years. The products you invest in client portfolios must align with this vision. Trading actively rarely adds value and is also very tax inefficient.
Don’t bet against human ingenuity: when markets get scary, if you are broadly diversified, you will recover from big market drawdowns.
François Doyon La Rochelle:
As we celebrate PWL Capital’s 30th anniversary in 2026, I can say, James, that I am incredibly proud of participating in the PWL story for the last 25 years. I truly believe in the values and mission of the firm. We have proven that by offering disciplined, evidence-based financial advice, clients can trust the investment plan we developed for them.
James Parkyn:
We’ve grown from an upstart boutique advisory practice to one of Canada’s leading evidence-based wealth management firms. I’m very grateful to my partners over the years and our new partners, OneDigital. I’m also very grateful to our highly talented team and the confidence of our clients, who continue to believe in us and have helped fuel our remarkable growth. Heartfelt thanks to you, Francois, my partner, for your great contributions and for sharing our vision.
I’m excited for the new chapters of PWL and what we will accomplish next.
3) CONCLUSION
François Doyon La Rochelle:
Thank you, James Parkyn for sharing your thoughts and expertise again today.
James Parkyn:
You are welcome, François.
François Doyon La Rochelle:
So, that’s it for episode #87 of Capital Topics!
Do not forget, if you would like to submit questions or suggestions for the show, please email us at: capitaltopics@pwlcapital.com
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Again, thank you for tuning in and please join us for our next episode to be released on June 17th. In the meantime, make sure to consult the Capital Topics website for our latest blog posts.
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