January 29, 2021 • 42 mins
In this episode I speak with the president of BMO InvestorLine, Silvio Stroescu, to get his response to the long wait times for clients calling in for customer service that all discount brokerages seem to be experiencing.
Silvio provides some shocking numbers showing the absolute explosion in new account openings and trading activity. Year-over-Year increases in trading activity have reached +200% in some recent months. The first nine days of 2021, which is really only five trading days, saw more transactions than all of January 2020.
Why the surge? And what are they doing to reduce wait times. Silvio candidly answers these questions and more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Silvio Stroescu (00:00):
Trading volume in December was 45%. Higher than
(00:03):
what you would typically see inthe old reality. During the peak
season, let's call it a peak RSPseason slowest month is 45%.
Higher than then like previousrecords, right. So that's the
magnitude of this.
Unknown (00:27):
This is Erica Ehm. And you're listening to the mostly
money podcast with PreetBanerjee, when you could be
listening to my podcast thereinvention of the vj, get your
priorities straight!
Preet Banerjee (00:47):
This is mostly money and I'm your host Preet
Banerjee. Now on the show todayI'll be speaking with the
president of BMO investor line,partly in response to a Rob
Carrick article in a tweet thatwe were both tagged in, in which
a client of BMO investor linewas complaining about not being
able to get through to acustomer service rep to make
transactions in their selfdirected discount brokerage
(01:07):
account. And I'll point out thatthat seems to be a common
complaint across the industry.
So we're going to hear hisresponse to that. But first, I
need to make a disclosure of aconflict of interest. I consider
Silvio to be a friend. And we'veworked together on some small
projects at his previous firm.
We share a love of motorcycles,we bonded over that. And also
(01:28):
I've done some work for beemo.
In the past, I think beforeSilvio was there. So let me
introduce my guest. He's thepresident of BMO investment
line, Silvio Soares qu. AndSylvia, thank you for taking the
time out of your busy scheduleto speak with me on the podcast,
and welcome to the show.
Silvio Stroescu (01:46):
Hey, thanks, Preet, and thanks for the
opportunity to talk throughthis. I think it's an important
topic. And it's best for us tobe out here chatting about it,
so people have a betterunderstanding of what's
happening.
Preet Banerjee (01:56):
Yeah, and you know, I'll give some background.
So there was a tweet fromsomeone who tagged as both and
they were talking about how theyhad an issue talking to a
customer service rep about somekind of transaction that they
wanted to execute or a questionthat hey, I don't know exactly
what their issue was. But they'dsaid that had been a couple of
days of trying, and the waittimes were at sometimes over an
(02:18):
hour each time. And as Imentioned, Rob Carrick, arguably
the most influential personalfinance writer in Canada wrote
an article about this a monthago. And it was an opinion
piece, which based on what hehad been hearing from readers
and seeing online, the numberone complaint against discount
brokers in general, seem to bethe long wait times to speak to
(02:39):
anyone across the board. Notthis is not just a beemo issued,
this was across the board. Solet me just start with your
response to that.
Silvio Stroescu (02:49):
Well, first, allow me to just acknowledge the
fact that indeed, the wait timesare long, they are a source of
frustration for our clients. Andwe are disappointed to be in
this position and put ourclients in a position where they
have to wait so long at thephones. And we are holding
ourselves accountable to closethe gap as a matter of fact, to
work smart and fast to close thegap between capacity available
(03:10):
to to handle this level ofdemand. So fully, fully
acknowledging that it is achallenge has been a challenging
time, I would frame this with ananalogy of you know, we're faced
with a tsunami of demand. Andthat's this tsunami is actually
flooded all boats. That's that'swhat's happening right now. And
(03:30):
indeed, look, the reality is wehave to work on the boats
itself, making sure that wereduce the wait times. The story
is also the tsunami itself, likejust the significant exponential
increase in demand is is theroot of of what we're facing.
Preet Banerjee (03:45):
What do you think is driving all this this
demand right now?
Silvio Stroescu (03:50):
We should really start with a bit of
context, which goes a pre COVID.
Right, let's call it pre prelast spring, which, you know,
seems like a very long time ago,in hindsight, but adoption of
digital investing was alreadygrowing, and it was growing at
an accelerated pace year overyear, you'd see more and more
Canadians adopt digitalinvesting. So we were already on
this, you know, acceleratedcurve of adoption. what's
(04:12):
happened since March is thatcurve has just exponentially
taken off. Right? And when weasked people before, you know,
we expected it as you know,preed we're passionate about
digital investing. I know youare too. So we ask people, you
know, what's preventing you fromactually doing more of this
stuff yourself doing more of itonline? The number one answer
people provide in that contextis time, just lack of time,
(04:34):
right? Like I don't have thetime to actually make the
transactions make the trades Idon't have the time required to
build my level of knowledge. Idon't have the time required to
actually do all that researchand it is also a emotional
component to it. Right? I guess,you know, if I had the time I'll
build my confidence and withconfidence, I would I would do
this more and better and moreoften, right? So what's
(04:56):
transpired since March is youknow, people have have the time
to be able to make to ramp uptheir knowledge. You know, we
call it always be learning,right I, you know, investors
that have adopted DIY platformself directed platforms are in
this like always be learningmode feeding and curiosity to
learn about how to trade, how tobuild their portfolios, how to,
(05:18):
you know, evolve their learningfrom cash accounts to opening
margin accounts, trading andoptions, right. So the the
difference breed, if I was tosum it up is just people now
half the time to actually feedthat curiosity.
Preet Banerjee (05:35):
Yeah, and I think along those lines, there's
so many people who are nowworking from home. And that
tends to be people who areworking in a knowledge economy
type job in front of a computer.
And when you're at work in theoffice place, it's hard to
execute trades, because peoplecan kind of see what you're
doing. But when you're at home,you know, you could be on, you
know, the eighth zoom conferencecall of the day, and you've got
(05:56):
a second screen or window open,where you're executing your
trades. So I imagine just thefact that so many people are
working from home, and that noone is sort of monitoring what
they're doing at their desk,also affords them the ability to
trade, which sounds like, youknow, this is behavior that I
don't know, is in alignment withgood investing principles. We're
(06:19):
going to talk about that. Butlet's let's go back to this
issue about, you know, theincreased demand, and how this
has put a strain on the currentsystem. So you talked about pre
COVID, there being anacceleration in digital
adoption, but then that hit aninflection point, and really
increased after the lockdownstarted. So can you give us a
(06:40):
sense to, you know, how long hadthe long wait times been an
issue? Was it before COVID thatit started to creep up? And what
have the trends been in terms ofhow long people are waiting to
talk to someone?
Silvio Stroescu (06:56):
Yeah, let me let me first started just by
adding some quants. And and justa really size of that demand,
right. So you know, pre COVID,you'd see an increase in
adoption of digital investing,where new client growth would be
up by 15 to 20%. a year. Right?
I do. That's kind of the theclip that we were seeing as far
as increasing adoption. what'stranspired since the spring is
(07:17):
the number of new clients is uptwo and a half times compared to
previous years, right. So you gofrom, you know, the 15 to 20%
range. And now two and a halftimes, training activity is
actually up two and a halftimes, we've had months where it
was up three times year overyear, just to stay on a trading
activity side of things.
December, which typically for uspretty is a pretty slow month,
(07:40):
right? December was 45%. Higherthe trading volume in December
was 45%. Higher than what youwould typically see in the old
reality, during the peak season,let's call it a peak RSP season
slowest month is 45%. Higherthan then like previous records,
right? So that's the magnitudeof this in January. So far,
(08:03):
we're seeing an increase of 30%.
Over December, like we'resetting new records on these
goalposts keep moving right. Onefinal a soundbite on that just
to give you a sense of themagnitude, transaction. So this
includes, you know, fundtransfers, as well as account
transfers, they're up to fivetimes your
Preet Banerjee (08:21):
five time first nine days of
Silvio Stroescu (08:23):
five times, first nine days of January. So
that includes January 1, right?
First nine days of January, wehad more transactions than we
did in all of January 2020. Sothat's it. That's that's what
we're chasing, if you want tothink of it that way, as far as
demand is moving the goalpostskeep moving, and we have to ramp
up capacity to get there.
Preet Banerjee (08:46):
I have so many questions, I have so many
questions. Do you have a senseas to where the bulk of
transfers are coming from or anytrends, where you're saying, oh,
there's a massive increase intransfers from these types of
institutions? Do you have anyanything you can share on that?
Silvio Stroescu (08:59):
What time will you see is not so much the types
of institutions but you know,it's empowerment, you know, this
feeling of I'm in power now,right? What time is a
superpower, frankly, right, toto be able to make my own
decision. So you have someinvestors that were you know,
delegating their investmentdecision to either financial
planners, advisors in the pastor investing in products that
(09:21):
were that didn't require them tobe more hands on, you know,
package portfolios. That way,you're delegating even that
investment management decision,not just the advice component of
financial planners. So we'reseeing these clients and look,
I'm going to do more On My Ownright now. So that's, that's
part of the trend. The secondwhen you look at the makeup of
the client base on self directedplatforms, about two thirds of
(09:43):
the client base, I'm going tosay, you know, in the old
reality, two thirds of theclient base where clients over
55 Well, we've seen since thespring, two thirds of the growth
is actually driven by clientsunder 35. Right so you tend to
have more people that are new toinvesting, the ones that were
already trading on the platformsare consolidating their
(10:05):
investments, right. So if theyhad cash and savings accounts
elsewhere, or differentinvestment accounts, through a
different approach to investing,they're consolidating more
towards a self directedplatform. So those are some of
the themes that we're seeing.
Preet Banerjee (10:18):
And when it comes to people are making
transfers, how long does it taketo complete a transfer? Because
I know that that's an issuewithin the industry as well.
Usually, it's the relinquishinginstitution that is kind of
holding things up as long asthey can. But how long does it
take to transfer account thesedays? Well, look,
Silvio Stroescu (10:34):
we're we're in transition there, I should say
from, you know, the the oldprocess which everything has to
be mailed, right. So you know,if that's the process that the
actual transaction lands in,you're looking at anywhere
between four to sometimes eightweeks. And there's also a more
automated process, whichactually makes it happen in less
than two weeks, right. So andthat continues to get even
better. So not all transactionscan go through the automated
(10:57):
process. So it does take alittle bit longer. And as you
can imagine, as you're waitingfor your funds to arrive, you
naturally would call them tolook for an update, right? And
you want to know what's goingon. And there's there's not a
lot of transparency in thatprocess as far as having really
good policies, aware where thataccount transfers sitting every
day.
Preet Banerjee (11:16):
So we have Okay, so we've got increased
dramatically increased tradingactivity, we've got a lot of
people transferring accounts.
What do people call in about?
Like, I have to be honest, youknow, of all the discount
brokers I've ever used in? Idon't know, decades, I've never
called in for anything. But I'min the industry, or at least was
(11:37):
and you know, this is kind ofwhat I do. So I don't need as
much help, I would think as theaverage person. But what do
people call into a discountbroker? About what are the
common types of customer servicequestions?
Silvio Stroescu (11:50):
will just based on the sheer increase in demand,
I'd say there are questions thatyou would have typically had
before, obviously, you know, ata different magnitude different
level of volume, right then, andthese include, you know, how
long where's my transfer?
Where's my account transfer? Howlong does this take the
conversation we just had aroundthat process. And you have
people that sometimes forgettheir passwords, right. So if
you haven't traded for a longtime, forget your password,
(12:11):
these are all just adminmaintenance type of
transactions, we've done a lotof work to make sure that the
online capabilities are simple,intuitive, and people are aware
they can do this stuff online.
So we've navigated a lot ofthese transactions and are
navigating a lot of thesetransactions online. If I was to
sum up again, the theme as faras why people are calling, let's
(12:32):
say, for one is leveling up. Andlet me let me unpack that a
little bit. So we have a lot ofnew investors that hadn't
invested in self directedplatforms. So either they, they
were new to investing alltogether. So they're leveling up
now to say, Okay, I'm going tostart investing. And I'm
actually going to do this on myown in a self directed platform.
So that requires you to build alevel of knowledge. And you ramp
(12:54):
up with a learning curve. Fromthat perspective, you have
another segment of investors whoagain, we're delegating their
investment decisions to anadvisor, financial planner, now
they're saying, I'm going to dothis on my own. So they're
technically leveling up, andalso on a learning curve in that
journey as well. And then youhave people that had been
trading on a self directedplatform before, but maybe they
(13:15):
had a cash account, let's callit a basic account, or RSP
account or a TFSA. What they'resaying now is, I want to do
more, right, and they're openingup margin accounts. And they're
they're building capabilities toto learn how to trade options.
So they're learning about thatprocess as well. So this
leveling up is actuallyhappening on such a broad range
of of investor segments, whichnaturally leads to, to calls
(13:39):
into this, as you know, operateon these platforms, we don't
provide advice. But when you gothrough a learning curve, you
you want to you want to speak tohuman right to actually give you
some validation and some comfortin that process as well. So I
would I would sum it up withthat as the core theme for why
you're seeing, you know, theincrease in calls, obviously,
again, complemented the factthat you just got to share
(14:00):
increase in demand.
Preet Banerjee (14:02):
And and how many customer service reps did you do
you have right now? What are theplans to address these wait
times? Are you doing anything toramp up capacity?
Silvio Stroescu (14:13):
Yes, look, this is our top priority has been our
top priority. So let me just goback to a question you asked
earlier. And, you know, how longhave the wait time has been an
issue? When you look at theaverage for 2020 calendar year,
our wait time average is 12minutes, right? So we've been
hovering around 40 minutesaverage at the beginning of
January. Just to put all thatinto perspective. This the last
(14:34):
quarter of 2020 was when westarted seeing more of this
challenge coming through. So ifyou think about what it looked
like for the first threequarters of the year, we average
wait times in less than twominutes, one minute and in some
cases as well. We had eventslike march for examples on event
the third week of March where weall started working from home
(14:55):
all of a sudden and things werehappening in the market. You
know that was that was a bit ofa week. That was an anomaly, I'd
say in the context of 2020, atleast the first half of the
year. We also had long waittime, in an event going back a
couple years ago, when thecannabis sector was was getting
prominence and trading and usthat sector was gaining
prominence. Right. So, but thatwas an event, it had a start
(15:16):
date, and it had an end date.
Right, right. But beyond that, Imean, you're looking at an
average of two, three minutes,wait times. Now, average means
obviously longest call will belonger than that. And you have a
big percentage of calls that areunder that as well. That's
that's where we stand. So it's,it's been a more pronounced
challenge on the wait timesfront, especially November,
December and kicking off theyear in January.
Preet Banerjee (15:39):
Now, you know, when you are managing people's
accounts, there's a bigresponsibility in terms of
security and the technologyinfrastructure that you have. So
I imagine that your your callservice reps, were also sent
home to work from home in somecases are not allowed to come
into they're normally where theywould work. So can you tell me
(16:00):
what that was? Like? Like, wherewere the reps? Where are they
now? And how is that sort ofbeen a variable that needed to
be accounted for
Silvio Stroescu (16:09):
the bulk of that mobilization happen in
March and April, right, and 100%of our agents were actually
working from a physicallocation, physical contact
center, one in Montreal, one ina couple in Toronto, and one in
Mississauga, as well. And we'vemobilized to have them work
remote. First of all, we stillhad some folks work in the
physical locations, as we dotoday. So we had to address the
(16:31):
spacing just for healthpurposes, and making sure that
we had the right distancingwithin our physical locations,
we have the capability now where80% of our agents can work from
home. So there's also a bit ofrotation where some choose to
work from home and a rotate andcome into our front a physical
location, you know, every nowand then on a rotational basis.
That's where we are today, fullyactivated. And if you think
(16:55):
about how fast that happened, ametabolic pace that that needed
to happen in the first couple ofmonths. You know, that's, I
would say, We checked that box,primarily, right? So what we're
facing now is not a matter ofnavigating how we mobilize
remote work is just simplykeeping up and catching up to
the goalposts on demand that aremoving. And look, the other
(17:18):
question you asked was, whathave we done right to to
mobilize? And how do we ramp upthe staffing? We started this
back in the summer, right? So wesaid a couple of things we need
to do. First of all, we need towrap up our hiring. And we need
to do more of more hire morepeople in the old process, which
is, you know, hire, recruit,first hire train in physical
(17:40):
locations and just do more ofthat. That the magnitude
increase there is for four timeslike we quadrupled the size of
new hires, from you know, thisentire process, starting with
recruitment, to hiring totraining, which takes months,
right. So think about that is upfor x, again, an exponential
(18:00):
increase in what we've done toimprove capacity. The second
thing we've done is lookedacross the business, not just
our investment in business, butacross the bank to say can we
actually attract more talent toactually help with the capacity.
The last training class we had,the numbers increased seven
times from what we would havetypically had like this, the
training class that is actuallyactive right now. And we'll be
(18:23):
on the floor answering calls andproductive in the queues in a
couple of weeks. It's it's seventimes higher than what we had
prior to, to see and to speak indemand. So we started this
process pre back in the summer,we've been sprinting through the
marathon to make sure that we weramp up the capacity. And we've
also done on the hiring front,we've actually changed how we
hire right. So it's one thing tosay we're going to do more of
(18:44):
the same internal process. Butwe also activated what we refer
to as Street to screen. And thisis remote, remote recruitment,
remote hiring, remote training,remote activation into the
queue. So you don't have to setfoot into context and it to be
able to do that. That's atransformational process. And we
had the first class as part ofthat new process actually
(19:04):
started training at thebeginning of January. So that's
what we've done on the hiringfront. And then he filled lobby
one. One more comment on this.
We also looked at how do wecontain and address more of this
demand online on the platform,right? So we looked at all these
micro journeys that led to acall. And we said we have to get
better at improving that journeyonline, make it more intuitive,
and also build awareness that itexists. All the efforts we've
(19:27):
done on that front as well assimplifying some legacy process
just to make it easier. Somethings that we've done before we
said, you know, there's littlevalue in this and it's just an
impediment for our clients tostop doing it. We measure our
trades to call ratio, just as ameasure of efficiency, the
trades to call ratio hasincreased 65% as a result of us
being able to contain moreonline. So we're, we're in we're
(19:48):
on the right track. The reasonwhy we still have a gap today is
the impact from that exponentialincrease in demand has been
imminent. Right, and once thegoalposts move, you feel that
very same day, the impact fromour activities on capacity have
a bit of a time lag, right,which you know, include
especially on the hiring fraud,recruit, hire, train, and
(20:09):
license, right, like that's,that's a nuance we shouldn't
forget in the context of ouragents. They also need to be
licensed and build theirproficiency requirements as
well.
Preet Banerjee (20:20):
Yeah, I was gonna ask you, because so
investing online is oio. Right?
So it's no it's not advice. Sosorry, order execution only. And
so people who who create anaccount there, they are
basically taking allresponsibility for the riskiness
of their trades, and you areexecution services only for
those platforms. So when itcomes to the licensing that's
(20:40):
required for these reps, whatwhat did they need to what
license do they need,
Silvio Stroescu (20:45):
what they need, they still need to be fully iraq
licensed, so they don't provideadvice, but they have to go
through all the proficiencyrequirements, including the
course on ethics, the Canadiansecurities course, which which
has two parts to it, so theyhave to be fully fully licensed.
And if they're supporting tradesand options, for example, they
also have to have that licensingas well. So even though they
don't provide advice, theproficiency requirements are
(21:08):
full fledged.
Preet Banerjee (21:16):
The conversation with Silvio Stroescu continues
in a moment, but I wanted togive a shout out to some
listeners who have left somekind reviews for the show. Doug
M. 34. sg 183 60, Apollon sevenand Brent Goucher, thank you for
taking the time to leave ratingsand reviews on Apple podcasts. I
(21:38):
also wanted to let you know thatI just published a crash course
on what's really been happeningwith GameStop. I'm sure you've
heard that name this past week.
I know you have questions. Whyhas a mall based retailer have
physical copies of video games?
Some would argue assume to diebusiness model. Given that you
(21:59):
can download copies of videogames in order console's online.
Why they seen their share priceup as much as 10,000%. In just
one year, most of them in thelast month. What is a short
squeeze? What else is reallyhappening? So you can check that
out on YouTube. My main channelcan be found under my name,
(22:19):
Preet Banerjee. And before weget back to Silvio, if you are
enjoying the content on thispodcast, I really do appreciate
it when you take the time toleave a rating and review
wherever you get your podcasts.
And I don't run ads on thepodcast yet, but that might
change in the future. And in themeantime, I guess I'll provide
some kind of placeholder andkind of do some public service
(22:43):
announcements or something likethat, again, just as a
placeholder, so I don't know.
Get your prostate checked orsomething. Anyways, back to my
conversation with the presidentof BMO investor line, Silvio
Stroescu.
(23:03):
Now, I want to just pull fromthe headlines. So I'm sure
you're familiar with GameStop.
And the gamma squeezed thatalmost bankrupted? I think, one
hedge fund I think it was Melvincapital had to get bailed out by
some other hedge funds. Becausebasically, I don't know if
you're familiar with theredditors. On this, this Reddit
called Wall Street bets, havepushed up the price of GameStop.
so high that it's it's forced ashort covering, and it's it's
(23:28):
kind of embarrassed, like theseprofessional, you know, money
managers. It's kind of funny towatch. But there's so many
people who are subscribed tothat, that Reddit there, I think
there's like 2 million activeusers or something like that.
And they are driving the themarket price for, you know, the
security and some other ones.
And so, when someone calls inand do they, what's the training
(23:54):
around getting a call that says,hey, I want to buy GameStop, I
want to buy call options? ShouldI do that? Like, I'm assuming
they get asked, you know, hey,do you think this is a good
idea? What's the training aroundthat for an order execution only
platform?
Silvio Stroescu (24:09):
Well, look, you're you're not diving deeper
into the, you know, whether youshould or shouldn't, right, but
what we do is we say, you know,we grounded in principles,
right? So, you know, typicallywould say like, Alright, so how
does that fit? You know, doesthat fit with your plans? Like
we don't even get into how doesthat fit with your plans? And if
you think, you know, if it fitswith your plans, and you've got
a deliberate reason for it,then, you know, it's your
decision, right? So we don't getinto the advice on whether you
(24:32):
should do it, you know, shoulddo it. We do feel the effect of
it, right? So you do see anincrease, you know, slight
increase in volume as well andthose things do happen. But the
extent of it is just to makesure that we just help
groundings in some principles,right, as opposed to telling you
whether or not he should do itor whether it makes sense for
him.
Preet Banerjee (24:51):
Yeah. Last thing on this, this overall issue
about capacity. So you've you'veyou mentioned that one class is
seven times the normal intakefor people that you're training
for this positions. Now, do youhave a sense as to whether or
not this demand is going to betemporary? Or do you feel that
there's going to be a sustainedlevel for this type of trading
activity?
Silvio Stroescu (25:11):
I believe that it's, you know, what we're
seeing is not an event, right.
And I made reference earlier tocannabis and I talked about
that, as an event, I get startedon x date, and it kind of, you
know, sizzled off on on this ydate, right? That's not what
we're seeing here. We're notseeing an event, we were seeing
an acceleration of adoption. Andto me, this is an inflection
point in that adoption ofdigital investing breed. So
(25:32):
that's, that that's our view forit. Now, I don't believe we're
going to see to you know,trading volume for January
become the norm, right. I mean,right now, again, we just had a
new record. 30%, higher, right.
So I don't think this will bethe norm. But if you think about
where we were in the previouspeaks, and what I referenced
around RSP, season, and Decemberjust blew out of the water, that
(25:54):
new reality, the new norm willactually be higher than the
previous peaks. That's that'swhere I see this landing up. So
it's somewhere between theprevious records as far as
monthly trading activity, andslightly below the the peaks
that we're seeing. And I'dargue, and I expect what we're
seeing in January and Februarywill actually be our peaks,
right? And that will level off.
beyond that. And the main reasonfor that, and just informing
(26:16):
that perspective is, during thethe cannabis sector trading
event, right, you didn't see asmany new clients join the
platform, right. And if therewas a blip, and there was, it
wasn't as sustained right nowwe're seeing this like two and a
half times increase in newclient during the platform. And
it's been happening, right andcontinues to happen. And it
continues to grow. So primarilybased on that, and the sentiment
(26:39):
and and frankly, just some othermacro elements around all of us
have lived digitally for 910months now. Right? And we likely
wolfer after a few more months,right? So
Preet Banerjee (26:50):
has it only been nine or 10 months, it feels like
forever.
Silvio Stroescu (26:53):
It's just reset, right? how we live our
lives and how we do things.
Right. So to me, this is this issustainable beyond what we're
seeing.
Preet Banerjee (27:01):
Right now, there have been other sort of
investment stories that havebeen catching the eyes of
investors and headline writers.
Certainly with GameStop. We alsosaw Bitcoin had another run up
and a bit of a drop as well. Andso when people have the ability
to access, you know, the marketsmuch more easily than they ever
(27:23):
had before, there are some risksthat people can do real damage
to their own portfolios. Whatare your thoughts or plans on?
How do you address that? Becausecertainly, there are going to be
some people who are just notgoing to listen to advice,
they're going to listen to aforum, or they're going to read
the, you know, their take somekind of trading course and you
know, they're fine, they're big,they're adults, they could do
(27:45):
that. But there are some peopleare gonna say, Okay, I got
interested because of thisheadline in Bitcoin or GameStop,
or people have been making a lotof money even though the economy
doesn't seem to reflect that.
And they're now interestedenough to say, Okay, I want to
open up an account, I want toempower myself a little bit
more. What can you do at a selfdirected brokerage, to help
(28:07):
guide people who may be in needof some help, but for whatever
reason, they're just not goingto go full service? They still
want to do it themselves. Butwhat what are their options? I
know that there are some guidedportfolios, all in one ETF
tickets, solutions, what haveyou, what do you recommend to
people who are coming, but theyneed just a little bit more than
just, you know, no advice? Whatare the options? So first, look,
(28:32):
it's just,
Silvio Stroescu (28:33):
I would phrase it as grounded in Northstar,
right, like so first of all,articulate what your Northstar
is. And I use grounding, inNorthstar deliberately, right,
so understand why you're doingthis in the first place. Right?
I you know, and it goes back tohaving a deliberate perspective
on you know, why you're joiningthe platform, why you're
investing in the first place,and in many cases, and I suggest
even writing it down andconversations that I have with
(28:54):
my friends, as well as, hey,write it down again, write it
out for yourself, not foranybody else, just write it
down. So you actually understandwhy you started doing this in
the first place, and what yourintent is right off the bat. And
then we say, you know, thetenants around investing, like
the principle that I've beenaround for a long time, they're
still the same today. Right? Imean, you know, fundamentals are
(29:14):
harder to pin down, you know, inthis market, right. But the, the
actual tenants of investing arestill the same, right. So think
about diversification, you know,think about how do you make sure
that you crystallize your goals,and what you're doing is
actually in alignment with thosegoals. Right. So those those
standards still apply, Preet.
And that the third element ofthis, I'd say, is just man, the
(29:35):
power of advice and thatimportance of advice, like, you
know, if we're talking abouttrends in self directed
platforms, I'll tell you, Iwould complement that with the
need for advice is is evenhigher now. Right. So what we've
done in the context of thedigital platform, you have folks
that are adopting self directedplatform because they want to do
more on their own right, andthey want to be able to make
(29:57):
their own decisions, but they'realso looking validation right
there, beyond just theconversations around, helped me
understand and get morecomfortable to know what I'm
doing and how I should do thisstuff. They're also looking for
validation, we created a servicecalled advice direct. And in
this context, you actually haveadvice. So we do provide you
guidance on how to build yourportfolio, how to make sure that
(30:17):
it's well diversified, how torebalance your portfolio along
the way to make sure that itstays aligned with your goals.
So there's a digital tool thatprovides you advice and guidance
on how to build and manage yourportfolio. And then you also
have access to an advisor. Sosomeone that actually can speak
to you and complement the actualdigital tools with with a human
being. The new ones here is thatyou still place a trade
(30:42):
yourself, that you're stillworking on the platform, making
the trade yourself but you havethe benefit of complementing,
you know, your your intent to domore on your own with support
from this digital tool, and anyadvisor. And even prior to prior
to spring and prior to March, wesaw adoption of that platform
growing exponentially as well.
(31:04):
And that continues. Right? Soit's it's just thinking
differently about how do we nowbuild services, and build
awareness of services thatalready exist, and and make sure
that we're helping folks thatway. We also launched a
portfolio health check. So thisis something that we've been
working on since the springwhere we saw this happening, we
said, well, what's the nextstep? You know, what would
(31:25):
investors look for beyond this?
And what would be the step afterthat? So using some foresight
back in the spring, we build aportfolio health check tool,
which helps you now run yourportfolio through this tool and
identifies First of all, itasked you, you know, what are
your goals, and remember theground that we talked about, it
starts off with that to identifywhy you're doing this in the
first place. So it helps youwith that self conversation of
(31:47):
grounding, and, you know,grounding in your North Star,
and then it actually you put inyour holdings, and we then give
you an output that talks aboutthe health of your portfolio. So
are you well diversified acrosssectors, geographies? Is your
asset allocation in line withwith your goals? And, you know,
what does that look likeoverall? So we've just launched
(32:09):
that a couple of weeks ago, andit's available on our site,
happy to share a link so we caninclude it for listeners of the
podcast as well, that said that,you know, that's one of the
tools we keep, which cancomplement what you have on the
platform. And and frankly, look,we're seeing adoption of those
services grow advice direct, forexample, December record month,
as well, for new accounts andclient joining that platform.
(32:30):
And this tool, I imagine itwill, will get a lot of traction
as well.
Preet Banerjee (32:34):
Yeah, I think that this hybrid model where you
have, you know, digital toolswith access to to advice seems
to be a model right for, forgrowth, like that seems like the
next paradigm. But what aboutcoxes? There are a lot of people
who, whether different reasons,people go to a self directed
platform, one is pureempowerment, they just want to
(32:56):
trade on their own, their costmight actually end up going up
versus you skip it, or they'reheavy traders. But there are a
lot of people who who move toself directed platforms, because
they explicitly want to save oncosts. And so they might go to
either, you know, super long buyand hold portfolio, buying
(33:16):
individual stocks and build outa portfolio or they might use a
couch potato strategy with indexfunds, what have you. But there
are a lot of people who are kindof in between those extremes. So
So talk to me about what is thecause for advice direct? And
what's the cause for thisportfolio? Check? Is that like a
free tool available on theplatform? Do you have to pay for
these two different types ofservices? Talk to me about
costs?
Silvio Stroescu (33:37):
Yeah, so look, first, the portfolio health
check. It's a free tool. So youplug in some information, you
know, we have some informationabout your profile. And we we
guide you on how to identifythat Northstar and then the
output with with flags to saylook previous should be
reviewing your diversificationand so on all that is free. That
(33:58):
is a sliver of the portfoliooptimization engine that we have
within the advice direct so itgives you a sense of a test
drive if you will, of whatadvice to write could do for
you. But this component of it isfree now if you want to pursue
that further and set up anadvice direct account so you
have these types ofnotifications and you know, I'm
(34:18):
telling you when you should makesome changes to your portfolio
because you need to realign withyour goals, then you'd go into
the full tool for advice direct.
The pricing for that is 75 basispoints and it's tiered as well.
So there is a cap once once youget to a certain threshold of
investable assets, you knowbecomes capped and that cap is
at 3700 3750 off top my head asfar as what what the overall cap
(34:38):
is so the more you have investedin that the more you benefit
from from the service and alsofrom a pricing perspective. It
also includes a number of freetrades as well so you're not
paying for the fee as well astrades right? So that's that's a
good combo there. Just you knowthe if you look at who's trading
under selling During theplatform, a majority of the
(35:00):
investors are actuallyinvestors, you know, the buy and
hold type that you reference,right. So, you see, as far as
active traders, they're anywherebetween five to 6% of all the
investors on the platform and byactive traders, I mean, they do
more than 10 trades a month,right? So the bulk of the
investors on the platform tendto be more of the, you know, buy
and hold, rebalance longer terminvestors.
Preet Banerjee (35:25):
Do you do you have a sense as to the average
hold period, for someone on yourplatform, like when they buy any
position, give any idea what theaverage hold time is? Well, it's
Silvio Stroescu (35:36):
obvious, if you're a long term investors, I
mean, you know, these people areholding until they reach their
goals, right. So So that's, Iwould say, the bulk of it would
be that now average hold timefor security, I don't have the
breakdown of that to say howmuch they hold to the security
because naturally, peoplerebalance their their
portfolios. But as far as howlong they stay invested in, you
(35:56):
know, how much to stay investedand how that stays, you know,
consistent across, across theirtenure. You have more of those
buy and hold. Even in March,right, when we saw a lot of
volatility, I mean, the activitythat happened was, you know, not
people just buying jumping inand out of holding securities,
you also had existing clients,especially retirees that were
(36:17):
actually de risking theirportfolios, right. So in that
case, it looked like they wereselling out, but, you know, they
were, they were de risking justto have, frankly, more available
to them in cash. And, you know,in many cases, while the
supplement retirement incomesand making sure that cash is
there to be able to do that.
Preet Banerjee (36:33):
Now, speaking of cash, one of the things that
we've noticed is that people arelooking at at this as kind of
like a tale of two economies,you have people who have been
affected negatively the most,they tend to be on the lower end
of the income spectrum, workingin retail jobs, the jobs most
affected by lockdowns andrestrictions, and they're been,
(36:54):
you know, completely decimated.
And then you have a lot ofpeople who are more kind of
white collar, who are able towork behind a computer either at
from an office or from a homeoffice. And so they may not have
necessarily lost any income, butthey've lost the ability to
spend because they're not ableto travel. And for a lot of
people, you know, not travelingis like, you know, five grand
extra in your pocket, not goingout to restaurants as often as
(37:18):
putting extra money in people'spockets. So we see that there is
some people who are actuallysitting on a lot more cash than
they've ever had access tobefore. And they're putting it
into their investment accounts.
Are they sitting in cash? Or arethey deploying that? Do you have
any sense of that.
Silvio Stroescu (37:36):
So savings rate is up overall, just to just to
build on your point as well. AndI think that's a healthy thing.
That's a really good thing. AndI think people are also reacting
to you know, the shock that thatwe all faced in March and and
people that didn't have a lot ofsavings for the emergency funds
top top to be able to withstandthat type of exogenous shock,
you know, they're they'reramping it up. So I think
(37:56):
there's there's an element ofthat as well. When you look at
our platform, the youngerclients, so let's call them
clients on a 35, which you and Icould consider ourselves in that
category. Once upon a time prebut clients, younger clients are
actually deploying more cash ifyou index to, typically new
clients come in, and let's saythey're bringing in 100,000, how
(38:17):
much 100,000 gets deployed, moreof the initial cash coming into
the account is being deployed bythe younger investors. Right. So
they're, they're looking for,you know, time in the market, as
opposed to timing the market,right. And then you also have
older clients, retirees inparticular, they've de risked,
right, so they have higher cashpositions, as we just talked
(38:40):
about, potentially think abouthow do I supplement my incomes,
right. And the income that Iused to get from bonds and the
fixed income component, myportfolio is not paying what it
used to. So I need to have somecash to be able to supplement
that. And, frankly, you know, Idon't know how long this takes,
right. So I want to make surethat I'm covered there. So let's
say, you know, those are smartdecisions, right? Again, you
know, it's not every singleclient, but if you roll it up,
(39:01):
but you know, that's that's theview that we see from a higher
vantage point. And then you havesome folks that are just looking
for opportunities, right, andjust waiting for that
opportunity. And I think, again,to hold that this whole idea of
like timing to market actuallybeats timing to market applies
to that. But I think for themost part cash, just the role of
(39:22):
cash has expanded. And either,you know, be able to protect
myself, supplement my income,make sure that I have savings to
respond to exhaustion asexogenous shocks, I see that the
role of cash has expanded andover indexing towards people
that are holding cash is thatreally, you know, those that
have to depend on that as far asretirement income.
Preet Banerjee (39:43):
All right. We'll leave it there. But I want to
thank you so much for coming onthe podcast and sort of
addressing the concerns thathave been raised by various
writers and people tweeting atus both. So I appreciate your
candor in addressing that.
Interesting times to say theleast When this is all over, are
you going to? Are you going toupgrade your bike? Or are you
happy with your bike? What'sgoing on?
Silvio Stroescu (40:06):
Hey, look where we're celebrating and what we're
celebrating, frankly, it's justthat bigger story of it's an
army of demand, right? I mean,like it's a privileged position
to be in an industry that seesthe level of demand. So, so
super, super happy about this.
And thanks for giving me theopportunity to jump on here. We
have to be responsive, as youknow, through social channels
and making sure that our clientsunderstand what's happening and
(40:26):
why and what we've done about itjust in terms of our
accountability. I'm notupgrading my bike. Now I have a
bike that I'm happy with rightnow. My goal would be to get out
there a little bit more andwrite a bit more next summer.
And that's that's the goal forthe year, but it's not a year of
the upgrade. I actually,
Preet Banerjee (40:44):
I'm in right now. Listen, I'm not allowed to
get a new motorcycle. What endedup happening was my partner was
on the balcony and we overlookthe gardener. And I think you
know this but I had a Ducati andit was stolen. And I've been
thinking about getting a newbike to replace it and she's out
(41:05):
on the balcony I was in theoffice and all all of a sudden I
hear just hear this this is yellyou're not allowed to get a new
bike. Like what the heckhappened? Someone just got
smoked on the highway, rightlike in front of her like from
the balcony she could see Sothat pretty much was the nail in
the coffin. I am not allowed toget into the bike that she knows
of.
Silvio Stroescu (41:27):
They're always they're always tracks right
tracks are also an option,right?
Preet Banerjee (41:30):
Exactly. Yeah, exactly. There's private roads.
There's the drag strip, there'sdirt biking. See? Thank you so
much Silvio. It's, it's been apleasure.
Silvio Stroescu (41:40):
Likewise, pleasure to connect and thanks
for the opportunity. Cheers andkeep safe.
Trading volume in December was 45%. Higher than
(00:03):
what you would typically see inthe old reality. During the peak
season, let's call it a peak RSPseason slowest month is 45%.
Higher than then like previousrecords, right. So that's the
magnitude of this.
Unknown (00:27):
This is Erica Ehm. And you're listening to the mostly
money podcast with PreetBanerjee, when you could be
listening to my podcast thereinvention of the vj, get your
priorities straight!
Preet Banerjee (00:47):
This is mostly money and I'm your host Preet
Banerjee. Now on the show todayI'll be speaking with the
president of BMO investor line,partly in response to a Rob
Carrick article in a tweet thatwe were both tagged in, in which
a client of BMO investor linewas complaining about not being
able to get through to acustomer service rep to make
transactions in their selfdirected discount brokerage
(01:07):
account. And I'll point out thatthat seems to be a common
complaint across the industry.
So we're going to hear hisresponse to that. But first, I
need to make a disclosure of aconflict of interest. I consider
Silvio to be a friend. And we'veworked together on some small
projects at his previous firm.
We share a love of motorcycles,we bonded over that. And also
(01:28):
I've done some work for beemo.
In the past, I think beforeSilvio was there. So let me
introduce my guest. He's thepresident of BMO investment
line, Silvio Soares qu. AndSylvia, thank you for taking the
time out of your busy scheduleto speak with me on the podcast,
and welcome to the show.
Silvio Stroescu (01:46):
Hey, thanks, Preet, and thanks for the
opportunity to talk throughthis. I think it's an important
topic. And it's best for us tobe out here chatting about it,
so people have a betterunderstanding of what's
happening.
Preet Banerjee (01:56):
Yeah, and you know, I'll give some background.
So there was a tweet fromsomeone who tagged as both and
they were talking about how theyhad an issue talking to a
customer service rep about somekind of transaction that they
wanted to execute or a questionthat hey, I don't know exactly
what their issue was. But they'dsaid that had been a couple of
days of trying, and the waittimes were at sometimes over an
(02:18):
hour each time. And as Imentioned, Rob Carrick, arguably
the most influential personalfinance writer in Canada wrote
an article about this a monthago. And it was an opinion
piece, which based on what hehad been hearing from readers
and seeing online, the numberone complaint against discount
brokers in general, seem to bethe long wait times to speak to
(02:39):
anyone across the board. Notthis is not just a beemo issued,
this was across the board. Solet me just start with your
response to that.
Silvio Stroescu (02:49):
Well, first, allow me to just acknowledge the
fact that indeed, the wait timesare long, they are a source of
frustration for our clients. Andwe are disappointed to be in
this position and put ourclients in a position where they
have to wait so long at thephones. And we are holding
ourselves accountable to closethe gap as a matter of fact, to
work smart and fast to close thegap between capacity available
(03:10):
to to handle this level ofdemand. So fully, fully
acknowledging that it is achallenge has been a challenging
time, I would frame this with ananalogy of you know, we're faced
with a tsunami of demand. Andthat's this tsunami is actually
flooded all boats. That's that'swhat's happening right now. And
(03:30):
indeed, look, the reality is wehave to work on the boats
itself, making sure that wereduce the wait times. The story
is also the tsunami itself, likejust the significant exponential
increase in demand is is theroot of of what we're facing.
Preet Banerjee (03:45):
What do you think is driving all this this
demand right now?
Silvio Stroescu (03:50):
We should really start with a bit of
context, which goes a pre COVID.
Right, let's call it pre prelast spring, which, you know,
seems like a very long time ago,in hindsight, but adoption of
digital investing was alreadygrowing, and it was growing at
an accelerated pace year overyear, you'd see more and more
Canadians adopt digitalinvesting. So we were already on
this, you know, acceleratedcurve of adoption. what's
(04:12):
happened since March is thatcurve has just exponentially
taken off. Right? And when weasked people before, you know,
we expected it as you know,preed we're passionate about
digital investing. I know youare too. So we ask people, you
know, what's preventing you fromactually doing more of this
stuff yourself doing more of itonline? The number one answer
people provide in that contextis time, just lack of time,
(04:34):
right? Like I don't have thetime to actually make the
transactions make the trades Idon't have the time required to
build my level of knowledge. Idon't have the time required to
actually do all that researchand it is also a emotional
component to it. Right? I guess,you know, if I had the time I'll
build my confidence and withconfidence, I would I would do
this more and better and moreoften, right? So what's
(04:56):
transpired since March is youknow, people have have the time
to be able to make to ramp uptheir knowledge. You know, we
call it always be learning,right I, you know, investors
that have adopted DIY platformself directed platforms are in
this like always be learningmode feeding and curiosity to
learn about how to trade, how tobuild their portfolios, how to,
(05:18):
you know, evolve their learningfrom cash accounts to opening
margin accounts, trading andoptions, right. So the the
difference breed, if I was tosum it up is just people now
half the time to actually feedthat curiosity.
Preet Banerjee (05:35):
Yeah, and I think along those lines, there's
so many people who are nowworking from home. And that
tends to be people who areworking in a knowledge economy
type job in front of a computer.
And when you're at work in theoffice place, it's hard to
execute trades, because peoplecan kind of see what you're
doing. But when you're at home,you know, you could be on, you
know, the eighth zoom conferencecall of the day, and you've got
(05:56):
a second screen or window open,where you're executing your
trades. So I imagine just thefact that so many people are
working from home, and that noone is sort of monitoring what
they're doing at their desk,also affords them the ability to
trade, which sounds like, youknow, this is behavior that I
don't know, is in alignment withgood investing principles. We're
(06:19):
going to talk about that. Butlet's let's go back to this
issue about, you know, theincreased demand, and how this
has put a strain on the currentsystem. So you talked about pre
COVID, there being anacceleration in digital
adoption, but then that hit aninflection point, and really
increased after the lockdownstarted. So can you give us a
(06:40):
sense to, you know, how long hadthe long wait times been an
issue? Was it before COVID thatit started to creep up? And what
have the trends been in terms ofhow long people are waiting to
talk to someone?
Silvio Stroescu (06:56):
Yeah, let me let me first started just by
adding some quants. And and justa really size of that demand,
right. So you know, pre COVID,you'd see an increase in
adoption of digital investing,where new client growth would be
up by 15 to 20%. a year. Right?
I do. That's kind of the theclip that we were seeing as far
as increasing adoption. what'stranspired since the spring is
(07:17):
the number of new clients is uptwo and a half times compared to
previous years, right. So you gofrom, you know, the 15 to 20%
range. And now two and a halftimes, training activity is
actually up two and a halftimes, we've had months where it
was up three times year overyear, just to stay on a trading
activity side of things.
December, which typically for uspretty is a pretty slow month,
(07:40):
right? December was 45%. Higherthe trading volume in December
was 45%. Higher than what youwould typically see in the old
reality, during the peak season,let's call it a peak RSP season
slowest month is 45%. Higherthan then like previous records,
right? So that's the magnitudeof this in January. So far,
(08:03):
we're seeing an increase of 30%.
Over December, like we'resetting new records on these
goalposts keep moving right. Onefinal a soundbite on that just
to give you a sense of themagnitude, transaction. So this
includes, you know, fundtransfers, as well as account
transfers, they're up to fivetimes your
Preet Banerjee (08:21):
five time first nine days of
Silvio Stroescu (08:23):
five times, first nine days of January. So
that includes January 1, right?
First nine days of January, wehad more transactions than we
did in all of January 2020. Sothat's it. That's that's what
we're chasing, if you want tothink of it that way, as far as
demand is moving the goalpostskeep moving, and we have to ramp
up capacity to get there.
Preet Banerjee (08:46):
I have so many questions, I have so many
questions. Do you have a senseas to where the bulk of
transfers are coming from or anytrends, where you're saying, oh,
there's a massive increase intransfers from these types of
institutions? Do you have anyanything you can share on that?
Silvio Stroescu (08:59):
What time will you see is not so much the types
of institutions but you know,it's empowerment, you know, this
feeling of I'm in power now,right? What time is a
superpower, frankly, right, toto be able to make my own
decision. So you have someinvestors that were you know,
delegating their investmentdecision to either financial
planners, advisors in the pastor investing in products that
(09:21):
were that didn't require them tobe more hands on, you know,
package portfolios. That way,you're delegating even that
investment management decision,not just the advice component of
financial planners. So we'reseeing these clients and look,
I'm going to do more On My Ownright now. So that's, that's
part of the trend. The secondwhen you look at the makeup of
the client base on self directedplatforms, about two thirds of
(09:43):
the client base, I'm going tosay, you know, in the old
reality, two thirds of theclient base where clients over
55 Well, we've seen since thespring, two thirds of the growth
is actually driven by clientsunder 35. Right so you tend to
have more people that are new toinvesting, the ones that were
already trading on the platformsare consolidating their
(10:05):
investments, right. So if theyhad cash and savings accounts
elsewhere, or differentinvestment accounts, through a
different approach to investing,they're consolidating more
towards a self directedplatform. So those are some of
the themes that we're seeing.
Preet Banerjee (10:18):
And when it comes to people are making
transfers, how long does it taketo complete a transfer? Because
I know that that's an issuewithin the industry as well.
Usually, it's the relinquishinginstitution that is kind of
holding things up as long asthey can. But how long does it
take to transfer account thesedays? Well, look,
Silvio Stroescu (10:34):
we're we're in transition there, I should say
from, you know, the the oldprocess which everything has to
be mailed, right. So you know,if that's the process that the
actual transaction lands in,you're looking at anywhere
between four to sometimes eightweeks. And there's also a more
automated process, whichactually makes it happen in less
than two weeks, right. So andthat continues to get even
better. So not all transactionscan go through the automated
(10:57):
process. So it does take alittle bit longer. And as you
can imagine, as you're waitingfor your funds to arrive, you
naturally would call them tolook for an update, right? And
you want to know what's goingon. And there's there's not a
lot of transparency in thatprocess as far as having really
good policies, aware where thataccount transfers sitting every
day.
Preet Banerjee (11:16):
So we have Okay, so we've got increased
dramatically increased tradingactivity, we've got a lot of
people transferring accounts.
What do people call in about?
Like, I have to be honest, youknow, of all the discount
brokers I've ever used in? Idon't know, decades, I've never
called in for anything. But I'min the industry, or at least was
(11:37):
and you know, this is kind ofwhat I do. So I don't need as
much help, I would think as theaverage person. But what do
people call into a discountbroker? About what are the
common types of customer servicequestions?
Silvio Stroescu (11:50):
will just based on the sheer increase in demand,
I'd say there are questions thatyou would have typically had
before, obviously, you know, ata different magnitude different
level of volume, right then, andthese include, you know, how
long where's my transfer?
Where's my account transfer? Howlong does this take the
conversation we just had aroundthat process. And you have
people that sometimes forgettheir passwords, right. So if
you haven't traded for a longtime, forget your password,
(12:11):
these are all just adminmaintenance type of
transactions, we've done a lotof work to make sure that the
online capabilities are simple,intuitive, and people are aware
they can do this stuff online.
So we've navigated a lot ofthese transactions and are
navigating a lot of thesetransactions online. If I was to
sum up again, the theme as faras why people are calling, let's
(12:32):
say, for one is leveling up. Andlet me let me unpack that a
little bit. So we have a lot ofnew investors that hadn't
invested in self directedplatforms. So either they, they
were new to investing alltogether. So they're leveling up
now to say, Okay, I'm going tostart investing. And I'm
actually going to do this on myown in a self directed platform.
So that requires you to build alevel of knowledge. And you ramp
(12:54):
up with a learning curve. Fromthat perspective, you have
another segment of investors whoagain, we're delegating their
investment decisions to anadvisor, financial planner, now
they're saying, I'm going to dothis on my own. So they're
technically leveling up, andalso on a learning curve in that
journey as well. And then youhave people that had been
trading on a self directedplatform before, but maybe they
(13:15):
had a cash account, let's callit a basic account, or RSP
account or a TFSA. What they'resaying now is, I want to do
more, right, and they're openingup margin accounts. And they're
they're building capabilities toto learn how to trade options.
So they're learning about thatprocess as well. So this
leveling up is actuallyhappening on such a broad range
of of investor segments, whichnaturally leads to, to calls
(13:39):
into this, as you know, operateon these platforms, we don't
provide advice. But when you gothrough a learning curve, you
you want to you want to speak tohuman right to actually give you
some validation and some comfortin that process as well. So I
would I would sum it up withthat as the core theme for why
you're seeing, you know, theincrease in calls, obviously,
again, complemented the factthat you just got to share
(14:00):
increase in demand.
Preet Banerjee (14:02):
And and how many customer service reps did you do
you have right now? What are theplans to address these wait
times? Are you doing anything toramp up capacity?
Silvio Stroescu (14:13):
Yes, look, this is our top priority has been our
top priority. So let me just goback to a question you asked
earlier. And, you know, how longhave the wait time has been an
issue? When you look at theaverage for 2020 calendar year,
our wait time average is 12minutes, right? So we've been
hovering around 40 minutesaverage at the beginning of
January. Just to put all thatinto perspective. This the last
(14:34):
quarter of 2020 was when westarted seeing more of this
challenge coming through. So ifyou think about what it looked
like for the first threequarters of the year, we average
wait times in less than twominutes, one minute and in some
cases as well. We had eventslike march for examples on event
the third week of March where weall started working from home
(14:55):
all of a sudden and things werehappening in the market. You
know that was that was a bit ofa week. That was an anomaly, I'd
say in the context of 2020, atleast the first half of the
year. We also had long waittime, in an event going back a
couple years ago, when thecannabis sector was was getting
prominence and trading and usthat sector was gaining
prominence. Right. So, but thatwas an event, it had a start
(15:16):
date, and it had an end date.
Right, right. But beyond that, Imean, you're looking at an
average of two, three minutes,wait times. Now, average means
obviously longest call will belonger than that. And you have a
big percentage of calls that areunder that as well. That's
that's where we stand. So it's,it's been a more pronounced
challenge on the wait timesfront, especially November,
December and kicking off theyear in January.
Preet Banerjee (15:39):
Now, you know, when you are managing people's
accounts, there's a bigresponsibility in terms of
security and the technologyinfrastructure that you have. So
I imagine that your your callservice reps, were also sent
home to work from home in somecases are not allowed to come
into they're normally where theywould work. So can you tell me
(16:00):
what that was? Like? Like, wherewere the reps? Where are they
now? And how is that sort ofbeen a variable that needed to
be accounted for
Silvio Stroescu (16:09):
the bulk of that mobilization happen in
March and April, right, and 100%of our agents were actually
working from a physicallocation, physical contact
center, one in Montreal, one ina couple in Toronto, and one in
Mississauga, as well. And we'vemobilized to have them work
remote. First of all, we stillhad some folks work in the
physical locations, as we dotoday. So we had to address the
(16:31):
spacing just for healthpurposes, and making sure that
we had the right distancingwithin our physical locations,
we have the capability now where80% of our agents can work from
home. So there's also a bit ofrotation where some choose to
work from home and a rotate andcome into our front a physical
location, you know, every nowand then on a rotational basis.
That's where we are today, fullyactivated. And if you think
(16:55):
about how fast that happened, ametabolic pace that that needed
to happen in the first couple ofmonths. You know, that's, I
would say, We checked that box,primarily, right? So what we're
facing now is not a matter ofnavigating how we mobilize
remote work is just simplykeeping up and catching up to
the goalposts on demand that aremoving. And look, the other
(17:18):
question you asked was, whathave we done right to to
mobilize? And how do we ramp upthe staffing? We started this
back in the summer, right? So wesaid a couple of things we need
to do. First of all, we need towrap up our hiring. And we need
to do more of more hire morepeople in the old process, which
is, you know, hire, recruit,first hire train in physical
(17:40):
locations and just do more ofthat. That the magnitude
increase there is for four timeslike we quadrupled the size of
new hires, from you know, thisentire process, starting with
recruitment, to hiring totraining, which takes months,
right. So think about that is upfor x, again, an exponential
(18:00):
increase in what we've done toimprove capacity. The second
thing we've done is lookedacross the business, not just
our investment in business, butacross the bank to say can we
actually attract more talent toactually help with the capacity.
The last training class we had,the numbers increased seven
times from what we would havetypically had like this, the
training class that is actuallyactive right now. And we'll be
(18:23):
on the floor answering calls andproductive in the queues in a
couple of weeks. It's it's seventimes higher than what we had
prior to, to see and to speak indemand. So we started this
process pre back in the summer,we've been sprinting through the
marathon to make sure that we weramp up the capacity. And we've
also done on the hiring front,we've actually changed how we
hire right. So it's one thing tosay we're going to do more of
(18:44):
the same internal process. Butwe also activated what we refer
to as Street to screen. And thisis remote, remote recruitment,
remote hiring, remote training,remote activation into the
queue. So you don't have to setfoot into context and it to be
able to do that. That's atransformational process. And we
had the first class as part ofthat new process actually
(19:04):
started training at thebeginning of January. So that's
what we've done on the hiringfront. And then he filled lobby
one. One more comment on this.
We also looked at how do wecontain and address more of this
demand online on the platform,right? So we looked at all these
micro journeys that led to acall. And we said we have to get
better at improving that journeyonline, make it more intuitive,
and also build awareness that itexists. All the efforts we've
(19:27):
done on that front as well assimplifying some legacy process
just to make it easier. Somethings that we've done before we
said, you know, there's littlevalue in this and it's just an
impediment for our clients tostop doing it. We measure our
trades to call ratio, just as ameasure of efficiency, the
trades to call ratio hasincreased 65% as a result of us
being able to contain moreonline. So we're, we're in we're
(19:48):
on the right track. The reasonwhy we still have a gap today is
the impact from that exponentialincrease in demand has been
imminent. Right, and once thegoalposts move, you feel that
very same day, the impact fromour activities on capacity have
a bit of a time lag, right,which you know, include
especially on the hiring fraud,recruit, hire, train, and
(20:09):
license, right, like that's,that's a nuance we shouldn't
forget in the context of ouragents. They also need to be
licensed and build theirproficiency requirements as
well.
Preet Banerjee (20:20):
Yeah, I was gonna ask you, because so
investing online is oio. Right?
So it's no it's not advice. Sosorry, order execution only. And
so people who who create anaccount there, they are
basically taking allresponsibility for the riskiness
of their trades, and you areexecution services only for
those platforms. So when itcomes to the licensing that's
(20:40):
required for these reps, whatwhat did they need to what
license do they need,
Silvio Stroescu (20:45):
what they need, they still need to be fully iraq
licensed, so they don't provideadvice, but they have to go
through all the proficiencyrequirements, including the
course on ethics, the Canadiansecurities course, which which
has two parts to it, so theyhave to be fully fully licensed.
And if they're supporting tradesand options, for example, they
also have to have that licensingas well. So even though they
don't provide advice, theproficiency requirements are
(21:08):
full fledged.
Preet Banerjee (21:16):
The conversation with Silvio Stroescu continues
in a moment, but I wanted togive a shout out to some
listeners who have left somekind reviews for the show. Doug
M. 34. sg 183 60, Apollon sevenand Brent Goucher, thank you for
taking the time to leave ratingsand reviews on Apple podcasts. I
(21:38):
also wanted to let you know thatI just published a crash course
on what's really been happeningwith GameStop. I'm sure you've
heard that name this past week.
I know you have questions. Whyhas a mall based retailer have
physical copies of video games?
Some would argue assume to diebusiness model. Given that you
(21:59):
can download copies of videogames in order console's online.
Why they seen their share priceup as much as 10,000%. In just
one year, most of them in thelast month. What is a short
squeeze? What else is reallyhappening? So you can check that
out on YouTube. My main channelcan be found under my name,
(22:19):
Preet Banerjee. And before weget back to Silvio, if you are
enjoying the content on thispodcast, I really do appreciate
it when you take the time toleave a rating and review
wherever you get your podcasts.
And I don't run ads on thepodcast yet, but that might
change in the future. And in themeantime, I guess I'll provide
some kind of placeholder andkind of do some public service
(22:43):
announcements or something likethat, again, just as a
placeholder, so I don't know.
Get your prostate checked orsomething. Anyways, back to my
conversation with the presidentof BMO investor line, Silvio
Stroescu.
(23:03):
Now, I want to just pull fromthe headlines. So I'm sure
you're familiar with GameStop.
And the gamma squeezed thatalmost bankrupted? I think, one
hedge fund I think it was Melvincapital had to get bailed out by
some other hedge funds. Becausebasically, I don't know if
you're familiar with theredditors. On this, this Reddit
called Wall Street bets, havepushed up the price of GameStop.
so high that it's it's forced ashort covering, and it's it's
(23:28):
kind of embarrassed, like theseprofessional, you know, money
managers. It's kind of funny towatch. But there's so many
people who are subscribed tothat, that Reddit there, I think
there's like 2 million activeusers or something like that.
And they are driving the themarket price for, you know, the
security and some other ones.
And so, when someone calls inand do they, what's the training
(23:54):
around getting a call that says,hey, I want to buy GameStop, I
want to buy call options? ShouldI do that? Like, I'm assuming
they get asked, you know, hey,do you think this is a good
idea? What's the training aroundthat for an order execution only
platform?
Silvio Stroescu (24:09):
Well, look, you're you're not diving deeper
into the, you know, whether youshould or shouldn't, right, but
what we do is we say, you know,we grounded in principles,
right? So, you know, typicallywould say like, Alright, so how
does that fit? You know, doesthat fit with your plans? Like
we don't even get into how doesthat fit with your plans? And if
you think, you know, if it fitswith your plans, and you've got
a deliberate reason for it,then, you know, it's your
decision, right? So we don't getinto the advice on whether you
(24:32):
should do it, you know, shoulddo it. We do feel the effect of
it, right? So you do see anincrease, you know, slight
increase in volume as well andthose things do happen. But the
extent of it is just to makesure that we just help
groundings in some principles,right, as opposed to telling you
whether or not he should do itor whether it makes sense for
him.
Preet Banerjee (24:51):
Yeah. Last thing on this, this overall issue
about capacity. So you've you'veyou mentioned that one class is
seven times the normal intakefor people that you're training
for this positions. Now, do youhave a sense as to whether or
not this demand is going to betemporary? Or do you feel that
there's going to be a sustainedlevel for this type of trading
activity?
Silvio Stroescu (25:11):
I believe that it's, you know, what we're
seeing is not an event, right.
And I made reference earlier tocannabis and I talked about
that, as an event, I get startedon x date, and it kind of, you
know, sizzled off on on this ydate, right? That's not what
we're seeing here. We're notseeing an event, we were seeing
an acceleration of adoption. Andto me, this is an inflection
point in that adoption ofdigital investing breed. So
(25:32):
that's, that that's our view forit. Now, I don't believe we're
going to see to you know,trading volume for January
become the norm, right. I mean,right now, again, we just had a
new record. 30%, higher, right.
So I don't think this will bethe norm. But if you think about
where we were in the previouspeaks, and what I referenced
around RSP, season, and Decemberjust blew out of the water, that
(25:54):
new reality, the new norm willactually be higher than the
previous peaks. That's that'swhere I see this landing up. So
it's somewhere between theprevious records as far as
monthly trading activity, andslightly below the the peaks
that we're seeing. And I'dargue, and I expect what we're
seeing in January and Februarywill actually be our peaks,
right? And that will level off.
beyond that. And the main reasonfor that, and just informing
(26:16):
that perspective is, during thethe cannabis sector trading
event, right, you didn't see asmany new clients join the
platform, right. And if therewas a blip, and there was, it
wasn't as sustained right nowwe're seeing this like two and a
half times increase in newclient during the platform. And
it's been happening, right andcontinues to happen. And it
continues to grow. So primarilybased on that, and the sentiment
(26:39):
and and frankly, just some othermacro elements around all of us
have lived digitally for 910months now. Right? And we likely
wolfer after a few more months,right? So
Preet Banerjee (26:50):
has it only been nine or 10 months, it feels like
forever.
Silvio Stroescu (26:53):
It's just reset, right? how we live our
lives and how we do things.
Right. So to me, this is this issustainable beyond what we're
seeing.
Preet Banerjee (27:01):
Right now, there have been other sort of
investment stories that havebeen catching the eyes of
investors and headline writers.
Certainly with GameStop. We alsosaw Bitcoin had another run up
and a bit of a drop as well. Andso when people have the ability
to access, you know, the marketsmuch more easily than they ever
(27:23):
had before, there are some risksthat people can do real damage
to their own portfolios. Whatare your thoughts or plans on?
How do you address that? Becausecertainly, there are going to be
some people who are just notgoing to listen to advice,
they're going to listen to aforum, or they're going to read
the, you know, their take somekind of trading course and you
know, they're fine, they're big,they're adults, they could do
(27:45):
that. But there are some peopleare gonna say, Okay, I got
interested because of thisheadline in Bitcoin or GameStop,
or people have been making a lotof money even though the economy
doesn't seem to reflect that.
And they're now interestedenough to say, Okay, I want to
open up an account, I want toempower myself a little bit
more. What can you do at a selfdirected brokerage, to help
(28:07):
guide people who may be in needof some help, but for whatever
reason, they're just not goingto go full service? They still
want to do it themselves. Butwhat what are their options? I
know that there are some guidedportfolios, all in one ETF
tickets, solutions, what haveyou, what do you recommend to
people who are coming, but theyneed just a little bit more than
just, you know, no advice? Whatare the options? So first, look,
(28:32):
it's just,
Silvio Stroescu (28:33):
I would phrase it as grounded in Northstar,
right, like so first of all,articulate what your Northstar
is. And I use grounding, inNorthstar deliberately, right,
so understand why you're doingthis in the first place. Right?
I you know, and it goes back tohaving a deliberate perspective
on you know, why you're joiningthe platform, why you're
investing in the first place,and in many cases, and I suggest
even writing it down andconversations that I have with
(28:54):
my friends, as well as, hey,write it down again, write it
out for yourself, not foranybody else, just write it
down. So you actually understandwhy you started doing this in
the first place, and what yourintent is right off the bat. And
then we say, you know, thetenants around investing, like
the principle that I've beenaround for a long time, they're
still the same today. Right? Imean, you know, fundamentals are
(29:14):
harder to pin down, you know, inthis market, right. But the, the
actual tenants of investing arestill the same, right. So think
about diversification, you know,think about how do you make sure
that you crystallize your goals,and what you're doing is
actually in alignment with thosegoals. Right. So those those
standards still apply, Preet.
And that the third element ofthis, I'd say, is just man, the
(29:35):
power of advice and thatimportance of advice, like, you
know, if we're talking abouttrends in self directed
platforms, I'll tell you, Iwould complement that with the
need for advice is is evenhigher now. Right. So what we've
done in the context of thedigital platform, you have folks
that are adopting self directedplatform because they want to do
more on their own right, andthey want to be able to make
(29:57):
their own decisions, but they'realso looking validation right
there, beyond just theconversations around, helped me
understand and get morecomfortable to know what I'm
doing and how I should do thisstuff. They're also looking for
validation, we created a servicecalled advice direct. And in
this context, you actually haveadvice. So we do provide you
guidance on how to build yourportfolio, how to make sure that
(30:17):
it's well diversified, how torebalance your portfolio along
the way to make sure that itstays aligned with your goals.
So there's a digital tool thatprovides you advice and guidance
on how to build and manage yourportfolio. And then you also
have access to an advisor. Sosomeone that actually can speak
to you and complement the actualdigital tools with with a human
being. The new ones here is thatyou still place a trade
(30:42):
yourself, that you're stillworking on the platform, making
the trade yourself but you havethe benefit of complementing,
you know, your your intent to domore on your own with support
from this digital tool, and anyadvisor. And even prior to prior
to spring and prior to March, wesaw adoption of that platform
growing exponentially as well.
(31:04):
And that continues. Right? Soit's it's just thinking
differently about how do we nowbuild services, and build
awareness of services thatalready exist, and and make sure
that we're helping folks thatway. We also launched a
portfolio health check. So thisis something that we've been
working on since the springwhere we saw this happening, we
said, well, what's the nextstep? You know, what would
(31:25):
investors look for beyond this?
And what would be the step afterthat? So using some foresight
back in the spring, we build aportfolio health check tool,
which helps you now run yourportfolio through this tool and
identifies First of all, itasked you, you know, what are
your goals, and remember theground that we talked about, it
starts off with that to identifywhy you're doing this in the
first place. So it helps youwith that self conversation of
(31:47):
grounding, and, you know,grounding in your North Star,
and then it actually you put inyour holdings, and we then give
you an output that talks aboutthe health of your portfolio. So
are you well diversified acrosssectors, geographies? Is your
asset allocation in line withwith your goals? And, you know,
what does that look likeoverall? So we've just launched
(32:09):
that a couple of weeks ago, andit's available on our site,
happy to share a link so we caninclude it for listeners of the
podcast as well, that said that,you know, that's one of the
tools we keep, which cancomplement what you have on the
platform. And and frankly, look,we're seeing adoption of those
services grow advice direct, forexample, December record month,
as well, for new accounts andclient joining that platform.
(32:30):
And this tool, I imagine itwill, will get a lot of traction
as well.
Preet Banerjee (32:34):
Yeah, I think that this hybrid model where you
have, you know, digital toolswith access to to advice seems
to be a model right for, forgrowth, like that seems like the
next paradigm. But what aboutcoxes? There are a lot of people
who, whether different reasons,people go to a self directed
platform, one is pureempowerment, they just want to
(32:56):
trade on their own, their costmight actually end up going up
versus you skip it, or they'reheavy traders. But there are a
lot of people who who move toself directed platforms, because
they explicitly want to save oncosts. And so they might go to
either, you know, super long buyand hold portfolio, buying
(33:16):
individual stocks and build outa portfolio or they might use a
couch potato strategy with indexfunds, what have you. But there
are a lot of people who are kindof in between those extremes. So
So talk to me about what is thecause for advice direct? And
what's the cause for thisportfolio? Check? Is that like a
free tool available on theplatform? Do you have to pay for
these two different types ofservices? Talk to me about
costs?
Silvio Stroescu (33:37):
Yeah, so look, first, the portfolio health
check. It's a free tool. So youplug in some information, you
know, we have some informationabout your profile. And we we
guide you on how to identifythat Northstar and then the
output with with flags to saylook previous should be
reviewing your diversificationand so on all that is free. That
(33:58):
is a sliver of the portfoliooptimization engine that we have
within the advice direct so itgives you a sense of a test
drive if you will, of whatadvice to write could do for
you. But this component of it isfree now if you want to pursue
that further and set up anadvice direct account so you
have these types ofnotifications and you know, I'm
(34:18):
telling you when you should makesome changes to your portfolio
because you need to realign withyour goals, then you'd go into
the full tool for advice direct.
The pricing for that is 75 basispoints and it's tiered as well.
So there is a cap once once youget to a certain threshold of
investable assets, you knowbecomes capped and that cap is
at 3700 3750 off top my head asfar as what what the overall cap
(34:38):
is so the more you have investedin that the more you benefit
from from the service and alsofrom a pricing perspective. It
also includes a number of freetrades as well so you're not
paying for the fee as well astrades right? So that's that's a
good combo there. Just you knowthe if you look at who's trading
under selling During theplatform, a majority of the
(35:00):
investors are actuallyinvestors, you know, the buy and
hold type that you reference,right. So, you see, as far as
active traders, they're anywherebetween five to 6% of all the
investors on the platform and byactive traders, I mean, they do
more than 10 trades a month,right? So the bulk of the
investors on the platform tendto be more of the, you know, buy
and hold, rebalance longer terminvestors.
Preet Banerjee (35:25):
Do you do you have a sense as to the average
hold period, for someone on yourplatform, like when they buy any
position, give any idea what theaverage hold time is? Well, it's
Silvio Stroescu (35:36):
obvious, if you're a long term investors, I
mean, you know, these people areholding until they reach their
goals, right. So So that's, Iwould say, the bulk of it would
be that now average hold timefor security, I don't have the
breakdown of that to say howmuch they hold to the security
because naturally, peoplerebalance their their
portfolios. But as far as howlong they stay invested in, you
(35:56):
know, how much to stay investedand how that stays, you know,
consistent across, across theirtenure. You have more of those
buy and hold. Even in March,right, when we saw a lot of
volatility, I mean, the activitythat happened was, you know, not
people just buying jumping inand out of holding securities,
you also had existing clients,especially retirees that were
(36:17):
actually de risking theirportfolios, right. So in that
case, it looked like they wereselling out, but, you know, they
were, they were de risking justto have, frankly, more available
to them in cash. And, you know,in many cases, while the
supplement retirement incomesand making sure that cash is
there to be able to do that.
Preet Banerjee (36:33):
Now, speaking of cash, one of the things that
we've noticed is that people arelooking at at this as kind of
like a tale of two economies,you have people who have been
affected negatively the most,they tend to be on the lower end
of the income spectrum, workingin retail jobs, the jobs most
affected by lockdowns andrestrictions, and they're been,
(36:54):
you know, completely decimated.
And then you have a lot ofpeople who are more kind of
white collar, who are able towork behind a computer either at
from an office or from a homeoffice. And so they may not have
necessarily lost any income, butthey've lost the ability to
spend because they're not ableto travel. And for a lot of
people, you know, not travelingis like, you know, five grand
extra in your pocket, not goingout to restaurants as often as
(37:18):
putting extra money in people'spockets. So we see that there is
some people who are actuallysitting on a lot more cash than
they've ever had access tobefore. And they're putting it
into their investment accounts.
Are they sitting in cash? Or arethey deploying that? Do you have
any sense of that.
Silvio Stroescu (37:36):
So savings rate is up overall, just to just to
build on your point as well. AndI think that's a healthy thing.
That's a really good thing. AndI think people are also reacting
to you know, the shock that thatwe all faced in March and and
people that didn't have a lot ofsavings for the emergency funds
top top to be able to withstandthat type of exogenous shock,
you know, they're they'reramping it up. So I think
(37:56):
there's there's an element ofthat as well. When you look at
our platform, the youngerclients, so let's call them
clients on a 35, which you and Icould consider ourselves in that
category. Once upon a time prebut clients, younger clients are
actually deploying more cash ifyou index to, typically new
clients come in, and let's saythey're bringing in 100,000, how
(38:17):
much 100,000 gets deployed, moreof the initial cash coming into
the account is being deployed bythe younger investors. Right. So
they're, they're looking for,you know, time in the market, as
opposed to timing the market,right. And then you also have
older clients, retirees inparticular, they've de risked,
right, so they have higher cashpositions, as we just talked
(38:40):
about, potentially think abouthow do I supplement my incomes,
right. And the income that Iused to get from bonds and the
fixed income component, myportfolio is not paying what it
used to. So I need to have somecash to be able to supplement
that. And, frankly, you know, Idon't know how long this takes,
right. So I want to make surethat I'm covered there. So let's
say, you know, those are smartdecisions, right? Again, you
know, it's not every singleclient, but if you roll it up,
(39:01):
but you know, that's that's theview that we see from a higher
vantage point. And then you havesome folks that are just looking
for opportunities, right, andjust waiting for that
opportunity. And I think, again,to hold that this whole idea of
like timing to market actuallybeats timing to market applies
to that. But I think for themost part cash, just the role of
(39:22):
cash has expanded. And either,you know, be able to protect
myself, supplement my income,make sure that I have savings to
respond to exhaustion asexogenous shocks, I see that the
role of cash has expanded andover indexing towards people
that are holding cash is thatreally, you know, those that
have to depend on that as far asretirement income.
Preet Banerjee (39:43):
All right. We'll leave it there. But I want to
thank you so much for coming onthe podcast and sort of
addressing the concerns thathave been raised by various
writers and people tweeting atus both. So I appreciate your
candor in addressing that.
Interesting times to say theleast When this is all over, are
you going to? Are you going toupgrade your bike? Or are you
happy with your bike? What'sgoing on?
Silvio Stroescu (40:06):
Hey, look where we're celebrating and what we're
celebrating, frankly, it's justthat bigger story of it's an
army of demand, right? I mean,like it's a privileged position
to be in an industry that seesthe level of demand. So, so
super, super happy about this.
And thanks for giving me theopportunity to jump on here. We
have to be responsive, as youknow, through social channels
and making sure that our clientsunderstand what's happening and
(40:26):
why and what we've done about itjust in terms of our
accountability. I'm notupgrading my bike. Now I have a
bike that I'm happy with rightnow. My goal would be to get out
there a little bit more andwrite a bit more next summer.
And that's that's the goal forthe year, but it's not a year of
the upgrade. I actually,
Preet Banerjee (40:44):
I'm in right now. Listen, I'm not allowed to
get a new motorcycle. What endedup happening was my partner was
on the balcony and we overlookthe gardener. And I think you
know this but I had a Ducati andit was stolen. And I've been
thinking about getting a newbike to replace it and she's out
(41:05):
on the balcony I was in theoffice and all all of a sudden I
hear just hear this this is yellyou're not allowed to get a new
bike. Like what the heckhappened? Someone just got
smoked on the highway, rightlike in front of her like from
the balcony she could see Sothat pretty much was the nail in
the coffin. I am not allowed toget into the bike that she knows
of.
Silvio Stroescu (41:27):
They're always they're always tracks right
tracks are also an option,right?
Preet Banerjee (41:30):
Exactly. Yeah, exactly. There's private roads.
There's the drag strip, there'sdirt biking. See? Thank you so
much Silvio. It's, it's been apleasure.
Silvio Stroescu (41:40):
Likewise, pleasure to connect and thanks
for the opportunity. Cheers andkeep safe.
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