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Chapter 1: Why have AMA episodes become less frequent?
This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from two Canadians. We're hosted by me, Benjamin Felix, Chief Investment Officer and Portfolio Manager, and Ben Wilson, Head of M&A at PWL Capital.
Chapter 2: What observations does Ben have about PWL's institutional investment business?
Yeah, this is episode 414. We're doing another AMA. I think it's actually the first one of the 2026 calendar year, so excited to get back into some questions.
Which means it's been like six months-ish since we did an AMA.
Chapter 3: How have newer products simplified the Rational Reminder model portfolios?
A lot of people ask for more AMA episodes. People seem to like them a lot. I was going through the questions to choose them for this episode. There's like over 300 in the bank.
Chapter 4: Should U.S. investors underweight their home market?
Oh, wow. And that's from what I downloaded in December, I think. And so there's probably a bunch more that if I reopen the form, there'll be more AMA questions. So we're working through them slowly. But it's just between interesting guests that come up and timely topics that come up, we fell out of the cadence of doing AMA. an AMA.
We were doing them very intentionally every third episode for a bit. We'll try and get back into it now. I do think we have some good questions. We have some on the old Roush Reminder model portfolios. An interesting question on what popular ETFs we would avoid, which is kind of hard to answer actually, but I tried to work through it.
Chapter 5: What are the pros and cons of leasing versus buying a vehicle?
Someone asked if we were wrong about Warren Buffett's long-term performance back in episode, I think it was 335, where we talked about Berkshire Hathaway's long-term performance relative to index funds and the implications of that. Someone had a good question that introduces some interesting topics that we can talk about.
I do want to mention that we are recording this on May 26th and the episode will come out on June 18th. So when you're listening, it'll be far in the future relative to when we record it. I just mentioned that because it always feels a little bit weird talking to people far in the future because stuff can change.
Chapter 6: What common misconceptions exist about currency exposure and ETFs?
Maybe some big event happened and the comments we make in this episode might feel out of touch for some reason or whatever. Just keep that in mind as you listen.
Either that or it just feels weird for us.
Maybe. I don't know. Like some major world event happens and we don't mention it and it might feel out of place. Oh, for sure. I get that. I'm going, taking my family to the West coast of Canada for a little vacation. So we're going to be gone for a couple of weeks. So we're recording this ahead of time because when this comes out, I will be on vacation.
Real quick, before we get into the content, I do want to just mention that PWL's institutional business has continued to see a lot of success, which has been really cool. And it's a part of the business that I'm increasingly passionate about as I get increasingly familiar with the institutional space.
It's kind of one thing to read papers about or practitioner reviews about how institutions invest, but seeing actually what PWL is coming up against is really eyeopening.
One of the things that we're seeing is that it's really hard to find institutional investment management service providers that will just take an institution's money, invest in low cost index funds, not push active management and alternative investments and take a holistic planning centric view of the institution's objectives.
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Chapter 7: What do portfolio managers at PWL focus on beyond market performance?
That service, as far as I know, maybe it exists outside of PWL, but it's really hard to find.
Yeah, there's been some really cool, interesting stories talking to Lucas on our team who has been involved in a lot of these discussions.
Yeah, and we will get Lucas on at some point to talk about his learnings working with institutions and just seeing what else is out there in the institutional space.
One of the really interesting things that we're learning as we onboard more institutional clients is that PWL's fees are broadly actually really similar to institutional service providers on the advice and implementation side, because there's always, just like with PWL, there's a fee that you pay to the firm to build the portfolio and give you advice and all that stuff.
And then there's a separate fee for the investment products that they use to build portfolios. So we're pretty similar on the advice and implementation side, right in line with all the other major providers in this space, which is cool because we didn't really know that when we were pricing the service.
But because we're using mostly low-cost index funds for institutions just to reduce tracking errors, it's a whole interesting thing. We believe in dimensional. We use that for retail clients pretty much exclusively.
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Chapter 8: How does financial planning integrate with portfolio management?
But when you get into the institutional world, tracking error relative to index benchmarks matters a lot. And it's really hard. What we're learning is that it's really hard for an institutional investment committee, which tends to turn over over time, which is normal. It's really hard for them to buy into the dimensional philosophy and deal with tracking error.
So we've pivoted to mostly using index funds for institutions. So because of that, dimensional would be low fee too, but because of the index funds, our total fee, the advice and implementation plus the product side tends to be quite a bit lower because most institutional service providers are using actively managed funds and alternatives. So our total costs come in pretty low.
And the other interesting thing that we're seeing is it's increasingly clear to us that our planning centric approach that we use for individuals and households, which in the institutional world just means thinking about the institution's cashflow needs and modeling long-term scenarios to inform spending policy and asset allocation. just like we do with households is quite unique.
It's rare to find from what we've seen institutional service providers that are taking that type of planning view of an institution. And I think that our retail background and our planning work with clients really informs how we're thinking about institutional service offerings.
I find that part fascinating. Not really surprising, but fascinating that maybe there's not that much competition out there, but institutional business is a pretty large part of the marketplace. And it's just a bunch of active managers competing against each other for the most part.
Yeah, well, the service is so focused on asset management. We're going to build a better portfolio as opposed to how can we help the institution make better long-term decisions, which is, I think, what we're really focused on.
One of the AMA questions that you'll speak to, Ben, we talked about how we think about that on the household side, on the retail side, but the same value applies to institutions. It's just not commonly thought about that way. Anyway, so I think that our roots with a planning centric approach for households is really putting us in a unique position to add value to institutions.
All that to say, if you're listening and you're on an institutional investment committee, we'd love to talk to you or your committee or your board about PWL's approach and how it differs from what else is out there. And we will get Lucas on at some point, like you said, and he's got some really interesting stories and learnings from working with our institutional clients.
Great conversation for sure. All right, let's get into AMA number 12, I believe. I'll read the first one. Hi, everyone. Kindly, can you ask Ben Felix if he still agrees with the Roush Reminder model portfolio from the past or if he would modify it and how he would modify it if he did?
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