Ask the Right Questions
WHERE ARE YOU TODAY?
Before you can reach any destination, you need to identify your starting point. We begin by taking a financial inventory. Once we know where all the moving parts are, we are ready to take the next step.
WHERE DO YOU WANT TO BE?
This stage begins with determining your goals, dreams, and aspirations. I will ask you a series of questions to help you develop this part of the plan. This will likely change over the years to reflect the changes in your life.
WHAT OPTIONS ARE AVAILABLE?
Once we know where you are and where you want to be, we can start to focus in on a course of action designed to help you achieve your goals. I can now gather options that align with these goals and prepare a proposal for you.
WHICH OPTIONS SUIT YOU BEST?
In a conversation driven by you, we narrow down which options suit you best. If you like something, great! If you don’t, then I can go back to the drawing board with new insight into what suits you best.
The answers to these questions help me build a detailed agenda for our meetings that is unique to your needs and will ultimately shape your financial plan, a plan you helped to create.
Investment Counsellor Referral Program
We assist professionals and business owners by utilizing a needs based financial planning process. We simplify and coordinate their unique financial needs to provide clarity, transparency and accountability for investment performance. Frequently we will refer clients to Investment Counsellors or Private Client Money Managers for their portfolio management needs. Thus we become the client’s investment advocate and help hold the Investment Counsellor accountable.
“PRIVATE CLIENT MONEY MANAGERS”
What is private client wealth management?
An Investment Counsellor, Portfolio Manager, Intuitional Investment Manager or Private Client Money Manager makes discretionary investment decisions for your assets based upon established goals and constraints. Typically, it is more personalized, better quality advice than is available through a broker, bank, or investment fund, but at less cost. However, unlike Stock Brokers and Investment Fund Companies, Investment Counsellors usually have a minimum account size that they will accept. Today these minimums are as low as $250,000.
Why consider an Investment Counsellor instead of a Broker for investment decisions?
Investment Counsellors charge a fee and don’t charge a commission every time there is a transaction. Therefore, their interests are aligned with the client’s long-term goals instead of being motivated to create a lot of activity. In addition, hidden commission such as strip bond spreads can cost clients without their even being aware.
Independence is also an important consideration. Underwriting and Investment Banking bias has plagued the brokerage industry for years. Even supposed “independent” brokerages can’t offer many investments if not supported or approved by their head office.
In addition, these Investment Counsellors are typically smaller boutiques to larger pension style managers. As such, one receives conservative Portfolio Management similar to a pension fund but with personalized service.
Why consider an Investment Counsellor instead of an Investment Fund?
There are 10 major differences between Investment Funds and Investment Counsellors:
Transparency – All fees are fully disclosed and the mechanics and relationships between all parties are easy to see. It’s not a closed box; it’s an open book.
Direct Ownership – You own the individual securities directly. Through a custodian such as National Bank the stocks, bonds and cash are held for you. The Investment Counsellor merely has your permission to buy and sell in the account. This leads to portability of the holdings. If we no longer want one manager to advise you, a simple form cancels their authority to trade in your account. Therefore, your portfolio can be managed by another Investment Counsellor, but the underlying investments don’t need to be sold. This avoids triggering Capital Gains Taxes.
Lower Fees – Investment Funds average 2.5%. Investment Counsellor fees average about 1% lower. A $250,000 account over 20 years earning 8% will yield $1,165,000 whereas at 7% you are left with only $967,000.
Deductibility of Fees – In non-registered portfolios the fees you pay are deductible on your tax return, further reducing the cost.
Enhanced Tax Efficiency – Gains and Losses in the Investment Counsellor portfolio are individualized, and offset against each other minimizing the reporting for tax in non-registered accounts. In addition, an Investment Fund’s investor could inherit some gains from the fund and pay the tax on it, but not even be an investor at the time of earning gains and enjoy the increase in the investment.
Liquidity of Holdings – Some Investment Funds have reported taking 130 days to sell some holdings, where as Investment Counsellors don’t have the same constraints. The reverse is also true. If one wants to enter the market slowly and buy securities selectively this can be done with an Investment Counsellor whereas the Investment Fund gets invested 100% the first day.
Enhanced Reporting – More accountable and easier to understand statements means a better understanding of exactly what you own. It will be easy to recognize the Large Blue Chip companies you own. There is less of what doesn’t matter and more of what does.
Custorodians are Covered by Canadian Investor Protection Program (CIPF) – CIPF covers customers of members for the failure to return securities and cash balances held in the account by a member for a customer. The coverage is $1 million for each account entity, in other words, each RRSP, RRIF, HoldCo. Account, cash account per individual is covered by a separate $1 million.
Efficicient Income Creation – When one is depending upon their portfolio for income it is better to depend upon dividend, trust and interest payments to be placed in your bank account. Investment Funds that use unit values to determine prices means you are selling some investments at a low to provide your income. In other words, you are selling some of the golden goose when the price is low.
Higher Degree of Personalization – If one has particular needs where certain investments are to be avoided because of “conflict of interest” or ethical investing preferences, these are easily accounted for in the Investment Policy Statement of the Investment Counselor.