financial advice - Assante Wealth Management

Bryan Deviney, CFP, CIM
Senior Financial Advisor
Assante Capital Management Ltd.
Yorkdale Rd.
Allen R
Yorkdale
d
in St
Duffer
Yorkdale
Shopping
Centre
Rd.
Free parrking available
Assante office
1 Yorkdale Road, Suite 310
Toronto, Ontario M6A 3A1
T: 416-939-2000 x 210
F: 416-785-8000
E: [email protected]
www.devineygoodman.ca
Founded in 1995, Assante Wealth Management has a long history of providing complete wealth management
solutions to meet the needs and goals of Canadian families and businesses.
We are one of the country’s largest wealth management firms with over 750 professional advisors located in
communities throughout the country overseeing more than $28 billion of assets under administration.
Let’s Talk About Fees
Bryan Deviney, CFP, CIM
Senior Financial Advisor
Assante Capital Management Ltd.
Assante Wealth Management is a fully owned subsidiary of CI Financial, a leading national investment
company with approximately $125 billion in total assets.
1 Yorkdale Road, Suite 310
Toronto, Ontario M6A 3A1
Our advisors and their clients are at the centre of our business and are supported by the exceptional
investment management team and wealth planning resources available through our sister-company
CI Investments Inc. and United Financial, a division of CI Private Counsel LP.
T: 416-939-2000 x 210
F: 416-785-8000
E: [email protected]
Be well-advised is our promise to you.
This document is intended only as a general guide for the clients and prospects of The Deviney Goodman Team to help them understand
the fees that are charged when they invest. Commissions, trailing commissions, management fees and expenses, may all be associated with
mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
Please read the simplified prospectus and consult a professional advisor to discuss your particular circumstances before acting on any of the
information above. Please also discuss the deductibility fees with your professional tax advisor and note that fees paid for, or on behalf of,
registered accounts (including RESPs and TFSAs) are not tax deductible. Insurance products and services are provided through Assante Estate
and Insurance Services Inc. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with
the Investment Industry Regulatory Organization of Canada.
©
Copyright 2014 Jeffrey D. Goodman and Bryan Deviney. All rights reserved
1407-1135 E (08/14)
©
www.devineygoodman.ca
financial advice
TABLE OF CONTENTS
FEE-BASED ADVISORS
LET’S TALK ABOUT FEES
All investment returns that you see on your statements
are always net of fees unless you have chosen to have
the fee paid directly from your bank account. As your
investments grow in value, so does our compensation.
However, the reverse is also true. When your investments
decline in value, so does our compensation.
REDUCE THE FEE BY DOING IT YOURSELF
COMPARING RATES OF RETURN
BULK BUYING TO REDUCE THE FEE
THE BENEFITS
THE BENEFITS OF BEING A CLIENT WITH THE DEVINEY GOODMAN TEAM
A TEAM OF PROFESSIONALS
We are fee-based advisors. We do not charge commissions,
sales charges (loads) whether front end or back end or
switch fees. All of our services, along with Assante’s, are
covered by the fee. For non-registered accounts, the fee
is often tax-deductible.
COACHING MAKES IT MORE LIKELY THAT YOU WILL ACHIEVE YOUR GOALS
Insurance-based products such as life, critical illness,
long-term care, and disability insurance have our fee
embedded in the price. We offer insurance products
from 15 different companies and look for the best
solution at the lowest cost. Guaranteed lifetime income
solutions have our fee embedded in their MER.
INDIVIDUAL COMPONENTS OR MANAGED PORTFOLIOS
TRUSTEE FEES
THE FEES
For client accounts held on the nominee platform,
there is an annual trustee fee for RRSPs/RRIFs/LIFs.
THE VALUE OF ADVICE
THE VALUE
$125 + HST for the first account, $45 + HST for
additional accounts. We pay the fees for those clients
in the top two tiers.
KNOW WHAT YOU ARE PAYING FOR
HOW THE MER IS CALCULATED
There are no account fees for TFSAs, RESPs, RDSPs
and non-registered (open) accounts. There are other
fees listed in the Assante fee schedule that are applied
infrequently or in special circumstances.
FEE BASED ADVISORS
TRUSTEE FEES
REFERENCES
1. The Value of Advice Report, IFIC
2. Putting A Value On Your Value, 2014, Vanguard
3. Mind the Gap, Russel Kinnel, 2014, Morningstar
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THE FEES
LET’S TALK ABOUT FEES
KNOW WHAT YOU ARE PAYING FOR
When looking at fees, you have to know what you are
paying for. In this discussion, we will not be discussing
individual stocks and bonds, but rather collections of
stocks and bonds known as mutual funds and ETFs
(exchange-traded funds). The least expensive approach
is to purchase individual mutual funds or ETFs, put
together your own portfolio and manage the investments
yourself. This means you need to know how to construct
the portfolio that would best suit your own situation.
You need to know about the different asset classes,
what the appropriate mix of asset class is for your
situation, and how to rebalance the individual
components back to their original percentages as they
change over time. Of course, there are trading costs
(fees) involved in every buy and sell of these components.
The more plain vanilla the investment, the lower the fee.
FEES
Our advisory fee for both our services and the
services of Assante are charged according to
the following fee schedule. The total of your
fee-earning assets determines your fee (i.e. if your
total fee-earning assets are between $500,000
– $999,999, your fee on the total amount is 1%).
Fee Earning Assets
Fee
$2,000,000+
0.50%
$1,000,000 - $1,999,999
0.75%
$500,000 - $999,999
1.00%
$250,000 - $499,999
1.25%
<$250,000
1.50%
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For example, the market cap weighted S&P 500 may be
the least expensive. But what if you did your research
and learned that an equally-weighted portfolio would do
better – the price goes up. Or suppose you wanted to
focus on dividend-paying equities – the price goes up.
For every extra tweak, the price goes up. How about
currency hedging? The price goes up.
There has been a lot of talk in the media about fees and their impact on your retirement
savings. The basic point they make is that the lower the fee, the larger your savings will be
when you reach retirement. Of course, this is true, just as it is in every other aspect of your
life. The media points out that there are two ways to reduce the fees you pay: reduce the
fee by doing it yourself, or use bulk buying.
HOW THE MER IS CALCULATED
REDUCE THE FEE BY DOING IT YOURSELF
BULK BUYING TO REDUCE THE FEE
The fees associated with a particular investment
are grouped together and are known as the MER
(Management Expense Ratio). The MER includes the
fund’s or ETF’s management fee and operating expenses.
They are paid by the fund or ETF, and are expressed as
an annual percentage of the total value of the fund. The
management fee is paid to the investment management
company for overseeing the fund or ETF. Operating
expenses include such things as bookkeeping and
administrative fees, marketing costs, custodial fees,
filings with the provincial securities commissions,
legal fees, audit fees, and the HST. Obviously, the
more responsibility that is given to the investment
management company, the larger the fee. For example,
if you want a managed portfolio composed of both
stock and bond mutual funds or ETFs including
Canadian, U.S., developed international and emerging
market equities as well as income sources including
government bonds, corporate bonds, high yield bonds,
emerging market debt, real estate investment trusts and
infrastructure including asset allocation, rebalancing
and consolidated statements, you will pay more. Fees
that are not included in the MER are the fees charged
by the government-required trustee (not Assante) for
RRSP & RRIF accounts, and the trading costs that the
fund or ETF incurs.
Like anything in life, if you do it yourself and you do
it competently, it will cost less. Doing your own car
repairs or house renovations will save you thousands
over a 20 – 30 year period. The question is whether
you want to do the tasks and are you competent? Do
you have the expertise and equipment to do the job
right? There is a big difference between patching some
drywall and fixing an electrical problem. Similarly, you
may be able to save for a vacation by yourself but you
may want professional advice on how best to achieve
your financial goals and plan your estate, taking into
account all the tax and legal implications involved and
applying them to your specific situation. A mistake could
have repercussions from which you cannot recover.
As with your other purchases, buying in bulk can
reduce your cost. With financial assets, consolidating
your investments and reaching milestones such as
$500,000, $1 million or $2 million allows one to pay
less in fees. We offer a competitive fee structure with
discounts as one reaches these savings milestones.
COMPARING RATES OF RETURN
When comparing rates of return, you have to make
sure you are comparing apples to apples, not apples to
oranges. Often, the media does not make it clear that
the higher rate of return was achieved by not paying
anything to an advisor or professional counsel, in short,
by the investor doing it themselves and not paying for
advice, trades and taxes. Once these extra costs are
factored in, there is very little difference in the rate
of return.
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THE BENEFITS
THE VALUE
A TEAM OF PROFESSIONALS
THE BENEFITS OF BEING A CLIENT
WITH THE DEVINEY GOODMAN TEAM
It takes a team of professionals to be able to offer these
services. While many work in the background and do
not generally interact directly with our clients, it is
their involvement that helps produce the reports and
advice that we give to you. It is this infrastructure that
makes our practice so successful. We also severely limit
the number of client families so we can give timely
and comprehensive advice to each and every one
of our clients.
We at The Deviney Goodman Team pride
ourselves on the total wealth management
services we provide. The fees you pay are
for more than just investment advice. Our
commitment is to do as much as possible to
make sure that all of our clients have financial
security. We want to make sure that your
financial well-being is protected during your
working years and your income is secure during
your retirement years. Toward this end, we
use the Financial Health Checklist and provide
the following:
THE VALUE OF ADVICE
Many Canadians find that they lack the financial
knowledge or the time required to research all the
options available to them in order to make important
financial decisions. Those without financial and
investment advice may find themselves ill-prepared
for some of the most important financial decisions they
will encounter in their lifetimes. Others may miss the
opportunity to make a good decision. Advised Canadians
are shown to have substantially higher amounts of
investable assets than non-advised Canadians in both
registered and non-registered forms, and across all
levels of income and age groups.1
• written financial plan
• retirement income stress test
• personalized investment policy statement
• customized portfolio solutions
• guaranteed lifetime retirement income solutions
• tax planning and minimization
• insurance, trust and estate planning
• government enriched education and disability
savings plans
• quarterly consolidated statements
• educational seminars and newsletters
• updates on your investments
• on-going contact including face-to-face
meetings, phone calls, e-mails and skyping
• referral network for accounting and legal services.
• helping your accountant, when requested,
to receive your correct information
COACHING MAKES IT MORE LIKELY
THAT YOU WILL ACHIEVE YOUR GOALS
INDIVIDUAL COMPONENTS
OR MANAGED PORTFOLIOS
It is well-established, across many different fields
of human endeavour, that those who use coaches
or mentors are more successful. We believe this also
applies to our clients. We take our coaching seriously
and believe in forming a partnership with our clients
with the aim of helping them achieve their goals.
Personal relationships also tend to do better when a
qualified and competent financial advisor is involved.
Having a financial advisor listen to you and develop
a financial plan based on your specific situation and
needs allows you to have confidence that you are on
the right track. It allows a couple to work together
towards realizing their common goals. Each partner is
encouraged to articulate their thoughts and differences
can be sorted out. The annual financial review provides
for an opportunity to review the past year and reaffirm
the goals for the next year. This process helps reduce
stress and provides for a much more harmonious
relationship between the spouses and their finances.
This is a very important consideration as financial
disagreements are a major cause of marriage breakdowns.
As with many of the things we buy, you can either
purchase the individual components or you can buy
the finished product. For example, if you want a
cake, you could look up a recipe, buy the individual
ingredients, mix them yourself and bake them in an
oven. Of course, the larger the number of ingredients
and the better their quality, the more they will cost.
You also have to provide all the necessary equipment.
This approach will cost the least amount of money but
will require the most time and expertise. Or, you could
buy a cake that meets all of your specific requirements.
With investments, it is pretty much the same. You can
buy the individual components, mix them yourself,
put them into a portfolio and manage that portfolio.
Or you could pay more and purchase a managed
portfolio constructed to your specific needs and
have someone manage it on your behalf.
A recent whitepaper by Vanguard suggests that the
discipline and guidance that an advisor provides
through behavioural coaching adds an estimated
1.5% per annum net return, when compared to an
average do-it-yourself investor.2 Morningstar research
shows there is a growing ‘performance gap’ between
the return of a fund and the return an average investor
in the fund actually gets. Morningstar’s research shows
that this gap has ballooned to 2.49% per annum.3
In addition to the services that we provide,
Assante maintains client accounts, prepares
consolidated statements, and supervises the
advisors who work with Assante to ensure all
client accounts and advisors are in compliance
with applicable laws and regulations.
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