Wealth Management - A Fee Based Approach
Managing your personal wealth over the long-term requires a unique relationship with a trusted professional who understands you and your family's needs and the best strategies to implement to reach your financial goals (short or long term).
When it comes to hiring a financial advisor it is essential that you choose a professional with experience you can trust. Managing the complex financial needs of high net worth individuals / small business' or guiding new investors into appropriate investment strategies and / or financial plans must be tailored in order to be accurate and efficient.
Having to choose between tens of thousands of investments available for purchase (stocks, bonds, mutual funds etc.) is an overwhelming task. Therefore, we believe that an advisors "value" is in the ability to define a financial plan or need, select & tailor the most suitable investments and strategies required for a given financial plan(s) and ensure constant management to keep the parameters of the financial plan in line at all times (financial objectives, risk tolerances and time horizons).
Fee Based Wealth Management: Over the last several years, there has been a gradual shift from commission-based financial advice to fee-based advice. Instead of paying traditional commission at the time of investment or defer commission over an extended period a time (usually 7 years), the industry is moving towards a fee-based model that applies an annual fee (deducted from portfolio) as an annual percentage of the clients total assets / investments.
Advantages in Fee Based Wealth Management over Traditional Commission Model
Low Annual Fees
By using a fee-based approach, it removes the retail costs that are usually involved in running a portfolio. Many times this has led to as much as a 30% reduction in the overall cost of managing a portfolio compared to traditional commission models.
The costs involved in managing investments as well as compensation are not hidden within the portfolio. These costs are visible and reported very clearly on a quarterly basis.
Fee based investments have no liquidity issues or locking in features which allows investors to make redemptions without any costs or hold up.
Your portfolio fee percentage can decrease as the value of your portfolio increases.
Linking Annual Portfolio Fees
Creating a family group of accounts with other family members (do not need to reside in the same location) allows for a discounted fee rate for the entire family or household
As your non-registered account (also called investment or open accounts) fees are visible in this taxable account type, these fees are mostly tax deductible which is a big advantage over traditional embedded commission based investments.
Contact us today for a no obligation appointment or to discuss how we can reduce your existing portfolios investment / account fees and maximize your portfolios "net of fee" performance. For more information on any of the above, please contact: [email protected]
Retirement Savings and Planning
Each year, Canadians are faced with the task of properly investing and saving for their retirement. With the creation of RRSP's or "Registered Retirement Savings Plans", Canadian investors can allocate a pre determined amount annually into an RRSP account for the purposes of saving for their retirement.
As an incentive for Canadians to save for their own retirement via an RRSP, a contribution will be recorded on a tax receipt issued to the contributor and can be applied to reduce potential annual taxable income.
The most attractive long term benefit of RRSP investing is the tax sheltered growth. RRSP's can be opened for Canadian investors 18yrs + and must be rolled over into a RIF (Retirement Income Fund) in the year in which the RRSP owner turns 71yrs. Other registered account types for retirement savings include:
Spousal RRSP or "SRSP"
Registered Retirement Income Fund or "RRIF"
Tax Free Savings Account or "TFSA"
Registered Pension Plan or "RPP"
Locked In Retirement Account or "LIRA"
Life Income Fund or "LIF"
It is vital that investors know how earnings from their investments are treated at tax time. This information is crucial when making any investment selection.
In Canada, there are many sources of "earnings" that an investment can accumulate or pay to investors. Canadians should be aware how Capital Gains, Dividend Income and Interest Income are treated and therefore taxed. The proper registration of the intended account for each investment is equally as important.
The Canadian tax system is an ever evolving one. Investors should be aware of the negative impact on wealth accumulation and sustainability when investing in a non tax efficient vehicle as this can severely hinder performance over the short and long term.
Studies have shown that Canadians are not utilizing nor are aware of the many tools that are available to them in the investment community that are considered tax efficient. Ensuring that the right type of investment is in the appropriate account for each investor is part of the many services that JLBennett Financial provides.
Contact us today to discuss how we can help you and your family construct a retirement plan or analyse your current retirement plan, savings or retirement planning situation. For more information on any of the above, please contact: [email protected]
Alternative & Specialty Investments
Speciality investments or alternative investments have various applications but most often are for those investors looking for a solution to a unique need or challenge. Examples of speciality or alternative investments include:
Hedge Funds *
Investments that use strategies only suitable to accredited investors
Limited Partnerships *
Offered through existing referral arrangements in place with FundEX Investments Inc.
Labour Sponsored Investment Funds *
Investments in new Canadian companies in exchange for tax credits.
Segregated Funds *
Investments that incorporate insurance and principle guarantee features.
*Investors that qualify to purchase hedge fund units should be aware that hedge funds often engage in leverage, short-selling, arbitrage, hedging, derivatives, and other speculative investment practices that may increase investment volatility and possibly loss. Hedge funds can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, and often charge high fees that can erode performance. Additionally, hedge funds may involve complex tax structures and delays in distributing tax information. While hedge funds may appear similar to mutual funds, they are not necessarily subject to the same regulatory requirements as mutual funds. Investors should always review the Offering Memorandum that is provided when purchasing hedge fund units and discuss the unique features of each hedge fund product with their advisor before an investment is made.
*Alternative investments have the potential for increased risk over more traditional investments. Please click here for important information on alternative investments.
For more information on any of the above, please contact: [email protected]