You can expect all the regular services that you would get from any financial advisor: investment advice, regular reporting (on paper and/or online), and tax reporting as required. You should expect this from anyone you work with.
In addition to that we hold regular review meetings, provide tax advice, income creation, charitable giving and much more. We review your situation regularly and will hold meetings with you to keep you informed.
There aren’t a lot of promises that we can make in this industry, but we can make these ones…
We have many specialties and are exceedingly competent in all areas of financial planning, but a few of our favourite areas of expertise are…
There are lots of reasons that you will find sprinkled throughout this website, but at the end of the day, we believe that it boils down to three simple things.
If you look hard, we’re sure that you will be able to find financial advisors who are “smarter” than us. By the same token we’re sure that you will find some cheaper than us. But we don’t think that you’ll find any that are both “smarter” and cheaper than us. And certainly, none that you can trust more implicitly than you can trust us.
No. That’s something we used to do, but as profitable as it was, for many reasons (primarily the two noted below) we have chosen to give up that line of business.
The Canada Revenue Agency (CRA) took steps a few years ago to make tax preparers their eyes and ears. Tax preparers are now required by law to report suspicious activity and can be fined heavily if they know or should have known of any improprieties when it comes to income taxes.
We choose to work for you, not CRA! We always encourage our clients to be honest with CRA, but our job isn’t to work for CRA, it’s to work for you. Since we don’t prepare income taxes, what you tell us is in full confidence… and that’s key.
As financial planners, it’s critical that we have a detailed and thorough knowledge of your financial situation and so we want to remove any barrier to full disclosure from our clients. Again, we encourage you to be completely forthright with your income tax return, but no matter what we want you to know that you can always be 110% honest with us.
Secondarily, many accountants refer their clients to us, and we don’t ever want to be in a perceived conflict or competition with them.
Although we won’t do your taxes for you, we can let you know what tax documents to expect for the accounts you might have with us.”
The Fine Print: As we are not lawyers, the concept of privilege does not apply to us, so while we take your confidence seriously, know that a court can compel us to disclose information and that certain activities such as suspected money laundering can and will be disclosed to the authorities.
We can help you with tax planning and tax alpha to help you get the most out of your tax returns every year.
YES! Tax planning is a very large part of what we do. There is a concept known as “tax alpha” – in simple terms the idea you can generate excess returns by being tax efficient. Or put another way, that a tax efficient 4.5% is worth more than a non-tax efficient 5.00%. Tax alpha is key to what we do.
We aren’t tax preparers (see above), but we do bridge the gap. When Arnold Machel started Visionvest, one of his frustrations with the industry as a whole was the fragmented and often conflicting advice he and others would receive. For the same problem, an accountant would provide different and contrary advice to an investment advisor who would provide different and contrary advice to an insurance advisor, who would provide different and contrary advice to a lawyer. As Certified Financial Planners we seek to look at problems holistically and gauge the importance of various factors to come up with the 95% best all around solution rather a perfect investment solution that’s terrible from an estate or legal or tax perspective. We listen and then we advise.
A small number of good advisors have clients send in their income tax notice of assessment each year, so that the advisor can note the client’s income, RRSP limit, etc. We take that one step further. We arrange (with your permission of course) to be able to review your tax situation directly with CRA. That way, without you needing to lift a finger each year we are able to do a cursory review of your return as well as make note of all the bits of information that we feel are important to give you the best advice possible.
Investment fees aren’t really all that complicated, but there are many different variations. That’s why explaining them can be complicated. Before you buy anything from us, we’ll explain in plain language what you can expect.
We’ll walk you through the main types of fees here. It’s best to find out what types of funds you have, so that you can know what YOUR fees are. It’s also possible (although unlikely) that you may own funds with an entirely different fee structure than the main types listed below.
First off, before we go anywhere else, understand that ALL funds have a Management Expense Ratio (MER) which is the percentage that the fund pays out in expenses as a proportion to their assets. Technically these aren’t fees, they are expenses, but whether they are a fee or an expense doesn’t change the fact that they reduce your net return. For example, a fund may have a 2.5% MER meaning that it has paid out 2.5% of its assets to various places, such as investment managers, trustees, brokerage houses, your investment advisor, taxes, etc.
If a fund earns 10% in the year and pays out 2.5%, then it will report a 7.5% return. Had you held $100,000 in that fund for the full year, it would have grown to $107,500.
These days more and more fund companies are offering rebates of the MER to investors on assets above a certain level. At this stage the asset levels required and the criteria for grouping are not consistent, but most companies offer some sort of householding (lumping family members into a group to qualify) and tiering (the larger the amount the larger the rebate).
A word about fine print. Every fund is unique, and you need to read the prospectus to understand the details. For example, it is common these days for funds to have a 30-day or 90-day short term trading fee, so even though in the description of Front End or F-class funds below we note that there is no lock-in period, there may be additional fees in some unusual circumstances.
That said, the most common fee types are…
Deferred Sales Charge (DSC) Funds
Most institutes no longer sell this type, but they started in the ‘80s and became the most common sales option up until 2020, so there are still many of these around. With this type of fund, generally…
Front End (FE) Funds
Prior to the advent of DSC funds, these were predominantly sold with a sales charge up to 9%. Today, with FE funds, generally…
Fee Based (F-class) Funds
These are still the least common but are a growing minority. The are used more commonly in higher net worth scenarios. With fee-based funds you don’t pay a commission to buy them or any kind of sales charge to sell them and there is generally no lock-in period. They offer much lower hidden, embedded costs (MERs) and are much more transparent in that the portion paid to the advisor is a separate deduction from the account value. After factoring in both the MER and the advisory fee, they may not always be cheaper than FE funds above, but they are more transparent and often will lead to savings.
Take a look at this short video to learn about the Value of Advice.
For more on this topic, check out this article (originally published in the Light Christian Magazine), but in short, while there may be a place for gold for purposes other than as a long-term investment, my thoughts echo those of Warren Buffet’s. He had this to say about it in his 2011 Berkshire Hathaway annual report (and while you’re reading, note the price of gold then compared to now)…
"Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce — gold’s price as I write this — its value would be about $9.6 trillion. Call this cube pile A.
Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
A century from now…
Admittedly, when people a century from now are fearful, it’s likely many will still rush to gold. I’m confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B."
Currently we have clients on 5 of the 7 continents – we wish we could say we’ve felt the rains down in Africa or broken the ice in the Antarctic, but that just wouldn’t be true. Not that we’ve been on all the other continents – we just serve clients there.
Technology has made it very easy to work with anyone, even while separated by great distances. Securities regulations prevent us from taking on new clients who do not reside in Canada, but it’s no problem working with existing clients who move out of the country. It’s important that you switch to a capable advisor BEFORE making the move though. After the move it may be too late.
Yes – It’s a fantastic deal… or at least BC’s program is. For more details check out this article of mine regarding Property Tax Deferral originally published in the Light Christian magazine.