Investment Approach

Setting Up A Portfolio

Once a client’s risk tolerance has been assessed and the appropriate mix of assets has been determined, the next step is selecting the best investments.  Because the market is constantly in flux, and mutual fund performances fluctuate, there is obviously no such thing as a “best” investment product over time.  That said, a financial advisor must select investments that always provide the best prospect for growth, at a reasonable amount of risk, and which represent the best value to a client’s portfolio. 

Core-Tactical Portfolios

Every individual client comes to us with a unique set of circumstances, level of investment knowledge and experience and different goals.  There is, however, one common thread between all of us and that is the desire to protect capital.  Historically, investors have tended to use a simply buy and hold strategy in managing their assets. Even if they are disciplined enough to ensure that the asset allocations remain consistent with their objectives and risk tolerance over time, periods of extrement volatility can erode their portfolios. Unfortunately, the changes taking place in today's global capital markets suggest that higher than normal volaility will probably be here to stay for a while. For this reason, ou preferred method of investment management is a core-tactical approach. 

The core of the portfolio is put together in strict accordance with the client’s horizon, objectives and risk tolerance and can consist of individual fixed income securities, stocks, Exchange Traded Funds ( ETFs) and, in limited situations, mutual funds. Typically, the core segment will represent somewhere around 75-80% of the individual's portfolio.

The remaining tactical segment of the portfolio is managed on a shorter-term horizon, based on our expectations of performance in fixed income and equity asset classes, domestic and global. In situations where certain assets appear overvalued or undervalued, we will underweight or overweight that asset in the tactical portfolio. And in extreme situations, where the overall equity market poses excessive risk over the near-term, we will build cash positions in the portfolio. Over time, the objective is to add value to a client's overall portfolio, while not exposing a majority of the portfolio to undue risk.

Fee-Based Advising

For decades, a financial advisor has typically been paid commissions on individual security trades and trailer fees and upfront commissions on mutual funds.  While this practice is still followed today, the problem is that it can put the advisor on the opposite side of the table from their client.  Compensation gets linked to how much trading you do and the fee structures of mutual funds, rather than your needs and objectives are.

What we deliver is a fee-based advisory service, where the fees charged are linked to the size of the account’s assets, not the number of transactions. Whether your portfolio is made up of individual securities or managed products, or a combination of both, it doesn’t matter.  When changes are made, we do so because it fits you’re your investment objectives, not because of a commission cheque.  With a fee-based account, the adjustments that are made due to either rebalancing requirements or in reflection of your changing circumstances are covered by the fee charged to the account.  This fee is always transparent and explained fully to the client.

The real value proposition from this approach is that it allows us to deliver a truly holistic financial advisory service, in addition to solely managing your investments.  Timely and regular reviews of your personal financial situation and aspirations enable us to also work on producing well-thought plans for retirement, education funding for your children, will and estate planning, business succession planning, insurance and charitable giving.

Partnership Plus

The fee-based account we predominantly use is called Partnership Plus and it can be used for both tax-exempt and taxable accounts, holding managed products as well as individual securities.  The fee itself is set according to the size of the assets, but in determining this fee we take all accounts from a household into consideration in order to maximize the savings for the client.  Depending on a client’s situation, the fee may also be deducted for tax purposes. 

All managed products purchased within account are done so without trailer fees, which usually means that a client’s all-in fee for a fund (after accounting for the fund company’s direct fee and the Partnership Plus fee) can be less than what the normal management expense ratio (MER) on the fund would be had the client purchased it in a separate account.  Trades in individual securities are done with zero commission up to a maximum number of trades per year, and this too is based on the account’s overall asset size.