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Three Big Elephants in the Room

Three Big Elephants in the Room. MFDA & IIROC. Embedded & Exposed Fees. Nominee & Client Name. Three Big Elephants in the Room. MFDA & IIROC. Embedded & Exposed Fees. Nominee & Client Name. George Aguiar President and CEO, GP Wealth Management. Patti Best

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Three Big Elephants in the Room

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  1. Three Big Elephants in the Room MFDA & IIROC Embedded & Exposed Fees Nominee & Client Name

  2. Three Big Elephants in the Room MFDA & IIROC Embedded & Exposed Fees Nominee & Client Name George Aguiar President and CEO, GP Wealth Management Patti Best SVP Client Experience, Mackenzie Investments Mark Kent President, Portfolio Strategies John Webster President, Queensbury Securities

  3. Nominee & client Name

  4. Client Name Accounts versus Nominee Name • Transparent Trustee Fee • Quicker trade execution/less cumbersome trading • No trade forms • Dealer/Advisor have higher level of control on the account • Direct Reconciliation • Fund redemption settles to cash • Dealer/Advisor has direct control of client service experience • Dealer/Advisor controls trading • Embedded Trustee Fee • Potentially limits investment options • Generally requires paper trail • Dealer/Advisor have limited control on the account (example, Transfer out) • 3rd Party Reconciliation • Fund redemption can settle to clients bank account • Dealer/Advisor has partial control of client service experience • Dealer/Advisor at risk of direct trading

  5. Nominee & client Name

  6. Embedded & exposed fees

  7. A number of factors may threaten the commission-based model of the financial advisor. Meanwhile the fee-based model adoption is slow to emerge. Factors threatening the traditional commission based model Other jurisdictions are regulating a fee for service approach Revenue stream volatility Media and regulatory focus ETFs and ETF portfolios • ETFs are an increasingly important asset class and , for the most part, do not have compensation embedded in their fee structures • Since the financial crisis, there is increased scrutiny placed on advisor remuneration and value delivery • For a maturing advisor base, predictable revenue in a fee-based model represents an attractive degree of stability • Britain and Australia have taken steps to eliminate commissions as a form of advisor remuneration Fee-based model slow to emerge in the financial advisor channels in Canada, meanwhile full-service brokers lead the charge Share of assets in fee-based programs Advisor fee-based adoption rates *Includes non-discretionary (FBB) and discretionary fee-based programs (AM, IHMW and SMW) Source: Investor Economics Retail Brokerage Report and Distribution Advisory Service; FA-IIROC includes MFDA firms with an IIROC platform e.g. Assante, Manulife, Peak.

  8. Embedded & exposed fees

  9. Mfda & iiroc

  10. END

  11. From Wikipedia "Elephant in the room" is an Englishmetaphoricalidiom for an obvious truth that is either being ignored or going unaddressed. The idiomatic expression also applies to an obvious problem or risk no one wants to discuss.[2] It is based on the idea that an elephant in a room would be impossible to overlook; thus, people in the room who pretend the elephant is not there have chosen to avoid dealing with the looming big issue.

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