Our philosophy
Our philosophy is based on a few key ingredients.
Service
The average Canadian financial advisor, planner, broker has about 350 client households with which he or she deals. If we assume a 40 hour work week with three weeks annual vacation and each week comprised of 15% administrative tasks, 35% research and planning and 50% meeting with clients, these advisors can devote 2.80 hours per year to each of their clients.
At present, we have approximately 50 active client households with whom we work. Having a small client base allows us to spend a great deal of time with each client, to provide in-depth planning and strategizing and to respond to clients quickly and efficiently. For the benefit of our existing clients, we do not take on every prospective client and we plan to cap our client base at approximately 60-70 client households.
Philanthropy
Each year, we direct a minimum of 5% of our net annual corporate revenue to charitable organizations. For 2012, the principal beneficiaries of this money are:
In addition, we support micro-finance through Kiva. At present, we’ve funded approximately 35 Kiva loans.
Process
For most people, the desire to outsource their financial planning stems from (a) a lack of time, (b) a lack of organization and (c) a lack of interest. Financial planning is not ‘rocket-science’ and anyone who says they have a unique system to beat the market or a tried and true method to improve returns is not being honest. We help people organize their financial lives, educate them on some of the basics of financial planning which in turn helps them to improve their monthly cash flows, plan for expenditures and retirement and free up some of their valuable time. We do this by being process driven – if we’re organized, we can help you be organized too!
Fees
How and how much you are charged for your financial planning services has a direct impact on your bottom line. In Canada, most financial offices charge commissions, which can range as high as 5%. We charge a fee for our services which is considerably less than this. Clients can work with us in one of two fashions: (a) contract us to provide financial planning advice only, for which we will draft a customized set of reports specific to your situation and invoice you a fee for these reports; or (b) hire us to manage their investment assets and provide financial planning advice, for which we charge a monthly fee.
We feel charging a fee for our service aligns our interests with yours:
- Transparency – you can see what you pay which allows you to measure value
- Removal of bias – we aren’t paid commissions which means we never have a conflict over product choice
- Reduction of cost – in general, our total fee is less than costs associated with a commission platform
- Tax deductibility – in some cases, fees can be deducted on your tax return
Investments & Markets
We believe that:
- In general, mutual funds are costly, complicated investment vehicles which over the long-term rarely perform as well as the markets. Our use of them is extremely infrequent.
- No one can outperform the market.
- Fees matter and, as such, we strive to provide quality service at a reasonable price. Some of our fees are tax-deductible and all are transparent.
- We aim to follow, as best we can, some of the time-proven strategies developed by Warren Buffett. We use a number of exchange-traded funds in our investment choices, a few blue-chip dividend producing stocks and a number of bond strategies.
- Our investment strategy is driven principally by the needs and goals of our typical client and can best be described as conservative growth. Our rolling three year consolidated average annual rate of return (total book of business) from 31 Mar 09 – 31 Mar 12 has been 10.60% per annum, net of fees.*
- We use exchange-traded funds to access global and bond markets; we use blue-chip dividend stocks to participate in domestic equity markets.
Practice Areas
We are not experts in every area. We have strong partnerships with other professionals who provide advice on subjects including accounting and taxes, legal issues and debt management. We prefer to complete full financial plans for clients which may include touching on the areas of retirement income planning, asset management, cash flow improvement, estate planning, debt reduction, risk management and tax reduction.
