A Program Deep Dive
- 1. IPC Private Wealth Program @ Work
- 2. Table of Contents 1. High Net Worth Market Opportunity 2. Refine Your Client Segmentation Strategy 3. Why IPC Private Wealth 4. Comparative Facts: Mutual Funds and UMAs 5. Portfolio Management Team – An Extension to Your Team 6. Your Opportunities 1. House holding for Wallet Share Increase 2. Cash flow/income management 7. Costs 8. IPC Private Wealth Total Client Experience 9. Testimonials 10. Next Steps
- 3. High Net Worth Market Opportunity
- 4. The Canadian High Net Worth Market
- 5. Why IPC Private Wealth
- 6. Why IPC Private Wealth Evolve and grow your business – focus on High Net Worth Clients Regulation is driving changes - CRM II Expand your offering and target a new a market space Add a discretionary wealth management service to your platform – one previously beyond your direct reach Target a growing, yet underserved market space – high net worth investors Expand wallet share of an existing client’s investable assets Attract more referrals and reach to new clients
- 7. Comparative Facts: Mutual Funds and UMAs
- 8. Evolve and Grow A UMA allows you to offer your clients a sophisticated private investment portfolio through which they can own a variety of investment vehicles all within a single account – one that is regularly rebalanced to keep it aligned to their objectives.
- 11. Portfolio Management: An Extension to Your Team
- 12. Portfolio Management Role As an extension to your team, the Portfolio Management Team will: 1. Construct and optimize your portfolio offering effectively and efficiently using a Unified Managed Account (UMA) structure. 2. Give your clients access to a wide variety of investment opportunities - separately managed accounts (SMAs), mutual funds, exchange traded funds (ETFs), fixed income securities and alternative asset class investment opportunities such as tail risk protection strategies. 3. Monitor your portfolios using the expertise of an Overlay Portfolio Manager. The Overlay Portfolio Manager will monitor the daily trading activities within each account, and provide oversight to tailor and manage tax strategies for each client’s portfolio.
- 13. 4. Evaluate, research & monitor asset allocation trends, new investment opportunities, and market trends using technical research data from an independent portfolio modeling service provider. 5. Go beyond routine portfolio rebalancing, which is aimed at keeping your client’s asset allocation strategy aligned to their investment objectives. 6. Research, select & monitor the investment specialists on our roster. Through research, the Team will ensure that the investment specialists are well matched to complement each other within a portfolio. Through rigorous monitoring, we will ensure each investment specialist stays true to their mandate. If necessary, an investment specialist may be replaced. 7. Efficiently manage cash flow strategies for your clients while remaining cost effective in our approach using the IPC Private Wealth Cash Flow Account. 8. Provide strategies to consolidate small accounts such as TFSAs or RESPs to lower a client’s overall investment costs. Portfolio Management Role
- 14. Your Opportunities: Household Client Assets – Increase Wallet Share Cash flow & Income Management
- 15. For qualified clients, you can consolidate smaller family related accounts (e.g. TFSAs, LIRAs, LRSPs or Joint Open accounts) under the IPC Private Wealth umbrella to offer your client a more attractive cost structure overall. To consolidate smaller accounts, you can leverage any of the Program's single solution Counsel Series P portfolios, developed exclusively for this Program (for accounts below $50,000), or the IPC Private Wealth Series P Portfolios (for accounts below $250,000). Why Take Advantage of this Program Feature? Simplicity in the management of overall family accounts It allows you to consolidate family assets and offer your client a comprehensive view of their overall investments through a single account statement. Lower costs based on higher asset size It streamlines and potentially lowers a client’s overall cost of investing. Each account holder in the family will enjoy a single Program Fee, per account, based on the family's overall assets. Eliminate trustee fees It allows you to offer cost savings. Any account held under the IPC Private Wealth umbrella is free of trustee fees. Household Accounts House holding - Opportunity to Increase Wallet Share
- 16. Cash Flow Management / Income Strategy – Simplify For clients who wish to draw regular cash from their investment account, we recommend the IPC Private Wealth Cash Flow Account. This account can be used in tandem with any registered or non-registered IPC Private Wealth Portfolio solution to give your clients a cost effective strategy for their overall plan. Benefits of the IPC Private Wealth Cash Flow Account: • More efficiency – Provide your clients with an efficient and convenient solution to manage both their investment and cash flow needs – Set cash flow payments at a frequency that is desired by your client • More cost effective – Offer your clients the opportunity for lower transaction costs by minimizing trades for the purpose of cash flow generation and eliminating unnecessary portfolio rebalancing • More Simplicity – Set-up the IPC Private Wealth Cash Flow Account in tandem with your client's core IPC Private Wealth portfolio using a single NCAF – Eliminate the need for an external account outside the Program for cash flow management • Improved opportunity for asset consolidation – Keep your client's assets within the IPC Private Wealth program – Provide consolidated reporting to reflect their overall investments on a single consolidated statement • Maintain liquid & stable investments for cash flow management – Keep your clients invested in a stable, liquid investment until the point at which they need cash flow – Maintain the character and profile of a client's core investment solution
- 17. IPC Private Wealth Portfolios
- 18. Cash Flow Portfolio 3. Your IPC Private Wealth Portfolios IPC PW Core Plus Fixed Income 59.0% North American Dividend 13.0% Global Dividend 11.5% Timbercreek Global Real Estate 8.5% Global Alternative 4.0% Global Small Cap 3.0% IPC Cash 1.0% Corporate Bonds 58.0% Global Fixed Income 22.0% High Yield Fixed Income 20.0%
- 19. Diversified Balanced Portfolio 3. Your IPC Private Wealth Portfolios IPC PW Core Plus Fixed Income 39.0% North American Growth 10.0%North American Value 10.0% Global Small Cap 10.0% International Growth Equities 8.5% International Value Equities 8.5% Global Alternative 8.0% Global Real Estate 5.0% IPC Cash 1.0% Corporate Bonds 58.0% Global Fixed Income 22.0% High Yield Fixed Income 20.0%
- 20. Focus Growth Portfolio 3. Your IPC Private Wealth Portfolios IPC PW Core Plus Fixed Income 19.0% Global Small Cap 15.0% North American Growth 14.0% North American Value 14.0% International Growth Equities 10.0% International Value Equities 10.0% Global Alternative 10.0% Global Real Estate 7.0% IPC Cash 1.0% Corporate Bonds 58.0% Global Fixed Income 22.0% High Yield Fixed Income 20.0%
- 21. Program Cost
- 22. • The Program Fee* has two components: – Cost of Management – Administrative (Advisor) Fee • Fees are calculated daily, and charged monthly based on the client’s holdings • Each account is charged “its own” schedule • Costs may be tax deductible for non-registered plans • Trustee fees are waived • Trade costs are charged at $9.95 per trade. These costs are passed through from NBCN • Embedded Management Fees of any ETF holdings . Costs * Subject to applicable taxes.
- 23. What the Cost of Management Covers PORTFOLIO REBALANCING REPORTING & COMMUNICATION OPERATIONAL OVERSIGHT TAX LOSS HARVESTING ASSET CUSTODY & RECORD KEEPING ACCESS TO LEADING MANAGERS OVERLAY PORTFOLIO MANAGEMENT PORTFOLIO CONSTRAINT MANAGEMENT PORTFOLIO DESIGN OPTIMIZATION
- 24. Cost of Management The management fees for the Program are determined based on several factors, including: The size of your client’s assets under management: • The larger the account size, the lower the cost of management given economies of scale. This is why many investors consolidate their holdings into a UMA account. The types of investments selected for your portfolios: • An active portfolio management strategy is more costly compared to passive portfolio management strategy. Through active management, an investment specialist aims to add performance value that is over and above their respective benchmarks and costs, while passive managers simply aim to model the performance to the overall indices.
- 25. The Advantage of Active Management • We combine active investment management styles with an active overlay management strategy in the management and monitoring of the IPC Private Wealth model portfolios • In a recent study*, we found that actively managed portfolios offered significant performance advantage relative to passive ETF portfolios • e.g. PW Income & Growth model with a $500,000 investment * Source: IPC Portfolio Management study; July 2014 1 Year 3 Years 5 Years IPC Private Wealth Portfolio 17.21% 11.22% 12.75% Passive Portfolio 14.70% 8.88% 10.69% ‘Cost’ of IPC Private Wealth Management Fee Premium -0.32% -0.32% -0.32% Performance Benefit +2.51% +2.34% +2.05% Net Benefit (%) +2.19% +2.02% +1.73% Net Benefit ($) +$12,550 +$42,511 +$80,243
- 26. Transaction Costs Before recommending a portfolio, it’s important to understand a client’s cash flow requirements and evaluate the implications of trading fees based on the following factors: Your Client’s Portfolio Activity • More frequent contributions and withdrawals in a portfolio will lead to portfolio rebalancing, which will in turn lead to higher trading costs • A client who needs frequent withdrawals may need a different solution than a ‘buy and hold’ investor in a similar sized portfolio • For clients who expect to have frequent cash flow requirements, consider using the IPC Private Wealth Cash Flow Account to minimize rebalancing and unnecessary trade costs Your Client’s Portfolio Size • Trading costs have a relatively smaller performance impact on accounts that are of a significant size • “Smaller” accounts should not be invested in SMA solutions with individual stock positions, as these costs can become more significant
- 27. Total Client Experience Tools
- 28. Deliver the Total Client Experience Communication tools to support you through each step of the client engagement process
- 31. On-going Reporting & Communication
- 32. Your Next Steps To be fixed based on new accreditation process
Editor's Notes
- #7: Level up your offering and target a new a market space Add a brand new wealth management service to your platform with a high net worth service – one previously beyond your direct reach Target a growing, yet underserved market space – high net worth investors Magnify your value to clients and strengthen relationships Adapt your offering as your client’s wealth management needs evolves and financial status grows – go beyond mutual funds Nurture, grow and deepen existing client relationships Create client stickiness – be armed and ready to be proactive with your clients Entrench your value as an investor’s Advisor of choice
- #13: As an extension to your team, the Portfolio Management will: 1. Construct and optimize your portfolio offering effectively and efficiently using a Unified Managed Account (UMA) structure. A UMA allows you to offer your clients a sophisticated private investment portfolio through which they can own a variety of investment vehicles all within a single account – one that is regularly rebalanced to keep it aligned to their objectives. Give your clients access to a wide variety of investment opportunities - separately managed accounts (SMAs), mutual funds, exchange traded funds (ETFs), fixed income securities and alternative asset class investment opportunities such as tail risk protection strategies. 3. Monitor your portfolios using the expertise of an Overlay Portfolio Manager. The Overlay Portfolio Manager will monitor the daily trading activities within each account, and provide oversight to tailor and manage tax strategies for each client’s portfolio.
- #23: The cost of investing in IPC Private Wealth is disclosed as an all inclusive fee, known as the Program Fee. The ‘Program Fee’ in made up of two components, which are the Management Fee and the Administrative (or Advisor) Fee These costs are calculated daily, and charged to the client portfolio each month, based on their holdings. It is important to note that each account is charged “its own” fee schedule, but the rate for each account is based on the overall family asset size managed under IPC Private Wealth. It is also important to keep in mind that there are separate trading costs that will be incurred for all transactions within an account. We will discuss trading costs a little more later. Fees that are incurred for non-registered plans may be tax deductible. Investors are encouraged to explore these tax deductions with their accountant. Once again, as a reminder, the trustee fees for all registered accounts held within IPC Private Wealth will be waived.
- #26: The Private Wealth model portfolios combine active investment management styles with an active overlay management strategy. Some competing investment options may appear less expensive, but a recent study* highlights the performance benefit that can more than make up for the fee difference. Over time, your client’s net performance – or bottom line – is what is most important.