How is your advisor compensated?

Like any other professional service, financial advice has a cost.  This is not debatable.  Contrary to what people may think, good financial advice is not free.  Before asking yourself, "how much are my fees?", a more appropriate question is, "how is my financial advisor compensated?" 

The most common compensation models that financial advisors employ are fee-based and commission-based.  Simply put, fee-based advisors are paid directly by their clients while commission-based advisors are paid directly by the investment fund companies.  In an advice-centric industry, the commission-based compensation model is flawed.  Clients are entitled to objective, unbiased advice.  Objectivity is not guaranteed when advice-providers are paid by the company whose product they recommend.

This flaw has been exposed, causing a world-wide review of the financial services industry and how advisors should be compensated.  In Australia, reforms such as the "Ban on Conflicted Remuneration Structures" have been implemented to eliminate potentially biased advice.  In the UK, the "Retail Distribution Review" dictates that fees for financial advice are to be paid by the client, to the advisor.  More and more countries (Canada included) are in the stages of implementing the same rules to reform financial advisor compensation.

At The McClelland Financial Group, we have stayed ahead of the curve.  Since 2004, we have been transitioning our clients from commission-based accounts to fee-based accounts, not in anticipation of the changes inevitably to come, but because it is the fairest way to be compensated for providing financial advice. 

Carlo Cansino, FMA, FCSI, CFP
Senior Financial Planning Advisor
Assante Capital Management Ltd.

Direction

Volatility is returning, what should I do?

If you don't like market volatility, you're not the only one. We manage our clients' investments and we are also investors in the same portfolios, so we feel the same pain. It is not pleasant when our portfolio values decline. However, portfolio managers who are trained and have seen various episodes of market volatility can handle it with more conviction than those who are not trained. In this month's commentary, we will explain how to manage volatility.

Read Full Article Here
By Alfred Lam,
CFA Senior Vice-President and Portfolio Manager, Investment Consulting

The Latest

Canadian Home Price Update: September 2015

Housing prices rose 1% from July to August and 5.4% from last year according to the Teranet-National Bank home price index released this month.

Vancouver, Toronto and Hamilton's prices continue to grow, with Calgary showing a strong gain of 3.9% between July and August.  Toronto prices climbed 1.6% since last month and 8.7% since last year.  With Vancouver showing a growth of 0.6% month-over-month and 9.7% since last year.

"The dichotomy on the Canadian residential market is more obvious than ever," said National Bank's Marc Pinsonneault.

"On one side, 12-month price increases over 8% in Vancouver, Toronto and Hamilton have pushed the Teranet-National Bank national composite index to a near record in August for a sixth consecutive month," he added.

"On the other side, prices in the eight remaining regions have grown over all a mere 0.2%"

It should be noted that Condo prices in Toronto and Vancouver have risen by 5.5% while other homes have increased by more than 10%.

Should you wish to learn more about mortgage solutions, please let us know and we would be happy to put you in touch with mortgage brokers within our professional network.

Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd.

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