Frequently asked questions
f.A.Q. @ N.O.W.
Q: How will my investment experience differ using a Portfolio Management firm as opposed to a mutual fund company?
A: A Portfolio Management (PM) firm will invest your assets inside an SMA (Separately Managed Account) on your behalf – which is a basket of securities tailored to your risk tolerance. In essence, you get your very own, personalized fund. You get to invest directly into companies that have a strong history of dividend yields and long-term growth. You will benefit from a direct relationship with a portfolio manager, a customized portfolio tailored to your needs, lower management fees which are fully tax deductible (for non-registered accounts), consolidated statements and improved reporting from both the custodian and asset manager.
Q: How will my relationship with my Financial Advisor change now that a Portfolio Manager has been added to the mix?
A: Instead of a two-way relationship, you will now experience a 3-way model where you are at the centre while your Advisor and Portfolio Manager work collaboratively to fulfill your financial priorities. Your Advisor continues to be your go-to resource for financial planning and to access other critical financial products in the insurance and lending space. However, investment recommendations will only come from your Portfolio Manager, as will market insights and investing intelligence.
Q: Is my money safe at New Outlook Wealth?
A: To be 100% clear, your money is not held at New Outlook Wealth. We have referral arrangements with 3rd party asset managers, such as BCV Asset Management and/or Harness Investment Management. Both of these firms manage money on behalf of our clients. Your assets, while being managed by these firms, are actually held by custodians that safe-keep your money. These custodians include National Bank Independent Network (NBIN) and Fidelity Clearing Canada. Furthermore, your money is protected by the CIPF (Canadian Investment Protection Fund) to the tune of $1M per account in the case of insolvency of any custodian.
Q: What happens to my investments if my Advisor retires or leaves New Outlook Wealth?
A: Your investments are managed by 3rd party portfolio management firms like BCV Asset Management and/or Harness Investment Management and held by custodians like National Bank Independent Network (NBIN) or Fidelity Clearing Canada. As a result, your investment accounts remain yours and can be re-assigned to another Advisor with New Outlook Wealth at any time at your request.
Q: You are a new firm – what peace of mind can you offer me?
A: While New Outlook Wealth Incorporated is a new firm, its founders are all seasoned industry veterans. In fact, the founding group of advisors represents over 200 years of combined financial industry experience! New Outlook Wealth is an umbrella for a team if independent financial planners. Under this umbrella, our clients gain access to asset management through 3rd party Portfolio Managers with decades of experience, industry-leading digital wealth management, as well as a broad range of insurance and lending products from firms that have been operating in Canada in some cases for over 100 years.
Q: Are any of my investments locked-in or will I be penalized if I decided to leave?
A: While certain registered products may prevent you from accessing assets until a specific time (ie: a LIRA or Locked-in Account) all client accounts are portable and not confined to any of our 3rd party asset managers.
Q: Lower fees sound nice, but how much of a difference can 50-100 bps really make on a portfolio?
A: The difference of lower fees on an investment will vary depending largely on the overall yield (growth) on the portfolio and the length of time the money is managed. For instance, the impact may seem modest in the first year, but over a period of 10, 20 or even 30 years the impact can become enormous. A simple example: if you invest $500,000 with an annualized gross (before fee) rate of return of 7%, your portfolio will grow to about $1,500,000 in 25 years with a management fee of 2.5%. That same investment would grow instead to $1,800,000 in 25 years with a management fee of only 1.75%. This seemingly small fee difference of 0.75% or 75 bps creates a wealth gap of $300,000!
Q: How can I calculate the amount of fees I will be saving from my current investments held elsewhere?
A: Any one of our Advisors will be happy to help you calculate the savings over a specified period of time. Simply put, on a $100,000 account held in mutual funds at a total fee of 2.5% (MER + Advisory Fee) you are paying $2,500 a year in management fees. In contrast, a similar account with a management fee of 1.5% will result in $1,000 a year in fee savings. It’s like earning an extra 1% on your investments without taking any additional risk in your portfolio. Furthermore, management fees from SMAs are fully tax deductible on non-registered accounts, which can add up to considerable additional tax savings compared to mutual funds. These savings are compounded over time, just as increases in investment performance also compound over time. An easy calculator can be found online at https://www.cchwebsites.com/content/calculators/CACompareFees.html
Q: What if I have investments with capital gains or penalties to pay if I move them?
A: There are a variety of ways to manage these issues and both our Advisors and our 3rd party Portfolio Managers are well equipped to help you assess if it makes sense to move those assets from both a tax and fee perspective. Often, a permanent and significant reduction in asset management fees can be an effective way to mitigate or absorb these costs. In certain instances, in-kind transfers can be arranged thus maintaining the accounts as they are until such time as it makes more sense to cash-out and move the assets into new investments.
Q: What if I have investments I wish to hang onto?
A: Our 3rd party asset managers will work with you to protect legacy products or securities. For example, you may currently have significant holdings in a company that has enjoyed substantial gains and you do not want to sell them, or stocks in a firm that you are simply attached to for whatever reason. This information would be shared with the Portfolio Manager to ensure those legacy products are kept intact and not sold or re-invested until your say-so.
Q: Every time my Advisor quits or retires, someone else is assigned my accounts. How can I ensure the revolving door of Advisors ends, NOW?
A: This is an issue that has plagued the financial industry for decades. Advisor churn or turn-over is a major problem for most distribution models, including the banks, insurance, and mutual fund companies. Clients end up in the middle, having to rebuild trust and confidence, and spend time bringing someone new up to date on their plan. While we cannot stop our Advisors from retiring, we do have robust succession planning for our Advisor practices and a desire to retain our clients and help them transition along with us. Typically, this means we pair up Advisors with Associates early on to create a built-in succession plan. We also encourage advisors to partner if they see synergies and want to capitalize on those. This usually boils down to good communications, setting expectations, and ensuring our clients are part of that transition process and not left in the dark or caught off guard.
Q: It seems every time I talk to an Advisor today, regardless of which firm, I get plugged into a conveyor-belt, one-size-fits-all process that seems to ignore my actual needs – the reason why I reached out in the first place. How are you any different?
A: One of our core values at New Outlook Wealth is that idea that all Canadians, regardless of their wallet size, deserve great financial advice. This means our Advisors are all experienced planners – several holding the Certified Financial Planner (CFP) designation – and believe in the power of the financial plan, but also know when NOT to use it. Financial planning is about laying down a roadmap to take you from A to B in the most effective way possible. Sometimes a roadmap is not what you need. Sometimes, you’re not even trying to get from A to B. So what then? Our commitment is to remain client-focused – what you need (or want) is our top priority.
Q: I am not located in or near Winnipeg, Manitoba. Does this matter?
A: No it does not matter – though we invite to you to visit Winnipeg! Quite possibly the most underrated urbandestination in Canada full of warmth, sophistication, and charm. That said, New Outlook Wealth provides planning, advice, and wealth management to clients across Canada. Our 3rd party asset management partners are licensed in every province and our Advisors tend to carry insurance licenses in multiple jurisdictions. From a servicing perspective, our Advisors are all comfortable providing their services and expertise through a variety of media, including email, phone, and virtual meeting platforms like Zoom and Microsoft Teams – something we encourage for those who are unable to meet in person or unwilling to.
Q: This FAQ seems to talk a lot about money. What other products do you offer?
A: New Outlook Wealth provides our clients access to a very broad product shelf to tie into our professional financial service offering and 3rd party referral arrangements. This includes a full suite of risk management and insurance products through over 20 insurance carriers in Canada, such as life insurance, living benefits, segregated funds, annuities, as well as a full suite of mortgage and lending solutions. In addition, our Advisors have access to products and services tailored to business owners, such as employee benefits and group retirement savings plans.