Archive for the ‘Blog’ Category

No ‘one-size-fits-all’ when switching a financial advisory practice to fees: Special to The Globe and Mail

Monday, May 6th, 2019

More financial advisors are moving to a practice focused on fees not only because of the erosion of commissions on financial products that’s squeezing profit margins, but by an increasing demand from investors seeking advice on increasingly complex portfolios and do-it-yourselfers who want a second opinion.

A recent study from Boston-based asset and distribution analytics company Cerulli Associates shows three-quarters of investors who use advisors prefer a fee-based arrangement. Cerulli’s research also reveals that the percentage of assets managed under a fee-based arrangement rose to 45 per cent from 26 per cent in the United States between 2008 and 2017. The trend is expected to continue as advisors “increasingly position themselves as clients’ partners in pursuit of long-term goals rather than transaction facilitators.”

As fee-based arrangements become increasingly popular, advisors must choose what type of fee-based practice to provide. Options range from a flat fee for advice to charging a percentage based on assets – or a mix of both.

“There is no one-size-fits-all approach,” says Norm Trainor, president and chief executive officer of the Covenant Group in Toronto, which provides coaching to advisors on how to grow their business.

Advisors who have adopted a compensation structure focused on fees provide big-picture financial advice and help manage a client’s portfolio as well as relationships with other wealth-management professionals, such as lawyers and accountants, he adds.

“[Investors] need someone to bring that all together,” says Mr. Trainor. “Typically, if an advisor is quarterbacking those relationships, it’s fairly time intensive. The fair-exchange of value isn’t in the risk-management or investment products, it’s in the formulation of the plan and the implementation of the plan. And so, it makes sense to charge a fee because that work is extremely valuable.”

Jason Heath, an advice- and fee-only certified financial planner at Objective Financial Partners Inc. in Toronto, charges his clients an hourly fee or flat dollar amount and doesn’t recommend financial products or receive commissions. He prefers the objectivity of this model.

“When I give advice to a client, it’s based solely on my opinion, based on what’s the best advice for them and personalizing it based on their financial situation,” Mr. Heath says. “I never have to worry about looking clients in the eyes and feeling like I’m giving them an honest answer. No biases. No conflicts of interests. I don’t accept referral fees; 100 per cent of my income comes directly from my client and it’s predetermined in advance. I think that’s pretty cool in an industry in which there are a lot of conflicts of interest.”

Furthermore, the increase in do-it-yourself investing through online discount brokerages and robo-advisors has investors hungry for independent advice, Mr. Heath says. “Just because they manage their own investments doesn’t mean they have all the answers.”

In addition, some investors also want a second opinion on what their advisors are recommending – particularly as investing has become more complex. “There is more demand for [financial] planning now than ever,” Mr. Heath says, citing the baby boomers who have accumulated assets, looking to retire on their nest egg and figure out ways to pass it down to the next generation.

“It’s more than just picking the right mutual fund now,” he says. “It’s tax and estate planning, when to start pensions, how to draw down on assets.”

Vela Wealth Management in North Vancouver has three revenue streams from the services it provides: fixed-fee financial planning, an annual retainer and commissions from products such as insurance that clients purchase through the firm.

“Fee-only makes sense when someone just wants a plan – and to make sure it’s on track,” says Jason Boudreau, Vela’s principal and founder.

The goal of Mr. Boudreau’s firm is to be more involved in the execution of the financial plan, including product implementation, and to build an ongoing relationship with clients.

“We are big on charging based on complexity,” says Mr. Boudreau. “We feel our intellectual capital – our knowledge, our experience, our expertise, our connections – is what we are able to leverage highly for our clients. The more complex the situation, the greater that intellectual capital is required.”

Regardless of the model advisors adopt, Mr. Trainor says they must be transparent with clients about how they generate fees. “Transparency is critical. The client has to understand it and it has to be agreed upon up front.”

Advisors making the switch to a fee-based model should also communicate the move clearly to existing clients – including why they’re worth the money.

“You can’t just say to your client one day, ‘You know that work we’ve been doing these past years? Now I’m charging a fee for it,’ ” Mr. Trainor says. “There has to be a demonstrated value that you’re bringing over and above what you’ve done historically. People often understand there’s a price attached to that … People will be willing to pay when they feel they’re getting value.”

Legacy Is Yours to Lead

Thursday, May 2nd, 2019

Traditional attitudes towards estate planning often leave individuals and families grappling with secrecy and procrastination – important but not urgent items to deal with. Afterall, who wants to dwell on their own demise or ill health?

We believe leaving legacy is positive both for those giving, and those receiving, if planned for in advance, well-communicated and executed properly.

Let’s start with some facts: the leading edge of the Baby-Boomers, the wealthiest demographic in history, starts turning 75 this year.  As they are passing on and leaving their wealth to the next generation, the largest inter-generational wealth transfer of all time is taking place.  In Canada alone, $205 million dollars moves per day from one generation to the next and it is expected to stay at this rate for the next 10 – 15 years. This is a staggering statistic, yet incredibly, nearly 50% of Canadians do not have a Will.  How are those passing on their legacies preparing themselves, and those receiving these legacies, to handle them with such a low estate planning engagement rate?

Legacies are about more than money. They are about family, values, continuity, giving and community. Rooted at the foundation of these principles is communication within a family and its stakeholders. Those leaving legacies can prepare those receiving them in advance for what is coming and why. Empowerment is key and we all have so much to give. Diminishing health is also an important consideration because those granted power of attorney need to know what assets are available to look after the grantor, as well as what their care preferences are. This is crucial to maintaining loved ones’ quality of life in their final years.

Countless individuals and families find out what is, or is not, being left to them, only once a person leaving a legacy is gone. Given the traditional attitudes to estate planning, it is little wonder that there are so many estate litigation lawyers ready to launch into battle on aggrieved beneficiaries behalves. Fighting these cases is costly, time-consuming and destructive to families and their wealth. It is also entirely unnecessary when proper planning and inter-generational communication is at the forefront of a family’s values.

How prepared are you and your family? Visit our website and take the Willing Wisdom Index to find out.  Embracing the Willing Wisdom Index can help achieve a well thought out Will, confidence in granting Powers of Attorney and Health Care Directives, as well as lower legal fees.

At VELA Wealth, we believe that legacies are powerful, positive and can carry momentum intergenerationally. Preparing your heirs for a world without you is one of the greatest gifts you can give.

The 5 C’s of Family Wealth

Friday, February 15th, 2019
As we approach Family Day, we often become nostalgic about our familial ties. Some relish time with loved ones, some think of those who have left them, others still about the tenuous bonds that they wish to mend. Family Day acts as a simple reminder that a sound family-focused wealth plan must extend beyond yourself. Below are some of the ways that stewardship of family wealth can succeed.
Connect to Your Core
No family wealth plan can begin without a focus on the core. Ask yourself questions, lots of them. These probing questions should focus on what concerns you most: your values, goals, ambitions, hopes, fears and motivations. Think beyond yourself to your family, business, community and philanthropy to truly get to the core of your vision and alignment will follow.
Communication is key in any relationship, whether that be family, personal or business. Open communication allows the opportunity to share your core values and wishes, while also hearing what your partners and family members have to say. Once all perspectives are on the table, one or more parties may end up adjusting their original positions, coming to new common ground.
Commit to your vision. Built on the foundation of your beliefs, values and aspiration, this vision for your family plan must be worked towards day in and day out. Work with your advisors at all levels to ensure you are optimizing your plan, making the best choices and taking the most effective steps to achieve your vision.
Expectations often result in disappointment when parties believe they are entitled to or expecting a particular outcome, that does not come to pass. When these expectations are not met, resentment sets in and conflict often arises. Many families attempt to avoid this conflict by not discussing particular issues or clarifying expectations in advance. If a conflict is going to arise, it will come whether now or later; however the sooner you clarify such concerns, the sooner your family unit can re-align to their common goals.
Coach your children and other vested parties around how to steward the family wealth plan. This coaching is a process and the journey should begin as early as possible to allow your family to understand the family legacy, their part in it and how they can support future outcomes.

What Does The Next 1-5 Years Look Like? And How Does That Influence Decision Making Now?

Thursday, October 25th, 2018

If we had had that dialogue two to three years ago, there was arguably, little to be concerned about. We enjoyed ultra-low interest rates, a favorable taxation environment, most asset prices still looked set to rise, political interference at the federal, provincial and even international levels seemed minimal and pro-business and finally, confidence was high.

Contrast that situation to now and we are facing a transformed business and political environment and possibly, the beginnings of a less comfortable economic climate, with threats to productivity and confidence from multiple angles. If you knew three years ago what the prevailing conditions would be like now, would you have made the same investment decisions back then?

I am not predicting that we are facing a situation akin to 2008, or that a down turn is imminent, far from it.  What I am advocating for is being prepared for the possibility that asset prices can be dynamic beyond expectations and that putting one’s wealth in a position where its owners can create the direction, rather than be driven by it, is what is key to long term success in wealth generation and preservation.

I can recall many times in the past few years where clients have chosen not to follow sound planning advice provided by advisors they appointed to create outcomes such as de-risking, optimized tax structures and to diversify wealth to achieve long-term growth and stability for generations. There is often so much noise that competes with sanity.

In general, allocating wealth to long-term investments and receiving growth is about being able to stay the course, as well as take advantage of new opportunities that present themselves along the way.

In 2009, investor sentiment was low. In the years that have since followed, long-standing and prudent Canadian insurance companies have experienced incredibly high demand for Participating Whole Life insurance contracts as they were one of the only assets where values or growth did not decrease because of the financial crisis.  Why did it take the events of 2008 to trigger a collectively larger focus on investing in tax efficient and stable asset classes?  Those with Whole Life policies in force long before 2008, would likely have had cash surrender values that could have been leveraged to make subsequent investments in newly undervalued assets, the value being created by fearful investors, or those forced to sell.

Those that aren’t prepared or misunderstand risk, create the opportunity for those that are prepared and can take calculated risks at their discretion.

Given these points and looking ahead to the next one to five years, are your investments adequately diversified? Is your tax planning optimal? And, do you know where in your portfolio you will look to take advantage of opportunities that may present themselves?

New Passive Income Rules

Tuesday, July 17th, 2018

The 2018 federal budget clarified rules around passive income for Canadian Controlled Private Corporations. The threshold for passive income starting $50,000 has now made holding life insurance within the corporation even more important. has created this article outlining several options for life insurance policies such as holding until death or withdrawing upon retirement. If anything in this article is of interest to you, please let us know and we would be happy to discuss further.

The Importance of Sharing

Wednesday, March 7th, 2018

More often than not, when you choose an organization to volunteer with or support, there is a personal story behind that motivation. This personal connection resonated no differently for me. A little over 4 years ago, I encountered a situation that I could never have imagined. One that continues to have a profound effect on my life, including how I engage in the community around me.

In 2013 a dear friend of mine took his own life. This story is not mine to share, however what I can share is how the actions went to effect me personally. I do not want others to take the action that my friend did, nor do I want someone’s friend’s, family and community to deal with the outcome.

After I moved to Canada in 2016, I reached out to The Crisis Intervention and Suicide Prevention Centre of BC (Crisis Centre of BC) to create a possibility of contributing to the great work that they do. I am honoured to have been recently been appointed to the Board of Directors of the service. I have followed closely and worked with the organization on a project for the last 12 months and expressed an interest in contributing at a strategic level. When a board position opened up late last year, it was a natural progression.

Roughly 500 people in BC will end their lives by suicide this year (BC Coroners Report, 2014); and roughly 11 people just today across Canada (Canadian Association of Suicide Prevention, 2014). Learning more about how 90% of people who die by suicide were experiences a mental health problem or illness (Mental Health Commission of Canada, 2014), has made me realize just how vulnerable young people are, especially men.

It has become a personal mandate to let those who are struggling know that it is OK to talk about what is troubling them and that seeking help is also okay.  As a community, we can contribute to removing stigmas around mental health and encourage greater awareness for suicide prevention. Looking back, I wish my friend knew he could talk to me or others that cared and found a path to help and healing.

If you or someone you know needs to talk to someone, don’t hesitate to reach out, there is always someone available to listen 1-866- 661-3311. or

The Intersection of Wealth & Health

Wednesday, January 3rd, 2018

Everything in your personal ecosystem is interconnected. This may seem obvious, however, have you ever taken a moment to truly reflect and let that sink in?

Every single aspect of your life is related and your choices create outcomes for your life. What would your ecosystem look like if you drew it on a white board?

Challenge yourself to do a health check on your personal ecosystem in 2018. What would getting healthy in all aspects of your life look like? Financial health, physical health, relationship health, career/business health, family health, community and giving health – where is the health gauge sitting in all areas of your life? How are these silos connected and are you leveraging the connections adequately?

When overall health is prioritized and a healthy lifestyle is pursued, you are revitalized, have increased energy and are more efficient, thus allowing for clarity in decision making, greater capacity and higher levels of achievement. Being healthy can add time to your life span, as well as dollars to your bank account over time. It is here that your health and wealth intersect.

Proactive choices and planning guide your success and as your health levels increase in any singular aspect of your life, it inadvertently supports the health in other aspects of your life. As your nutrition gets better, so does your physical health. In turn you have more energy to give to your family and community. As you increase your presence in the community, your business grows and therefore your financial health. At every turn you find that a healthy lifestyle supports holistic success.

As it relates to your “future self”,  engaging in meaningful, holistic, life-focused financial planning can benefit you in many ways including helping ensure you safe-guard your family’s future, build your legacy and give you the peace of mind to choose the best route when faced with difficult decisions, both now and over the long-term.

The Canadian Medical Association has indicated that those who describe their health as “very good” or “excellent” are amongst the top earners within Canada. As one moves up the ladder with respect to their financial stability and security, they have less sickness, longer life expectancies and improved overall health.

The connection between your health and your wealth is clear. Make 2018 an opportunity to develop a new level of understanding and mastery of your personal ecosystem. What are the opportunities and where are the blind spots? Enlist the support of coaches and advisors within the areas you’d like to see improvement and be your best self in 2018.

Recognizing Strategies that Work for Business Owners

Thursday, September 7th, 2017

With the Liberal Government’s present focus on making life harder for business owners, it may seem like the benefits of owning and running a small business are diminished.  With this in mind, we felt it important to re-visit some of the positive strategies that being self-employed and/or incorporated can bring which are not currently in Bill’s cross hairs… (more…)

Living Your Life By Design

Monday, July 10th, 2017

We all have a vision for our ideal life. The version of our best life that we hope to attain. The difference between achieving that life and dreaming about it comes from whether we are living
our life by design, or by default.


Entrepreneurial Families: Your Personal Board of Directors

Monday, May 8th, 2017

As seen in the Spring 2017 issue of Iconic Concierge Magazine.

Embracing the entrepreneurial spirit, we subscribe to the idea that the path of life is not a straight line, it is unique series of detours. As such, it is important that your financial plan services your unique set of circumstances and delivers the solutions that matter most to you and your family.