Transcript - M. Baron & Associates

Professional Wealth Management
Outline of Services : Chris and Michelle Dowling
M. Baron & Associates
January, 2013
See last page contact info
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified
prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other
government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount
or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be
reported. Mutual Funds Provided Through FundEX Investmsnts Inc.
Professional Wealth Management
Our Firm: What are the Benefits
 Independent Investment Advice: Two levels of “Active Management”
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No incentives to sell Proprietary products, like the banks
Best selection based on your personal needs and requirements
 Services, for those investing > $350k, what you get included are:
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Annual Income Tax preparation : you and your spouse
Continuous Tax planning and strategies from Qualified Professionals: C.A.
Financial/Retirement plans, updated annually to meet changing needs
Simplified costs; typically lower costs than Traditional Financial Institutions
• No or only Low load Commissions, no back end deferred sales charges , no
switching penalties
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Risk Management assessment: Insurance review and Estate planning
 Experienced Professionals in the business for over 20 years
• Tax planning, strategy and Return preparation , Investments, Financial Planning
• Track record of success
• Personalized service
Mike Baron
Professional Wealth Management
Mutual Funds compared to Fee based account
Mutual Funds
 Commission on Sale (one time)
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No Load or Front Load: pay on purchase
DSC: Back end load: pay if sell within 6 years
Portfolio Manager and expenses
Annual Trailer paid to Advisor
 Administration and Overhead
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 No commissions on Sale
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No load
Low Load: pay only if sell within 2-3 years
 Management Fees
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Our Approach
Overhead for Financial institution
Record keeping, tax, mailing, Audit , Legal
 No tax work, limited financial plannning
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WE do NOT sell DSC back end loads.
 Management fee
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Portfolio Manager and expenses
Annual Trailer paid to Advisor
 Administration and Overhead
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Same as Mutual fund
Same as Mutual fund
 Additional Services you will receive
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Tax preparation, Strategies & Planning
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Financial Plans/Retirement plans
Professional Wealth Management
Mutual Fund – Fees and how we get paid?
Sales Commissions on Purchase:
Some Institutions charge a commission on Mutual Funds:
-Deferred Service Charges or Back ended Load
-must hold for 7 yrs OR you pay a DSC to get out early
-Low Load -must hold for 3 years or you pay a penalty to get out
-Front Load –you pay a commission up front when buying
Some institutions have no Load – i.e. most Bank funds
Our Way: NO COMMISSIONS, we gain our revenue
from Annual trailer portion of MER% on selected
solutions
Mike Baron
Professional Wealth Management
How we select Portfolio managers/Mutual Funds:
We look for:
 We review and select managers based upon their track records and how they
performed in different markets
 Review performance in history, the portfolio manager’s approach
 Select a small stable of good Pooled funds or Mutual funds, with sound
managers
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4-5 for equities, 1-2 for fixed income
 Negotiate lower fees…. institutional Management fee rates, not retail rates
 Request our clients to move on a timely basis to our recommendations
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No charges or switching fees
 Continuous monitoring of performance,…with the ability to “fire a portfolio
manager” if we need to quickly
Mike Baron
Professional Wealth Management
Fee for Service
 We can also arrange our services to you on a fee for service platform, usually with
assets > $700k
 We invest in F class mutual funds (fee charged is lower than traditional A class ) are
represents only the investment portfolio manager fee which are lower than traditional
MER% structures
 You and I negotiate our firm’s service fee directly, based on specific need
 The fee is paid through a % of assets under management, and the fee charged each
month from your investment returns or we can invoice you bi-annually directly.
 Fees can be allocated to non Registered assets to achieve good tax efficiency.
Mike Baron
Professional Wealth Management
Specific Fee for service alternatives
 Asset Level
 0-$350k
Traditional A class MER%, MBA svcs paid usingTrailers on Pooled/Mutual funds
All services (Tax prep, planning, Retirement and Education plans) are charged at
separate negotiated , non discounted fee/hr & HST
All managed Funds are held at B2B Bank
 $350-$500
Same as above on MER% compensation , All services are included in MER%, so
so you get them without an extra fee charged
all managed Funds are held at B2B Bank
 $500-above
Manage your assets independent of location, we negotiate a fee for MBA services .
You can keep assets where they are or locate at B2B Bank,your choice
Mike Baron
Professional Wealth Management
Dowling Fee for Service for assets $500 to $1000k
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MB&A fee of $ 5000/annum & HST, or .60 bps plus HST, no other fees
Assessed by invoicing directly bi annually.
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Personal T1 Tax returns for Chris and Michelle (sole proprietorship)
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Tax planning and implementation included (spousal loan, corporate class
structure on Non registered assets, tax efficiency rebalancing between Registered
and Non Registered and TFSA
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No fees for switching, no commissions
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Financial plan for retirement , initial creation and annual updates, refresh
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Financial plan for education funding
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Consulting income planning for either Chris or Michelle, including corporate
structures…………..discounted price on corporate T2 tax preparation
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Risk Management / insurance reviews
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Investment counsel , asset allocation and risk reviews, full portfolio analysis
quarterly
Mike Baron
Professional Wealth Management
How we work with our clients?
 We jointly decide on optimal asset allocation to meet your specific life
requirements, risk tolerance and financial objectives
 Select appropriate investments from stable of proven portfolio managers
 We tell you up front what the Management fees are for each fund (MER%)
 Switching your holdings…usually. occurs without transfer fee, ie
• if we think you should change your fund within equities portfolio,
there is no charge
• If we decide to amend asset allocation, the only fee change is on the
above mix through the MER% changing
 B2B Bank does charge an annual registration / reporting fee to house each
account:
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$135 plus HST for the first account, with an additional $75 plus HST
charge for each additional registered (RRSP, RRIF, LIRA, etc.) account.
Mike Baron
Professional Wealth Management
What can we buy for you?
 We do business with most mutual fund companies in Canada
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Current stable of portfolio managers includes:
• PH&N , Fidelity, BMO, RBC, TD, Acuity (now AGF)
 GIC’s/Bonds: Direct access to some banks and trust companies to make
these purchases for you
 Money Market accounts
 Direct purchase of Stocks & Bonds:
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Although today , not a large part of our business model, for trades in
other securities we refer clients to B2B Securities Inc., a company related
to B2B Bank.
Mike Baron
Professional Wealth Management
Mike Baron & Associates – Experience matters!
 Experienced Professionals in the business for over 20 years – Tax , Investments, Planning
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Track record of success
Been through several recessions and economic cycles
 Small size, independent advice
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Leverage research from Internet based Investment expertise
• = lower overhead than big firms/banks
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Team of only Qualified professionals, no juniors
• High quality services at a reasonable cost to you
 Protection of your Assets: risk coverage same as Big firms
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CDIC/MFDA protection coverage
 Back office: FundEX Investments Inc.
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Industrial Alliance Insurance owns FundEX
Full compliance requirements, oversees what happens, audits
Mike Baron
Professional Wealth Management
How your money is invested and how is it protected?
M.Baron & Associates (MB&A):
Your money is not deposited in Mike Baron (MB&A), we
are your investment counsel only, The funds are held in
Trust with the trustee/custodian of the investment you
endorse/choose through our recommendations.
Your Money $
FundEX is our dealer, who provides compliance and
audit checks and balances on what we recommend to
ensure what we recommend is in alignment with your
written objectives (investment policy statement)
M. Baron &
Associates
FundEX
B2B Bank
B2B Bank is our custodian/trust, they administer your
account, independent of MB & A. They provide all the
normal reporting and statement communication directly to
you. The statements are both mailed quarterly and are
available on line any day/24hrs/7 days/week.
Investment
Eg: Mutual Fund
Investment Vehicle:
For most investments other than GIC’s, there are no
“guarantees” of return performance. Depending on the
investment type selected , many investments offer
Investment
consumer protection, exactly the same as those offered
Eg: Mutual Fund by Chartered Banks
Mutual funds provided
through FundEX investments inc
Investment
Eg: Mutual Fund
Trust Co.
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Trust Co.
Trust Co.
Custodian Trust co: eg. RBC, CIBC, State Street trust etc
For most investment vehicles, the assets are actually
held in Trust for the Mutual fund co. as an example. The
trust operates independently from the Mutual fund co. to
ensure protection.
Professional Wealth Management
Is my Money safe ?
 FundEX Investments Inc (www.fundex.com) is our investment “dealer” ($11B in assets)
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wholly owned by Industrial Alliance Insurance, a major global company
Supervises the Investment funds advisor, provides compliance monitoring and control based
on your stated written risk tolerance and financial objectives
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Assists the advisor in providing advice and supporting research
 B2B Bank (https://b2bbank.com/), is the “trust/custodian of your investment”
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B2B Bank is a wholly-owned subsidiary of Laurentian Bank of Canada
located in the heart of Toronto’s financial district and has regional representation coast to coast.
Executes, clears and settles the trades made by M.Baron and Associates (Mike)
handle the processing of the transactions in your account(s)
provide reporting services both on line/Web and with Quarterly Mailed statements.
A annual fee for this service – currently $135 plus HST for the first account, with an additional
$75 plus HST charge for each additional registered (RRSP, RRIF, LIRA, etc.) account.
 For a further explanation of the relationship between Dealers (FundEX) and trustee (B2B) and
advisors (M.Baron & Associates) Log onto: The above links also provide the details on “protections
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against insolvency”
Professional Wealth Management
Investor/Consumer protection
There are no performance guarantees with any products other than GIC’s.
Investment Type
 Mutual Funds &
Overseeing Regulatory Body
Investor Protection
Amount/Coverage
Mutual Fund Dealers Association Investor Protection
$1,000,000 for every
(MFDA)
General Account
Corporation (IPC)
 GIC, Bank Deposits
 Insurance/Segmented Funds
Assuris
Canada Deposit Insurance
$100k per depositor
Corporation (CDIC)
in each institution
Assuris
$60000 on insurance
per policy holder
YOUR MONEY IS PROTECTED TO THE SAME LEVELS AS IT WOULD BE
WITH ANY BANK OR FINANCIAL INSTITUTION
TO ENSURE WE ARE LICENCED AND REGISTERED WITH THE
ONTARIO SECURITIES COMMISSION PLEASE REVIEW THIS WEB
SITE: http://www.osc.gov.on.ca/Dealers/RegistrantList/reg_registrantlist-tc_index.jsp
Mike Baron
Professional Wealth Management
Contact information
Mike Baron, C.A.
M. Baron and Associates
Financial and Tax Professionals
34 King Street East,
Suite 1010
Canadian Press Building
Toronto , Ontario
M5C 2X8
Phone: (416) 367-2557
Fax:
(416) 367-2167
Email: [email protected]
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified
prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other
government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount
or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be
reported. Mutual Funds Provided Through FundEX Investmsnts Inc.
Mike Baron