Hi Everyone,
As I write this the nights are cooler and the leaves are changing color. I just returned from a professional work conference held in BC. It was an intense learning experience with some fun thrown in.
I debated on the format of this newsletter and since it has been a few years since you all have received a letter from me it would be a less formal way to bring you up to speed on the latest happenings. That has always been my goal, for everyone to learn something new each newsletter or meeting.
One question from the conference stuck with me: We were asked: How much do your clients know about what you do and who you are? I have to confess that I probably err too much on the side of privacy and probably could be more open about my work and myself.
But let us begin with a high level overview.
I have joined Portfolio Strategies Corporation (PSC). Portfolio Strategies was established in Calgary 20 years ago. I am proud to be part of a 100% Canadian, locally established business, that has expanded to several provinces. The number one reason I changed dealers was to find a place where my clients could have the maximum benefit. Any financial company’s raison d‘etre is their client base, and if they forget that then their future is bleak. I am positive that PSC honors that the client’s best interest is put first always. This was reiterated several times at the conference.
Acronym Soup
Not only is PSC an investment dealer, as a corporation their management team is effecting change by their presence in various organizations such as the Federation of Mutual Fund Dealers, Investment Fund Institute of Canada, and the Association of Canadian Compliance Professionals, to name a few. As a corporation it has submitted comment letters on Client Relationship model Phase 2(CRM2). Remember this acronym. PSC actions are in contrast to some companies trying to defend the status quo and turn back the clock on progress. Change in the financial services profession is occurring rapidly and are for the benefit of the investor. CRM2 will encompass more disclosure on written communication which includes statements. This disclosure will include the costs associated with investing and performance reporting. Each in person meeting we have for the next 2 years you will learn something different. You will notice that your statements will have more information which we will review together.
Your participation in my successful transition was invaluable and crucial. I learned a lot about human nature, communication (what I say is sometimes not what you hear), and my clients in the process. Thank you for your patience in filling out the paperwork required. You probably are wondering why I had to ask so many questions. “Why was Cindy being such a nosy person?” you probably wondered. Well although I know all of you, my new company relies on me to collect the information to satisfy the Mutual Fund Dealers’ Association(MFDA), and Alberta Securities Commission(ASC) regulations. Take note of those acronyms as you will be hearing a lot more news related to both those entities.
These regulations are in place to counteract terrorist financing, money laundering, and identity theft. Enough criminals utilize the financial system for nefarious purposes to warrant rigorous rules to establish the truth.
Through me, PSC must confirm correct identity and that is why government issued photo ID is required. To satisfy anti money laundering rules, I must also verify that the account being used for the purpose you say it is. I hope I never have to deal with a prospect that may have less than honorable intentions.
Advisors must establish that clients understand the risks in borrowing to invest, which is called leveraging. Also Canadian investors must now declare any US ties, as the US government is looking for delinquent taxpayers outside the US.
Relevant & Timely Discourse
I would like to draw your attention to item #3 in the client disclosure brochure. The information I am required to record is used to make recommendations and ensure suitability of your investments. Know Your Client(KYC) is of the utmost importance, and must be updated annually. You will get the best and most personally relevant advice if you disclose fully all pertinent life events. For example, I had a client I had not seen in years. During that time he has moved to a different city in Alberta, and got married. I know this only because people he knows have told me. I however, cannot inform him that I know because of confidentiality regulations. His non disclosure could affect the tax status of his investments, not to mention that he exposes himself to identity theft when mail is going to the wrong address. I offered to resign as his advisor and he refused. This example can be likened to you forgetting to tell your doctor during your annual physical exam, that you regularly eat donuts for breakfast, brownies for lunch and French fries and fried chicken for supper, and your opinion of fresh fruits and vegetables is that they are food for the farm animals.
Still I have more enthusiasm for the future than I have had in the past few years. I am excited to help all of you reach your full potential and achieve your financial goals. I feel I am finally able to put to use my professional education in an environment that values financial planners and the benefits they offer to their clients. I am glad that my experience and education is trusted, and further professional development is encouraged.
The next meeting is very important to review the annual statement. Because my resignation from my former dealer became effective just prior to the issuing of your June semi annual statements I never got to see that statement. Therefore I am stressing the importance of an in person meeting early in the new year for a portfolio review, life update, and to become informed of the new ways I can add to your financial planning journey.
Happy Autumn! We will see each other soon!