What is the difference between an Investment Advisor (IA) and Portfolio Manager (PM)?

A PM has a fiduciary duty to act with their clients’ best interests in mind.  That means, legally, a PM must place the interests of their ahead of anything else.  A PM is also required to meet rigorous experience and educational standards by the Ontario Securities Commission (OSC).  An IA is only required to be registered as a salesperson with the OSC and has no fiduciary duty to the client.  ICM is a PM so our interests always align with yours.  That may not always the case for an IA.

How would you invest my money?

After working with you to develop an Investment Policy Statement (IPS), we construct a portfolio that has been quantitatively tested to ensure it meets your risk and reward profile.  Portfolios are built using low-cost exchange-traded funds (ETFs).

What is an IPS?

An IPS is an Investment Policy Statement.  It is a document, similar to an agreement between you and your portfolio manager, which describes your investment objectives and risk tolerance.  It also defines what the appropriate portfolio composition is, what strategy will be used to manage the account and how that will be implemented.  Think of it as a plan, that both you and your portfolio manager will stick to, that is regularly reviewed and should only change if your circumstances change.

Why is an IPS important?

It is important because it defines the relationship between the client and the manager – we can only invest the way that is right for you if we understand you.  The IPS also helps you understand your own goals, and outlines the risks you care about.  Finally, it helps when we review the plan and the portfolio to make sure they are meeting your expectations.

Where are my accounts held? Are the accounts held in my name? Are they insured?

The assets in your account will be held in your name with our custodian, National Bank Correspondent Network.  All accounts are insured by the Canadian Investor Protection Fund (CIPF).  We have negotiated an extremely competitive cost structure for our clients at NBCN, but if you have a custodian you would prefer to work with, you are free to do so.  We do not receive any compensation from any of the custodians – we are here to serve only you, our client.

Can you tell me more about National Bank Correspondent Network (NBCN)?

With over 25 years of continuous service and a team of more than 200 professionals, National Bank Correspondent Network is Canada’s leading provider of custody, trade execution and brokerage solutions to independent Portfolio Managers. Currently, they serve over 400 independent firms representing over $100 billion of assets for 500,000 Canadian investors.

NBCN is a member of, and regulated by, the Investment Industry Regulatory Organization of Canada (IIROC), the national self-regulatory organization that oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.  NBCN is a wholly owned subsidiary of the National Bank of Canada, a federally chartered schedule A bank.

Why should I entrust my money to ICM?

The team at ICM has decades of senior-level experience in the investment industry and has invested in years of research to develop proprietary analytical tools to build diversified portfolios to match your goals and manage risk. Your portfolio will be tailored to your needs and be invested in highly liquid, diversified ETFs.  In addition, our firm is an Ontario Securities Commission registered Portfolio Manager.  As such, we have a legal fiduciary duty to act with care, honesty and good faith, and to always put our clients’ interests ahead of our own.

How will you deal with me as an individual? To whom do I speak if I have a question or concern?

In order to properly manage a person’s money we need to understand what you care about.  That is the reason we will meet with you, in person, as many times as required, in order to develop an IPS that fits your needs.  If you ever need to talk to someone, call or email us and an actual person will answer.

Can I access my account info online?

Yes, just like your bank account, you can access your account online.

How do you get compensated? Are there any hidden fees?

Investment Management Fee

We charge a flat annual fee based on the value of your account. It is clearly defined in our agreement.  Our fee declines from 1% as asset under administration increase.  This fee is tax-deductible for non-registered accounts.  This is the only fee we earn.  We do not receive fees, trailers or commissions from any other source.  There are no hidden fees.

Custodial Fee – National Bank

National Bank charges a custodian fee based of the value of all of your assets (this fee also declines as assets under administration increase).  Inukshuk Capital Management has negotiated extremely low commissions for our clients.

For tax efficiency, and cost minimization, our strategic portfolios are designed have very low turnover.

Exchange-Trade Funds:  Management Expense Ratios (MER)

Inukshuk Capital uses ETFs to build personalized investment portfolios for our clients because they are extremely tax-efficient and cost-effective.  According to a Morningstar study, the average equity mutual fund management expense ratio (MER) in Canada is 2.41%.  The average equity ETF MER in our universe is only 0.14%!

What sort of reporting on my account can I expect?

Every month, National Bank will send you an account statement that shows you your holdings and any activity that has taken place in your account.  Every quarter, we will send you a detailed performance report of your portfolio. You can go online and access your account at any time.

Can I access my funds?  Are there any penalties for withdrawing money?

You can access your funds any time. There are no penalties for withdrawing money from your account.