“It ain’t what you don’t know that gets you into trouble.
It’s what you know for sure that just ain’t so.”
About the Family
The GTA-area family was approaching their retirement years and contemplating the capability of their net worth to take them through and adapt to changing lifestyle needs. They had approximately $1 million in investable assets and a home valued at over $2 million. After downsizing, they anticipated adding more than $1 million to their investable wealth to complement government benefits and other sources of retirement income.
The family had been working with a financial advisor for over 10 years who was a personal contact. They were uncomfortable with his abilities to handle their increased wealth, and asked their accountant to recommend alternative wealth managers, which is when we were introduced.
When HighView dug deeper during our discovery process, we found that the actual fees were 2.5%, more than double the disclosed amount.
When the Fee Isn’t the Fee
CRM2 regulations came into effect at the end of 2016 and required investment advisors and firms to disclose the direct fees they charge their clients. In this family’s case, the annual statement from their advisor divulged a 1% fee. When HighView dug deeper during our discovery process, we found that the actual fees were 2.5%, more than double the disclosed amount. The majority of the fees the family paid were embedded and therefore did not need to be published.
The family was shocked, but they were also confused. When they approached their advisor, he used the regulator-approved CRM2 disclosure statement to provide psychological comfort and continue to hide his true fees.
Who were they to believe—their long-term investment advisor or HighView?
Ultimately, the family looked to the opinion of their accountant who quickly dismissed the advisor’s claim and confirmed that the family was in reality paying closer to 2.5% in annual fees. HighView’s transparency reinforced the family’s decision to entrust us with their long-term wealth management.
Putting a Detailed Wealth Plan into Action
When HighView began working with the family, we produced a detail-oriented wealth plan to provide them with a roadmap for their retirement future.
After selling their home and transferring wealth management to HighView, this plan gave them confidence by integrating a tailored investment portfolio that would meet their retirement cash flow needs and also take into account risk metrics and volatility they were willing to tolerate.
Performing Regular Reviews
Providing quarterly performance statements and comprehensive annual reviews makes it easy for the family to track how they are progressing on the road to accomplishing their stated goals. In these reports, we clearly outline all fees (not just direct fees).
The family now feels that they have peace of mind knowing HighView is on their side of the table.