pick-the-best-structure

The panelists

David Bluteau and Darren Caseley

David Bluteau and Darren Caseley

National Bank Financial, Halifax (fee practice with insurance)

Martine Cunliffe

Martine Cunliffe

Macquarie Private Wealth, Vancouver (fee practice, with commission on certain products)

Jason Pereira

Jason Pereira

Bennett March, Toronto (fee practice with insurance)

Which compensation model is best for a client, fee or commission, isn’t cut and dried.

And, says a panel of three advisors we assembled, deciding to work with someone depends on more than whether she’s better suited to fee or commission—the prospect’s service expectations, investment philosophy and earning potential are all equally important.

Nevertheless, there are guidelines: Most advisors say a percent-of-assets fee only becomes viable after $100,000, and a 1% fee is only viable after $250,000.

Halifax advisor David Bluteau says in order to help clients with less than $100,000 to invest, “there could be an opportunity to dispense [non-specific] advice in a larger setting, like a seminar format, to bring down the cost.”

Or, the National Bank advisor suggests, the industry could evolve to a point where small clients could take a battery of tests online for a small fee, and receive generalized advice based on those results.

The clients*

David YamashitaDavid Yamashita

39, owns a thriving cupcakery in Vancouver’s Gastown district. He and his partner recently purchased a downtown condo, and the mortgage eats just more than half of the $6,000 he takes home each month.

David pumps most profits into new equipment and is setting aside cash to open a second, and possibly third, location. His company’s six employees also get supplemental health and dental benefits.

His life partner Suzette Finkle is a 43-year-old mergers and acquisitions lawyer who works primarily with import-export businesses. She pulls in $175,000 annually and should make partner this year. Due to medical issues, the couple has no children. Now that the pair has bought a home, they want to get going on both registered and non-registered investments.

Add a comment

Have your say on this topic! Comments are moderated and may be edited or removed by
site admin as per our Comment Policy. Thanks!