Month: May 2016

Build a Compelling Value Proposition

The Canadian investment advisory landscape is being overwhelmed by the challenging circumstances of diminishing fees, increasing regulation and industry consolidation.  Issues like these are putting intense pressure on independent advisors to find their place in this evolving environment. One way to help sort through the data is to look at potential clients in terms of how they seek advice, identify which of these client types best suit your style and then draw up a value proposition which aligns your skill set with the appropriate target clients.

Clients who are looking for investment advice generally fall into three categories; selective customers are in the majority and they look for qualifications, affiliations, products, track records and/or fee levels; traditional customers usually choose an advisor based on a referral or personal recommendation; and assistance seeking customers are those who know what they want but need help to complete the process. It is this last category which is likely the most underserved in the market as there are many tech-savvy individuals who are not familiar with how to put together a comprehensive financial plan. Assistance seeking customers are less fee conscious as they generally understand the value-added benefit of being guided through a challenging process.

Historically, investment management firms have used a one-way style of advertising to promote brands and products. Technology and social media are changing how customers consider their options. To some extent technology is commoditizing the investment services industry but at the same time allowing consumers to find more detail and focus on product benefits and prices. This opens up opportunities to get ahead of the competition and engage customers in a new and relevant way.

Given the rapid changes brought about by social media, advisors have to rethink their role. A key way to do this is to determine the type of client an advisor is best suited to work with and set out a value proposition for these clients stating what they are uniquely able to provide to this target market. In this example there are five steps to putting together a value proposition: first, who are the target clients; second, what is the problem these clients need to solve; third, what can be offered; fourth, identify how this solves the problem; and lastly, contrast how the solution is an advantage over the alternatives.

Using these five steps, an example value proposition could be to target assistance seeking clients. The target can also be narrowed down to clients within a profession such as engineers or doctors. The types of problems that need to be solved could range from thinking their account size is too small for an advisor, to not fully understanding the products they have researched online. The product or service that can be offered as a solution will be determined by each advisor’s affiliation and expertise. The solution can then be evaluated to determine how it solves the problem and its advantages.
Putting it all together, an example of how an advisor can compose a value proposition to help clients in today’s disruptive environment could be; “The goal of my business is to assist small business owners who are computer literate but need guidance in setting up an overall financial plan. My familiarity with drafting Investment Policy Statements, access to a wide range of investment options, and my technological expertise will help my clients develop a financial plan that is otherwise challenging and inefficient for these clients to do on their own.” With such a plan in place, an advisor can then use social media to be identified as a targeted specialist and a sought after solution provider.

Aligning Interests

The term Pay-for-Performance™ was coined with the aim of improving the quality, efficiency and overall value of wealth management. This arrangement provides financial incentives to investment managers to achieve optimal results for clients. Some of the key factors to ensure the alignment of interest between clients and investment managers are set out here:

There needs to be mutual dependence, such that the commitment to the investment service is meaningful for both the client and the investment manager. In other words, clients are dependent on the investment management firm to achieve good returns and the investment manager is dependent on good returns to earn revenue. Having benefits for both parties dependent on the same result helps to ensure that interests are aligned.

Clients want to know that investment managers with whom they are investing their hard earned money with are as committed to the investments as they are. Clients have peace of mind when they know that all parties are in the same boat. A large commitment by an investment manager to its own investment vehicle indicates a high level of conviction in its investment strategy.

The investment manager should be spending a significant amount of their time managing the assets. They should have clear guidelines for telling clients about any conflicts of interest. Investment managers must have a clearly defined set of ethical parameters and principles for managing assets.

Fee disclosure is rightly becoming a major issue in the investment industry. The traditional approach of charging fees is being challenged on many fronts with new disruptive approaches, threatening the status quo. Clients are expecting results and demanding transparency around the delivery of financial services. It is not unreasonable to see a mass migration to a performance based world, where compensation comes from performance.

Alignment matters a great deal although it is still very rare. If it is delivered by implementing the above criteria, then investment managers can differentiate themselves from the competition and put the power back in the hands of clients.

Transcend offers performance-based fee structure

Provisus Wealth Management has created a new company, Transcend Direct, which will charge clients fees according to the investment returns they earn. Transcend charges 20% on any amount that a portfolio beats its benchmark.

Provisus announced the launch of Transcend Direct on May 3 and says its subsidiary will make money when client portfolios outperform industry benchmarks. The company suggests the platform will appeal to investors who want more fee transparency. Besides portfolio construction, management, and monitoring, Transcend offers goal-based financial planning, account aggregation, as well as a personalized investment policy. Clients are able access their accounts online at any time.

Family of funds

Clients pay a fee of 0.25% to cover the base cost of administering a family of funds. “When these funds do not perform better than the market as measured against their industry benchmark, clients will pay fees similar to traditional ETFs,” says Transcend. “When these funds outperform, a performance fee is charged that is equal to 20% of the performance of the fund above its industry benchmark. This directly ties the investment manager’s remuneration to the value added results achieved by the clients.”

To open an account at Transcend there is a minimum equity portfolio size of $50,000, but this number may be reached by combining two accounts (e.g., an RRSP of $40,000 and a TFSA of $10,000). There are no trading costs, custodial charges, or annual fees.

 

by Andrew Rickard

May 6, 2016

 

Link: http://insurance-journal.ca/article/transcend-offers-performance-based-fee-structure/

 

 

First Pay-for-Performance™ Financial Planning and Wealth Management Service Launches in Canada

Transcend Direct answers calls from investors looking for better fee transparency and the ability to leverage state of the art technology with experienced advisors

TORONTO, ON, May 3 2016Transcend Private Client has something different to offer Canadian investors who are tired of paying high investment costs without high returns. Operating on the philosophy that it will make money when client portfolios outperform industry benchmarks, the firm is launching a service called Transcend Direct and plans to redefine the nature and delivery of financial services.

“We believe that linking investment management fees to the quality of performance achieved is a good way to align our clients’ interests with ours, ensuring that we are successful when our clients are successful” said Chris Ambridge, Chief Executive Officer of Transcend Private Client Corp. and President & CIO of Provisus Wealth Management Limited, an investment management firm that has been helping clients grow their net worth for a decade.

Now launching a sister company targeting consumers directly, Ambridge says “A performance-based fee structure provides an incentive to maximize risk-adjusted returns and accountability from money managers. It is one of the most cost-effective fee structures in the country and something which has long been needed in Canada.”

The onset of this new model comes on the heels of a new legal framework, pushing for tighter regulations governing financial advisors. Many feel that greater transparency about how fees are calculated and what portion the advisors receive is required. With the advent of online financial firms, often known as robo-advisors, it’s clear that more Canadians are searching for alternate methods of investing.

Recognizing the fundamental role that technology has in redefining investment management, Transcend Direct combines a sophisticated, proprietary investing approach employed by Provisus’ portfolio managers with Transcend’s experienced financial planners. The result is a personalized, comprehensive financial service, available to Canadians with diverse incomes – not just high net worth individuals.

Services available include customized, goal-based financial planning; financial account aggregation; investment management; personalized investment policy and portfolio construction; ongoing cash management; portfolio monitoring and 24/7 online access to portfolios.

How Performance Fees Work

Pay-for-Performance™ is a fee structure whereby through Transcend, a subsidiary of Provisus Wealth Management, clients have access to a very low fee of only 0.25 per cent that covers the base cost of administering a family of funds. It is based on a philosophy of delivering better value for clients by charging a very low administration fee, while the investment firm earns income only after outperforming its industry benchmark’s return.

When these funds do not perform better than the market as measured against their industry benchmark, clients will pay fees similar to traditional ETFs. When these funds outperform, a performance fee is charged that is equal to 20 per cent of the performance of the fund above its industry benchmark. This directly ties the investment manager’s remuneration to the value added results achieved by the clients.

About Transcend Private Client

Transcend Private Client was created by Provisus Wealth Management Limited to offer Canadians flexible financial planning services. Transcend Private Client provides a Pay-for-Performance™ service through Transcend Direct, delivering sophisticated investment management for a low cost. Provisus manages $400 million in private client assets and has been offering investment management services since 2007.

For media inquiries, please contact:

Brown & Cohen Communications and Public Affairs Inc.

Laura Casselman
416-906-7689
laura@brown-cohen.com

Wendy Kauffman
416-725-9552
wendy@brown-cohen.com

Transcend Private Client Launches Low-Fee Service

Transcend Private Client, a financial planning firm, has launched Transcend Direct, which has a pay-for-performance fee structure that’s offered to all clients.

The fee is 0.25%, which covers the base cost of administering a family of funds. The firm earns income only after outperforming its industry benchmark’s return.

When funds do not perform better than the market, clients will pay fees similar to traditional ETFs, notes the firm. When funds outperform, a performance fee is charged that is equal to 20% of the performance of the fund above its industry benchmark.

 

Link: http://www.advisor.ca/news/industry-news/transcend-private-client-launches-low-fee-service-205071

 

First Pay-for-Performance™ Financial Planning and Wealth Management Service Launches in Canada

Transcend Direct answers calls from investors looking for better fee transparency and the ability to leverage state of the art technology with experienced advisors

TORONTO, May 3, 2016 /CNW/ – Transcend Private Client has something different to offer Canadian investors who are tired of paying high investment costs without high returns. Operating on the philosophy that it will make money when client portfolios outperform industry benchmarks, the firm is launching a service called Transcend Direct and plans to redefine the nature and delivery of financial services.

“We believe that linking investment management fees to the quality of performance achieved is a good way to align our clients’ interests with ours, ensuring that we are successful when our clients are successful,” said Chris Ambridge, Chief Executive Officer ofTranscend Private Client Corp. and President & CIO of Provisus Wealth Management Limited, an investment management firm that has been helping clients grow their net worth for a decade.

Now launching a sister company targeting consumers directly, Ambridge says, “A performance-based fee structure provides an incentive to maximize risk-adjusted returns and accountability from money managers. It is one of the most cost-effective fee structures in the country and something which has long been needed in Canada.”

The onset of this new model comes on the heels of a new legal framework, pushing for tighter regulations governing financial advisors. Many feel that greater transparency about how fees are calculated and what portion the advisors receive is required. With the advent of online financial firms, often known as robo-advisors, it’s clear that more Canadians are searching for alternate methods of investing.

Recognizing the fundamental role that technology has in redefining investment management, Transcend Direct combines a sophisticated, proprietary investing approach employed by Provisus’ portfolio managers with Transcend’s experienced financial planners. The result is a personalized, comprehensive financial service, available to Canadians with diverse incomes – not just high net worth individuals.

Services available include customized, goal-based financial planning; financial account aggregation; investment management; personalized investment policy and portfolio construction; ongoing cash management; portfolio monitoring and 24/7 online access to portfolios.

How Performance Fees Work

Pay-for-Performance™ is a fee structure whereby through Transcend, a subsidiary of Provisus Wealth Management, clients have access to a very low fee of only 0.25 per cent that covers the base cost of administering a family of funds. It is based on a philosophy of delivering better value for clients by charging a very low administration fee, while the investment firm earns income only after outperforming its industry benchmark’s return.

When these funds do not perform better than the market as measured against their industry benchmark, clients will pay fees similar to traditional ETFs.  When these funds outperform, a performance fee is charged that is equal to 20 per cent of the performance of the fund above its industry benchmark. This directly ties the investment manager’s remuneration to the value added results achieved by the clients.

About Transcend Private Client 

Transcend Private Client was created by Provisus Wealth Management Limited to offer Canadians flexible financial planning services. Transcend Private Client provides a Pay-for-Performance™ service through Transcend Direct, delivering sophisticated investment management for a low cost. Provisus manages $400 million in private client assets and has been offering investment management services since 2007.

SOURCE: Transcend Private Client

For further information: For media inquiries, please contact: Brown & Cohen Communications and Public Affairs Inc., Laura Casselman, 416-906-7689, laura@brown-cohen.com; Wendy Kauffman, 416-725-9552, wendy@brown-cohen.com

 

Link: http://www.newswire.ca/news-releases/first-pay-for-performance-financial-planning-and-wealth-management-service-launches-in-canada-577924381.html

Provisus subsidiary to introduce unique online platform

Transcend Direct is being ushered in as a response to the financial services industry’s new regulatory and technological environment

Transcend Private Client Corp., a subsidiary of Toronto-based portfolio management firm Provisus Wealth Management Ltd., is bringing flexible financial planning and “pay for performance” investing services to individual investors with the launch of its Transcend Direct online platform.
Specifically, the firm will charge clients a fee of 0.25% for the administration of the investment funds the firm uses in its portfolios. If the funds outperform, the firm will charge a performance fee that is equal to 20% of a fund’s outperformance compared with the benchmark.
“Provisus will not make any money until the client’s [portfolio] outperforms the benchmark,” says Chris Ambridge, CEO of Transcend Private Client Corp. and Provisus’ president and chief investment officer. “Until the client sees alpha or outperformance, they have a fee of 25 basis points, which is lower than [fees attached] to most [exchange-traded funds (ETF)] in this country.”

The firm chose its outperformance fee based on an industry standard of what hedge fund managers charge clients for their services. It also makes the program economically viable for the company and is justifiable based on the successful results Provisus has been able to produce for several years, Ambridge explains.
The program is an offshoot of one that has been available to Provisus’ private clients for approximately 10 years, in which clients can begin the investing process with the firm by filling in an online application. The firm is now bringing that model to the mainstream investing public, says Ambridge.
The online process and subsequent consultation with a portfolio manager is similar to what would occur with a traditional Canadian robo-advisor, but Ambridge describes his firm’s methods as more detailed than those of other offerings.
Transcend Direct’s online application is the first step for any client; following the application, a portfolio manager will get in touch with the client to gather more specific information, which would lead to the development of a customized investment policy statement, according to Ambridge.
“With the traditional robo-advisor, you get a [number of] questions and you’re slotted into a box,” he says. “In our case, every client will be different.”
The firm’s portfolios are actively managed and include corporate-class pool funds in addition to an ETF bond mandate. Transcend Direct will also make use of the services of institutional third-party managers.
Clients who invest a minimum of $50,000 in the equity portion of the portfolio are eligible for Transcend Direct’s pay-for-performance service. “Unlike the other robo-advisors that take very small clients, we’re not dipping down that low. We feel this is a unique offering,” says Ambridge.

Services available within Transcend Direct, which is accessible throughout the country, include goal-based financial planning, financial account aggregation, investment management, portfolio construction, ongoing cash management, portfolio monitoring and constant online access to portfolios.
The firm’s original announcement, regarding the platform, which was released early on Tuesday, suggests that Transcend Direct is a response to the financial services industry’s new regulatory and technological environment.
“The onset of this new model comes on the heels of a new legal framework, pushing for tighter regulations governing financial advisors. Many feel that greater transparency about how fees are calculated and what portion the advisors receive is required,” the announcement states. “With the advent of online financial firms, often known as robo-advisors, it’s clear that more Canadians are searching for alternate methods of investing.”
Provisus created Transcend Private Client in order to offer these flexible financial planning services. Provisus manages $400 million in private client assets and has been offering investment management services since 2007.

 

By Tessie Sanci

 

Link: http://www.investmentexecutive.com/-/provisus-subsidiary-to-introduce-unique-online-platform?utm_source=newsletter&utm_medium=nl&utm_content=investmentexecutive&utm_campaign=INT-EN-All-afternoon

 

Golden Cross

Canadian equities appear to have entered into a new stealth bull market with a cyclical rally apparently having begun on April 28, 2016. The potential reasons for this occurring are as wide and varied as the pundits’ opinions on whether or not there is a new bull market. Of course this is what makes a market; differing points of view and the gumption to stand up for your opinions and investing accordingly. The rational for the current signal comes from the archaic world of technical analysis.

Technical analysis adds a new dimension to the traditional methods of fundamental stock analysis. It is a discipline used for forecasting the direction of stock prices through the study of past market patterns, primarily price and volume information. The reason for the current optimism is a little known technical indicator first created in Japan 50 years ago, the Golden Cross.

A Golden Cross develops when a shorter term moving average rallies to cross above a longer term moving average which has turned positive and is moving upwards, such as when the 50 day moving average of the S&P/TSX Composite Index crosses above its 200 day moving average. As long term indicators carry more weight, the Golden Cross indicates a bull market is on the horizon. Like most technical analysis signals, Golden Crosses can be excellent at predicting where a market is headed.  Being able to successfully take advantage of these signals is what makes a clever and observant investor.

A Golden Cross indicates that the upside momentum may persist. Even though the Golden Cross is defined by what happened in the past, many see it as a forward looking indicator as its track record as a harbinger of higher stock prices is clear. Since 2000 there have been four distinct instances in Canada when the Golden Cross has occurred (2003, 2009 and 2012) and now. Of course, periods of downward stock prices can also be observed when the 50 day moving average crosses below the 200 day moving average (2000, 2008, 2011 and 2014) as can be seen in the chart to the right and the data to the left which shows the percentage change in the index between these periods.

A Golden Cross is not intended to pinpoint the absolute top or bottom of the market. It provides a signal that indicates a trend is changing and implies a potential future direction for the market. As an investor, you should be investing for the long-term, but sometimes you need a spark to push you in the right direction.

Many skeptics believe that the Golden Cross and other technical indicators are simply wishful thinking while others live and die by them.  The reality is likely somewhere in between. The usefulness of this type of indicator is left to the interpretation of advocates of various investment philosophies, but it is important to be cautious. One of the reasons why technical indicators such as the Golden Cross garner so much attention is because they can become self fulfilling prophecies if enough investors follow them. And plenty do which may explain concepts such as momentum or the speed at which a rally or sell off occurs. When you roll a boulder down a hill, you do not want to be in front of it, so take technical indicators as a sign that selling momentum is shifting and you might just avoid getting flattened.

MARKET DATA

 

 

This report may contain forward looking statements. Forward looking statements are not guarantees of future performance as actual events and results could differ materially from those expressed or implied. The information in this publication does not constitute investment advice by Provisus Wealth Management Limited and is provided for informational purposes only and therefore is not an offer to buy or sell securities. Past performance may not be indicative of future results.

While every effort has been made to ensure the correctness of the numbers and data presented, Provisus Wealth Management does not warrant the accuracy of the data in this publication. This publication is for informational purposes only.