Most Canadians – including many financial advisors – are unaware of what a Portfolio Management (PM) firm is. This corner of the industry is populated by fiercely independent boutique companies that are generally small and owner-operated, registered and regulated directly by the Canadian Securities Administrators as opposed to IIROC (Investment Industry Regulatory Organization of Canada) or MFDA (Mutual Fund Dealer’s Association) who collectively regulate the “retail” broker/dealer space. While there are some IIROC advisors registered as Portfolio Managers, PM firms accept comparatively fewer clients, and may offer access to categories of investment, and/or more sophisticated investment strategies than brokerage firms permit. PMs typically have larger investment minimums (1 or even 3 million dollar minimums are not uncommon),and often cater to institutional investors such as small pension and endowment funds, charities, family offices and ultra-high-net-worth individuals.
Because of the boutique nature of PM firms, very few of them are large in terms of scale and size. In fact, the leading custodian in Canada reports that only 8% of over 330 PM firms it supports manage in excess of 1.5 Billion dollars of client assets. As one of the few large PM firms in Canada, Q Wealth Partners’ innovative business model has built bridges for both IIROC and MFDA advisors to work with us, and become Partners in the firm. This offers our Partners and their clients materially all the benefits of starting a boutique PM firm, without the risk, complexity, cost, and distraction of a start-up, combined with the strength, stability and scale of a PM firm with 17 years of history, over 160 head office and partner staff coast to coast, and managing assets in excess of 2.3 billion dollars.
The terms financial advisor and financial planner have been largely unregulated in Canada. Despite recent proposals to impose standards, it is still challenging for consumers to understand the qualifications of the person sitting across from them. In contrast, registration as a Portfolio Manager (known as an Advising Representative) requires the highest level of professional education and experience in the industry. Portfolio Managers are the only type of adviser in Canada to uphold a fiduciary standard. A fiduciary must act in the best interest of their clients at all times, presenting the best solutions to meet their client’s needs, at the best possible cost, in a transparent manner – either avoiding or fully disclosing any conflicts of interest.
There are many different types of firms that hold themselves out to provide wealth advice. In order to provide investment advice in Canada, a firm must actually be registered in some capacity, as do individual advisors. Some firms focus in on investments only, others offer investments or insurance and casually provide other services. Some focus mostly on financial planning, but have unsophisticated investment offerings, or make referrals to Portfolio Managers, but inflate the costs to clients in so doing. Q Wealth Partners’ mission is to provide a truly comprehensive set of services, delivered with a high level of expertise, at a truly competitive cost. All guided by the shared platforms, technologies, and collective experience of the Q Wealth Partnership and its members.
Ultimately, your most important relationship is with your trusted advisor who is responsible for putting together your financial plan, and helping you navigate all aspects of managing wealth and life transitions. There’s much more to it than just investments, and so the ultimate barometer of how you’re doing will always be your financial plan – think of this as the highest form of reporting we provide – it’s the answer to the all-important question: “Am I ok?”, and it’s always being updated because your life never stands still.
Our Partner firms collectively own Q Wealth (where we provide investment management). Each of our Partners operates under their own brand identity to deliver a unique service experience, and comprehensive wealth management layered on top of investment management – which is everything beyond securities. Your advisory team typically includes a multi-disciplinary group including Certified Financial Planning professionals, investment professionals registered under Q Wealth, or both. Think of your Advisor’s firm as your personal “family office”.
In all cases, individuals who provide investment advice are registered to do so under Q Wealth, so you may see them affiliated with both the Q Wealth Partnership and their Partner firm. As a registered Portfolio Manager and Investment Fund Manager, Q Wealth replaces the operational functions advisors must typically affiliate with an investment dealer to provide, but we also “vertically integrate” the investment management function – which usually reduces external costs that are often hidden from investors. Clients receive a detailed chart explaining who provides each function when they onboard to help keep it clear.
Q Wealth maintains service agreements with custodians such as National Bank’s Independent Network (NBIN). The custodian is where your accounts sit, protected by their large scale, and the Canadian Investor Protection Fund. Read on for more details about our relationship with custodians, and how they benefit our clients.