Paul Carpentier*

62 years old | Weedon | $1 400 000 in assets with two advisors

Paul has little knowledge when it comes to investing; one of his children recommended a portfolio analysis. His analysis revealed that the primary portfolio’s tax allocation was non-existent and, although Paul believed he was paying his advisors 1.25% in annual fees, he was, in fact, paying 1.8% annually to one advisor and 2.0% to the other, representing $8500 more per year than he had initially thought.

Actions taken to improve portfolio management
Paul changed one of his advisors for a more experienced one and negotiated a lower fee with the other current advisor. His fees have since dropped by at least $6000 and he now saves an estimated $1000 annually in unnecessary taxes.

Mathieu Lauzon*

44 years old | Sherbrooke | $300 000 in assets with three advisors

Mathieu understands investments, but has little time to devote to them. After analyzing his file, we were able to determine that there is no communication between his three advisors when it comes to tax allocation. Therefore, Mathieu is not getting the best yield and is paying $350 in unnecessary taxes every year. We also discovered that his financial institution was withholding the majority of any potential return because of a 2.4% fee charged for a very safe portfolio. Moreover, the investment advisor was unaware of the magnitude of the fees paid by Mathieu.

Actions taken to improve portfolio management
Mathieu consolidated his investments with two advisors. This has resulted in better management of the overall distribution of his assets while reducing unnecessary taxes. The financial institution that was charging 2.4% in fees was replaced and Mathieu now pays about 1.55% in fees annually, representing a savings of roughly $1100 yearly.

Ryan Gray*

41 years old | Calgary | $250 000 in assets with three advisors

Happy with his advisors and yield, Ryan was still seeking an impartial second opinion on the management of his portfolio. The Verifolio analysis revealed a very good tax allocation of assets and expenses, and a fee of 1.6%. However, the analysis also uncovered that the managers selected by the investment advisor had underperformed over the past year. In fact, Ryan obtained a return of 12.8% during 2019, whereas a neutral portfolio with the same risk level posted a return of 14.8%, representing a $5000 underperformance in 2019 alone.

Actions taken to improve portfolio management
Ryan shared the Verifolio analysis findings with his advisor. They agreed not to make any changes for the time being, but to review his portfolio at the end of 2020 to see if the managers had improved and then apply changes, if necessary.

* The names used in the case studies above are fictitious.