Investment Strategies - Simon Fraser University by hcj


									 Simon Fraser University
                            April 24, 2012
Wayne Chappell
Vice President and Director
Odlum Brown Financial Services Limited*

Agnes Douglas
Portfolio Manager, Odlum Brown Limited

    *A wholly-owned subsidiary of Odlum Brown Limited
    Odlum Brown Limited is a Member-Canadian Investor Protection Fund
Retirement Planning
                The Bare Facts
 Between 1992 and 2006, the
percentage of Canada’s labour
  force with Defined Benefit
Pension Plans dropped from 33
   per cent to 26 per cent*.
*Based on information provided by Statistics Canada (Insights Report, Fall 2008).
Beyond Age 65
  Longevity Risk
 Beyond Age 65        – Cont’d.

Underestimated spending habits
Unknown future tax and inflation
What is Retirement Planning?
                     Asset & Financial Management

   Risk Management                                  Tax Planning

      Retirement Planning                    Estate Planning
•   Financial planning
•   Retirement planning
•   Estate planning
•   Gift planning
•   Tax planning
   Are You Ready?

Three Question Approach
• Where are we now?
• Where do we want to be?
• What do I have to reconcile?
         Are You Ready?
    Things You Can Do Now!
Four Broad Categories

      - Housing
•Risk Management
      - Obstacles to achieving my goals
•Estate Issues                            -
What happens to what’s left?
Retirement Planning

          •Where are we now?
          •What will I need?
          •How do I reconcile the
Where Are We Now?
Where will we be if
we keep doing what we
are doing right now?
                                                    Government Plans,
Pension Plans                    Wage                   CPP, etc.

      Real Estate                                  Daily Living

                    Investment Plans        RRSP

                            Future Income
Could we live on that
amount today?

Why not?
Where Do We
Want To Be?
Example of Semi-Budgeting
                  (Cheque and Visa System)
Step 1                                  Step 2

Add up everything for                   •Use Visa and pay off monthly
which you write cheques:                •Add up Visa and divide by 12 to
                                        equal monthly payments
•House Insurance
•Car Insurance
•Life Insurance
•Yard Maintenance
•Furniture, Windows, Roofing, etc.

= Fixed Costs / 12 = Monthly payments

                       Add 1 & 2 together
             and adjust for special items and Voila!!!
         Set Goals
•   Realistic
•   Wish lists vs. to-do lists
•   Income and lifestyle needs
•   Flexibility
What Do We Have
 To Reconcile?
A daunting exercise made
too complicated by the
desire to “Get It Right.”
 Investing for Retirement:
   The Transition Begins

Agnes Douglas, CFP, CIM, FCSI
Portfolio Manager, Odlum Brown Limited

Member-Canadian Investor Protection Fund
    Your Investments

• Transition Into Retirement

• Getting Advice
        The Transition
“Creating your new paycheque.”

    •   Income withdrawal plan
    •   Security of income pay-outs
    •   Continued investment growth
    •   Tax efficiency
Process for Investing

    •   Goals & Needs
    •   Risk Tolerance
    •   Time Frame
    •   Diversification
Investment Goals

Be specific and realistic
1.   Growth
      2.    Income
      3.    Liquidity
      Risk vs. Return

• Risk is defined as the potential
  for loss

• Understand the relationship
  between risk and return
          Asset Allocation
 Diversifies assets into three classes:

•Fixed   Income
(i.e. Liquid Investments)
•   Canadian savings bonds
•   Treasury bills
•   Money market instruments
Fixed Income
•   GICs
•   Bonds
•   Debentures
When you buy an equity (stock),
you own a share of the company.

Two types:
•Common Shares

•Preferred Shares
     Equity Products
• Common or preferred shares
  – Large, medium and small cap
  – Domestic, foreign and emerging markets

• Mutual funds
• Real estate income trusts (REIT’s)
• Exchange traded funds (ETF’s)
• Income trust units
• Options/hedge funds
When Transition Begins

•   Critical point
•   Develop comprehensive income
    withdrawal plan

•   Time to delegate
     Getting Advice
1.   Working with an advisor
2.   Finding the right resources
3.   Finding an advisor
4.   Assessing your advisor
Working With An Advisor

What should you expect from an advisor?
a. Clear and specific recommendations
b. Explanation of risk
c. Need permission for each transaction unless discretionary
d. Send regular statements

How is your advisor compensated?
a. Salary                     d. Fee-only
b. Sales fee/commission       e. Fee-based
Finding The Right Resources
Sources of advice on financial matters:
1.Customer     Service Representative
                                            i.e. Bank
2.Personal    Banker

3.Mutual   Fund Representative

4.Investment    Advisor                 i.e. Investment Firm

5.Portfolio   Manager

6.Financial   Planner

7.Insurance    Representative
Choosing The Right Advisor
Questions to Ask Yourself
1.What   are your financial goals?

2.How   much do you know about investing?

3.How   much money do you plan to invest?

4.What   type of products and services do you need?
Choosing The Right Advisor
Questions to Ask An Advisor
1.What   are your qualifications?

2.Are   you and your firm registered?

3.How   much experience do you have?

4.What   products and services do you offer?
Choosing The Right Advisor
Questions to Ask An Advisor
5.To   which type of clients do you cater?

6.What   is your investment philosophy?

7.How   are you compensated?

8.How   will you work with me?
Finding An Advisor
•   Through referrals

•   Online or contact local security regulator

Search for an advisor through industry sources:
(See slide 44 for useful links)

•   IIROC: Investment Industry Regulatory Organization of Canada

•   MFDA: Mutual Fund Dealers Association of Canada

•   Advocis: The Financial Advisors Association of Canada

•   FPSC: Financial Planners Standards Council of Canada

•   BCSC: BC Securities Commission

•   OSC: Ontario Securities Commission
   Assessing Your Advisor
5 Steps:
1.Understand    your total return over time

2.Calculate   your total costs for each year

3.Compare     your results with benchmarks

4.Assess   the total value your advisor provides

5.Assess   whether you are happy with your results
   Assessing Your Advisor

Have a Complaint?
1.Talk   to your advisor

      a letter to senior management
3.Complain to the appropriate regulator
     1. BCSC – File a complaint

     2. IIROC - An Investor’s Guide to Making a Complaint
                       WE’RE ALMOST THERE!
                            Now to...
Brush up on your abilities to live life to the fullest in retirement.

                 Food for Thought: “Keeping up
                 with the Joneses in retirement –
                 don’t even think of it... Keeping up
                 with inflation – plan on it!”

Quote from a Mackenzie Financial presentation:
                          Agnes Douglas, CFP, CIM, FCSI

                          Portfolio Manager | Odlum Brown Limited
                          • Over 22 years of investment industry experience
                          • With Odlum Brown Limited since 1999

Wayne Chappell, CFP, CLU, ChFC, CPCA

Vice President and Director,
Odlum Brown Financial Services Limited

    • Over 40 years of financial industry experience
    • With Odlum Brown Financial Services Limited
      since 1990
Bibliography and Other Useful Links

•Answers to Your Money Questions: Getting Advice.
•BCSC: InvestRight. Tools for investors.
•IIROC: Investment Industry Regulatory Organization of Canada.
•MFDA: Mutual Fund Dealers Association of Canada.
•Advocis: The Financial Advisors Association of Canada.
•FPSC: Financial Planners Standards Council of Canada.
•OSC: Ontario Securities Commission.

The information contained herein is for general information purposes only and is not intended to
provide financial, legal, accounting or tax advice and should not be relied upon in that regard.
Many factors unknown to Odlum Brown Limited may affect the applicability of any matter
discussed herein to your particular circumstances. You should consult directly with your financial
advisor before acting on any matter discussed herein.

No part of this publication may be reproduced without the express written consent of Odlum
Brown Limited. Odlum Brown Limited is a Member of the Canadian Investor Protection Fund.
Thank You!

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