Performance & Fee Reports


You may have noticed a special insert in your September 30, 2016 statement referring to upcoming performance and fee reporting that will be coming in the New Year. In simple terms, over the past few years our regulators have rolled out something called the “Client Relationship Model” (CRM) which entails providing clients with more information regarding their investments. Phase two of this initiative, called CRM2, is set to begin in January 2017, when regulators are aiming to provide more transparency to clients regarding the performance of their investments, as well as fees investors are being charged. Click here to review this insert. Please note that existing fees are not increasing, nor are there any new ones. In fact, fees on average have been coming down over the last few years. All that is happening is a shift towards more transparency, regarding what fees have always been in place. In this issue of The Martens Report we want to take some time to focus on the costs you incur for the services being provided, as well as some of our own policies around them. There are many factors we consider when recommending a mutual fund to a client: management style, process, fund manager tenure, past performance, to name a few. Fees are also one of the important aspects we consider. We are always committed to discovering options that will help maximize returns and lower fees, without sacrificing the quality of the product. Finding the lowest possible fee, in itself, is not necessarily our goal. Sometimes a fund with a lower fee could also have a lower return or be more volatile, so please keep in mind that this is only one consideration of many. Our business model is to use “Front Loaded” funds whenever possible with a 0% up front charge. This means there is no up-front fee to purchase, and no fee to sell a fund. Our compensation centers around an ongoing service fee, called a trailer fee, which is a part of the underlying cost of owning a mutual fund. Typically, our dealer, HollisWealth Inc. receives approximately 1.0% as a trailer fee on balanced and/or equity mutual funds (less on fixed income products). In case you’ve never really thought about this in dollar terms, it would equate to about $1,000 for every $100,000 invested. The majority of our client accounts are set with this compensation model. Please know that our interests are aligned with yours… If your account grows our compensation would increase, and if the market turns downward, we would participate in that too with lower compensation. To help understand the total cost of owning a mutual fund, often expressed as a “Management Expense Ratio” (MER), we thought we would share an article written by the management team at EdgePoint Wealth Inc (see below) that helps explain in simple terms what various costs a MER covers. Also, please feel welcome to ask us questions about the fees you pay. We strive to fully inform our clients on all aspects of their investments, including the costs associated with them.

Thank you,

Andrew & Peter [if !supportLineBreakNewLine] [endif]

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