Why Consider a Discretionary Advisor
Why Consider a Discretionary Advisor
A discretionary advisor is one of the more prestigious titles for an investment advisor in Canada. It requires additional education, mandatory industry experience, a proven track record, and a written detailed investment process that must be approved and monitored by the firm. Discretionary managers also have a fiduciary duty to their clients.
It is important to understand how a discretionary advisor differs from a traditional investment advisor. Discretionary management allows the advisor to make buy and sell investment decisions on behalf on the client. This investment process is disclosed at the beginning of the relationship, giving the client confidence to allow the advisor to act on their behalf. Traditional advisors need to receive verbal authorization from each client before processing any transaction on their behalf.
To provide prospective on these differences, lets compare the two types of advisors, each managing the same number of client families – lets assume 100. When an investment change needs to occur, by selling investment A and buying investment B, the process is quite different for each advisor type. The traditional advisor has a more laborious process of contacting each client for approval prior to making the switch. Whereas the discretionary portfolio manager can make this change immediately across all client portfolios at the same time.
This enhances performance and allows the discretionary advisor to quickly act when an opportunity presents itself. It also provides a level playing field for all the clients within the portfolio model.
This information has been prepared by Jack Fournier and Travis Kidson, who are Portfolio Managers for iA Private Wealth and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Managers can open accounts only in the provinces in which they are registered.
Insurance products are provided through iA Private Wealth Insurance Agency which is a trade name of PPI Management Inc. Only services offered through iA Private Wealth, are covered by the Canadian Investor Protection Fund.
Beacon Wealth Partners is a personal trade name of Jack Fournier and Travis Kidson.