Investment Counsel FAQ



Does Dan Hallett and Associates Inc. (DH&A) have a license to provide investment advice?

Yes. DH&A is licensed as Investment Counsel with the Ontario Securities Commission. This allows our licensed representatives to provide advice on any security or investment to residents of Ontario. We are not licensed to sell or receive commissions from any products. Our license is an ‘advice’ license – not a ‘sales’ license.

What types of services do you provide for the individual, retail investor?

DH&A’s areas of specialty are portfolio construction, investment management, and investment related tax issues. Specifically, we will review individual circumstances and provide specific buy and sell advice in an effort to improve investment portfolios. Investment advice is documented in a written Investment Policy Statement (IPS).

Financial planning services are also provided on a fee-only basis. The most common financial planning service that DH&A provides is that related to pre-retirement projections and sustainable rates of withdrawal during retirement.

I reside outside of Ontario. Can I access your services somehow?

No. DH&A is licensed only in the province of Ontario to provide investment advice based on individual circumstances. However, financial planning advice is not regulated in most of Canada.

We are happy to refer you to an advisor if we know of a qualified professional in your area. No referral fees are accepted from other professionals.

If I want to become a client, what is involved in your process?

Our process involves six steps.

1. You would send us a summary of your situation (including a portfolio summary) along with a note detailing the services desired. DH&A will, in turn, review the information and estimate how much time may be required to deliver the desired services.

A letter of engagement will be sent to you outlining the services to be provided, the general process to be followed, a cost estimate, and the other terms of the engagement. If you are comfortable with the information contained in the letter, you need only sign and return it to DH&A. This authorizes us to move forward on your file.

2. We will request a more detailed set of information, including your most recent investment statements and other related information such as book value figures and details of any applicable exit fees or redemption charges for each holding.

Detailed net worth information is also obtained via a confidential questionnaire. In some cases, we will request such items as tax returns and pension plan details. We like to obtain this type of information so that we are aware of other factors that should be incorporated into your investment strategy.

3. All of this information is reviewed and a list of items requiring clarification is drafted. At this point, we schedule a meeting to review the submitted information, clarify any necessary details, and to obtain any other relevant information. This meeting will include a series of questions aimed at getting a firmer grasp of your goals, risk tolerance, and other investment constraints.

4. We will analyze and process all of this information to determine an appropriate course of action for you. Often, questions arise during this process which will be addressed via telephone and e-mail. At this point, your customized IPS is drafted.

5. Another meeting is scheduled in order to present and review your IPS. Often, a draft is sent to you ahead of time to allow you to preview it prior to our meeting.

6. The IPS is presented to you, reviewing the highlights of our recommendations along with an explanation of the reasoning behind the suggested changes. Your invoice will be issued at the completion of this meeting.

Can DH&A take over the investment account I have with my broker or financial planner?

DH&A neither handles client money, nor executes trades on clients’ behalf. We only provide advice and document it in a customized IPS. Clients usually implement our advice using a discount broker. While we may provide recommendations to brokerage firms, this decision is ultimately yours to make. The client is also responsible for actually implementing the recommendations in the IPS.

What happens if I need advice after the IPS is presented to me?

We are happy to answer routine, quick, and infrequent questions after the presentation of your IPS. However, for anything more involved, any additional advice will incur additional fees. We will quote a fee to you based on the nature and extent of advice required.

How often do you recommend periodic reviews of my portfolio? And how much does this cost?

Periodic reviews are usually recommended once annually. Sometimes more frequent reviews are necessary and other times it's fine to let it go a bit longer. But most portfolios should have at least an annual check-up. The cost for period portfolio reviews and an updated IPS (i.e. for a return client) is $1,750 plus GST. For those requesting a performance update as part of their updated IPS, a fee of $2,000 plus GST applies. An updated net worth statement and other information regarding goals and objectives will be required to make sure that we are aware of any changes that might affect the portfolio. The portfolio is then measured against this updated profile to make sure it remains suitable. An Annual Review Authorization letter will be sent to you at that time so that such details are documented for you.

Retirement Plan updates will be done at a cost of $2,000 plus GST.

Since each engagement incurs a cost, we can only recommend periodic reviews. It's up to you to make the commitment by authorizing us to do the work. Most of our clients opt for a full review every 12-15 months. Often, interim advice is required in the event of things like maturing bonds or an unexpected windfall (or expenses).

What is your fee for an IPS and a Retirement Plan for a new client?

DH&A charges $2,500 (plus GST) for the first IPS we prepare for clients. The first Retirement Plan we prepare also carries a $2,500 fee (plus GST). If we are engaged to prepare both an IPS and Retirement Plan simultaneously, the combined fee charged is $4,000 (a discount of 20% if done separately).

What types of investment products do you recommend?

We have a bias toward low fee products since we are being paid separately for advice. For exposure to stocks, pooled investment products - i.e. low fee mutual funds, pooled funds, exchange-traded funds - are the vehicles of choice. For fixed income exposure, direct bond investments are favoured for government bonds while low fee investment funds are preferred for corporate bonds, high yield bonds, or preferred shares.

I have a number of individual stocks. How do you deal with such holdings?

While we generally do not construct portfolios of individual stocks, we will give advice for holdings on which we feel sufficiently informed. Our process incorporates your entire portfolio.

Is your fee tax deductible?

The portion of the fee relating to "Investment Counsel" services is deductible on your tax return for your taxable investments (i.e. outside of RRSP/RRIF). Your invoice will break out that portion of our total fee charged that is attributable to each account, which will help you determine how much you can deduct. However, you are encouraged to seek outside tax advice on the deductibility of our fee. See also Canada Revenue Agency's Interpretation Bulletin IT-238R2 for more information.

You're located in Windsor Ontario, so how will we meet?

Many clients that reside outside of Windsor have chosen to travel here to meet in person. While unnecessary, this is always an option. We often use technology - i.e. e-mail, fax, telephone - to deal at a distance with clients. E-mail, fax, and regular mail are usually used to exchange information. Actual meetings usually take place over the phone.

DH&A will, to the best of our ability, accommodate those out-of-town clients wishing to visit our office outside of normal business hours for face-to-face meetings.