QUARTERLY FUND PROFILES / PRACTICE MANAGEMENT / OUTLOOK / OPINION
Fork in the Road: Today’s Income Decision Your Turnkey RSP Campaign. Managing risk, generating income and beating inflation
Q3 – SEPT. 30, 2012
TO DEFEND OUR EMPIRE, LET’S BUILD A SMALL FENCE.
GREAT LEADERS MAKE STRONGER PLANS: TODAY’S INCOME DECISION. It’s a tough decision, but it’s time to make it. We have reached a fork in the road. The flight DECISION to “safer” assets in the face of volatile markets TOOLKIT may have worked until now, but record low yields are proving to be a threatening force. Now is the time to plan for the future.
Renaissance is committed to going further for you. We have actionable tools, solutions and key support to make today’s income decision easier. Get your Income Decision Toolkit today. Visit incomedecision.ca or call 1-888-888-FUND (3863).
TO DAY ’ S I N C O M E S O LU T I O N S Optimal Income Portfolio
Short-Term Income Fund
Corporate Bond Capital Yield Fund
Millennium High Income Fund
Optimal Inflation Opportunities Portfolio (inflation mitigation)
7th Century BC China decides to build a Great Wall.
TM Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the Renaissance Investments family of funds simplified prospectus before investing.
In this issue
8 6 14
Tax and Estate Deconstructing Dividends
Economic Outlook Should We Start Thinking About Inflation?
Back of the Napkin Beyond Rapport
Fork In The Road Today’s Income Decision
Solution Highlight Today’s Income Solutions
Thanks to Our Supporters Prepared to Listen
December – Time to Party!
Letter from the National Sales Manager
Happy Holidays! My hope is that 2012 finishes very strongly for you in your practice and that your planning for a successful 2013 is well under way. NCAA College Football is in the final stages and soon the National Championship match ups will be determined. I am an ardent fan of U.S. college football and look forward to bowl season over the holidays. One of the most successful college football coaches in history is Lou Holtz. He has had success at every school that he has coached – most notably Notre Dame, and is an accomplished speaker. Should you ever have the opportunity to attend an event that he is speaking at, please take advantage of the chance – it will be a changing moment both in life and business. Let me take some time to share part of the message that he delivers. He discusses 6 aspects of leadership that are integral to success and lists three key elements to live by. It is these three characteristics that I want to share with you as I have discussed with our team here at Renaissance. The first element is Do The Right Thing. Seems simple, yet sometimes is very difficult to implement. Think of your clients in today’s environment and how difficult it is to get them to invest in the “right” investment for the long term. Fear has gripped our clients and many are only willing to look at safe investments regardless of your recommendation. It is imperative that we “do the right thing” for our clients. If we do the right thing, then the second element is to Do it to the Best of Your Ability. Be persistent in your recommendations and steadfast in your resolve to implement it for the client. You believe that it is the right thing and that should shine through in your actions. Finally, the third element to live by is Show People that You Care. Consider each interaction with your clients and their feelings. Go the extra mile for them and be genuinely interested in all aspects of their well-being – not just financial.
Do the Right Thing
Do it to the Best of Your Ability
Show People that You Care
If we live by these three elements, we will build better relationships with our clients and our friends and family. We will make better decisions and be consistent in our advice and rapport. As always, we welcome your comments and will continue to earn your business. We will always strive to be your trusted business partner through best of breed advice and caring about our clients. I wish all a happy holiday season and a great start to 2013.
Dave Wahl National Sales Manager Renaissance Investments 416-943-6959
TODAY'S INCOME DECISION
Deconstructing Dividends TAX AND ESTATE
A dividend is a distribution of after-tax income from a corporation to its shareholder(s). Although the concept of a dividend is quite straightforward, the Canadian taxation of dividends is more complex. A corporation pays corporate income tax on income that it earns. When the corporation’s after-tax income is distributed to the shareholder, personal tax is then levied on that dividend. To minimize the double taxation that occurs at the corporate and shareholder levels, an individual shareholder receives a dividend tax credit (DTC) to help offset the tax that was paid by the corporation. Active business income exceeding the small business deduction (SBD) limit, which is $500,000 federally and for most provinces in 2012, is taxed in a corporation at the general corporate rate, which ranges from 25% to 31%, depending on the province of corporate residency. Dividends paid to individual shareholders from this income are eligible for an enhanced DTC to compensate for the relatively high rate of corporate tax. The highest personal tax rate applied to these “eligible dividends” ranges from approximately 19% to 36%, depending on the province. Canadian-controlled private corporations pay tax at rates ranging from 11% to 19% on active business income below the SBD limit. Because this income is taxed at lower corporate rates, dividends paid from this income are not eligible for the enhanced DTC and are called “non-eligible dividends.” Some income that is earned in a Canadian corporation is not taxable, such as 50% of net capital gains and certain life insurance death benefits. This income can be distributed as a “capital dividend” that is tax-free to the shareholder. Interestingly, at low personal marginal tax rates, the combined federal/ provincial DTC may actually exceed the personal tax. For example, in Ontario for 2012 the lowest personal tax rate is 20.05% but the DTC allowed on eligible dividends is 21.42%, leaving an excess credit that can offset tax on other income. Due to the favourable DTC at low income levels, up to $47,885 of eligible dividends can be received tax-free by an Ontario individual who claims the basic personal amount and has no other income in 2012.
Some income that is earned in a Canadian corporation is not taxable, such as 50% of net capital gains and certain life insurance death benefits.
Different tax treatment applies to foreign dividends. When a dividend is paid from a non-Canadian corporation to a Canadian shareholder, a 15% withholding tax is generally applied in countries that have a tax treaty with Canada (although no withholding tax applies when dividends are paid on U.S. shares held in an RRSP or RRIF). The shareholder may claim a foreign tax credit for the withholding tax against tax otherwise payable in Canada on the foreign dividend, provided the shares are held in a non-registered account.
Jamie Golombek is Managing Director, Tax and Estate Planning with CIBC Private Wealth Management. He works closely with advisors to help them provide integrated financial planning solutions for their high-net-worth clients. Jamie is frequently quoted in the media as an expert on taxation. Follow @JamieGolombek www.advisor.ca/togo Podcast > Estate Plans Are For Everyone www.renaissanceinvestments.ca/en/jamie_golombek/
RENAISSANCE INVESTMENTS 3
TODAY’S INCOME DECISION
Should We Start Thinking About Inflation? ECONOMIC OUTLOOK
The U.S. Federal Reserve’s (Fed) third round of quantitative easing is different from the previous two, as it is basically unlimited in scope and duration. The Fed will continue to print money until it sees a “significant improvement in the labour market.” This could take a while. The market’s main focus was on the impact this move will have on equity markets. But the most important reaction was regarding inflation expectations, which following the move, rose half a percentage point to 2.5%. This would suggest that the market is starting to speculate that the Fed will be willing to tolerate somewhat higher inflation in order to improve the economic picture. And maybe this time around, the market is right. In fact, inflation has already been behaving in a way that is inconsistent with economic theory. With the U.S. economy still in a significant slack, in theory, core Consumer Price Index (CPI) measures should be decelerating. Yet on both sides of the border, core prices have firmed around 2%. Where has the missing disinflation gone? In part, inflation’s resistance to fall below 2% might reflect the growing skill mismatch in the U.S. labour market, with the skill level of the unemployed inconsistent with what companies need and want. This means that the bargaining power of existing labour is stronger than perceived, something very evident in the trajectory of real wages since the beginning of the recession. Furthermore, the Fed has done a lot to reinforce expectations that it won’t let CPI drift too low while the factors that prompted disinflation in the 1990s (especially a one-time shift in consumer goods production to emerging markets) have run their course. Core Consumer Price Index Canada 3.0
2.5 2.0 1.5 1.0
“Inflation has already been behaving in a way that is inconsistent with economic theory.” Our expectation is yes. At least for a while. The Fed, with its dual mandate of low inflation and full employment, will be willing to sacrifice some inflation in order to reach the promise of full employment. Accordingly, even if we see some signs of life, don’t expect the Fed to start removing liquidity from the market until it is certain that the recovery is durable and sustainable. We are not at this point yet. Overall, economic activity is far too weak to trigger any acceleration in inflation in the near term. However, at some point in 2013, the market will start assessing the inflationary potential of three rounds of quantitative easing on a gradually improving economy and a more tolerant central bank. It’s at that point that there might be some upward pressure on inflation expectations, which no doubt will find their way north of the border. Benjamin Tal is Deputy Chief Economist for CIBC. Described as one of Canada’s leading experts on the real estate market by the International Monetary Fund, he is responsible for analyzing economic developments and their implications for North American fixed income, equity, foreign exchange and commodities markets. Videos > Inflation 101 Inflation 201
0.5 0.0 2009
Simply put, inflation might be downwardly sticky at low levels. The practical implication here is that when the U.S. starts seeing more consistent signs of improvement that might generate some upward inflation pressures, the starting point of inflation will not be zero percent, but roughly 2% – the Fed’s target. Therefore it might be very easy to overshoot the target. The question is, will the Fed tolerate such overshooting?
Source: Statistics Canada, BLS (Bureau Labour Statistics)
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HE WOULD NOT STOP UNTIL HE REACHED THE MIDDLE.
GREAT LEADERS SEE FURTHER. AND PREPARE FOR ALL CONDITIONS. Reaching the top is about keeping your eye on the future. It’s seeing beyond today’s headlines and understanding the issues that will matter to you and your clients. When it comes to inflation, Renaissance is focused on solutions that will help you navigate what lies ahead. We go the distance so you can focus on heading straight to the top.
Sir Edmund Hillary conquers Mount Everest.
Renaissance Investments is offered by and is a registered trademark of CIBC Asset Management Inc.
Beyond Rapport Going deeper in challenging times
BACK OF THE NAPKIN
So, where do we stand today?
Over the years, I’ve talked a lot about the importance of creating a genuine emotional connection with our clients and prospects. In today’s economic climate, that connection is more critical than ever!
Following the near-devastating events of 2008, and what could cynically be characterized as a “false” recovery, we now find ourselves living in a unique environment highlighted by the convergence of three realities: 1
A generalized fear and mistrust of the stock market
Historically low yields in the bond market
A cash market that will cost us money in real terms
Yes, it’s true that economic struggles are nothing new, and we’ve all lived through dark periods punctuated by stock market crashes, secular bear markets, and range-bound consolidations. But, if you remember, many of those trials and tribulations also coexisted with bond and cash markets ready to serve as effective alternatives. We’re living in a period of time with a unique set of obstacles and challenges, and, as a result, many advisors are taking a break from active prospecting and gathering assets. They are instead focusing their energies predominantly on managing existing client relationships. It’s a fascinating study in human nature and a pattern we’ve seen repeated throughout our history. As the capital markets morph from one phase to another, so does our collective advisory focus. The environment sets the mood, and, subsequently, drives our behaviour. Sometimes we’re engaged in the process of growing wealth… sometimes we’re protecting hard-earned assets… sometimes we’re on a quest for income…and sometimes we’re prospecting wildly for new business. And, even though this ever-changing dynamic truly defines our professional lives… this moment in history somehow feels different. Recently, several top-producing investment professionals have confessed to me that they are completely perplexed by our current conditions. Even their most mature clients, who understand the need to maintain a long-term view, are having their patience tested at every turn. And, as the frightening news of global debt, and other markers of economic uncertainty, flows daily into our homes, the list of reasons to avoid investing continues to grow.
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When there’s “no place to hide and nowhere to run”…we tend to respond as humans do – with growing frustration, mounting anxiety, and learned helplessness. It’s not always enough to tell our clients that the S&P 500 Index is hitting five-year highs, or to selectively snip articles on “improved corporate earnings.” The markets are driven by fear and greed, and every emotion in between – including lethargy. This is not an environment where the evidence of sound economic fundamentals automatically leads our clients to make sound investment decisions. No, this is an environment requiring a delicate emotional touch. Ultimately, we’re in the business of finding prospects, turning them into trusted clients… and… keeping them. Somewhere, buried deep inside that trio of directives, is the required function of portfolio management.
Think about it, as licensed investment professionals, we gain ready access to a massive inventory of manufactured products, processes, and systems designed to simplify the task of “money management.” If we add to that mix a basic understanding of portfolio theory, asset allocation, and prudent investment principles – we can soon replicate the track records of some of the world’s top experts. Bear in mind, this reality takes nothing away from the specialized expertise that some advisors bring to the table, but rather highlights the plethora of tools available to facilitate the process. Unfortunately, that same inventory of tools is not readily available when it comes to navigating matters of the heart and mind. Ironically, the real struggle here has less to do with the technicalities of managing wealth, and more to do with the sensitivities of managing human nature. And, while human nature may be the greatest enemy to successful investing, it also remains the essence of who we are, and, therefore, needs to be factored into our client-communication matrix.
a first position bias will leave us with very little capacity for things like heartfelt empathy or sympathy. One of the greatest skills we can learn, as advisors operating in a relationshipdriven business, is the ability to travel freely and easily into “second perceptual position” with our clients. When we move from first position into second position, we essentially leave “ourselves” behind, and travel into the other person’s shoes. We vividly imagine what it would be like to be that (client), with their personal history, their family, their occupation, their financial means, and their challenges. When this is done with full engagement, it provides a rich understanding of that person’s emotional state and their unique set of needs.
“...forge stronger relationships as your clients discover your growing ability to align elegantly with them.”
PROCESS The process itself simply requires making the decision to travel into second position, and then practicing the procedure regularly with clients and nonclients alike. As you do so, you will not only gain a deeper understanding of your clients’ needs, but you will also begin to forge stronger relationships as your clients discover your growing ability to align elegantly with them.
FIRST PERCEPTUAL POSITION
SECOND PERCEPTUAL POSITION
By making the decision to fully identify with our clients, we gain an entrance into their personal experience, and can then begin to communicate from a place of real empathy.
For many investors, nothing is more attractive than a knowledgeable investment advisor who has also mastered the art of caring.
Gaining New Insights with Perceptual Positions Advisors are human too, and can easily become preoccupied with their own internal challenges during prolonged periods of uncertainty. But sometimes, we need to shake ourselves loose, step back into the ring, and aggressively seek a renewed understanding of what our trusted clients are facing too. Most of us spend the majority of our waking hours living in what’s known as “first perceptual position.” While in first position, we are fully aware of the sights we see, the sounds we hear, and the emotions we feel. In this state, we are almost exclusively focused on our own needs, wants and desires, and we are, therefore, fully self-aware. Naturally, and by its very nature,
Grant Shorten is Director of Strategic Insights at Renaissance Investments. He offers insights and approaches that will work with your clients and have an immediate impact on your practice.
RENAISSANCE INVESTMENTS 7
F O R K
T H E
R O A D
TODAY’S INCOME DECISION
51% of Canadian investors’ assets are now in balanced, fixed income, and money market investments. That’s a 50% jump in safer assets compared to 12 years ago.* This flight to perceived ‘safety’ comes with inherent risks that investors can’t afford to ignore any longer.
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Uncertainty is the New Certainty Given dim global economic prospects and unprecedented market volatility, it’s no wonder that skepticism is growing. As a result, many investors are sitting on the sidelines, moving to GICs and bonds and clinging to traditional income approaches to safeguard their capital. But with interest rates at historically low levels, traditional fixed income investing methods aren’t as effective as they once were. Taking inflation into account, the real returns on these investments is likely to be low, or even negative.
“We’ve had a major bull market in bond prices that started in September 1981 and has continued to this day,” says Barry Morrison, manager of the Renaissance Millennium High Income Fund and CEO of Morrison Williams Investment Management. “Interest rates have dropped to 284-year old lows, if you look at the U.S. and England. It’s uncharted territory, but the problem is that the typical yield on the average bond is 2.29% today, and that’s not going to cut it going forward.”
“...the problem is that the typical yield on the average bond is 2.29% today, and that’s not going to cut it going forward.” Barry Morrison These low yields are jeopardizing income generation for Canada’s aging population. The chart below shows, just 12 years ago investors needed only $800,000 in savings to generate $50,000 in annual income from 10-year U.S. Treasuries. Today, that magic amount is four times greater, or $3.3 million, to generate that same $50,000. Low Yields = Less Income Assets needed to fund $50,000 income $3.3 MM
2.5 2.0 1.5 $0.8 MM
0.5 0.0 July 31, 2000
The need for higher income-generating solutions is now more necessary than ever, and investors must rethink both their strategies and their attitude to risk. Patrick O’Toole, Vice-President, Global Fixed Income, CIBC Global Asset Management, and co-manager of the Renaissance Corporate Bond Capital Yield Fund notes, “The old ways of investing in bonds (60/40 split, a laddered bond portfolio, etc.) is not working. We have to rethink these old relationships, the credit crisis accelerated some of that thinking.” “We are in an environment where there is going to be a lot more volatility, both in stocks and bonds,” he says, “but you want to be compensated for that more so than in the past. You are not as concerned about growth, you are concerned about stability, a little more about safety, and you want to see some return on your investment – it is a new environment.” We have hit a fork in the road. The decision is whether to continue down the ‘traditional’ income path, or take a new route.
Opportunity is Out There A new approach is needed to successfully generate income, manage risk and beat inflation. This goal is not easily achievable. Professional advice is now more crucial than ever for most investors who lack market access, time and commitment, research and scale – all vital to unlocking new incomegenerating opportunities. Scour the Globe to Find the Best Yield “In this day and age, it’s hard to look at government bonds and just conclude automatically, that if you invest in a government bond, your investment is safe,” says Patrick Bradley, co-manager of the Renaissance Optimal Income Portfolio and a member of the Global Fixed Income Team at Brandywine Global Investment Management.
Special insights by:
July 31, 2012
Source: U.S. Department of the Treasury. Bloomberg. Calculation based on 10-yr U.S. Treasury yields.
The question is, how do you separate the good yield from the bad? “As a global bond manager, we have the resources to scour the globe to find good high-yielding solid credits and avoid those where we think there is not the greatest opportunity or where there is risk,” he adds.
RENAISSANCE INVESTMENTS 9
Move Beyond Traditional Income
Augment Returns by Diversifying Fixed Income Assets O’Toole believes a new fixed income approach is needed. “I think advisors and investors should be diversifying in fixed income like they’ve done in equities, do the same thing in bonds,” he says.
Traditional income GICs, government bonds Core domestic income assets Dividend stocks, corporate bonds
“I think advisors and investors should be diversifying in fixed income like they’ve done in equities...”
Non-core domestic income assets High yield bonds, preferreds Non-Canadian income assets Foreign bonds, global dividends
“Buy regular bond funds,” he adds, “(but also) look at corporate bond funds, look at high yield funds, look at real return funds. There are different vehicles out there to look at, to try and augment returns, and to help improve your situation as far as retirement planning.” With tighter bank lending, many companies are raising capital via corporate bond markets. Subsequently, for yield-hungry investors, corporate bonds offer attractive yields backed by solid balance sheets.
Dividend Yields are More Attractive Than Ever The financial crisis of 2008 spurred many companies to clean up their balance sheets and slash debt. Now many of these firms are financially sound, offering solid dividends. “I think you have an incredible market opportunity at the moment in terms of yields on dividends with well managed companies,” says Morrison. “In a dividend income approach, you buy a diversified portfolio of securities that we are on top of all the time to try and eliminate the bad apples. Your capital grows over time, and you have a lot more money in time. It is the dynamic of the two – of growing dividends and growing capital, versus a fixed income and fixed capital position.”
Advantages of Professional Scale O’Toole believes that professional managers add value by identifying and accessing quality holdings, “We can get access to fixed income products much more readily than say a retail investor can,” he says. “The vast bulk of corporate issue is from new corporate bond issues that are bought by institutional investors – large players, like ourselves – so we will tend to help drive a new issue. By that I mean we will try to set the term of that bond issue, also the spread or the coupon that ultimately the investor is receiving on that bond, so being a large institutional manager, I think, is an advantage in the Canadian marketplace.”
Let’s Make the Right Income Decision In today’s low growth and low-yield reality, investors relying on traditional income vehicles such, as GICs and cash, will likely not meet their retirement needs and goals. Renaissance Investments recognizes that investors need *Source: Investor Economics
Get started with your own Income Decision client discussions today by getting your Renaissance Investments Income Decision Toolkit at: incomedecision.ca or call 1-888-888-FUND (3863).
YOUR INCOME DECISION TOOLKIT 10 RENAISSANCE INVESTMENTS
Step-by-Step Advisor Guide
Video > Fork In The Road: Today’s Income Decision
Today’s Income Solutions – Sales Tools
to adapt and work with their advisor to successfully navigate this new income reality. Whatever your clients’ risk tolerance, there are many ways to generate income, including fixed income diversification, equity income funds and inflation-proof investments. Our comprehensive suite of income-generating solutions can be tailored to satisfy your clients’ risk appetites and needs.
TAX-EFFICIENT INTEREST INCOME NO LONGER AN OXYMORON Jamie Golombek
ADVISOR ToGo Access to the experts when you need them
Access the Experts When You Need Them
Listen to short podcasts from the experts quoted in this article.
Barry Morrison Morrison Williams Investment Management
Podcast > Find Yield In Down Markets
Patrick Bradley Brandywine Global Investment Management
Podcast > Don't Give Up On Bonds
Patrick O’Toole CIBC Global Asset Management
Podcast > Help Clients Buy Bonds
Investors have struggled for years trying to come up with a tax-efficient way to invest in fixed income securities outside a registered plan. We put this task to the alchemists at Renaissance Investments, who have come up with a way to generate capital gains where the return is based on an underlying diversified, professionally-managed corporate bond portfolio, resulting in a tax advantage for investors. Through the use of forward sale contracts, also known as ‘swap agreements,’ the Renaissance Corporate Bond Capital Yield Fund seeks to generate and pay out a tax-efficient monthly distribution that will be characterized as a capital gain as opposed to ordinary income. As the example below shows, an Ontario investor in the top marginal tax rate of 46.41%, who invested in the fund and received a 3% pre-tax return, would yield 1.92% after tax and forward contract fees by having the return paid out in the form of capital gains, versus only 1.61% if the same pre-tax return was taxed as interest income – a tax benefit of almost 20%.
An illustration of the tax treatment on interest income vs. capital gains Pre-tax Return
Interest Income Earned
Net After-tax Return
Net Pre-tax Capital Gains2
Capital Gains Tax1
Net After-tax Return
Interest Income Scenario
Capital Gains Scenario
1 Assumes interest income tax rate of 46.41% and capital gains tax rate of 23.20% (top Ontario tax rate for 2012, not considering the high-income surtax proposed in the 2012 Ontario provincial budget). 2 Net pre-tax capital gains return is after assumed forward sale agreement costs used in the structure. There are risks associated with an investment in the Renaissance Corporate Bond Capital Yield Fund, including risks with respect to the tax treatment of the return generated. For further information regarding these risks, please refer to the Simplified Prospectus. There is a counterparty fee associated with the forward sale agreement.
RENAISSANCE INVESTMENTS 11
TODAY’S INCOME DECISION
Today’s Income Solutions It’s time to take a new approach
The flight to ‘safer’ assets in the face of volatile markets no longer generates sufficient income to meet retirement goals, manage risk and beat inflation. Take action and explore new income opportunities to satisfy the need for income, stability and growth:
Renaissance Optimal Inflation Opportunities Portfolio
Inflation Mitigation Less Risk
Customizable framework to navigate today’s income landscape
Renaissance Corporate Bond Capital Yield Fund
Renaissance Optimal Income Portfolio
Renaissance Millennium High Income Fund
Renaissance Short-Term Income Fund Tax-Efficient Income Conservative Income
Leverage the framework Core Income
Offer tax-efficient income, capital appreciation with low volatility and inflation protection
Offer a steady flow of income while dialing down risk for more conservative investors
Offer enhanced income opportunities from diversified, tax-efficient sources of income
Offer inflation protection for investors while providing diversification through non-traditional assets
Renaissance Optimal Income Portfolio
Renaissance Short-Term Income Fund
Renaissance Corporate Bond Capital Yield Fund and/or Renaissance Millennium High Income Fund
Renaissance Optimal Inflation Opportunities Portfolio
For more information on how to put these solutions to work for your clients, please speak to your Renaissance Investments representative.
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Prepared to Listen THANKS TO OUR SUPPORTERS
Without the support of advisors like you, Renaissance Investments would not enjoy the privilege of helping so many Canadians realise their investment goals. Here is one of the outstanding professionals we are so very proud to work with. What I love about the business: This business allows me to write my own story, chapter by chapter. In my experience, hard work, patience and service that goes beyond expectations is what turns a prospect into a client. These are all factors that I can control myself. I find that whatever effort you put in, you get back in return. Another reason I enjoy this business is the fact that I can build my practice by offering services that are personalized to my clients. I can focus my practice on what I believe is best for my particular clientele. This business allows me to be flexible and use solutions that I am comfortable with and that will meet my clients’ individual needs.
actively listen to what the client is trying to achieve – hearing their needs is essential. The best way to make a good first impression is simply to listen. Listening will show the client that I have their best interests in mind. Best tip for gaining new clients: The best tip for gaining new clients (and retaining current clients) is to always be yourself, be honest, be transparent and think outside the box. There is no fixed formula for investing. Clients want tax efficiency, low risk and a holistic financial plan that will cover all their needs. Over the years I have realized that no two clients are the same. Therefore, it is important to understand their unique needs and tolerance. Secondly, you can’t be everything to everyone. It’s important to identify prospective clients that you would like to work with. Initially, it can be difficult because you are pressured to build up your client base. However, sometimes refusing business can help you grow relationships with existing clients that have a positive attitude. This will create a loyal client and a circle of strong potential references. What I offer to the local marketplace and to my clients:
Lastly, I love meeting new people, listening to their needs and working closely with them to meet those needs with a comprehensive financial plan. Often a customized plan will comprise of an investment portfolio, insurance solutions and other financial vehicles that I can leverage from my partners, including Renaissance.
Over the past few years we have been through a difficult environment. We cannot control the financial markets and political uncertainty. We focus on what we can control, which is planning and creating low risk, tax-efficient portfolios for our clients with a high level of client service. Always be proactive – that’s the commitment I offer my clients.
How I prepare and lead client meetings to ensure they are productive:
My team and I are constantly monitoring our clients’ portfolios and the current events of the day. In order to provide superior service to our clients, we like to take a proactive approach. If we recognize an opportunity or idea that may benefit a specific client, I will contact the client myself to set up a meeting at their convenience. This allows us to keep our clients engaged, to discuss portfolio evaluations and also provide relevant new investment ideas or strategies. The current economic environment has resulted in very volatile financial markets. By being proactive with our clients we can help them feel more at ease about their investments.
Yoga, playing team sports, spending time with my family.
What do I do to leave a good first impression with prospective clients: I believe the initial meeting is the most important contact you will have with a client. If you are prepared to listen, it really allows you to understand the needs of a prospective client. I never prepare any material to present in a first meeting, except for a team profile page. My goal in the first meeting is to
One item I can’t be in a client meeting without: A pen and notepad! I like taking notes.
Firm: CIBC Wood Gundy Years in Business: 14 Team Members: 3
Filomena Catallozzi Rizwan Moorji
RENAISSANCE INVESTMENTS 13
December ~ time to party!
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To nurture your most valuable corporate relationships, host a December holiday event. Here are some tips on how to throw a successful bash that will make others green with envy.
take charge of party planning Planning an event for your clients can seem like an overwhelming task, especially for first-time hosts. But, like any big project, organizing a successful event can be broken down into a few manageable steps.
No matter how many emails, texts or tweets you broadcast, establishing and maintaining a real connection with your clients requires an occasional injection of face-time. Hosting a seasonal event allows for real, uninterrupted conversation of the kind that lets people know they are more than just a demographic. Plan a warm and welcoming event this December – drinks, lunch, dinner or a full-blown party. It’s the one time of the year when it’s okay to take the focus off building your business and concentrate on building relationships, establishing your reputation, and fostering peace and goodwill with your clients.
Make your event stand out Everyone’s social calendar is packed in December, and people are pretty picky about which events they plan to attend. Make sure your party makes it to your clients’ “To Do” lists by serving up entertainment with a twist. Before you start planning, spend a few minutes thinking about your guests. What would they enjoy most? Do they have children who should be included, or will this be an adults-only event? Do they like to dress-up, or would they welcome a casual outing? Think about the ambience you want to create at your event, and the impression you would like to leave. A sit-down dinner is ideal for a small group of people who know each other well, but if you want people to mix and mingle, a cocktail evening is probably a better option. Here are some quick ideas to make your party stand out from the seasonal crowd: entertain guests with interactive technology screens (icebreakers, trivia) and games (Guitar Hero). Serve funky food: molecular gastronomy, interactive food stations, a seafood bar, or specialty cocktails. Swap dessert for a serve-yourself sundae station. Offer an incentive to guests in the form of a raffle, silent auction, seasonal gifts, awesome goody bags, or an invitation to bring their spouse and children. TIP: Make sure you include details about your food and giveaways in your invitation. Instead of the usual group email invitation, send a colourful email invite through www.evite.com or www.punchbowl.com. Both are free, and you can customize your invitation, upload your contact list and send it in less than half an hour. Or, make an impact with beautiful paper invitations sent by snail mail: check out templates at www.vistaprint.com, or talk to a local printer or graphic designer.
1. Plan your guest list. Include a mix of long-time clients, colleagues, staff and prospects. A party is a nice way to say thanks to your clients for another year of business, and the relaxed atmosphere gives you an opportunity to spend some pressure-free time with people you would like to know a little better. TIP: The more people you invite, the better. 2. Choose a venue and a date. Now that you have a rough idea of how many people will be attending, choose an appropriate location based on available room size and convenient location. Shortlist a few of your favourites, call around for the best available dates and times, and make a reservation as soon as you can – restaurants fill up quickly this time of year. TIP: Don’t neglect simple things like making sure it’s easy for guests to travel to and find your venue. 3. Decide on a theme, if you want one. If a regular cocktail party feels too low-key for you, consider throwing a Feliz Navidad evening at a Mexican restaurant or hosting a Cinq à Sept (literally, “five to seven”) party, a practical Québec tradition that gathers everyone together for French wine and snacks, but allows guests to be home in time for dinner. TIP: Your party could also be centred around an event: a gallery hop; a cocktail-making evening or cooking class; or a champagne, beer or wine tasting event. 4. Send your invitations. Mailed or emailed invitations are fine. 5. If you need to, select a menu and pre-order your food. Some spots allow for pre-ordering cocktail snacks, leaving you free to chat with guests without the distraction of choosing and ordering. If you are taking a large group out for a sit-down dinner, see if you can arrange with the restaurant to present a selective mini-menu to your party, with no visible prices. This makes ordering stress-free for everyone, and turns a dinner in a public restaurant into a private party of your own. TIP: Ensure your guests have a place to put their coats, and get a glass into everyone’s hand immediately by serving a “welcome drink” that can be pre-poured. 6. Get there early so you can greet your guests as they arrive. Whatever you plan, remember to respect your clients’ tastes, interests and comfort level. TIP: Put your guests’ needs first and foremost, and your event will be a success.
RENAISSANCE INVESTMENTS 15
The basics of
Hosting any party can be stressful, but hosting an event for your most important clients can really make you sweat …and the host should never look like they’re sweating. If you have planned everything carefully, there should be nothing to worry about at the party except making sure your guests enjoy themselves. Even if some little thing does go wrong, it’s up to you to fix it quickly, smile and move on. Take your time with everyone, shake hands warmly and don’t get hung up on the many little niceties of etiquette your grandmother may have drilled into you. Remember, being courteous is more important than rules about handkerchiefs and which fork to use.
Still, rules exist for a reason, so here are the top 10 Do’s of corporate party hosting.
16 RENAISSANCE INVESTMENTS
Be on time
Wear your business best
Consider making a brief welcome speech (30 seconds at the most) thanking your clients for their loyalty, a great year, etc.
Make sure everyone on your team knows who the guests are, including their names and titles, and what they worked on over the year
Circulate and speak to those people you don’t normally talk to
Check out industry and general news before you go so you have something to chat about
Most people are their own favourite topic. If you have trouble chatting, just ask people about themselves
Network lightly – it’s supposed to be a party
Be attentive: ask people if they need their drink refreshed or something to eat
Make sure you spend a few minutes with every guest
brain calisthenics Word scramble – Unscramble the following letters to spell words from the article on pages 8-11:
Sudoku – Complete the Sudoku puzzle so that each and every row, column and 3x3 box contains the numbers one through nine only once.
1. stssae 2. ktimpcssei
3. rirtotery 4. avsngsi 5. ohgrtw
9 4 2
1 4 Source: 4puz.com
Spot the difference – Can you spot the five differences between the pictures below?
Check your answers at www.renaissanceinvestments.ca/magazine/answers/
RENAISSANCE INVESTMENTS 17
To learn more about how Renaissance Investments can help you and your clients, visit www.renaissanceinvestments.ca or call 1-888-888-FUND (3863).
FOR DEALER USE ONLY Renaissance Investments and the Axiom Portfolios are offered by CIBC Asset Management Inc. This material was prepared for investment professionals only and is not for public distribution. It is for informational purposes only and is not intended to convey investment, legal or tax advice. The material and/or its contents may not be reproduced or distributed without the express written consent of CIBC Asset Management Inc. â„˘ Axiom, Axiom Portfolios and Renaissance Investments are registered trademarks of CIBC Asset Management Inc.
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