IPG Completes its 2012 Annual Educational Conference

The 2012 IPG Annual Education Conference was held during the weekend of October 11th to 14th in the beautiful Park Hyatt Hotel in downtown Toronto, Ontario, Canada.  The entire event had about 220 people in attendance with a strong educational content for financial advisors and some great after hours entertainment.

We were proud to announce the following award winners this year:  Associate of the Year Award was presented to Bona Savone, the branch office of the year was presented to our Sault Ste.Marie office and the administrator of the year was presented to Wendy Molinaro in our Sault Ste.Marie branch office. Congratulations to everyone.

For many years, our conference has been considered one of the best in the industry from an educational and networking point of view. We are extremely fortunate that our sponsors go out of their way to support us by having their top level experts speak on many relevant and timely topics.

IPG Launches a new Client Website and Blog

After months of research and work, Independent Planning Group has launched a new website for the clients of their financial advisors.  The new website is structured as an information source for investors and financial planning clients.  Several information sources include many investment calculators, client webinars and advisor websites.  Please take a moment to view our new website at www.yourplan.ca .

Products - Standard Life launches website for PRPPs, VRSPs - Article - investmentexecutive.com

Products - Standard Life launches website for PRPPs, VRSPs - Article - investmentexecutive.com

Industry News - Flaherty announces date for the elimination of the penny - Article - investmentexecutive.com

Industry News - Flaherty announces date for the elimination of the penny - Article - investmentexecutive.com

Company News - Iranian Canadians have bank accounts closed by TD - Article - investmentexecutive.com

Company News - Iranian Canadians have bank accounts closed by TD - Article - investmentexecutive.com

Winfund to be acquired by RPM Technologies

Please note that Mackenzie Investments has entered into a definitive agreement with RPM Technologies to sell all shares of Winfund, which includes all of its assets and operations, to RPM. The transaction is expected to close on July 31, 2012. Mackenzie has made a strategic decision to sell Winfund and continue focusing on its core competencies of investment management, distribution and client servicing. There is no change to Mackenzie’s unwavering commitment to support financial advisors. RPM is a Canadian company focused on investing in and building software solutions for our industry. Both Winfund and RPM have proven expertise, strong intellectual capital and excellent software systems. This change will not impact your day-to-day operations and no action is required on your part. Winfund and RPM have assured us there will be no interruption to the level or quality of service that you are accustomed to receiving

From the Regulators - FSCO to review suitability of life insurance products - Article - investmentexecutive.com

From the Regulators - FSCO to review suitability of life insurance products - Article - investmentexecutive.com

Financial Planning for Canadians: Planning for long term care - News Canada

Financial Planning for Canadians: Planning for long term care - News Canada: Planning for long term care - News Canada

IPG launches new Financial Planning blog for Canadians

We are proud to announce that IPG has launched a new blog to help educate Canadians on the importance and benefits of financial planning and advice.  

We believe that many Canadians are under-served when it comes to having access to comprehensive financial advice.  Our plan is to provide helpful and meaningful information on all aspects of financial planning such as retirement planning ( will I have enough money to finance my retirement?), estate planning (will my family be well looked after if something happens to me?), education planning (will I be able to afford a post-secondary education for my children?),  risk planning (will my family be protected if I become disabled or have a critical illness?) and life goals planning (will I have sufficient savings to take advantage of my dreams to travel, buy a vacation home or buy a Harley Davidson?)

Please take a moment to visit www.onlinefinancialplanning.ca and take a look.  We've got just a couple of articles so far but we expect this blog to grow.  Please feel free to offer us with recommendations on what kind of information we should be discussing.

Financing Options on Buying an Advisor’s Book – Part 3

Creative Financing Options on Buying a Financial Advisor’s Book

One of the most important aspects of buying an advisor’s book of business is to ensure that the clients make a smooth transition to their new advisor owner.  Depending on the size and complexity of the book, this can take up to 2 years or more.  So, its in the purchaser’s best interests to ensure that the seller is willing to stay active and be motivated to transfer the business to the new owner.

I have witnessed many deals and I have never seen a deal whereby a seller demands and receives 100% of their asking in cash, as a down payment.  I think this is a recipe for disaster.

In structuring a fair deal for both parties, I believe a purchaser should never offer more than a 50% down payment to purchase a book.  The balance should be paid out to the seller over a 3 to 10 year period, depending on individual circumstances.  The three-year term as a minimum is deliberate.  A seller should have “some skin in the game” to ensure that they’re motivated to transfer the client base to the new owner. 

Ideally, from a purchaser’s point of view, the payment terms should be at no interest and based on either quarterly or monthly payments.

Depending on the financial status of the purchaser, a larger down payment in cash should mean a lower negotiated price and better terms.  If the purchaser does not have the financial resources to provide a large down payment, then some creative financing options should be considered such as:

·      - Don’t haggle with the asking price.  Give the seller want he/she is asking and focus on negotiating favourable terms such as a longer payment term.

·      - Offer a higher price, if necessary, and negotiate on the favourable terms. If the seller is motivated to deal with you, get the seller involved in the financial analysis of buying the book and ask for their help in coming up with solutions

·      - Consider a home equity loan. Considered to be one of the cheapest forms of financing.

·      - Speak to your product suppliers. Some of them may be willing to provide financing.  This might be an ideal route to use as long as you don’t have to compromise yourself and your clients by agreeing to sell the lenders products and services.

In conclusion, the seller’s hardest job will be to find a suitable successor for his/her client book.  Once a seller finds such an individual, they will be motivated to help the purchaser get involved.  Both parties should keep their minds open and creative during negotiations.  Good luck.

Financing Options - How to Buy a Financial Advisor’s Book of Business

As you read through our blog, you’ll notice that we’ve written several articles on the do’s and don’t’s of selling and buying a financial advisor’s book of business.  One of the most important things that a buyer should do prior to approaching any potential seller is to do their homework.

As an example, if you’re shopping around for a new home, an experienced real estate agent will suggest that you obtain pre-approved financing prior to beginning your search.  Pre-approved financing helps the purchaser understand what they can afford to buy and furthermore, gives the potential seller confidence to enter into negotiations with the pre-approved purchaser.  Nothing can be worse for the seller to enter into negotiations, take their home off the market only to find that the purchaser’s request for financing has been declined.

The same should hold true for financial advisors that would like to purchase another advisor’s business.  Several options are available to the potential purchaser such as applying for a secured and/or unsecured line of credit, speaking to the current dealer or MGA about internal financing options and also running some financial analysis on a potential offer that would include some cash and seller financing.  A purchaser that can confidently offer a prospective seller some assurance with regard to financing will be held in higher regard than a purchaser that is unsure of their financing arrangements.

One of the questions that I’m commonly asked is “ If an advisor’s business is valued based on their annual revenue, how can I easily know if I can afford to buy the business without asking them some personal questions about their annual revenue figures?” Well, you don’t have to.  A rough rule of thumb is the rule of 0.70%. That is, if an advisor tells you that they manage a mutual fund book of $10,000,000, then multiple their assets by 0.70% to come up with a ball park annual revenue figure ($70,000).  Advisors are more open to discussing their assets under administration and this will give you a general idea if you can afford to buy the advisor’s business or not. If you can’t afford to buy a $100 million book, then don’t waste your time.

In my future blogs, I will expand on various financing options that you can use to purchase a book without having to put down a lot of cash. Stay tuned.

Fee for Service

Compensation disclosure to investors is on the rise in Canada.  Both recent and pending legislation will require financial advisors to disclose their compensation, embedded or otherwise, to investors at the point of sale and on a cumulative basis if certain proposed legislation is approved.

Embedded (or hidden) compensation such as back-end loads and trailer fees are reported to clients in prospectuses and information folders but many investors say that they do not read or in some cases, understand this important information. 

Over the past several years, many financial advisors have begun to opt for a Fee for Service compensation arrangement whereby their compensation is collected by charging the client a fee on the total investment assets under management.  This is a transparent and disclosed fee to the investor and in many cases, some of the investor’s holdings are redeemed to collect the fee. As well, through regular reporting, the investor is informed of the fee collected and in certain circumstances, can use the advisor’s fee as an income tax deductible expense.

No Bias on Fixed Income or Equities

When you charge a standard fee on the total assets managed, you, as the financial advisor, get paid the same amount regardless of the asset class in the investor’s account.  As an example, if an investor’s account is holding fixed income mutual funds and equity mutual funds in a non-Fee for Service account, you will be paid a lower trailer fee on the fixed income mutual funds. This could lead to a bias for equities.  With a Fee for Service account, you can hold many types of investments within an account and your account fee is collected on the account rather than asset type.

Annuitize Your Book – Increase your Book Value

Recurring revenue on a fee for service book of business can be worth more when it comes time for an advisor to think about their succession planning.  Typically, fee revenue is more predicable and profitable than a variable commission based business.

Develop your own Wrap Service Offering

Fee for service accounts gives full pricing flexibility to the advisor which can help the advisor develop a business plan/ wrap account offering for their practice.  As an example, an advisor can opt to charge a lower fee based on the amount of assets under administration to encourage larger accounts. Furthermore, an advisor can add specific services and benefits based on account sizes and fees.  Another example would be to advertise for accounts over $250,000 and for a 1% fee, I will offer a comprehensive financial plan, one income tax preparation, a will review and one annual portfolio review.  If the account totals $500,000 or more, then the fee will become 0.90% and I will offer the same services but add one more income tax preparation.

In conclusion, the industry is moving toward more compensation disclosure and a fee for service approach is one way not only maintain your competitive advantage but to also improve your offering.  

Career Opportunities for Women

A career opportunity as an independent financial advisor can be an ideal career for many women as explained in Julia Chapman's video below. Please take a moment to view the video.


http://www.youtube.com/watch?v=K10G339cb5Y&feature=related

Long Term Care Insurance

If you are a typical Canadian then you likely have not considered Long Term Care Insurance. Don't beat yourself up too much on this as it could quite likely be because no one has taken the time to inform you about this valuable insurance protection. However take note, I believe that Long Term Care Insurance is going to become the most sought after insurance need as statistics indicate that we have increased our life expectancy and with that comes other major issues.

What are my Odds of needing Long Term Care?
There's greater than a 70% chance you'll need some sort of long term care after age 65.


Won't my Government and Employer Health Benefits help me? 
No, even if you have group benefits and with the excellent provincial health coverage we enjoy, neither are comprehensive enough and chances are that you and your loved ones will end up footing most of the bill.

At IPG Insurance we're working hard to inform more Canadians of this unaddressed need. To help support our advisors we are pleased to announce that one of the most qualified Long Term Care Specialists in Canada has aligned her practice with IPG Insurance. Wendy Black with over 20 years experience in Long Term Coverage is willing to shore up our advisors successful practice by teaming with our advisors, meeting with their clients and educating them on Long Term Care Insurance. If you'd like to connect with Wendy, please contact me at abulloch@joinipg.com

In the meantime, I encourage you to check out our website for more valuable information on long term care insurance: who needs it and how much and when is it necessary. Please visit www.ipginsuranceinc.com product info-long term care.

 Thank you,

Allan Bulloch

James Campbell joins Brigata Capital Management

Vince Valenti, president of Brigata Capital Management, is pleased to announce that James Campbell will be joining our firm on Monday, January 30th, 2012 as Vice-President of Operations for Brigata Capital Management. James’ mandate will be to assist us with the day to day operations and business development of Brigata.

James brings many years of industry experience to his role as Vice-President of Operations. He holds numerous professional designations, such as; Certified Financial Planner (CFP), Canadian Investment Manager (CIM) and a Masters of Business Administration (MBA). James has been an active volunteer in our community and has been involved with the Canadian Securities Institute and Algonquin College on various committees.

James can be contacted at:

35 Antares Drives
Ottawa, Ontario, K2E 8B1
Tel: (613) 288-0572
Email: jcampbell@brigatafunds.com

What is an Independent Financial Advisor?

Independent Financial Advisors are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products and services from a wide range of suppliers.

The Canadian financial services industry has many types of individuals that call themselves financial advisors but depending on the services they offer and the organizations they represent, many cannot call themselves truly independent.

A truly independent financial advisor is an individual that is not bound or motivated by quotas, minimum desk production and other production targets that may result in exotic trips and prizes for the advisor or conversely, immediate dismissal if targets are not reached. As well, an independent financial advisor must have access to a very broad shelf of products and services so that they can easily “shop the market” for the best possible option for their clients.

Some financial service organizations aggressively recruit their own sales force of advisors to promote only the organization’s limited product shelf. Having access to 3rd party products and services is not allowed and discouraged. These organizations typically encourage their sales force to promote the company’s most profitable products and tie incentives to reaching specific targets. It is comparable to walking into a Loblaws Superstore to see that thousands of 3rd party products have been removed from their shelves and only No Name products are offered. While No Name may offer good value, they may not always be the best choice!

Do Professional Designations Matter?

Yes, professional designations such as the Certified Financial Planner (CFP) do matter and demonstrates that the advisor has the knowledge to create and monitor a financial plan. However, the fewer product and service options that a CFP has means that their client may not receive the best features and pricing to the solutions recommended.

The Perfect Independent Financial Advisor

In my opinion, the perfect independent financial advisor would be an advisor that holds a professional designation such as CFP and demands that all new clients receive a written financial plan. The perfect advisor would hold more than one industry license such as a life insurance license, mutual fund license or securities license. Multiple licenses would allow them to shop the investment and insurance market for the best possible options to meet the client’s needs.

As an example, if a written financial plan presents a need for the client to obtain life insurance, disability insurance and set-up a monthly investment plan to save for retirement or a rainy day, then these products must be “shopped around” by the advisor to ensure that the most comprehensive and cost effective insurance is purchased and the best money managers are selected based on risk tolerance and other objectives. Rarely would any one company have the best solution available for each distinct product offering.

The perfect independent financial advisor would have access to a large variety of money managers, insurance companies, banks and other financial institutions such as investment counselors. Depending on the size of an investment plan, my perfect independent financial advisor would work with other 3rd parties as my “quarter-back” to find alternatives for my specific needs.

The perfect independent financial advisor would be associated with suppliers, investment dealers and brokers that would respect their independence and allow the independent financial advisor to own their book. Many organizations do not permit an advisor to own their client base and must leave their clients behind if they leave the organization. These individuals are purely “renting” client relationships rather than having a long term ownership stake in the well being of their clients. I think you would agree that an owner takes a greater pride in their work than a renter would.

Lastly, my perfect independent financial advisor would provide me with an engagement letter or document to help me understand any fees, commissions or charges that I would be faced with. With transparency in any relationship comes trust and I would rather work with my advisor knowing that all avenues and options have been explored rather than question their integrity and have doubts that my financial future is not properly safeguarded.

In my past 20 plus years as the president of Independent Planning Group Inc., we have developed an environment where financial advisors can be truly independent and offer unbiased advice. We have promoted the benefits of comprehensive financial planning to all of our independent associates and encourage them to offer this important service to their clients.

IPG Insurance Launches Online Travel and Health Insurance for its Advisors

As the vast majority of Canadians turn to the internet for research before buying a product and service, we wanted to offer our advisors the ability to take advantage of the immense potential the internet offers.
 
To quote a Google Canada spokesperson, "we're at the stage where if you're a business, whether it's an independent advisor or any kind of business, a website now is like your calling card. Businesses won't be found if they aren't where customers are looking for them." Their research shows that 86% of Canadian consumers will research product and services online before they buy.
 
I cannot recall the last time I personally used a phone book instead of just looking through the internet to find "stuff". We want to use the IPG Insurance website as an effective way to bring in new business and to also become a lead generator for our advisors. While the internet will not replace advice giving, you can impart knowledge and experience through the internet.
 
As you browse through our new website you'll see that we've teamed up with Manulife's Cover-Me, Follow-Me and Travel Insurance client orientated website. In 2011 Manulife's Cover-Me.com client orientated website was awarded the 2011 International Business Award of Best Insurance Website in the world. Cover-Me was recognized for its consumer-friendly quote and application process, knowledge center and client-referral program. You also no doubt have noticed the extensive TV advertisement Manulife does for this product line up.
 
With the introduction of IPG Insurance website, clients that use our website to purchase these products, Manulife will pay compensation to IPG Insurance. It is our intent when compensation is paid to us, we'll browse our VO client data to identify if the client is one of our advisors and proceed to pass on the commission to that advisor.
 
In addition IPG Insurance's website has a request for quote section. While as you will see, this will not get the consumer a quote, it will send us their request. When we receive their request to quote, we'll once again review VO to look for any matching advisor, but if none is found we plan to distribute these leads to interested advisors so that they may respond in a timely manner and hopefully turn this lead into a client of theirs.

For more information, please visit www.ipginsuranceinc.com
 
Allan M. Bulloch
President of IPG Insurance