Benefits of Investment Counsel Firms

Once reserved for only the wealthy, access to investment counsel firms have become more commonplace in recent years.
At minimum, one requires obtaining a Portfolio Manager designation or similar and the granting of a license from the BC Securities Commission with all related initial requirements of experience, capital, insurance and ongoing regulatory compliance.
Potential advantages of this structure to an investor may include increased freedom, transparency, lower fees and potential tax advantages.
Unlike a traditional account where each individual transaction must be confirmed with a client, investment counsel firms have discretion to execute trades within the objectives of the account. This frees the client from day-to-day participation in investment decisions and its’ related stresses.
Safeguarding of a client’s assets is held with a firm known as a Custodian which also provides monthly statements, tax receipts and any and all cash requirements.
The management firms are required at minimum to provide Quarterly Reports detailing all securities held, transactions and performance relative to applicable benchmarks.  Some firms provide additional services like financial and tax planning while most partner with financial planners, accountants and lawyers.
These firms work on a fee for service basis usually as a percentage of assets under administration.  Consideration is made for the type of investments held and price point breaks reward those with greater capital invested.  This arrangement avoids retail commissionable activity and eliminates the question of inherent conflicts of interest.
Unlike a mutual fund, securities are mostly individually owned providing transparency and more flexibility for year-end tax planning.  The fees also tend to be lower than those associated with a mutual fund and compare favourably to a stock and bond portfolio with limited turnover.
A significant benefit for some is that CRA rules allow a taxpayer to deduct all fees paid for advice in the buying or selling of a specific security from income.  What this means is that management fees charged by investment counsel firms are tax deductible for non-registered accounts.
This structure is best suited to those with more capital to invest.   Regional firms may consider accounts of $200,000 or more although some in larger centers will demand much higher minimums.  Each firm will have a different approach so it is best to interview several before making a commitment.
With future returns likely to be constrained by economic growth one way an investor can improve their overall returns is by seeking the most cost-effective and tax efficient strategy for their needs.