Remuneration

Our clients pay for our services a management fee according to an agreed upon percentage of the assets under management.  The rate is mainly defined according to assets and varies between ¾ of 1% to 2%.

In 1995, we introduced the management fee structure, replacing the commissions on transactions.

The following points explain our views:

1. The work of the portfolio manager, which more closely resembles our activities than that of a sales representative, has a continuous and regular scope.  It is only normal that our remuneration be synchronized with the way our service is rendered. Our actions are not of a punctual and occasional nature, which would suggest a commission-based approach;
2. The role of the principal financial advisor requires complete trust between the customer and the advisor. The commission-based formula is susceptible for some not to favour such a climate in various respects :
   • the advisor's remuneration is linked to the execution of a transaction.  The client could wonder if the transaction is recommended in order to generate a commission or, even worse, if the product is offered because it generates a higher commission than another product.  The conflict of interest environment, even if only apparent, is not conducive to the essential establishment of absolute trust; and
   • most clients do not know how much the fixed income securities portion of their portfolio costs (which often represents over 50 % of the portfolio) and also ignore the fees received by their advisor on the sale of investment funds. This lack of transparency is not appropriate in the light of the role we want to have with our clients ;
3. The fixed-rate fee formula ensures that the only possible source of increase in the advisor's remuneration is the growth of the customer's portfolio, whether this stems from the annual return on investment or from additional contributions. This corresponds exactly to customer expectations, in which a partnership is established where interests coincide perfectly;
4. We are convinced that a non-negligible part of our success in obtaining competitive portfolio returns is because our portfolio management is 'pure' and unencumbered from having to generate transactions every month to earn a living; and
5. In view of the significant investment that we have made in our business, it is obvious that the steady monthly revenue generated from the fee formula is advantageous and allows for better planning.