The Renaissance QUARTERLY FUND PROFILES / PRACTICE MANAGEMENT / OUTLOOK / OPINION
Q3 – SEPT. 30, 2016
Focusing on the Opportunity
CR
M2
CRM2’s final stage is a clear call to solidify client relationships
For Advisor Use Only
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In this issue
Economic Outlook 4 A Few Points Regarding the Situation… Tax and Estate 6 What Do “Tax Rates” Really Mean? Global Market Perspectives Central Banks Pass the Baton
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CRM2 – Focusing on the Opportunity 8
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Solution Highlight 11 A Powerful Solution that Performs and Protects Give the Gift of Time This Holiday Season and Beyond
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Thanks to Our Supporters 15 Always Search for Opportunities to Add Value
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Brain Calisthenics 16
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From the Managing Director of the Renaissance Sales Team
Reaffirming Your Value Through CRM2 Welcome to the fall edition of The Renaissance Advisor. It’s hard to believe that we are deep into fall and closing in on the final stage of one of the biggest regulatory changes yet—the Client Relationship Model Phase 2 (CRM2). As part of CRM2, clients will receive a new enhanced annual report in 2017. By discussing these changes with clients in advance, you can reaffirm why your role is critical to helping them achieve their wealth goals. In our feature article, CRM2—Focusing on the Opportunity, we discuss the new annual report and some of the key points that will help you address client questions. On a festive note, as the holiday season quickly approaches and gift-giving activities are top-of-mind, you may be considering giving your time to a worthy cause. In Give the Gift of Time This Holiday Season and Beyond, discover ways you can make a difference and how charitable endeavours can contribute positively to your health. We also hear from our experts. Jamie Golombek discusses what ‘tax rate’ really means, and Ben Tal offers insights on world economies. The Solution Highlight is dedicated to the Renaissance U.S. Equity Income Fund. The fund recently celebrated its third anniversary as well as its strong three-year performance—making it an excellent option for your clients’ portfolios. Contact your Renaissance sales representative today for more information. Finally, thank you for your readership and support of The Renaissance Advisor magazine and thank you to those who participated in our recent survey. Your responses will help shape future advisor communications. We look forward to providing you with a new solution in 2017. As always, you can expect timely market information, insights from our experts, tips on managing your practice and more. We thank you for your business and welcome your feedback.
Shelly McLean Managing Director, National Sales Renaissance Investments
A Few Points Regarding the Situation… economic outlook
The Brexit vote was nothing more than a buying opportunity. Markets reacted by overestimating the short-term impact and underestimating the long-term impact, as they usually do. Investors panicked following the vote. However, today they seem to be too relaxed about the potential long-term impact of Brexit on the very stability of the European Union.
As for the euro, its stability depends to a large extent on one person— Angela Merkel. The current refugee crisis, and its damaging impact on political stability in Germany, can have a significant effect on the euro’s volatility should markets start to toy with the idea of a Merkel election loss. Add to this the rising uncertainty regarding the stability of the Italian banking sector and the diverging monetary policies between the European Central Bank and the U.S. Federal Reserve (Fed). There is good reason to believe that in the foreseeable future the euro will be under pressure. In China, there are some early signs that the authorities are willing to slow the pace of progress and move toward a more balanced economy (less investment, more consumption). This should encourage a modest increase in demand and prevent unemployment from rising too rapidly. Bank lending is now rising strongly, with a notable portion of this new leverage going to investment in unnecessary real estate developments. At the margin, that might help China to surprise on the upside in terms of economic growth. The positive spin-offs on emerging markets will translate to a modest increase in commodity demand in general, and oil in particular. Accordingly, that demand, along with the recent agreement by OPEC to limit production, should support oil prices toward the $55–$60 USD/bbl mark within the next year. Having said that, the impact on Alberta will be very modest, as any increase in demand will be met with increased production by U.S. shale oil producers. This would put a cap on the upside potential of oil prices, making it difficult for Alberta to participate in that trajectory.
Potential GDP (Real, %) 3.0
12
2.5
10 8
2.0 3.0
12 6
1.5 2.5
10 4
1.0 2.0
8 2
0.5 1.5
2002
2006
2008
2010
Canada Euro area
1.0
2012
2014
2016
2018
United States China (Right)
0.5
2002
2004
2006
2008
2010
2012
6 0 4 2
Source: OECD, CIBC
2014
2016
2018
0
The U.S. economy is likely to surprise on the upside in the coming year. Canada United States Supporting the domestic economy are some wage inflation, increased credit Euro area China (Right) availability and continued improvement in housing activity. Recent indicators suggest that manufacturing activity is also starting to improve as firms slowly adjust to the impact of a stronger U.S. dollar.Cdn WeOilexpect Sands the U.S. 120 economy to expand by 1.5% and 2.1% in 2016 and 2017, respectively. Global Oil Demand 2018
100
Production (mn bbl/d) 80 120 60 100 40 80 20 60 0 40 20 20 0
Cdn Oil Sands Global Oil Demand 2018 North American Shale Middle East 30
40
50
60
70 80 90 100 North American Shale $/bbl
50
60
70
Middle East 20
30
40
Source: lwww.simontaylorsblog.com, CIBC
France
4
2004
Italy USA France
80
90
100 $/bbl
3.0
12
2.5
10 8
2.0
6 1.5
4
1.0
2
0.5
2002
2004
2006
2008
Canada Euro area
2010
2012
2014
2016
2018
0
United States China (Right)
Accordingly, we expect the Fed to raise rates in coming quarters, but the trajectory will be extremely slow. A December move is a real possibility, followed by two more hikes in 2017. In Canada, the forest fires in Alberta led to negative growth in the second quarter but above 3% growth in the third quarter as exports rebounded. Cdn Oil Sands 120 So the real tale of the economy will be more visible in the fourth quarter. Global Oil Demand 2018 Here we expect a bit below a 2% reading—a rate that is more consistent 100 with the current ability of the economy to grow. 80
However, there are early signs that the rotation toward non-energy exports 60 is starting to happen. It’s still early in the game, but recent numbers are encouraging. What’s less encouraging is the North fact that the improvement in 40 American Shale exports is not being translated into real GDP and employment gains. So the 20 need to increase is probably limiting the positive spin-offs of Middleinvestment East increased export activity. Add to this the reduced capacity in Canadian 0 20 30 and the 40 fact that 50 U.S. 60 70 buy more 80 services 90 100 manufacturing consumers $/bbl domestically than the goods Canada sells them. It’s reasonable to expect only a slow advance in manufacturing.
The Canadian consumer will continue to benefit from the income effect of increased child care benefit transfers but the impact will be less visible on growth in 2017. Overall, we expect GDP growth to reach 1.2% in 2016 and 1.8% in 2017. Accordingly, we do not expect the Bank of Canada (BoC) to change policy until very late in 2018. This is because the BoC would like to allow U.S. rates to rise and produce some downward pressure on the Canadian dollar. The reduced running speed of most major economies, including Canada, and the very limited ability of monetary policy to help in any meaningful way suggest that fiscal policies will take over. In that context, infrastructure investment will lead the way. The focus on infrastructure is important, given that most of the softening in major economies is structural and not cyclical. In that context, fiscal policy makes sense only if it lifts the potential growth of the economy. The key test will be what kind of infrastructure projects will be supported. And to what extent politicians will resist the temptation to approve projects that can create short-term lift, but with very limited long-term impact on the ability of the economy to grow.
Share of Final Goods in Gross Exports (%) France Italy
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.
USA Germany UK Japan Canada 0 Source: OECD, CIBC
15
30
45
www.renaissanceinvestments.ca/en/economy/ renaissanceinvestments.ca/en/economy/
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What Do “Tax Rates” Really Mean? Tax AND Estate
There’s been much discussion about tax rates this year. This is due to a cut in the 2016 federal tax rate for middle-income Canadians and an increase in the tax rate for Canada’s highest earners. But when we say “tax rate,” what rate are we really talking about?
The marginal tax rate means the rate of tax an individual would pay on an additional dollar of income. Contrast this with the average, or effective, tax rate, which is the rate of tax paid on total income. This rate is often much lower due to the progressive, graduated tax system and the effect of various tax deductions and credits. Individuals pay income tax at graduated rates, meaning that their rate of tax gets progressively higher as their taxable income increases. The federal tax rate on the first $45,282 of taxable income is 15%. With taxable income between $45,282 to $90,563, there was a decrease of 1.5% (from 22% to 20.5%) from 2015 to 2016. This is known as the “middle-income tax cut.” In contrast, for high-income individuals with taxable income exceeding $200,000, the tax rate rose 4% (from 29% to 33%) this year. While graduated tax rates apply to “taxable income,” not all income is included and certain amounts may be deducted. This thereby reduces the base to which marginal tax rates are applied. For example, only 50% of capital gains (less capital losses) are taxed. Common deductions that may decrease taxable income include investment management fees for non-registered accounts and contributions to an RRSP.
“...only 50% of capital gains (less capital losses) are taxed.” Tax credits, on the other hand, directly reduce the tax payable. A fixed rate is applied to eligible amounts and the resultant credit amount offsets taxes payable. Common federal non-refundable tax credits include the basic
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personal amount, the amount for a spouse or partner, and credits for medical expenses, charitable donations and Canadian dividends. Suppose Bob lives in Ontario and has $50,000 of employment income in 2016. Allowing for only the basic personal amount, he will pay about $8,400 in combined federal and Ontario taxes in 2016, yielding an average tax rate of 16.8% ($8,400 divided by $50,000). His marginal tax rate, however, is significantly higher, at 29.7%, on each additional dollar of income. In contrast, suppose Doug also lives in Ontario and earns $50,000 of investment income in 2016: $10,000 of interest income, $20,000 of capital gains and $20,000 of eligible dividends. Assuming only the basic personal amount as well as the applicable dividend tax credit, his combined federal and Ontario tax bill would be a mere $1,400. His average tax rate would be only 2.8% ($1,400 divided by $50,000). The reason for such a low rate stems from half-taxable capital gains and the dividend tax credit. The dividend tax credit entirely eliminates his tax bill on the dividend income. It also acts as a tax shield to recover some of the taxes he would otherwise pay on interest and capital gains.
Jamie Golombek is Managing Director, Tax and Estate Planning with CIBC Wealth Advisory Services. 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
renaissanceinvestments.ca/en/jamie_golombek/
Central Banks Pass the Baton Global Market Perspectives
Central banks have done all they can for economic stimulus. Governments must now step in.
Central Banks Pushed Interest Rates to Record Lows Sub-zero interest rates and quantitative easing are having intensifying undesired effects on world economies. While central banks were certainly aware that their actions were not without risk, they underestimated the negative side effects of this unorthodox policy mix. Governments are breathing easier thanks to lower borrowing costs, but the same cannot be said for other economic entities. Artificially low interest rates are hurting aging households, and financial institutions are under increasing pressure. Central banks must hand policy leadership over to other policy makers (read politicians) to continue stimulus efforts with fiscal policy and longer-term structural reforms. This is obviously easier said than done, given the political tensions in many regions. Political risks will be particularly elevated over the coming months with the U.S. presidential election and the period before the president-elect takes power. In addition, moving into 2017, many European countries will also be holding elections. This substantially delays the potential use of fiscal policy to support economic activity. What This Means for Investors Over short-term periods (i.e. a few months), the change in interest rates is the main driver of bond returns. Investors typically look at falling bond yields as a loosening of monetary conditions that should be followed by better growth. In this context, positive bond returns (from lower yields) are associated with positive equity returns (from expectations of better growth). However, in a deflationary economic environment, disappointing growth will push bond yields lower (positive bond return) but also stokes fears of
deflation that drives equity prices lower. Therefore, the correlation between equities and bonds turns negative.
“... safe assets are not as safe as they used to be, given the distortion effect of indiscriminate bond buying by major central banks.” With a significant number of global bonds now with negative yields, central banks have reached a point where their policies are, at the margin, much less effective. One consequence: bonds are unlikely to rally much in the case of a “risk-off” equity correction and will likely provide a lower degree of portfolio diversification. There are some specific segments of the bond market where investors can still find attractive yields—long-term Canadian and U.S. bonds, corporate and high yield bonds or emerging market sovereign bonds. The caveat is that these bonds are riskier than core government bonds. The bottom line is safe assets are not as safe as they used to be, given the distortion effect of indiscriminate bond buying by major central banks. Their actions have pushed bond yields to unprecedented low levels, making bonds a tough choice for the typical investor.
Luc de la Durantaye is Head of Asset Allocation and Currency Management with CIBC Asset Management. He is responsible for strategic and tactical asset allocation, currency management, absolute return strategies and index management.
Perspectives For the period beginning October 1, 2016
Asset Allocation Outlook as at October 1, 2016 Underweight
CENTRAL BANKS PASS THE BATON Central banks have done all they can for economic stimulus. Governments must now step in. Central banks must hand policy leadership over to other policy makers (read politicians) to continue stimulus efforts via fiscal policy and longer-term structural reforms. This is obviously easier said than done, given the political tensions in many regions. Political risks will be particularly elevated over the coming months with the U.S. presidential election (see page 4). In addition, moving into 2017, many European countries will also be holding elections. This substantially delays the potential use of fiscal policy to support economic activity.
Neutral
Overweight
Asset Class Significant Moderate
Moderate Significant
P
Equity Relative to Fixed Income Fixed Income Canadian Money Market
P
P P
Canadian Government Bond Canadian Corporate Bond International Government Bond
P
Equity Canadian Equity U.S. Equity International Equity (Developed Markets)
P
P P P
Emerging Markets
Underweight
Go to renaissanceinvestments.ca to read the full Perspectives report
Neutral
Overweight
Currency (versus U.S. Dollar) Significant Moderate
Canadian Dollar Euro Japanese Yen British Pound
P
Swiss Franc Australian Dollar Emerging Markets
Moderate Significant
P P P
P P P Perspectives | 1
renaissanceinvestments.ca/en/economy/
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CR
M2
Focusing on the Opportunity CRM2’s final stage is a clear call to solidify client relationships Securities regulators are focused on enhancing transparency around performance reporting and the fees received in connection with a client’s accounts. The most significant recent initiative regulators have undertaken, Client Relationship Model Phase 2
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(CRM2), is entering its final stage. CRM2 may seem like one more set of regulations you need to comply with, but, managed properly, it can be a perfect opportunity to demonstrate your value and enhance your client relationships.
As you probably know, CRM2’s final stage involves two major changes to client investment reporting beginning Jan. 2017:
1 2
Enhanced performance reporting that uses a different approach to calculating investment account returns, the Individual or Money-Weighted Rate of Return (MWRR)
to their investment portfolios. Like a business, an investor will have a plan designed to meet his or her short- and long-term financial goals. And, just like a business, the investor uses a series of reports that gives him or her–and you–insight into progress toward those goals.
Enhanced disclosure of charges and compensation, focused on a dollars-and-cents explanation of the fees paid by a client or a third party, including operation fees, transaction fees and fees paid by others in connection with a client’s account.
This last step is where CRM2 comes in to play. The goal of the new client reports is to provide a fuller, more nuanced picture of your client’s progress towards meeting his or her goals. As a result, you’ll both be in an even better position to determine whether any adjustments are needed to the overall financial plan.
"It’s critical to be proactive in helping clients understand what’s changing," says André Fok Kam, CPA, CA, a continuing education course author for advisors and consultant to the securities industry. He suggests getting in touch with clients via email or letter before January to let them know they’ll be receiving new, enhanced year-end account reports. This communication should include an invitation for a face-to-face meeting or a phone call to discuss the key information they will see in the new year-end account report. Also consider adding CRM2 as an agenda item at an upcoming client meeting.
Let’s take a look at the key changes coming and how they can best be communicated to your clients. A New Way of Explaining Investment Performance One of the ways you can add value is to take complex investment subjects and make them understandable for non-experts. “If I were an advisor trying to explain the significance of CRM2 to clients, I would use an analogy, and the analogy I like to use is that of a business.” says Fok Kam. He explains: Every business aims to be profitable. To achieve this goal, it creates and implements a plan and assesses its progress using quarterly or annual financial statements. Investors are similar to businesses when it comes
Let’s look at what is different about the new performance reporting and how you can explain the refinements to your clients.
Time-Weighted Rate of Return (TWRR) Currently, performance reporting on client statements usually uses the Time-Weighted Rate of Return (TWRR). The TWRR calculation is designed to isolate the performance of an investment or fund manager within a specific period of time. As every advisor knows, when a client makes a deposit to (or withdrawal from) their investment account, as well as how much is deposited or withdrawn, can have a significant impact on the account's performance by year-end. For example, let’s say a client adds significantly to a specific mutual fund allocation right before that fund makes a sustained move upward. Her action will make that fund more profitable for her than it would have been had she not purchased those additional units. In the same vein, if she sold units right before the upward movement, the fund would be less profitable for her than had she not sold any units. The TWRR calculation is designed to strip out the impact of these client actions, with the aim of isolating the performance of the fund manager. This approach definitely has benefits—specifically, it allows you and your clients to assess how well the fund manager is performing. TWRR’s downside is that, by removing the impact of client actions, it creates a less personalized picture of the client’s performance.
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Money-Weighted Rate of Return (MWRR) The MWRR, which will be required for all year-end account reports beginning in January, factors in the impact of both fund manager performance and investor deposits and withdrawals. It therefore creates a more accurate and personalized picture of where the client stands relative to meeting his or her goals. For this reason, MWRR is often referred to as the individual rate of return. Fok Kam says that using the MWRR is especially helpful given that investors are subject to a whole range of cognitive biases. These biases can lead them to bypass your counsel, and instead make decisions based on emotions such as fear. Specifically, investors tend to become fearful during down markets—leading them to sell—and emboldened during up-trending markets—leading them to invest more. In other words, they tend to buy high and sell low. Fok Kam says studies show investors can lose a considerable amount of value annually as a direct result of behavioural biases. The MWRR captures the impact of these actions on the investor’s portfolio. In cases where client deposits and withdrawals have a particularly adverse impact on performance, there will be a significant divergence between the TWRR and the MWRR. That means, the MWRR will be significantly lower than the TWRR.
While these commission figures will not show what portion you personally receive from the firm, they effectively represent the amount the client pays for your advice. CRM2’s new approach to fee reporting thus provides you with a perfect opportunity to articulate how you add value. In addition to investment advice, you have likely provided many or all of the following to your clients: • Long-term financial/retirement planning • Access to tax-advantaged vehicles like RRSPs, RESPs, TFSAs, etc. • Debt management advice • Encouragement to save regularly and invest with discipline for the long term • Guidance on wills, powers of attorney or other estate-planning assistance • Tax-effective investment strategies
And the list goes on. It’s no accident that a prominent study showed that households working with an advisor for 7 to 14 years accumulate twice the financial assets than non-advised households that are identical in all other respects.1
The "MWRR thus provides a reference point when leading clients back to a more disciplined adherence to the financial plans they’ve developed with your guidance," adds Fok Kam. Compensation and Charge Reporting New for 2017, your clients will receive a presentation of the transaction and account administration fees they pay to your firm using dollar amounts (not as a percentage). They will also see a dollar figure for third-party compensation paid to your firm by issuers or other registrants. This includes trailing commissions and deferred sales charge (DSC) commissions the firm receives from mutual fund companies.
Seize the Opportunity Many see regulatory changes as a burden, and there is no denying that implementing CRM2 has involved a significant commitment of time and resources. But CRM2 also offers you an opportunity to demonstrate with greater clarity the value you bring to clients. And in so doing, you can differentiate yourself from your peers as well as from competing services, such as online or “robo” advice. With only a short time before the new reports are mailed to clients, it’s a good idea to take action now. Let your clients know what’s changing and be there to explain these changes before or soon after their new reports arrive.
Sources: 1 Dr. Jon Cockerline, “New Evidence on the Value of Financial Advice, ” 2012 (Investment Funds Institute of Canada).
Use the following quick-reference guide to explain to clients the difference between the TWRR and MWRR.
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TWRR $ Time-Weighted
$
Rate of Return
MWRR Money-Weighted
$
Rate of Return
1. Isolates impact of fund manager’s decisions within a specific timeframe; strips out investor actions (deposits and withdrawals).
1. Shows combined impact of fund manager’s decisions and investor’s actions (deposits and withdrawals).
2. Excellent tool for assessing performance of fund managers.
2. More nuanced picture of an investor’s progress towards their financial goals.
$
A Powerful Solution that Performs and Protects SOLUTION HIGHLIGHT: Renaissance U.S. Equity Income Fund
The Renaissance U.S. Equity Income Fund recently celebrated its third anniversary as well as some very strong results, including: • Top quartile performance on a six-month, year-to-date, one-year, two-year and three-year basis • Above-average returns compared to its peer group • Strong downside protection Sub-advisor American Century Investments identifies high-quality securities with competitive yields that are trading at a discount relative to their intrinsic value. Investments include dividend-paying companies and convertible bonds to reduce volatility. 22 S&P 500 TR Index
Delivered better three-year risk-adjusted returns than its peers
20 Returns (%)
Three-year risk versus return
Russell 3000 Value TR Index (Benchmark)
18 Renaissance U.S. Equity Income Fund
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U.S. Equity Fund Category Average
14 6 8 10 12 14 Standard Deviation (%) 6 Months
YTD
1 Year
2 Years
3 Years
Since Inception
3-Year Downside Capture
Renaissance U.S. Equity Income Fund
8.25%
7.61%
18.06%
17.19%
18.04%
17.66%
66%
U.S. Equity Fund Category Average
6.34%
1.02%
9.09%
10.85%
14.98%
Outperformance
1.91%
6.59%
8.97%
6.34%
3.06%
Performance vs Peer Group
108%
Source: Morningstar Direct. Data as at September 30, 2016. All Currency is in CAD. Renaissance U.S. Equity Fund inception date: September 16, 2013. The standard performance for Russell 3000 Value TR Index (benchmark) is 1yr:14.1% & 3yr: 18.8%. ©2016 Morningstar Research Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Renaissance Investments is offered by CIBC Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. To obtain a copy of the Renaissance Investments family of funds simplified prospectus, call 1-888-888-FUND (3863). Alternatively, you may obtain a copy from your advisor. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Distributions are not guaranteed and may fluctuate and should not be confused with a fund’s performance, rate of return, or yield. Distributions paid as a result of capital gains realized by a fund and income and dividends earned by a fund are taxable in the year they are paid. ®Renaissance Investments is a registered trademark of CIBC Asset Management Inc.
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time
Give the gift of
this holiday season and beyond
Use your special talents to make a difference in your community
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The holidays are right around the corner, and there’s no better time to give back to your community. When most people think of charitable giving, the first thing that comes to mind is writing a cheque. But there are so many other ways the charitably minded can benefit worthy causes in need. For those of you who already give time, this article might simply spark an idea that you haven’t considered.
Let’s look at some of the ways you can give the gift of expertise. Board of directors You can leverage your business development knowledge and skills for the benefit of a charity by sitting on its board of directors.
Bookkeeping and accounting Charities need people who can crunch numbers and ensure the organization’s financial records and tax filings are in order. If you have expertise in this area, you can save a charity a lot of money by providing these services on a volunteer basis.
Photography
Your professional skills and hobbies "Sometimes the greatest gift you can offer a charity is your special skills," says Brad Offman, founder and managing partner at Spire Philanthropy in Toronto. The firm specializes in developing lasting relationships between major corporations and charitable organizations. Most charities have a need for a wide range of services that can only be provided by the highly skilled. Giving the gift of your special talents—whether related to your career or your hobbies—can relieve charities of the significant financial burden associated with paying for these services from the organization’s budget.
If taking that perfect photo is one of your passions, you can put your skill to work for charities in so many different ways. You can take photos of guests and speakers at charity dinners, or take skilled shots of volunteers at work for the charity’s website or social media account.
Music Are you a skilled guitarist, drummer or classical musician? If so, consider providing free lessons through one of many organizations dedicated to spreading the gift of music to underprivileged youth.
Exercise Love running or walking? You can benefit charities that raise funds through walks, races and other activities you enjoy.
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Offman suggests some other ways the gift of time can complement your financial generosity.
For them, and you.
Hospitals They are in constant need of a wide range of volunteers. They need caring communicators who can comfort patients who may not have family (or whose family is far away), greeters and people to deliver supplies.
Food banks and homeless shelters They can always use help with food preparation and distribution, laundry and other day-to-day tasks.
Please don’t give up! Smaller, understaffed charities are sometimes not as responsive as they’d like to be when they receive offers of assistance, notes Offman. It may be that the charity doesn’t have a dedicated staff member for communicating with and managing volunteers. If you’ve sent an email or left a voicemail indicating your desire to help, but haven’t received a reply, give it another try or visit the charity in person. Offman says it’s important to choose a charity you’re passionate about. That passion will fuel a long-term commitment that can be as rewarding for you as it is for the charity. He also suggests bringing along likeminded family, friends, co-workers and even clients. Volunteering as a group is a great way to help a worthy cause, as well as to deepen your personal and professional relationships. Donating money, securities, art and other assets are still great ways to benefit the causes that matter to you most. But the gift of your time and the skills you’ve worked so hard to hone can offer an equal, and sometimes greater, benefit to your favourite charity—during the holiday season and in the months and years to come.
When you give your time to charity, you do it to help a deserving cause. But don’t forget the personal benefits that come with charitable giving. A 2013 article on Harvard Medical School’s health blog draws attention to the positive impact charity has on givers’ emotional and physical well-being.1 “Studies have shown that volunteering helps people…feel more socially connected, thus warding off loneliness and depression,” the article explains. Potential physical benefits include lower blood pressure. “Adults over age 50 who volunteered on a regular basis were less likely to develop high blood pressure than non-volunteers. High blood pressure is an important indicator of health because it contributes to heart disease, stroke and premature death.” A recent Wall Street Journal article suggests additional physical benefits.2 “Studies in the medical literature find that giving to others reduces stress and strengthens the immune system,” says Baris K. Yörük, associate professor of economics at the University at Albany-SUNY.
Sources: 1 Stephanie Watson, “Volunteering may be good for body and mind,” Harvard Health Blog, June 26, 2013 (updated October 29, 2015). http://www.health. harvard.edu/blog/volunteering-may-be-good-for-body-andmind-201306266428 2 Lisa Ward, “Does Charitable Giving Lead to Better Health?” Wall Street Journal (online), February 1, 2015. http://www. wsj.com/articles/does-charitable-giving-lead-to-betterhealth-a-study-finds-a-link-1422849618
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Always Search for Opportunities to Add Value THANKS TO OUR SUPPORTERS
Without the support of advisors like you, Renaissance Investments would not enjoy the privilege of helping so many Canadians realize their investment goals. Here are two of the outstanding professionals we are so very proud to work with. What do you love about the business?
Best tip for gaining new clients?
We love interacting with clients on both a business and personal level! It’s rewarding to know that by assisting them with their wealth management goals, they can spend time with the people they care most about.
Providing a high level of service and always looking for opportunities to add value go hand in hand. When you do these well, you will uncover more intergenerational connections. We also network with centres of influence. However, referrals are the best way to gain clients.
What is your personal formula for building strong client relationships? Our main focus is getting to know all we can about our clients, including their families, their passions and their hobbies. From there, we can help them build a tax-effective plan that will support their financial dreams. What is your clients’ number one concern and how do you address it? The number one concern for clients is market volatility. Given that it’s caused by uncontrollable forces, we understand why it can put them on edge. Our approach is to shift their focus back to their long-term goals and remind them that markets always revert to the mean. How are you preparing your clients for the new annual reports coming in January 2017 as a result of CRM2? We encourage clients to take advantage of our fee-based services. The benefits include transparent disclosure of fees and performance. So for many of our clients, the new annual report won’t be a surprise. For the remainder of our clients, open and transparent communication is key. While we explain the changes that are coming, we also remind them of our value-added services. How are you addressing your clients' fixed income needs in this low-rate environment? For clients’ short-term needs, we typically invest in laddered bonds or GICs. For their longer-term goals, we use actively managed fixed income funds, ETFs, preferred shares and alternatives, like mortgage investment corporations. This approach helps us generate a higher yield in the fixed income space.
Favourite hobbies? Both of us love to golf, cook, travel and attend and watch sporting events. What is the one item you can’t be without? Dan: It’s my smartphone. I’m most comfortable when I know I can connect with family, friends and clients! Dennis: Trust is essential. Knowing that people trust me and feeling confident that I can trust them is paramount!
Dan Saikaley Portfolio Manager, Investment Advisor CPA, CA, CIM, CFP, EPC
Dennis Shaw Portfolio Manager, Investment Advisor CFP, FCSI, FMA, CIM
Firm: CIBC Wood Gundy Location: Ottawa, ON Years in Business: 35 collectively Team Members: Three
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brain calisthenics Word scramble – Unscramble the following letters to spell words from the article on pages 8-10:
1. sturorelga
2. orpectiva
3. dgeaan
4. alnyago
5. udaecnn
6. hewetdgi
7. lsnaiogti
8. tgncviioe
9. taetes
10. ticarly
Sudoku – Complete the Sudoku puzzle so that each and every row, column and 3x3 box contains the numbers one through nine only once.
5
1
3
8
4 2
6
1
9
8
3
4
2
6
3
8
2
3
6
1
8
6
9
4
4
9 5
1
7
3 Source: 4puz.com
Spot the difference – Can you spot the five differences between the pictures below?
Check your answers at renaissanceinvestments.ca/magazine/answers/ 16
FOR ADVISOR USE ONLY Renaissance Investments, Axiom Portfolios and Renaissance Private Investment Program are offered by CIBC Asset Management Inc. The views expressed in this document are the personal views of the authors and should not be taken as the views of CIBC Asset Management Inc. This document is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice, it should not be relied upon in that regard or be considered predictive of any future market performance, nor does it constitute an offer or solicitation to buy or sell any securities referred to. The information contained in this document has been obtained from sources believed to be reliable and is believed to be accurate at the time of publishing, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions and estimates expressed in this document are as of the date of publication unless otherwise indicated, and are subject to change. Any information or discussion about the current characteristics of the funds or how the portfolio manager is managing the funds that is supplementary to information in the prospectus is not a discussion about material investment objectives or strategies, but solely a discussion of the current characteristics or manner of fulfilling the investment objectives and strategies, and is subject to change without notice. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Certain information that we have provided to you may constitute “forward-looking” statements. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or achievements to be materially different than the results, performance or achievements expressed or implied in the forward-looking statements. ™ Renaissance Private Investment Program is a trademark of CIBC Asset Management Inc. ® Renaissance Investments, Axiom and Axiom Portfolios are registered trademarks of CIBC Asset Management Inc. The material and/or its contents may not be reproduced without the express written consent of CIBC Asset Management Inc.
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(1) Forbes Magazine, November 24, 2014 - “Glory To The New Bond King” (2) Bloomberg Markets magazine September 5, 2012, October 5, 2015 and September 22, 2016. 50 Most Influential magazine editors favour recent accomplishments above lifetime achievements to build their list. They rely on the rankings, profiles, and cover stories they publish throughout the year in Bloomberg Markets. (3) Institutional Investor. www.usinvestmentawards.com May 2013. Manager winners are selected by the editors of the magazine based on the results of a survey conducted of U.S. institutional investors. DoubleLine® is a registered trademark of DoubleLine Capital LP. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. To obtain a copy of the Renaissance Investments family of funds simplified prospectus, call 1-888-888-FUND (3863). Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ®Renaissance Investments is offered by, and is a registered trademark of, CIBC Asset Management Inc.
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Renaissance Investments and Renaissance Private Investment Program are offered by CIBC Asset Management Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. To obtain a copy of the Renaissance Private Pools simplified prospectus, call 1-888-888-FUND (3863). Alternatively, you may obtain a copy from your advisor. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. ™Renaissance Private Investment Program is a trademark of CIBC Asset Management Inc. ŽRenaissance Investments is a registered trademark of CIBC Asset Management Inc. The material and/or its contents may not be reproduced without the express written consent of CIBC Asset Management Inc.*Refer to the simplified prospectus for more information on Management Fee Reductions, family account linking and multiple purchase options. 02001E(201610)