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Wayne Kemick M Moai on esn Many investors do not want to handle their own portfolio so they turn to mutual funds. Now, there is an increasingly more popular alternative, ‘‘The Managed Account.‘‘ Most major investment firms offer an Investment Management Service for portfolios in excess of $100,000. For an annual fee plus commission a professional team of managers will set up a portfolio structured to your individuat needs and then continue to administer it on an ongoing basis. Managed accounts are operated on a discretionary basis meaning that the clients are not consulted before each trade is transacted, however, a detailed agreement must be signed before any trading can begin. This agreement provides strict parameters for the managers to follow thus ensuring the needs of the client will be followed. For a tax deductible fee of 1% (decreasing for larger accounts) investors receive a number of major benefits. First, as mentioned, a team of seasoned professionals (many with 10â€"25 years experience) will manage your account. Many portfolio manaqers.hold degrees such as Chartered Accountant, Chartered Financial Analyst and Fellow of the Canadian Securities Institute. Clients also benefit from continuity. Because portfolio managers are licensed in all jurisdictions, you do not have to switch managers even if you move. This can be particularty reassuring since you know that once you establish a bond with your manager, he can continue to service your account no matter where you reside. Individual brokers on the other hand are &prmally licensed only in their area and thus may not offer this portability. Wayne Kemick is a Viceâ€"President and Branch Manager with Midland Doherty in Kitchener. c on w s ds a e t c anaceil stt it 1 Record keeping and safe keeping are also simplified. Easy to read statements outlining your holdings are sent out on a regular basis and you receive a single tax receipt outlining your investment income including capital gains. Also, all of your investments are held in safe keeping free of charge. Finally, clients are well protected since their portfolios are audited by both the firm and the Toronto Stock Exchange on a regular basis. Can you beat the pros? " Financial Planner Wayne Kemick When it comes time to invest, many individuals base their decision mainly on the commission being charged. Is this the right approach? I don‘t think so. Although commissions do play a role in the decision making process, in the final analysis one must go with the investment that will give the best overall rate of return. Questions concerning commissions usually take two forms. Should I use a discount broker? Which is better; no load or load mutual funds? These are important questions and must be addressed separately. Discount brokers certainly have their place but they are not for everyone. You have to ask yourself, am 1 willing and able to make all of my investment decisions on my own? It may be too great a sacrifice to give up service solely for the purpose of attaining lower commissions. Discount brokers are not allowed to give any advice. Another important factor is the limited range of products available from discount houses. What this means to you is that you are forced to deal with a number of different institutions instead of L o 6 Disability Insurance Guaranteed Investment Certificates HE . INANCIAL JQERVICE UE THE COMPLETE FINANCIAL HOUSE Tie decisions to rate of return and service nmmmnmwwmemm-mmewmm 55 Erb Street East, Suite 102, Waterloo David Cowis David Kachik H. Grant Webber Life Insurance Mutual Funds Baet .6 YhRAAUARS3Ii YA0Q23UM03W ,3J0IMORHD OOJRAITAW . at 3DA9 Annuities RRSP®S RRIEPS 747â€"9050 for being able to build a rapport with one person. Fullâ€"service firms can meet all of your needs and you do not have to pay commissions everytime you invest. CSBs, Guaranteed Investment Certificates, Treasury Bills and short term deposits are all commission free. The second question ‘‘should you purchase a load fund?*‘" is more straight forward. A load fund only has to outperform a no load fund by Vz % /year for an investor to be ahead after a 10 year period. (This is assuming a 5% commission.) Also, the administration charge for the funds must be compared. This is an ongoing annual fee and certain no load funds charge /2 % more. This quickly negates the advantage of no commissions and actually can result in lower performance since these fees are paid in perpetuity . â€" In the'final analysis, base your decisions on the overall rate of return and service. With these two factors firmly in hand your investments will prosper and you will sleep much better. Wayne Kemick is a Viceâ€"President and Branch Manager with Midiand Doherty in Kitchener. SPECIAL load fund?‘‘