This chapter provides an introduction to wealth management as a distinct practice in today’s financial services environment. You will learn about the key trends in the industry and the skills and traits you need to be a successful wealth advisor. We also explain how changes in the regulatory environment are likely to affect advisors in the wealth management industry. Furthermore, we provide a process with which you can create a financial plan and manage the diverse wealth management needs of your clients. Finally, we explain the importance of assembling a team of specialists you can rely on to help provide holistic wealth management services to your clients.
In the previous chapter, we provided an overview of the shifting dynamics in the wealth management industry. In this chapter, we discuss ethics in the context of that industry. We explain the concept of ethics and describe the different types of ethical dilemmas. We also provide a framework for ethical decision-making in an industry where unethical behaviour can destroy careers and harm the reputation of financial institutions and the industry as a whole. We discuss regulatory infractions and the potential consequences of regulatory non-compliance.
In this chapter, we provide a process for getting to know everything necessary about your clients. You will learn the federal legal requirements regarding business conduct and the collection and sharing of client information. We also discuss the account-opening requirements of the Investment Industry Regulatory Organization of Canada (IIROC). Finally, we explain how to engage in a probing dialogue with clients to collect and document information beyond the minimum required by law.
Once you have collected all necessary financial and non-financial data, you must use that information to assess your clients’ wealth planning needs. In this chapter, you will learn how to create a budget and savings plan based on the client’s net worth and available cash flow. Every plan should incorporate savings strategies that suit the individual client. It should also incorporate funding strategies for any emergencies that might arise. Finally, we highlight the importance of the time value of money for wealth managers.
In this chapter, we discuss various forms of credit and describe the steps taken to evaluate a client’s creditworthiness. We discuss the two different mortgage markets – the primary and secondary markets. We also explain the financial factors used to qualify a client for a residential mortgage. To further help you work with clients seeking credit, we explain the methods used to reduce interest costs and penalties. We also provide some general strategies they can use to manage their credit. Finally, we discuss several mortgage-related topics, including real estate investing, reverse mortgages, self-directed mortgages, and the use of funds in registered retirement savings plans to purchase a home.
In this chapter, we introduce the various family-related dynamics that may be revealed when you are dealing with a client’s finances. We also consider the fragility of the family unit and the issues related to marital breakdown. You will learn about aspects of family law in Canada relating to rights arising from cohabitation, marriage, separation, and divorce. This chapter will acquaint you with family law rights and obligations arising from relationship breakdown. We focus on both federally and provincially governed aspects of family law. Federal areas of the law for married spouses include divorce, child custody and access, spousal support, and child support. The provinces and territories govern issues around marital property division in their separate jurisdictions. For unmarried spouses, issues relating to child custody, access, and support also fall under provincial and territorial property legislation.
In this chapter, we explain the concept of personal risk management as part of a fully integrated wealth management plan. We describe the different characterizations of risk and what they mean to both advisors and clients. We also explain the different methods that analysts use to measure risk. Finally, we provide a process for creating a personal risk management plan that can be used throughout the client’s life cycle.
In this chapter, you will learn about the importance of addressing income tax issues in financial planning. We explain three tax planning strategies: eliminate, reduce, and defer taxes payable by clients. We also explain how income taxes are calculated on personal income tax returns, including the deductions and non-refundable tax credits that can reduce a client’s tax bill. You will also learn about the rules that apply to taxation of investment income. Toward the end, we explain how some employee benefits are taxable and others are not.
In this chapter, we discuss various techniques that can be used to minimize taxes. You will learn about the features and tax advantages of different types of registered accounts used mainly for non-retirement purposes. You will also learn how the different types of business structures are taxed differently and what the advantages are of certain types of structures.
In this chapter, we discuss all aspects of registered retirement savings plans that are set up as savings vehicles for retirement. Registered accounts for other purposes, such as saving for post-secondary education or for a disabled dependant, are covered in Chapter 9.
In this chapter, we discuss all aspects of employer-sponsored pension plans, which are a form of savings vehicles for retirement. We also look at the very important matter of funding retirement using registered retirement income funds and locked-in accounts.
In this chapter we discuss the main government pension programs – Canada Pension Plan/Quebec Pension Plan and Old Age Security – set up to provide pension income and other benefits to Canadians during their retirement.
In this chapter, we discuss a holistic approach to the retirement planning process that factors in all sources of retirement income. We explain how to determine a client’s retirement income needs and suggest some strategies to manage an income shortfall. Finally, we provide some general strategies that clients can use to reduce their taxes in retirement and increase their retirement income.
In this chapter, we discuss several annuity-based products that are designed to provide an income stream for clients in their retirement years. We explain how the various types of annuities work, including products that have annuity type features and benefits. We also describe some strategies for putting these products to work for suitable clients.
In this chapter, you will learn about estate planning more specifically, will planning under Canadian law, including common law in most of Canada and the Civil Code of Quebec. We explain how the probate process works and provide some strategies that clients can use to reduce the costs associated with the probate process and probate fees, if payable. Later in the chapter, you will learn why clients should arrange a power of attorney for personal care (or a living will) and an enduring power of attorney for property as a substitute decision maker in the event of incapacity. Finally, you should keep in mind certain compliance considerations when dealing with vulnerable senior clients who may be exposed to elder abuse.
In this chapter, you will learn about the different types of trusts and their specific roles in estate planning. We also explain how to reduce an estate’s income tax burden, both before and after death. Later in the chapter, we end by providing a checklist of issues you and your clients should consider when preparing an estate plan.
In this chapter, we explain the three-part process used in a systematic approach to investment management. You will learn about passive and active investment management and the difference between strategic and tactical asset allocation. We also explain the important function of rebalancing, along with the factors you should consider when deciding whether to recommend managed products or individual securities. Furthermore, we provide a primer in modern portfolio theory and explain how it is used to construct portfolios of optimal performance. In this context, you will learn how the capital asset pricing model is used to determine the expected return on an asset or portfolio. Finally, you will learn what you need to know to be successful in the world of international investing.
In this chapter, you will learn a three-part process for allocating assets in a way that best suits your clients’ goals and objectives. You will learn how assets are classified and the benefits of an asset allocation strategy. You will also learn the difference between strategic and tactical asset allocation and the importance of rebalancing.
In this chapter, we discuss the different types of equity securities and the markets in which they are bought and sold. We also describe the different roles played by those involved in equity trading. Furthermore, we explain the various types of analysts and the analysis they provide to help advisors make recommendations. Next, we discuss the two main strategies used in equity trading. Finally, we explain how options can be used to reduce investment risk.
In this chapter, you will learn about the many types of debt securities and their key characteristics. We discuss the risks of debt securities and the basics of credit analysis. We also explain the mechanics of debt trading in Canada and the term structure of interest rates.
In this chapter, you will learn about the relationship between coupon rate, yield, term-to-maturity, and price volatility. We also explain how debt security strategies work, both active and passive.
In this chapter, you will learn about several types of managed products and the role they play in an investment portfolio. You will learn the features and uses of mutual funds, wrap products, exchange-traded funds, hedge funds, digital assets and principal-protected notes. We discuss the impact of fees, portfolio turnover, and taxes on managed product returns. We also discuss the concept of overlay management, in which a single wealth manager oversees the management of multiple managed accounts. Finally, you will learn about outcome-based investments, which differ from traditional investments in that they are designed to achieve a specific client goal.
In this chapter, you will learn the steps involved in monitoring a portfolio’s performance. You will also learn to calculate portfolio returns and evaluate the portfolio manager’s performance using four classes of benchmarks. Finally, you will learn to use several risk-adjusted return measures to compare the returns generated by a managed product to the level of risk taken to earn those returns.
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Upon successfully completing this course, you will be able to download a Notice of Course Completion available through your student profile. This will remain on your profile as formal confirmation of course completion. Please note that the Notice of Course Completion will state that you have completed the Wealth Management Essentials (WME®) course. The transcript will not indicate that you completed the abbreviated version of the WME® (i.e. WME® for Wealth Managers).
You can also accept a digital badge through your student profile after successful course completion. Digital badges are portable image files that allow you to share your credentials across the web. You can post them to your email signature, personal website, social media channels—even to electronic copies of your resume.
CSI will mail you a wall certificate within 4 – 6 weeks of course completion. Frames to display your certificate are available. Please ensure that your First and Last Name on your profile matches your First and Last Name on your Government Issued Photo identification – this will ensure you receive an accurate certificate.
CSI will be pleased to issue an Honours Certificate to all students who obtain a final course mark of 85% or higher.