Assess Your Portfolio

With more capital to manage and higher taxes, affluent families need to optimize the structure of their portfolio to avoid any drags on performance.

While affluent families enjoy a greater variety of investment options, having more to invest means that even slight portfolio under-performance can lead to substantial dollars being lost over time. Here are some of the more common under-performance pitfalls:

Are you amply diversified?

  • Does your portfolio go beyond the traditional allocations to bonds and stocks?
  • Does your asset mix incorporate material exposure to markets outside of Canada?
  • Does your investment strategy capitalize on the full breadth of the credit spectrum?
  • Does your portfolio incorporate exposure to dimensions of the market that have the potential for long-term outperformance?
  • Does your asset mix include alternative asset classes?

Have you rid your portfolio of all unnecessary costs?

  • Do you know how much you are paying in fees?
  • Do you know how much you are paying in hidden costs such as trading commissions?
  • Does your portfolio incur unnecessary costs due to higher turnover?
  • Have you grouped family members’ portfolios together to potentially reduce fees?
  • Are your pooled investments (funds, ETFs, etc.) selected with cost minimization in mind?

Have you structured your portfolio to maximize after-tax performance?

  • Do you know how much in taxes your current managers are incurring?
  • Does your portfolio use tax deferral vehicles such as corporate class shares?
  • Do your bond and equity investment strategies incorporate tax reduction as a parameter?
  • Have you taken family members’ tax profiles into account in constructing a tax-effective portfolio?
  • Is your portfolio rebalancing undertaken in the most tax-effective manner possible?
  • Have you structured your investment management arrangements to maximize deductibility of fees?