A list of common questions and answers related to Planning, Investments, and more.
Nexus provides discretionary investment management and wealth planning services to individuals and their families, including their holding companies, estates and trusts, and to not-for-profit organizations.
We offer various account “types”, including taxable accounts for individuals, corporations, estates and trusts; tax-deferred accounts for Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) (including various “locked-in” versions); Tax-Free Savings Accounts (TFSAs); and First Home Savings Accounts (FHSAs).
We currently do not offer accounts for Registered Education Savings Plans (RESPs) or Registered Disability Savings Plans (RDSPs).
Please contact your Wealth Manager for more information.
Nexus manages portfolios for both private clients (families and individuals) and not-for-profit organizations (foundations, charitable organizations, and endowments) who are able to invest at least $1 million at Nexus.
Nexus is incorporated in Nova Scotia and registered under applicable provincial securities legislation as a portfolio manager and an investment fund manager, with the Ontario Securities Commission acting as our principal regulator. Most of our officers and directors are registered with certain provincial securities authorities because of the nature of their activities, role or both.
Individual accounts are managed on either a pooled fund or segregated account basis. Regardless of management type (pooled or seg), all our investment services follow Nexus’s investment management philosophy and are designed for the long-term investor.
Pooled funds are an investment vehicle that “pools” money from many investors and invests the money in individual securities such as stock and bonds.
Instead of owning the underlying individual securities, investors purchase units of the fund which provides them with exposure to all the investments within the pool and any income they generate.
Segregated accounts hold individual equity and fixed income securities for clients who may have particular investment needs that cannot be accommodated by our pooled funds.
Clients are not permitted to buy and sell stocks and other securities in their Nexus account. They have the option of either investing in a Nexus pooled fund account or segregated fund account where all investment decisions are made by the Nexus investment team.
RBC Investor Services Trust, a federally-regulated and wholly-owned subsidiary of the Royal Bank of Canada, serves as Nexus’s custodian. The primary purpose of the Custodian is the safekeeping of client assets. All Nexus client assets are held by the Custodian, in Canada, in accounts maintained in our clients’ names. Our authority is limited to directing the purchase and sale of the investments held in those accounts. Nexus does not have the authority to remove any monies from the account and pay them to anyone other than the account holder.
Nexus’s pooled funds are valued on the business day on or immediately before the 15th and last days of each month.
Pooled Fund Account:
Pooled fund clients can add to their portfolio on the two valuation dates each month (see pooled fund valuation above). Clients should contact their Nexus representative indicating they would like to make an addition to their portfolio. Funds added to a Nexus portfolio leave your bank account 1-2 business days after the pooled fund valuation date.
Segregated clients can add to their portfolio on any business day. As above, clients should contact their Nexus representative indicating they would like to make a contribution to their portfolio. After the contribution has been processed, the money will take 1-2 business days to leave your bank account.
Pooled Fund Account:
Pooled fund clients can redeem from their portfolio on the two valuation dates each month (see pooled fund valuation above). Clients should contact their Nexus representative indicating they would like to get monies from their portfolio. Funds redeemed take 1-2 business days following the pooled fund valuation date to arrive in your bank account.
Segregated account clients can withdraw from their portfolio on any business day. As above, clients should contact their Nexus representative indicating they would like to withdraw funds from their portfolio. It takes 1-2 business days for monies to arrive in your bank account.
The International Equity Fund can be purchased as a standalone investment in a Nexus non-registered account. The International Equity Fund is not RRSP eligible.
RRSP accounts can be converted to a RRIF as soon as an individual reaches 55 years of age, at which time mandatory minimum annual withdrawals begin as per the prescribed withdrawal schedule set out by the CRA. Once an RRSP is converted to a RRIF it cannot be converted it back.
RRSP accounts are required to be converted to a new RRIF account by the end of the year in which the accountholder turns 71. Your Nexus team will contact you prior to this date. If we are unable to contact you before this date your account will be automatically converted to a new RRIF account.
Nexus pooled funds are proprietary investment products available only to Nexus clients.
Wealth planning is available to all Nexus clients at no extra charge.
You can receive your full CPP retirement benefits when you turn 65. However, you can take payments as early as age 60 or as late as age 70. When you decide to do so depends upon your lifestyle and income needs in retirement and is a decision best made with your Nexus Wealth Planner.
You can start collecting monthly payments from Old Age Security (OAS) at age 65 or older. You can delay payment of OAS for up to 5 years after you are 65 and the longer you delay, the larger your pension payment will be.
However, once your taxable income rises above the “minimum income recovery threshold” (which changes from year to year and can be found on the CRA website), your OAS income can be “clawed back”.
The HBP allows a first-time home buyer to withdraw funds (up to $35,000) from their RRSP to buy or build a home. The program allows the withdrawn funds to be paid back within a 15-year period. There are certain conditions that must be met in order to qualify for the HBP. Contact your Nexus representative to see if this strategy works for you.
The tax-Free First Home Savings Account (FHSA) enables first-time home buyers to contribute up to $40,000 over their lifetime and up to $8,000 in any one year.
Unused contributions, up to $8,000, may be carried forward to use in a later year.
FHSAs offer many benefits: contributions are tax deductible, investment income is tax-sheltered, and withdrawals are not taxed (if used to buy a home).
Similar to the Homebuyers Plan (HBP) withdrawals, there are certain conditions that must be met in order to qualify for this redemption. Contact your Nexus representative to see if this a strategy that works for you or read our Nexus Notes article “How Much” by Brad Weber for more information.
PRLs are an effective income splitting strategy that involves a person loaning money to their lower income spouse, adult child, or trust. This strategy is most beneficial when there is a significant difference between the marginal tax rates of family members and there are substantial funds available to lend and invest.
The lower income borrower invests the funds to earn investment income and/or capital gains which will be taxed at their lower income tax rate.
Interest on the PRL is charged at the prescribed rate in effect when the loan was made and needs to be paid every year within 30 days of calendar year end.
Nexus will remind you of these interest payments and will help to facilitate their payment in time for the January 30th
For more information on this strategy, please contact your Nexus representative or read this blog by Brad Weber “A Tax Planning Strategy that Still Works – And is Getting Better”.
A DAF is a philanthropic arrangement that allows clients to make and manage charitable donations as an individual or a family over a multi-year timeframe.
DAFs offer greater flexibility and benefits than one-time donations and are simpler and cheaper than setting up a private foundation.
We require a minimum investment donation of $100,000 to open a DAF at Nexus. To find out more about DAFs and their benefits, please contact your Nexus representative or read our blog by Alana Buckley “Donor Advised Funds: An Overview”.
Clients are charged a management fee based on a tiered fee schedule. The calculation of fees depends on account type, investment holdings, and market value at the end of the calendar quarter. Except for TFSAs, all accounts in a client household will be pooled for fee calculation purposes, so that larger household portfolios benefit from the fee taper. Fees are charged to client accounts quarterly in arrears and fee rates are quoted on an annualized basis, excluding taxes, such as HST or GST.
Until age 25, children’s accounts will be pooled with their parents’ accounts for purposes of calculating Nexus’s management fees.
In addition to the management fees, clients bear the cost of (a) trading fees and commissions, (b) custody fees charged by RBC Investor Services Trust for segregated accounts, and (c) expenses paid directly or indirectly by the pooled funds. For detailed information contact your Nexus representative.
Clients should refer to their December 31st RBC non-registered account statement to see the total amount of management fees they’ve paid for the year.
Only management fees charged in respect of non-registered accounts are deductible for tax purposes.
The management expense ratio, or MER, represents the embedded fees paid directly by the pooled funds.
Tax Documents / Statements / Accessing Our Portal
Clients will receive monthly statements from our custodian, RBC Investor Services Trust, that will include account balances and transaction activity for the month. These typically arrive 2 weeks after month-end (4 business days if delivered via Nexus’s on-line reporting portal).
At the end of each calendar quarter (March, June, September, December), Nexus provides comprehensive reporting to clients, including detailing performance information, asset mix, a consolidated summary of holdings, and a market commentary from the Nexus Investment Team.
All reporting, from Nexus and our Custodian, are available in printed form, electronically on a portal maintained by Nexus, or both.
The market value represents the value of the account as of the most recent month end (see pooled fund valuation in the General section of the FAQs).
The client’s book cost, or Adjusted Cost Base (ACB), represents the net contribution made to the account (contributions – redemptions + reinvested income and capital gains distributions) and should be only used to calculate the unrealized gain or loss on a client’s taxable account. This is not a performance figure.
The discrepancy can be attributed to the reinvested distributions of the Nexus Pooled Funds. The Funds pay a quarterly income distribution and annual capital gains distribution to all unitholders of the fund(s). The distribution is automatically reinvested in client accounts and increases the “book cost” by the amount of the distribution.
Although the underlying securities in the Nexus Pooled Funds trade daily, the Funds are only valued twice per month (see pooled fund valuation in the General section of the FAQs).
At client request, all or any part of their reporting can be provided electronically to another party, such as a relative, accountant, or other service provider.
Such third parties will have their own unique credentials for accessing our reporting portal. We remind each client quarterly which such parties have access to their reporting. The client is responsible for advising Nexus when such third-party access should be withdrawn.
Clients who have elected a third-party (e.g., lawyer or accountant) receive copies of their reporting can see who these individuals are by looking at the bottom of the cover letter accompanying their quarterly reporting package.
Login to the Nexus portal and under the “Shared Documents” folder, filed under “Help” you’ll find the “How to use the Nexus Portal” instructions.
If you have any issues navigating or accessing the portal, please contact your Nexus representative and they will be happy to assist you.
Nexus Pooled Funds are not considered foreign property in accordance with subsection 233.3(1) of the Income Tax Act, and are therefore not required to be reported on a T1135.
Clients will receive a mailing schedule for tax reporting towards the end of February that outlines what they should expect to receive and by when.
Clients will receive all of their tax reporting from Nexus’s custodian, RBC Investor & Treasury Services. Please contact your Nexus representative if you’re unsure what tax documents you’ll need to complete your taxes.
All tax reporting will also be available on the Nexus portal.
Clients can securely send documents to Nexus via the Nexus portal. After logging-in, click the ‘Upload Document’ icon at the bottom of the browser in order to securely send a document to Nexus. After your document has been securely uploaded your Nexus representative will be notified.
Nexus provides an annual fee summary for each account as part of our year-end reporting package.
Management fees for registered accounts, such as RRSPs, RRIFs and TFSAs, are not reported on the monthly RBC account statements (as they are for taxable accounts) because they are not deductible for tax purposes.
Capital gains reported on a T3 tax slip represent the accountholder’s share of the capital gains realized by the fund itself on sales of investments held by the fund.
Capital gains reported on the last page of your RBC pooled fund account statement represent gains (or losses) resulting from redemption of units held in the client’s account (not in the fund).
Both capital gains values need to be recorded on your tax return.
Contact your Nexus representative and request to stop receiving paper copies of your statements. Nexus will provide you with instructions on how to view all your statements (Nexus + RBC) electronically on the Nexus Portal. Please note that RBC is required to mail you hard-copies of any applicable tax receipts and, if you have a segregated account, a December segregated account statement.
We can provide you with each individual statement in a separate pdf, rather than combining everything into a single PDF file. Please contact your Nexus representative to make this change.
Money-weighted return (MWR) answers the question, “How has my account done this period?” The MWR is affected by the timing and size of your deposits to and withdrawals from the account. The MWR of a client’s account cannot be compared to the returns from market indices or other investment managers.
Time-weighted return (TWR) is the return that we provide clients in our regular quarterly reporting and answers the question, “How has my manager performed this period?” The TWR is unaffected by the timing of any deposits or withdrawals made during the period. The TWR can be compared to the rates of return of a market index or the performance of other investment managers.
For more information please refer to the cover page of your annual statement for CRM2 reporting or read our blog by Alex Jemetz “It’s All Relative”.
We typically compare client portfolios over various time frames against a market index benchmark which is the hypothetical return from investing in one or a combination of market indices, such as the S&P/TSX Composite or S&P 500. It represents the return an investor could theoretically earn if they owned a portfolio comprised of, for example, all the stocks in the S&P/TSX Composite index, in precisely the same proportions as in the index, and incurred no expenses to acquire, hold or dispose of those stocks. For more information on benchmarks, read our blog by Denys Calvin “Measuring Up: Benchmarks and Your Portfolio”.