Is Our Information About You Still Current?

Q2 | May 2022

Topic: Inside Nexus

R. Denys Calvin, CFA

May 31, 2022

Image used with permission: iStock/anilakkus


Print & Share

Print

Is Our Information About You Still Current?

Q2 | May 2022

No doubt you know that scene in the movie where the protagonist jumps into a taxi and shouts “Follow that car!” While it makes for exciting cinema, and may be fine for a chase, it’s Hollywood, not reality. And it surely wouldn’t work for a long trip. In the real world, the driver needs more to go on than breathless exhortations from someone in hot pursuit.

It’s the same in our business. A client who hands over some capital and tells the portfolio manager “just don’t lose money” isn’t giving the “driver” much to go on. Fortunately, most clients are quite open about themselves and what they’re trying to accomplish by engaging a portfolio manager. For sure the manager wants to understand the client and their circumstances, to have a clear picture of the client’s financial objectives, and, importantly, not to miss a meaningful change in the client’s situation because “it didn’t come up” in the normal back-and-forth between manager and client. And it’s best for both if the information exchange is efficient, and there are no glaring gaps or misunderstandings.

Going back to the taxi example, when it comes to information exchange, Uber’s got it down pat. Through an app, Uber has all the relevant information: the passenger’s cellphone, email, credit card, and usual destinations (mine are “Home” and “Work”), to list the most obvious. There’s even a place for something called “trusted contacts” – people who are allowed to see my location in real-time when I’m in an Uber.

In our business, we’ve always sought to make the information exchange between client and Nexus efficient. But it’s hardly been “Uber-like”. However, as regulators are raising the bar, and now require us to confirm with clients at least annually that the client information we have on file remains accurate, we’ve had to come up with a more streamlined approach – one that’s not a burden on clients or on us. Unlike Uber, however, we can’t herd everyone onto a smartphone app. Our approach has to be more tailored than that.

To accomplish this, starting later this spring, Nexus will begin rolling out an “update questionnaire”. Each year, we’ll provide the client with the information they’ve told us previously – including such things as their expected pattern of portfolio contributions and withdrawals, their employment situation and income, summary information about non-Nexus financial accounts and assets, and their professional advisers and “trusted contacts”. The client can revise the things that have changed, and tick “No change” beside those that remain the same. However, there is no way to avoid the fact that the first time the questionnaire is completed it will take some time as clients help fill in some gaps in our records. In subsequent years, it should only take a few minutes.

Not everyone will get the same questions. A retired person would be justifiably irritated to be asked “When do you expect to retire?” Similarly, questions about changes in signing officers and decision-makers are important for a large charitable organization, but don’t really make sense to ask a married couple. While both spouses are welcome to complete separate questionnaires, in most households the “family CFO” will probably respond on behalf of the couple.

Much of the questionnaire will be familiar to clients who have had a financial plan prepared by Nexus. But someone who hasn’t looked at a financial advisor’s “know your client” form in the last 10 years will probably find that some questions have become a little more specific since then. Suffice it to say that we’re asking only questions that are required by regulation or which will yield information that we know from experience enables us to best serve clients.

We anticipate that most people will prefer to complete something like this on-line – on their computer or tablet. To quote Apple, we’ll “have an ‘app’ for that” (complete with the sensible data security features you might expect). No doubt some will prefer paper. There will probably also be situations where it works best if the Nexus partner jots down the answers while in conversation with the client.

Suffice it to say, we’ve thought carefully about how to make the information exchange as seamless and useful for clients and Nexus alike. With luck it will be nearly as convenient as Uber, but in a much nicer “vehicle”!


More on the Client Focused Reforms:

New regulations, known as the “Client Focused Reforms”, now apply to all firms that are registered to give investment advice and trade in securities. Among other things, these reforms address conflicts of interest and disclosure. While Nexus has always provided our clients with the proper disclosures, we do welcome the regulators’ efforts to create standards that apply consistently to all participants in our industry for the benefit of all Canadian investors.

As outlined above, the most noticeable effect of these reforms for clients will be the additional information we are now required to gather (and confirm annually) about our clients’ personal and financial circumstances. Those who have used our wealth planning services will be familiar with these types of questions. Your Nexus relationship manager may spend some more time with you during your next meeting on some of these questions, and we thank you in advance for your understanding.

More Like This...

See another CRM2 blog post that may be of interest to you.

CRM2: The Nexus Approach to our CRM2 Reports

Topic:
CRM2
Excerpt:
With changing securities regulations coming into effect, investment firms are now required to provide individual investors with specific additional in

More Like This...

See another Foundations & Endowments blog post that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

More Like This...

See another Human Interest blog post that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

More Like This...

See another Inside Nexus blog post that may be of interest to you.

The Nexus Growth Spurt (Pandemic Edition) Continues!

Topic:
Inside Nexus
Excerpt:
As Nexus continues to grow, we remain committed to maintaining the highest levels of client service. This requires an ongoing investment in talent and

More Like This...

See another Investments blog post that may be of interest to you.

The End of an Era – Inflation is Back!

Topic:
Investments
Excerpt:
Inflation talk is dominating the news. It is on the mind of the man in the street and investors alike – and not just in North America or the lands of

More Like This...

See another Pearls of Wisdom blog post that may be of interest to you.

“Work, Work, Work, Work, Work, Work”

Topic:
Pearls of Wisdom
Excerpt:
This has been a busy year. I’ve had lots happening on the home front (a wedding!) and lots going on at the office (too long to list!) Managing work

More Like This...

See another Tax Planning blog post that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

More Like This...

See another Wealth Planning blog post that may be of interest to you.

Dentists Get Their Financial Check-Up: Nexus attends the 2022 Ontario Dental Conference

Topic:
Wealth Planning
Excerpt:
In early May, we had the opportunity to attend the Ontario Dental Association’s (ODA) Annual Spring Meeting (ASM) in Toronto. Now in its 157th year,

On a Side Note…

See another CRM2 Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Foundations & Endowments Nexus Notes Quarterly article that may be of interest to you.

Donor Advised Funds: An Overview

Topic:
Foundations & Endowments
Excerpt:
As we approach the end of the calendar year, taxes and charitable giving inevitably surface as ”things to do” in peoples’ minds. Here, we’d like to

On a Side Note…

See another Human Interest Nexus Notes Quarterly article that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

On a Side Note…

See another Inside Nexus Nexus Notes Quarterly article that may be of interest to you.

The Nexus Growth Spurt (Pandemic Edition) Continues!

Topic:
Inside Nexus
Excerpt:
As Nexus continues to grow, we remain committed to maintaining the highest levels of client service. This requires an ongoing investment in talent and

On a Side Note…

See another Investments Nexus Notes Quarterly article that may be of interest to you.

The Long and Winding Road

Topic:
Investments
Excerpt:
Reading the newspaper is an unsettling activity these days. In almost every facet of life there is a concern that can rattle even the most stoic

On a Side Note…

See another Pearls of Wisdom Nexus Notes Quarterly article that may be of interest to you.

A Table for None, Please; Working From Home on the Rise

Topic:
Pearls of Wisdom
Excerpt:
Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some

On a Side Note…

See another Tax Planning Nexus Notes Quarterly article that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

On a Side Note…

See another Wealth Planning Nexus Notes Quarterly article that may be of interest to you.

Living to 100… Is 100 the New 80?

Topic:
Wealth Planning, Living to 100
Excerpt:
It’s a common saying that there are two certainties in life, death and taxes. While we have a pretty good idea when we get taxed, which feels like all