Compensation

We are compensated by Capesky Insurance and Wealth Management Inc.

If you choose to purchase a product through us, Capesky Insurance and Wealth Management Inc. will be paid by the company that offers that product. Capesky Insurance and Wealth Management Inc. is compensated by a sales commission if you retain that policy with the insurance company. For certain products, Capesky Insurance and Wealth Management Inc. may receive a referral fee.

  • If you choose to purchase a product through us, Capesky Insurance and Wealth Management Inc, will be paid by the company that offers that product.
  • Capesky Insurance and Wealth Management Inc. is compensated by a sales commission for most products at the time of sale, and may receive a renewal (or service) commission if you retain that policy with the insurance company. We offer fee for service as well.
  • For certain products, Capesky Insurance and Wealth Management Inc. may receive a referral fee.

Capesky Insurance and Wealth Management Inc. may also be eligible for additional compensation, such as bonuses and non-monetary benefits, such as travel incentives. This compensation depends on various factors such as the volume of business placed with a particular company during a given time period

Capesky Insurance and Wealth Management Inc. may also be eligible for additional compensation, such as bonuses and non-monetary benefits, such as travel incentives. This compensation depends on various factors such as the volume of business placed with a particular company during a given time period.

Management Expense Ratio – (MER)

The Management Expense Ratio (MER) represents the combined total of the Management Fee, Operating Expenses and Taxes charged to a fund during a given year expressed as a percentage of a fund’s average net assets for that year.

The returns you earn as an investor – weather reported in your statement, in newspaper or in promotional materials reflect performance data that is reported after the fund’s MER is deducted. For example, if your fund’s investments gained 9% last year and its MER is 2%, the reported return would be 7% for that time period.

Management Fee

The management fee (as shown in the diagram below) includes two components:

The fee paid to the investment manager: Pays for professional investment management, supervision of the fund, administration of fund operation and service support.

The trailing commission paid to an advisor: Fund companies pay ongoing fees (known as trailing commissions or trailers) to the firm for which your advisor works. A portion of the trailing commission is sometimes paid to be the advisor’s firm to its representatives.

The value-added activities that you advisor provides in exchange for the trailing commission can be summarized under three pillars:

1. Service

Encompasses a wide range of activities, including account openings/closings, reporting and issuance of quarterly account statements and client communications, and regulatory compliance activities.

2. Advice

Represents the expertise an advisor provides to clients. This expertise can include fund recommendations and portfolio construction; ongoing monitoring and portfolio re-balancing; and retirement, tax or goal-specific planning.

3. Access

Includes the infrastructure required of your advisor’s firm to support the distribution, sales and servicing of all types of investments.

Operating Expenses

Each fund also pays an administration fee that is used to pay for regulartory filing fees and other day-to-day expenses such as:

  • Record-keeping fees
  • Accounting and fund valuation costs
  • Custody fees
  • Audit and legal fees
  • Costs of preparing and distributing annual and semi-annual reports and prospectuses

Taxes

Each fund is required to pay Harmonized Sales Tax (HST) on management fees charged to the fund. In general, the HST rate depends on the residence of the fund’s unit holders at a certain point in time.

Sales Commissions

Segregated funds are sold with one of three types of sales commission structures:

No-Load

No sales commissions are paid when a no-load fund is purchased or redeemed.

Front-end Load

A front-end load is a sales commissions paid upon purchase of a fund and is expressed as a percentage of the amount you invest (ranging from 0% to 5%). The commission, which is often negotiated with the advisor prior to investing, is deducted from your initial investment and paid to your advisor’s firm.

Back-End Load

With a back-end load, you do not pay a sales commission at the time of purchase; instead, it’s the fund company that pays a redemption fee to the fund company.

  • Deferred sales charge (DSC):

    This is most common back-end load. The redemption fee rate diminishes to zero over a time frame of typically six to seven years. The commission paid by the fund company to the advisor’s firm at the time of purchase is typically 5%.

  • Low-Load

    Similar to a DSC, but a lower redemption fee rate diminishes to zero over a shorter time frame of typically two to three years. The commission paid by the fund company to the advisor’s form at the time of purchase can range between 1% and 3%.

When it comes to your financial plan, there is no one size fits all solution.

Let us help you find the best solution for you and your family.

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