Relationship Disclosure Information
Please review the Relationship Disclosure Information for further information regarding the conflicts of interest which may arise when WWM provides services to Accounts, WWM’s complaint handling process and other important information.
Introduction
As a client of Westmount Wealth Management (“WWM”), it is important you understand your relationship with us. The Relationship Disclosure Information document (“RDI”) provides you with important information about our roles and responsibilities, your accounts at WWM and the services available to you. We ask that you take the time to read this document carefully.
Not all information outlined in the RDI may apply to your personal circumstances or your relationship with WWM, if you have questions, please contact your Portfolio Manager.
In this disclosure, we refer to Westmount Wealth Management as “we”, “us”, “our”, “Westmount” or “WWM”.
Along with the Investment Management Agreement (“IMA”) you entered into with us when you open an account, this disclosure describes your relationship with us. By accepting the IMA and maintaining an account with us, you confirm that you have received this disclosure, understand its contents, and acknowledge your consent to both the Agreement and the information outlined in this disclosure.
A current version of this document will be provided to you at account opening, is available on our website, and you will receive notification of any material changes to the document via your online client portal. When there is a material change to this document, WWM will notify you electronically and provide a link to the updated version on our website.
About Us
WWM is an independent, transparent, client-first firm. Our aim is to provide our clients with discretionary portfolio management and personalized financial solutions and advice to help them at every stage of their lives. Our head office is located Suite 1900-650 West Georgia St. Vancouver, B.C. V6B 4N7.
WWM is a Portfolio Manager registered under the securities laws of British Columbia, Alberta, and Ontario. WWM provides investment advice, discretionary portfolio and asset management services in accordance with each client’s Investment Management Agreement and Investment Policy Statement.
As a Portfolio Manager, WWM provides portfolio management services to private clients and investment advisory services to the Westmount Wealth Management Funds (the “WWM Funds”). The WWM Funds are two proprietary pooled investment trusts, which are utilized in the Model Portfolios managed by WWM.
The WWM Funds Offering Memorandum contains important information regarding fees and expenses, risk factors and other information related to the WWM Funds.
Our Products and Services
Our Services
WWM acts as a portfolio manager for your discretionary managed accounts, which means we make investment decisions based on the information you provided us as part of the Know Your Client (“KYC”) collection process. The KYC describes your risk profile – including your risk tolerance and your risk capacity -, investment objectives, time horizon and liquidity needs for each of the individual accounts you open with us. Your Portfolio Manager (“PM”) will use this information to invest in a Model Portfolio as agreed to in the Investment Policy Statement (“IPS”), as well as the IMA.
In addition to portfolio management services, we offer other professional services through our team members, which are covered by the management fee you pay us. Included in this service offering is personalized financial planning.
Our Products
WWM invests in pooled investment funds, including exchange-traded funds and proprietary funds (“WWM Funds”), used in the construction of the Model Portfolios. You can find detailed information on the WWM Funds in the WWM Funds Offering Memorandum.
The two WWM Funds are used exclusively in the management of your investment account. As they are proprietary investment products, they are not available at other investment firms. They may not be transferred in kind to other firms.
Your Managed Account with WWM
Accounts are managed on a discretionary basis by WWM under the direction of an appropriately registered PM and in accordance with the mandates established by your KYC information, IPS and IMA. In certain circumstances there may be assets held in your account which are excluded from the PM’s discretionary authority. For example, you may have deposited securities (“Legacy Assets”) into your account which cannot be sold due to market conditions or other trading restrictions.
In these circumstances, we will note this fact in your file, and we will only transact on those investments based on your instructions.
Management Fees and Fund Level Fees
Account Level
You will be charged a management fee regardless of your account performance, as per the Fee Schedule provided to you at account opening. Management Fees will be calculated monthly based on the average of the daily closing net asset value of your Accounts and accrued at the end of the month, and will be debited monthly plus applicable taxes in the jurisdiction in which you reside. Account level fees will be deducted directly from your account as per the IMA and appear as a line item on your account statement identified as “Management Fee” or “Platform Fee”.
We do not charge additional fees to operate or maintain an account with us. All these costs form part of the account level management fee we charge to you; however, you may be charged third-party fees, outlined in the paragraph on Custodial and other Operating Fees.
We will provide you with at least sixty (60) days’ notice in writing prior to charging any new or increased charges payable to Westmount associated with the management of your Account.
Fund Management Fees and Expenses
WWM earns an Advisory Fee from the WWM Funds set at 0.45% of the Net Asset Value (“NAV”) for Series W units of the WWM Funds, which are the series held in discretionary accounts. In addition to this Advisory Fee, the Funds also bear the cost of any appropriate expense associated with the ongoing operations of the funds. The Advisory Fee and other costs are described in the WWM Funds Offering Memorandum under “Fees and Expenses”. As fees and costs are charged directly to its respective Fund and reflected in the calculation of the NAV for each Fund, they will not be included in your fee disclosures on your account statements or on the Annual Report of Charges and Compensation.
Custodial and other Operating Fees
Segregated portfolios held at Fidelity Clearing Canada ULC (“FCC”) may be charged additional fees as outlined in the Fee and Service Disclosure sent by FCC directly to you at account opening. Please contact your Westmount advisor for a description of these fees and for a fee schedule from FCC.
Impact of Fees and Expenses on Your Returns
The fees and expenses described above reflect the value of our portfolio management and other services and will affect the returns on the investments in your account by reducing the returns in proportion to fees and expenses. Over time, similar to the compounding effect of performance returns, the compounding effect of these fees and charges will affect how your portfolio grows.
Opening an Account with WWM
We act as a portfolio manager on your behalf and are required to obtain certain KYC information from you before executing any transactions. We are required to put your interests first, ahead of our own interests and any other competing considerations, when making any recommendations or taking any investment action in your account.
KYC and Suitability
To meet our suitability obligation, we are required to collect and maintain current and appropriate KYC information to ensure our actions are suitable for you. In order to satisfy our regulatory requirements, we require certain personal and financial data, which includes your name, age, address, telephone number, e-mail address, occupation, financial situation (income and net worth) and other information pertaining to your family. The information collected will be used:
to establish your identity;
to establish whether you are an insider of a reporting issuer;
to establish whether your accounts(s) will be used by or on behalf of a third-party;
to establish your investment needs and objectives;
to understand your personal circumstances;
to establish your investment time horizon;
to note your investment knowledge;
to assess your financial circumstances; and
to determine your risk profile, which is made up of your willingness to take on risk (your risk tolerance) and our assessment of your financial ability to take on risk (your risk capacity).
WWM is required to take reasonable steps to confirm that investment recommendations made to you are suitable for you and put your interests first. This means we will ask you from time to time to provide us with updated KYC information. At least annually your PM will ask you to confirm your KYC information, and for you to provide any updates as necessary. This will ensure that we continue to manage your account in a suitable manner.
To meet our suitability obligation, we must also “know” and understand each investment we place you in. Through our “Know Your Product” (“KYP”) due diligence process, WWM analyzes every investment we place you in or recommend to you. Without limitation, as part of our KYP process, we generally consider such things as the reputation and track record of the investment product, the potential for profit and loss, the associated risk level and potential for conflicts of interest, the investment’s time horizon and complexity and the specific features of any investment, including costs and fees, liquidity, redemption rights and the frequency, completeness, and accuracy of an issuer’s disclosure. Our proprietary products are subject to the same rigorous KYP process.
We will also assess suitability on a periodic basis, including in the following circumstances:
when there is a change to your PM;
when we are informed about changes to your KYC information; and
in response to certain changes to market conditions.
Trusted Contact Person
We encourage you to provide us with the name and contact information of a trusted contact person, who should be an individual with whom you are comfortable allowing us to discuss your financial or personal circumstances, in specific circumstances. We may contact your trusted contact person and/or disclose information about you or your account to your trusted contact person:
if we are concerned that you are being exploited financially;
if we are concerned about your mental capacity as it relates to your ability to make decisions involving financial matters;
to obtain the name and contact information of your legal representative, if any; and
to obtain your contact information if we cannot get in touch with you.
When you provide us with the name of a trusted contact person, you confirm to us that you have the consent of that person to provide us with their name and contact information and that the person knows you are naming them as your trusted contact.
If we reasonably believe that you are in a vulnerable position and are being financially exploited or that you are experiencing diminished mental capacity which may affect your ability to make financial decisions relating to your account(s) with us, we may place a temporary hold on a particular transaction. A vulnerable position includes where an illness, impairment, disability or aging-process limitation places you at risk of financial exploitation. If we place a temporary hold on a particular transaction, we will provide you with notice, either written or verbal, explaining our reasons for the temporary hold, and at least every 30 days thereafter until the temporary hold is revoked. We may also contact your Trusted Contact Person about a temporary hold.
Your Relationship With WWM
It is important that you actively participate in our relationship. In particular, we encourage you to:
keep us fully and accurately informed regarding your personal circumstances. Promptly advise us of any change to information that result in a change to the types of investments appropriate for you, such as a change to your income, investment objectives, risk tolerance, time horizon or net worth;
review the documentation and other information we provide to you regarding your account, transactions conducted on your behalf and the holdings in your portfolio; and
ask questions and request information to address any questions you have about your account, transactions conducted on your behalf or the holdings in your portfolio, or your relationship with us or anyone acting on our behalf.
Custodial Arrangements
WWM does not take physical custody of your assets or accounts; all of your assets and accounts are held in your name by an external custodian. The primary benefit of having a third-party custodian is to minimize risk of loss.
Managed Assets are held at Fidelity Clearing Canada ULC (“FCC”), who are responsible for holding the securities and cash held within your Managed Account. Fidelity is responsible for the safekeeping and recordkeeping of all securities and cash, and for providing you with ongoing statements on a timely basis. Although FCC is responsible for delivering these statements to you, both WWM and FCC are responsible for ensuring the accuracy of the statements. Should you have any questions related to your statements, you may contact FCC directly at the contact details provided to you at account opening.
WWM has trading authority granted by you over your assets held at FCC. We do not have access to those assets, and we are not authorized to transfer securities or cash into or out of your account, except in the limited circumstances as described below.
FCC is independent to us and is required to segregate client assets from its own assets and is subject to regulatory oversight, minimum capital and insurance requirements. FCC may hold securities on your behalf in its name as your nominee. They may appoint sub-custodians to hold client assets in foreign jurisdictions or to hold assets other than cash or securities.
Client assets are subject to risk of loss:
(i) if the Custodian becomes bankrupt or insolvent; or
(ii) if there is a breakdown in the Custodian’s information technology systems; or
(iii) due to the fraud, willful or reckless misconduct, negligence or error of the Custodian or its personnel.
WWM has reviewed the Custodian’s reputation, financial stability, relevant internal controls and ability to deliver custodial services and has concluded that the Custodian’s system of controls and supervision is sufficient to manage risks of loss to client assets in accordance with prudent business practice.
FCC is a Canadian investment dealer and is regulated by Canadian Investment Regulatory Organization (“CIRO”) and is a qualified custodian under applicable securities law. Each client Managed Account held at FCC is insured by the Canadian Investor Protection Fund (“CIPF”) in an amount up to $1,000,000. Please visit www.cipf.ca for further information on the conditions and limits of CIPF coverage.
Although your assets are held by the FCC, as per the IMA, you have granted WWM access to your assets in the following circumstances:
to accept delivery of securities or cash on a temporary basis to facilitate a deposit or the settlement of a trade;
authority to transfer cash from your account at FCC to your financial accounts;
to withdraw funds or securities from your accounts, in limited circumstances; or
authority to debit your account to pay management fees.
In these cases, you have granted access for convenience and efficiency to WWM in the management of your assets. Granting us access, even in the limited circumstances as above, will exposes you as the client to risk of loss:
(i) if there is a breakdown in our information technology systems; or
(ii) due to the fraud, willful or reckless misconduct, negligence or error of WWM or its personnel.
In addition, we are required under applicable securities laws to insure against the additional risk of loss which arises due to its access to client assets.
Account Statements and Performance Reporting: Quarterly Account Statements
You will receive on at least a quarterly basis an account statement issued by WWM. It will set out each transaction executed during the reporting period, including the dates on which these transactions took place, and the names of quantities of the securities involved. Your quarterly account statement will provide details regarding the names, quantities, costs and current values of the securities held in your account.
Annual Report on Charges and Other Compensation and Investment Performance
On an annual basis, we will provide you with a report on charges and other compensation, and investment performance. This statement will detail the fees you paid: operating, transaction or other charges related to your managed account, and if applicable, any charges relating to the purchase or sale of debt securities. The annual report also includes your money-weighted returns over various time periods and the performance of your accounts net of fees. The money-weighted rate of returns measures how well your account has performed, taking into consideration the timing of your personal deposits and withdrawals, as well as most of the cost charged to your account.
Privacy Policy
WWM has adopted a policy outlining collection, use and disclosure of personal information which can be found on the website.
If you have a privacy matter you want to report, please contact: compliance@westmountwealth.com or (604) 733-8888 and we will respond to your concern in a timely manner.
Risks
Securities laws require us to provide all clients with a description of risks that you should consider when making an investment decision. Depending on the nature of your investment, the type of investment risk will vary; below is a brief summary of some of the investment risks for you to consider. More details of investment risks applicable to the WWM Funds, can be found under “Risk Factors” in the WWM Funds Offering Memorandum.
Capital risk: the risk that you may lose the money you invest.
Business risk: the risk inherent in the operations of the entity or industry in which you have invested.
Currency risk: the risk associated with currency fluctuations if you invest in non-Canadian dollar denominated securities, or in companies whose businesses are carried out in foreign jurisdictions which create exposure to foreign currency fluctuations.
Interest rate risk: the risk that the principal of a debt instrument that you’ve invested in will go up or down as the interest rates in the economy go up and down.
Commodity risk: the risk that exposure to certain commodities, or to companies whose business is dependent on commodities, may be directly affected by movements in the price of the commodities.
Concentration risk: if you invest in relatively few securities, then this can result in a lack of diversification across all sectors, regions or countries and may result in higher volatility of your investment performance.
Specialization risk: if you invest primarily in one industry or market capitalization range, then this may cause your investment performance to be more volatile and strongly affected by the overall economic performance of the area of specialization.
Risk of loss: investing, in general, has risk associated with it, including the risk that the investor may lose a portion or all of an investment.
Risk of loss of key personnel: the business you invest in may be dependent on a small number of key officers and employees, the loss of any of whom could have an adverse effect on your investment.
Leverage risk: the risk of loss associated with borrowing.
Risk of Using Borrowed Money to Finance an Investment
WWM does not lend money, extend credit or provide margin to its clients. Margin may be available for your account from FCC and WWM may trade on margin for your account if it is considered a suitable investment strategy for you. Any use of margin would be approved by you in advance in your IPS.
Using borrowed money to finance the purchase of securities or make other investments involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remain the same even if the value of the securities purchased declines. Using borrowed money to purchase securities can magnify the gain or loss on the cash invested. It is also important that you are aware of the terms of any loan that is secured by securities or other investments. The lender may require that the amount outstanding on the loan does not rise above an agreed percentage of the market value of the securities or other investments. Should this occur, you will be required to pay down the loan or sell the investments so as to return the loan to the agreed percentage relationship.
Conflicts of Interest
A conflict of interest exists when there are circumstances where:
(i) your interests, and the interests of WWM or its employees (including PMs) are inconsistent or divergent;
(ii) WWM or its employees may be influenced to put our interests ahead of your interests; or
(iii) monetary or other benefits available to us or our employees may compromise your trust in us.
It is our policy to identify conflicts of interests and ensure we always resolve them in your best interests and ahead of our own. If we cannot resolve a conflict in your best interest, we will avoid the activity in its entirety.
WWM will deliver to you a Conflicts of Interest Disclosure Statement which provides details on identified conflicts of interest. It will be delivered to you at account opening, posted on our website and you will be notified as we identify or update any conflicts of interest we have identified.
Potential conflicts of interest include:
Referral arrangements;
Sales practices, compensation arrangements and incentive practices;
Conflicts of interest in fee-based accounts;
Outside Activities;
Proprietary products; or
Relationships with issuer.
WWM will provide you with information about any conflicts of interest that may reasonably affect the services we provide at the time of account opening and in certain situations before investing your account. Disclosure will be provided in a timely manner so that you have a reasonable amount of time to assess the conflict.
Additional Services
In addition to investment management WWM provides clients supplementary services, such as personalized financial planning. You may also be offered insurance products through Westmount Wealth Planning (“WWP”), which is wholly owned by WWM. You are under no obligation to utilize insurance products and services offered by WWP. These services are delivered through your Portfolio Manager, Wealth Advisor, Financial Planner, and Insurance Advisor. Your Portfolio Manager will continue to manage your investments. Personalized financial planning services are available to all clients and are included with the fees you already pay. WWP may receive commissions and recurring renewal payments from the sale of insurance products, which commissions will be disclosed to you prior to sale.
The employees providing these services are responsible for:
Creating Financial Plans;
Reviewing of Plans on an ongoing basis; and
Providing Insurance Solutions if they are licensed to do so.
In some circumstances this employee may also be your Portfolio Manager, if they have attained the required accreditations.
Best Execution
Westmount employs Fidelity Clearing Canada ULC ("FCC") to provide trade execution services on its behalf. Westmount will ensure that the following is performed:
a) A review of the best execution disclosure of FCC and a review when changes to the disclosure are made; and
b) Obtaining an annual attestation from FCC that FCC has complied with and tested its best execution policies and procedures; and
c) Westmount will follow up with FCC if it identifies execution results that are inconsistent with their best execution disclosure.
Fair Allocation
Westmount acts on behalf of many clients and we endeavor to allocate investment opportunities among all our clients in a fair manner and not intentionally favour one client over another. We have a trade allocation policy that is intended to ensure that allocations are determined on a basis that is fair, reasonable, and equitable for all clients.
Security purchases and sales for multiple accounts may be grouped and submitted to the market together. The decision to group orders will take into consideration the investment profile of each client. When trades are grouped, each account will generally receive its pro rata share and the same average price of each fill wherever practicable. If securities are purchased for the accounts of more than one client and an insufficient number of securities are available to satisfy the purchase order, the securities available will be allocated pro rata based on the size of the accounts, to the extent reasonably possible. Allocations for clients always take precedence over trading for any proprietary accounts or the accounts of our staff.
The purpose of this policy is to ensure fair treatment of all accounts and to avoid the appearance of favoritism. There may be times, however, where strict application of this policy would not lead to a fair, practical, and reasonable allocation. In such circumstances, allocation by a method other than this policy will be permitted, provided that such allocation produces a more fair and reasonable result.
Complaints and Dispute Resolution
The complaints and dispute resolution service available to you is described in Schedule “A”.
Referral Arrangements
WWM does not currently have any referral arrangements.
Soft Dollar Arrangements
WWM does not use soft dollar arrangements.
Schedule "A"
COMPLAINTS PROCESS AND INDEPENDENT DISPUTE RESOLUTION SERVICE
Our Complaint Process
WWM has policies and procedures for handling client complaints outlined below. If you have a complaint related to any advising or trading activity of WWM or one of our representatives, we would like to hear from you. Complaints should be in writing and to the attention of the Chief Compliance Officer. Please include any details that would be pertinent to the complaint including the date, what happened and your expectation. Any complaints with respect to the services provided by WWM should be directed to Westmount Wealth Management Inc. at:
Westmount Wealth Management Inc.
Suite 1900-650 West Georgia St.
Vancouver, BC
V6B 4N7
Phone: (604) 733-8888
Email: compliance@westmountwealth.com
You may want to consider using a method other than email for sensitive information.
WWM will acknowledge your complaint in writing, within five (5) business days after receiving your complaint. We may ask you to provide clarification or more information to help us resolve your complaint. In order to help WWM respond as quickly as possible you should make your complaint as soon as possible after the event occurs, reply promptly if we ask you for more information and keep copies of all relevant documents, such as letters, emails and notes of conversations.
WWM will provide written notice of its decision within ninety (90) days of receiving your complaint which will include:
a summary of the complaint;
the results of WWM’s investigation;
WWM’s decision to make an offer to resolve the complaint or deny it; and
an explanation of our decision.
If WWM cannot provide you with its decision within ninety (90) days WWM will inform you of the delay, the reason why and provide a new date for our decision.
Taking your Complaint to the Ombudsman for Banking Services and Investments (“OBSI”)
If you are not satisfied with our decision, you may be eligible for the independent dispute resolution service offered by OBSI. Bringing an action to OBSI will not restrict your ability to take a complaint to a dispute resolution service of your choosing at your own expense, or to bring an action in court. Keep in mind there are time limits for taking legal action.
If you are a Québec resident, you may consider the free mediation service offered by the Autorité des Marches Financiers.
OBSI’s services are provided free of cost and is an independent dispute resolution service available should WWM not provide its decision within ninety (90) days after you made your complaint, or you are not satisfied with WWM’s decision. Please keep in mind that OBSI can only recommend compensation of up to $350,000, which you must agree to when you decide to use their resolution services. There is also a time limitation of 6 years from the time that you first knew, or ought to have known, about the event that caused the complaint. If you are not satisfied with WWM’s decision, you have up to 180 days after WWM provides you with its decision to take your complaint to OBSI.
Filing a complaint with OBSI
Contact OBSI
Email: ombudsman@obsi.ca
Telephone: 1-888-451-4519 or 416-287-2877 in Toronto
For more information about OBSI, visit www.obsi.ca
OBSI works confidentially and in an informal manner. It is not like going to court and you do not need a lawyer. During its investigation, you may be interviewed, along with representatives from WWM.
Once OBSI has completed its investigation, it will provide a recommendation. OBSI’s recommendations are not binding to either party, satisfied with the recommendation, please keep in mind you may opt to take the compliant to a dispute resolution service of your choosing at your own expense.