Common Questions About Working With a Cross-Border Financial Advisor

1) Is working with a cross-border financial advisor worth the cost?

Anyone with financial interests in the U.S. and Canada faces complexities that are not easily managed alone. The cost of not working with an advisor can be high.

However, every investment company and team operates differently, which can lead to confusion regarding payment structures and services provided.

Clients engage SWAN to leverage our cross-border expertise, experience, and resources to plan for expected and unexpected financial scenarios. Our job is to help you avoid potential financial setbacks, develop strategies to achieve your long-term objectives and provide guidance on managing your investments in Canada and the U.S.

The comprehensive services we offer encompass the following:

• Offering guidance based on your unique financial priorities and family circumstances.
• Guiding you through the complexities a U.S. person investing in Canada needs to know to avoid costly pitfalls.
• Developing a customized financial plan that serves you as an American living in Canada or a Canadian living in the U.S.
• Assisting you in navigating potential tax complications that could impact your financial well-being.
• Providing education on the steps to take before moving investments across the border.
• Managing RRSPs, Roth IRAs, inherited IRAs and traditional IRAs, whether you live in Canada or the U.S.
• Providing comprehensive tax receipts for both U.S. and Canadian tax returns so that tax time doesn’t become a nightmare.
• Serving as your trusted advisor when making critical financial decisions requiring navigating complex financial information.
• Acting as a liaison with other advisors such as tax lawyers, immigration lawyers and cross-border accountants to ensure a cohesive cross-border financial strategy.
• Offering guidance on estate planning and measures to safeguard your financial legacy.

Our team at SWAN comprises fiduciary professionals who hold designations such as CFP, TEP, CRPC, and Portfolio Manager. We are cross-border specialists. We ensure you receive personalized and expert guidance tailored to your unique financial needs.

At SWAN, our role goes beyond trying to get the highest return on investment. We understand that we cannot control the markets, and this is essentially gambling, which comes with significant risks and uncertainty.

Instead of trying to time the markets, we focus on what we can control: minimizing risk and investing in tax-efficient investments. We are your quarterback, so you can make educated decisions and achieve your goals.

2) How do the costs work?

At SWAN, we prioritize transparency and simplicity in our fee structure. We do not impose hidden trading fees or commissions or charge fees for joining or leaving our services.

Our fee, which is tax-deductible in Canada, covers the management of your customized investment portfolio and a comprehensive suite of services tailored to your financial goals and needs.

There are three primary payment structures to consider when engaging a financial advisor:

1. Commissions
2. Built-in Commissions (i.e., mutual funds)
3. Percentage of Assets Under Management

At SWAN, we do not charge commissions or built-in commissions. Our cost structure is based on a percentage of assets under management.

Commissions:

Under a commission-based structure, you pay for each trade your advisor executes. This cost is deducted directly from the trade amount. For example, if a trade is valued at $10,000 and the commission rate is two per cent, you would pay $200 for that specific trade. This is not how we work at SWAN Wealth.

Built-In Fees/Commissions MER:

Many mutual funds and packaged products include a fee within their expenses, adding a layer of complexity to understanding the total cost of your investments. Your advisor's compensation may be integrated into the mutual fund fee structure, making it less transparent for clients to discern the exact amount paid to the advisor. This is not how we work at SWAN Wealth. Our approach is to build the portfolio with quality individual stocks, not simply use mutual funds. We may only add a mutual fund if we determine it will be worth it because of a narrow market, and we want the added protection of a group of holdings.

Percentage of Assets Under Management:

In this payment model, the advisor charges a percentage of the assets they manage on your behalf. This cost is tax-deductible in Canada, except when the assets are held in registered accounts such as an RRSP.

Unlike the other structures, you do not directly pay the advisor; the fee is automatically deducted from your account monthly or quarterly. At year-end, you receive a summary detailing the total cost for tax deduction purposes. So, as a rough calculation, if you paid 1% and were in a 50% tax bracket, this would be deducted and cost you approximately 0.5%.

This is how costs are structured at SWAN Wealth.

However, it's important to note that different financial advisors, including those within the same firm, may have varying fee structures based on their expertise and licenses.

At SWAN Wealth, our account minimum is $2.5M.

We typically work with clients with $3M or more in investments under SWAN’s management. Our clients pay a maximum of 1.25% per year. The greater a client’s portfolio, the lower the percentage. In other words, as your investments grow, you pay less for our wealth management services.

At SWAN Wealth, the cost structure includes the following services:

• Customized portfolio tailored to your specific needs
• ESG and ethical portfolios are available
• Personalized investment strategy
• Fiduciary management, which means all advice will be in your best interest
• Personal portfolio reviews twice a year
• Sounding board for big financial decisions
• Advice on RMDs, RRIF payments and pensions on both sides of the border
• A detailed financial plan that is in alignment with your goals
• Ongoing cross-border guidance which saves you time and helps you avoid costly pitfalls
• A full set of tax receipts for Canada and the U.S. to ensure tax time runs smoothly
• Cost-base tracking for Canada and the U.S. to help save your accountant time and you money while keeping you onside with the IRS and CRA
• Ongoing tax consultation support
• Guidance on charitable giving and insurance solutions
• Referrals to our network of outside professionals, such as cross-border lawyers and accountants
• Access to our estate and trust services, including solutions such as executor, trustee or power of attorney*
• Access to our tax preparation services for Canadian and U.S. tax returns**
• Ongoing education and videos to build your financial literacy within a cross-border and Canadian context
• Monthly updates on key areas of portfolio strategy and understanding of the markets

*Hiring our trust services has an additional cost discussed beforehand

**Hiring our tax preparation services has an additional cost discussed beforehand

Before you open your accounts with an advisor, determine your financial advisor’s cost structure.

As outlined, there are many different ways a firm can structure payment. We recommend that you find out the costs and ensure that there are no hidden costs, so you can feel comfortable moving forward.

At SWAN Wealth, there are no hidden costs or commissions. We are transparent about the cost of our cross-border wealth management services.

SWAN Wealth Management Account Costs

$2,000,000 to $3,000,000 - 1.25% of assets under management*

$3,000,000 to $5,000,000 - 1.0% of assets under management*

$5,000,000 to $10,000,000 - 0.85% of assets under management*

For amounts above $10 million, please request our full cost-schedule PDF.

* There are no trading costs or commissions. This is the total amount charged by SWAN Wealth Management and Raymond James Ltd. Costs on non-registered accounts are fully tax-deductible.

3) How does SWAN work with Raymond James?

SWAN Wealth and Raymond James work in partnership, and the benefit is that we can leverage the resources, protection, and expertise of a leading independent full-service firm.

While Raymond James provides back-office support and access to a global network of analysts and services, each Raymond James team operates independently.

At SWAN Wealth, we collaborate with Raymond James to offer our clients the personalized service of our team combined with Raymond James’s broad resources, ensuring a tailored approach to their financial goals.

What are the benefits of working with SWAN Wealth Management?

• Access to a team of experts with over 30 years of experience
• Focus on cross-border wealth management for Canadians and Americans
• Specialization in financial planning, estate planning, tax consultations, and investment management for clients with cross-border complexities
• Portfolio managers with a fiduciary responsibility
• Dedication to creating and sharing quality resources and information with clients to help them feel more confident and make better decisions
• In-house trust and estate experts
• In-house CFP, CRPC, TEP, and portfolio managers

What are the benefits of being supported by Raymond James?

• One of North America’s leading independent full-service firms
• We have access to 62 analysts globally
• Fortune 500 company
• Collecting and managing more than $1.45 trillion in client assets
• Access to Raymond James trust services
• Raymond James Charity Foundation, so you can easily support your philanthropic goals and the causes that have meaning to you.
• Access to Raymond James cross-border accounting services

Think of it this way: SWAN is an independent advisory firm and Raymond James is our back office. Every Raymond James team is entirely independent of each other and operates differently.

Therefore, experience, designations, specialties, philosophies, and values vary from one firm to the next.

4) Do I need an advisor in my city or country?

In today's digital age, your location is no longer a barrier to receiving high-quality financial services.

It is essential that you get a cross-border expert with the knowledge and experience to help you confidently take the right steps. Working with the advisory firm down the street is unlikely to yield the best results.

I have spoken to hundreds of cross-border families and professionals, and seen what can go wrong when people aren’t aware of the steps they need to take to optimize their cross-border wealth. One of the biggest mistakes is a lack of expert planning.

At SWAN, we specialize in cross-border. We work with clients across Canada and the U.S., leveraging technology to provide personalized financial planning and investment management.

The most important thing is that you have a team that specializes in helping clients like you, so you can avoid costly headaches, a massive accounting bill, or accidentally being invested in PFICs.

Cross-border financial planning is more complex than either Canadian or U.S. planning alone, and if you don’t have a specialist, you can easily fall into tax traps that cost you time and money.

We recommend selecting an advisory team based on their specialty and experience rather than location.

At SWAN, we prioritize understanding your unique financial circumstances, values, and goals to ensure the advisor-client relationship is built on trust and alignment.

5) Can I do cross-border investing and portfolio management on my own?

It’s essential to consider the risks of managing your finances independently, especially when you are a cross-border person or have assets on both sides of the border.

For example, as a U.S. person living in Canada, you must avoid certain investments, or you may face complicated U.S. tax reporting and increased U.S. tax rates. In addition, you will need to report your investment income to Canada and the U.S. Without a full set of tax receipts for each country, making costly or time-consuming mistakes is easy.

While one could potentially do cross-border investing independently, the sheer time and stress of dealing with the cross-border complexities make it inadvisable.

When working with SWAN, you receive valuable expertise. We help you understand tax implications, navigate market volatility, and progress toward your goals.

At SWAN, we work with clients who don’t want to do their own investing. You likely have a financial advisor that you’re happy with, but now that you’re moving, you need help from a specialist.

6) Can I just pay for a one-time financial plan?

Financial planning is an ongoing process that evolves with your life and requires continuous monitoring and adjustments. This is why a one-time plan doesn’t make sense. In addition, after you have a financial plan, you will still need an advisor to invest your assets according to your financial objectives.

When you have accumulated wealth in the U.S. and Canada, you need a detailed cross-border financial plan that covers the following:

• The rules and regulations for registered accounts including strategies on where to draw money from first.
• A plan of action for taking money from your pensions.
• Considerations with gifting and estate planning.
• Tax-planning tools and tactics depending on your country of residence now and in the future.

At SWAN, we develop cross-border financial plans that act as a blueprint for the investments in your customized portfolio. SWAN stands for Sleep Well at Night, and that’s our goal for every client. We are here to provide ongoing support and help you make educated decisions so you can relax and Sleep Well at Night.

7) Am I ready to work with a cross-border financial advisor?

When considering a new client, SWAN looks for certain indicators to ensure a successful and collaborative relationship.

If you’re not sure what the role of your financial advisor will be and what services you will receive, you may not be ready to work with an advisor. In addition, if you’re not ready to organize your statements and move your assets, you may not be ready to work with a financial advisor.

If you focus on short-term rather than long-term goals, you may not be ready to work with a financial advisor. Finally, if you’re not ready to be truthful and transparent about your financial goals, working with a financial advisor is not advisable.

By fostering open and honest communication, we work with our clients to build a strong financial foundation for the future.

You’re ready to work with a cross-border financial advisor if you identify with the following:

• You have a move across the border planned in the near future and want to start to get it organized so you can do it properly.
• You’re organized and ready to prepare your statements and move your assets.
• You’re excited about your next adventure and do not want to spend hundreds of hours managing your cross-border finances every year.
• Once you find someone you trust, you’ll be happy to have them manage your investments so you can focus on what you love.
• You have long-term goals and are not looking for risky short-term wins.
• You don’t want to deal with cross-border pitfalls or a big tax hit, so you prefer to work with cross-border specialists.
• You’re looking for a firm that you can work with over the long term.