- Non-discretionary financial assets - consist of those financial assets where decisions regarding deployment are made by an entity other than the household. The main components of non-discretionary financial assets are the assets in defined benefit pension plans and insurance protection reserves.
- Net worth - comprised of the accumulated wealth of households. It is the amount by which total assets exceed the total liabilities of households and unincorporated businesses. Over time, changes in net worth are a true barometer of the improvement in economic wellbeing of the entire household sector.
- Non-embedded fund options - have been available to the high net worth (HNW) investor for many years. These funds, or fund wraps do not have advice/service fees embedded in the fund’s net asset value. In certain HNW series, there is also no embedded asset management fee. The payment of both fees is administered by individual fund managers who redeems units and remit the fees to either the dealer or the asset manager or to both. Several new series have emerged to address the potential need for advisors with clients holding funds in client name, operationally not conducive to traditional fee-based programs. These new series have low or no minimum investment thresholds.
Non-discretionary fee-based programs -
advice-based programs in which clients are required to approve all transactions in the program. The category originated in the full-service brokerage channel with the fee-based brokerage (FBB) programs. Using an open architecture concept, FBBs represent full-service brokerage accounts where the investor is entitled to a scaled number of trades for a fee, based on portfolio size. The fees are calculated as an asset class-based fee or a single blended fee. Examples include RBC Dominion Securities Advisor Program and BMO Nesbitt Burns Meridian.
Over time, the non-discretionary fee-based program category has grown to include fee-based programs offered by firms in the financial advisor/financial planner channel, as well as the branch advice channel. The shelves of these two types of programs are generally limited to F-series mutual funds and deposits or other products available to Mutual Fund Dealers Association (MFDA) members.