Transcript Slide 1

“At Cardinal Capital we don’t want Advisors to
partner with us because of our exceptional returns,
we want advisors to work with us because we provide
a solution that is right for their practice
and their clients.”
Timothy E. Burt, CFA
President & C.E.O.
Discretionary Management – The
Cornerstone to Building High Value
Relationships
The thing we hear most from advisors is that they
want to grow their practices, strengthen their
client relationships and have peace of mind that
they are providing the best financial advice and
solutions possible.
Simply put…
INCREASING assets under administration while
DECREASING the number of client accounts
Results in…
Having more time to work on the aspect of client
management that matters most…
building the client relationship
INCREASING assets under administration
while DECREASING the number of clients
Requires advisors to…
 Acquire
 Retain and
 Grow
High Net Worth Clients
More and more, high net worth individuals are
demanding more planning, greater access to experts,
solutions customized to their specific needs – their own
personal CFO! Investment advice and portfolio
management top the list of “most valued services”.
Warren Buffet
Timothy E. Burt
You may not be planning on
changing anything in your
financial planning practice,
but the industry has other
plans for you.
 The projected growth rate of the
HNW marketplace is nearly 88%
over the next seven years
 HNW households control about $1.3
trillion of $3.2 trillion in Canada or
more than half of the overall
financial wealth market of $2.3
trillion
 When it comes to the primary advisors to Canada’s HNW
households, full service brokers currently take the lead at
37%; while 22% of households use investment counsellors;
and 21% opt for financial planners.
 Bederman says a big challenge is that more than half of the
HNW households that use a financial planner are not
satisfied.
 Only 48% of these households believe their advisor is
exceeding expectations, compared to a much higher
satisfaction rate for brokers (56%) and 67% for investment
counsellors.
“It doesn’t necessarily mean that
financial planners are out of the
game, but it means that the
nature of financial planning and
what particular advisors do will
have to change.”
Brugger Wealth Management Ltd.
The Managed Money Continuum
Fee based programs level of investable assets/degree of customization
LEVEL OF INVESTABLE ASSETS
$500,000+
Cardinal Capital Management – (MER 1.50)
Hemisphere Capital – (MER 1.50)
Bissett Private Portfolio Management – (MER – 1.50 – 1.80)
Connor Clark & Lunn – (MER 1.50)
$250,000 - $499,999
Tapestry Pooled Portfolio Management – (MER 1.93 – 2.55)
Standard Life Legends – (MER – 1.55 – 2.05)
SEI Pooled Portfolio – (MER – 1.82 – 2.21)
$100,000 - $249,999
SEI Portfolios – (MER 1.95 – 2.32)
Standard Life Eclipse – (MER 2.00 – 2.50)
AIM/TRIMARK Dialogue – (MER 1.97 2.61)
$25,000 - $99,999
Franklin Templeton Quotential – (MER 2.07 – 2.74)
SEI LifePath – (MER 2.55)
AGF Harmony – (MER 2.79 – 3.05)
Mackenzie Financial Symmetry – (MER 2.26 – 2.79)
$0 - $24,999
AIM/Trimark Investments – (MER 2.14 – 2.90)
Mackenzie Financial Corp. – MER 2.20 – 2.91)
Standard Life Mutual Funds – (MER 1.97 – 2.47)
Franklin Templeton – (MER 2.41 – 2.98)
DEGREE OF CUSTOMIZATION
The Power of Dividends
Over time, cumulative dividends offer a similar benefit to traditional fixed
income investments
Assuming a $30,000 Initial Investment - RBC
$20,314
ASSUMPTION: No dividend re-investment
$21,750
The Tale of the Numbers
Assets Under
Administration
Assets with
Cardinal
1998
$11.519 Million
$0
1999
$19.998 Million
$0
2000
$36.688 Million
$0
The Tale of the Numbers
Assets Under Assets with
Administration
Cardinal
2003
$46.444 Million
$3.982 Million
2005
$64.615 Million
$14.145 Million
May 2007
$84.688 Million
$19.758 Million
Number of Family Units with
Over $1 Million of Investable
Assets
2000
0
2007
31
Conclusion
 Change, or evolution, is not just an option:
 it is a fact of life for all businesses
 Change is all about people and it takes time
 You have it within your reach to take your
practise to the next level of performance
Thank You
Market Outlook
Stronger Than Expected Economy
 Low unemployment rate
 Good job growth
 Increasing personal income
 Strong corporate sector
 Weak housing sector bottoming out in U.S.
 Bank credit still accessible
 Interest rates still low for now
Inflation Concerns Will Worsen
 Higher energy costs
 Higher food costs
 Increasing wage rate pressures
 Higher minimum wage
 Higher rental costs
 Higher industrial commodity costs
High Financial Liquidity
 Hedge funds
 Private equity firms
 Strong corporate balance sheets
 OPEC money
 Cheap credit
 Increasing M.& A. Activity
Stock Valuations Are Reasonable
 Many stocks still selling below their 1998-2000 highs
 Corporate profit growth is still good
 Many stocks still sell at historically low p/e’s
 Low bond yields make stocks more attractive
 Companies are still raising dividends and buying back
stock
 Increasing scarcity of high quality stocks due to
takeovers
Stock Market Outlook
 Last bear market was in 2006 – bear markets occur every
4 yrs.
 Next bear market in 2010 – bull market peak in 2009
 Last recession was in 2001 – recessions occur every 8-9
yrs.
 Next recession in 2010
 Eventually steadily higher interest rates in 2008 and 2009
will cool off the global stock markets
 Conclusion – stock markets will move higher in 2007 and
2008 due to a stronger than expected economy and better
than expected corporate profits
Bond Market Outlook
 Stronger than expected GDP Growth
 Higher than expected CPI Rates
 World central banks will gradually tighten monetary
policy
 Yield curve will become positive – sloped again
 Bond investors will demand higher inflation risk
premium and higher credit risk premium
 Conclusion - rising bond yields and falling bond
prices for 2007 and 2008
Canadian Dollar Outlook
 Canadian dollar will strengthen against the U.S. dollar
towards $0.95 U.S. by end of 2007 and towards $1.00 U.S. by
end of 2008
 Canadian dollar will weaken against the euro
 Large U.S. budget and trade deficits will eventually take its
toll on the U.S dollar
 The U.S. will become increasingly protectionist with
Democratic Congress and likely Democratic President in
2009
 Higher energy prices and commodity prices will keep the
Canadian dollar strong against the U.S. dollar
 Political uncertainty in Canada is becoming less of a concern
to global investors