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Client Relationship Disclosure Information

Last updated on June 28, 2021

About this Disclosure

We believe that successful long-term relationships are built on a foundation of trust and transparency, where both parties clearly understand their roles, obligations, and expectations. In that spirit, and to meet the requirements of securities legislation to make certain disclosures to you in a prescribed format, we provide relationship disclosure information. Not all information may apply to your personal circumstances or your relationship with WealthBar Financial Services Inc. doing business as CI Direct Investing (“CI Direct Investing”). 

In this disclosure, we refer to CI Directing Investing, as “we”, “us”, “our”, “WealthBar” or “CI Direct Investing”. 

This disclosure forms part of your Managed Investment Account Agreement (“MIAA” or "Agreement") with us. By accepting the Agreement and maintaining an account with us, you confirm that you have received this disclosure, understand its contents, and acknowledge your consent. 

If you have any questions related to the contents of this document, please contact us at 888-373-7674 or via email at [email protected].

About Us

CI Direct Investing provides financial planning, investment services, and financial products. We are a registered portfolio manager under the securities legislation in all provinces and territories in Canada. WealthBar is also registered as a Life Insurance Agent in the provinces of Alberta, British Columbia, and Ontario.

CI Direct Investing is a subsidiary of CI Financial Corp (TSX: CIX) and an affiliate of CI Investments Inc. CIX is a publicly traded corporation whose shares are traded on the Toronto Stock Exchange.

Our head office is located at #900 – 625 Howe Street, Vancouver, BC, V6C 2T6. You can reach us also by telephone: 888-373-7674; by fax: 888-373-7674 or by email: [email protected].

Products and Services

CI Direct Investing takes a unique approach to wealth management through our convenient online platform and high standard of client care. We provide discretionary investment advisory and digital financial planning services. 

We use a team approach to provide you with advice and service. When you need to contact us, you can use an online messaging service through our online platform or email [email protected]. You can book a call with members of our portfolio management, financial advice, or customer service teams on request.

Members of our teams may contact you to assist with requests like account opening, transfers, and other account maintenance. This ensures you get the timeliest service possible. 

Investment Advice

CI Direct Investing acts as a portfolio manager for your separately managed account, which means we make investment decisions for you. Discretionary investment authority for the assets under our management is pursuant to our Agreement. 

Our investment strategy is based on the view that your asset mix primarily determines portfolio performance, and includes diversified asset classes in portfolios to maximize returns at different levels of risk. Our portfolios primarily contain Exchange Traded Funds (“ETFs”) and commission-free mutual funds. We use passively indexed along with selective actively managed investments. We offer a variety of portfolios tailored to your needs and preferences, including low-cost portfolios of ETFs, portfolios with access to private investments, socially responsible impact investing portfolios, and more. We also provide optional thematic investment exposure in your portfolio. 

Investment decisions are made by CI Direct Investing’s portfolio managers, who are registered advising representatives with the applicable securities regulators. We make portfolio recommendations and manage your account to meet your individual needs based on the “know your client” (“KYC”) information you provide during the online account opening process (“Application”). A portfolio manager may contact you for additional information, and you can speak to a portfolio manager about your investments. 

Financial Planning

You can create a personalized financial plan and discuss your financial situation and goals with a financial advisor or financial planner that has a relevant credential (such as a Certified Financial Planner® professional or Qualified Associate Financial Planner).

If you work directly with a financial advisor or financial planner who introduced you to us, they will provide you with financial planning services as described in your Financial Planning Service Fee Agreement. 

Hold on Deposits

Deposits to your CI Direct Investing account may be held for up to 30 days before they can be withdrawn in order to prevent fraud and identity theft. Since we are an investment management firm not meant for short term trading, our clients do not typically withdraw funds within this window. 

Trading Frequency

Cash from new deposits, transfers in, and investment income is usually invested within one week. If you have a portfolio composed of ETFs, cash will typically be invested within a few days. If you have a portfolio composed of mutual funds or private investments, cash will typically be invested once weekly, on Fridays. In some cases it can take up to one month for cash in your account to be invested.

However, there may be a few reasons why your cash isn’t invested:

  • Accounts must have a minimum balance of $1,000 to be invested.
  • Accounts will not be traded if your portfolio choice has not been confirmed by a portfolio manager. If you requested a different portfolio than we recommended, a portfolio manager may need your explicit confirmation before we invest your account.
  • Small cash balances of less than $100 or less than 0.5% of the account value may not be invested.

If your cash isn’t invested and you don’t know why, please contact us.

Performance Benchmarks and How to Use Them

Due to the individual customization of portfolios, we do not provide benchmark comparisons. You should speak with a portfolio manager if you have any questions about the performance of your portfolio or which benchmark(s) might be appropriate for you. 

You may assess the performance of your investments by comparing them to an investment performance benchmark. Benchmarks show the performance over time of a select group of securities. There are many different benchmarks. When choosing a benchmark, you should pick one that reflects your investments. For example, the S&P/TSX Composite Index follows the share prices of the largest companies listed on the Toronto Stock Exchange. This index would be a good benchmark for assessing performance of a Canadian equity fund that invests only in large Canadian companies. It would be a poor benchmark if investments are diversified in other products, sectors, or geographic areas. 

Know Your Client (“KYC”) Information

We act as a portfolio manager on your behalf, and are required to obtain certain KYC information from you before executing any transactions so that we can determine whether investments are suitable for you. KYC information includes information: 

  • to establish your identity
  • to establish whether you are an insider of a reporting issuer
  • concerning your investment needs and objectives
  • to assess your financial circumstances, and
  • to determine your risk tolerance

You provide KYC information when you complete the online Application, and maintain KYC information through our online platform.

It is important that you provide us with accurate KYC information, and let us know about any changes to your KYC information. This includes letting us know if your circumstances change or if any of the information you previously provided needs to be updated. This could include changes to your address, marital status, employment, income, attitude about risk, or investment assets or debt. If there are changes, we will review the new information, assess the investment recommendation and if necessary, make changes to your portfolio. We will connect with you on a periodic basis to confirm there are no changes to your information or circumstances so that your portfolio remains suitable for your needs and objectives.

We must take reasonable steps to confirm that, before we make a recommendation or accept an instruction from you to buy or sell a security for your managed account, it is suitable for you based on the KYC information you provided. If you instruct us to buy, sell or hold a security that in our opinion would not be suitable for you, we will inform you of the reasons and will not buy or sell the security unless you instruct us to proceed nonetheless. A portfolio manager must pre-approve the suitability of any transaction based on the KYC information you provided.

Client Reporting

CI Direct Investing provides you with a summary of your account(s) in accordance with regulatory requirements, including a monthly statement with information about your investments including original cost, performance, fees, and transactions. 

You can access your account information, account statements, and tax documents at any time through our online platform. Account information available includes fees, current holdings, activities, and portfolio values as of the last date of valuation. Account statements are provided through the online platform monthly, and we will notify you when they are made available each month. Any tax documents related to your account(s) are provided through the online platform and we will notify you as each tax document is made available.

You should regularly review all account information, portfolio holdings, and performance. Please contact us if you have any questions or concerns about your client reporting. Please review your statements and notify us of any discrepancies within 45 days of its distribution.

Management Fee 

We charge a management fee regardless of your account performance. Fees are based on a blended annual rate, calculated daily, and deducted from your account each month in arrears. The management fee we charge reduces the return of your account over time. We determine your blended annual rate based on the value of all of your accounts according to the pricing tiers in our fee schedule (Schedule C of the Agreement). We calculate your monthly fee by applying the daily equivalent of your blended annual rate to your daily balances. Charging a monthly management fee based on account balances instead of other pricing structures, like earning commissions on investments, supports our commitment to providing you with objective advice. 

Visit https://help.cidirectinvesting.com/en_US/fees-and-minimums/fee-schedule for the most recent fee schedule.

Our management fee covers our investment advisory and financial planning services, as well as the following costs incurred by your account: 

  • custodial fees
  • trading fees 
  • account administration fees
  • registration fees (for TFSAs and RRSP, Spousal RRSP, LIRA, RIF and LIF plans subject to account minimums), and
  • deregistration fees (for deregistration of registered plans such as TFSAs, RRSPs, etc.)

We will not introduce any new charges or fees unless we provide you with at least 60 days prior written notice. Any such changes may be further restricted under the Agreement, or by securities rules and regulations. 

Management Expense Ratio (MER) Fees Charged by Third Parties

You may pay other fees or expenses related to management, brokerage, legal, accounting, or custody, to the issuers of ETFs or mutual funds held in your portfolio. The management expense ratio (MER) fee is charged by the underlying fund companies in your portfolio. The MER is not a fee deducted from your account and is instead reflected in the prices of the investments in your portfolio.

We calculate the MER of the investments in your portfolio using a weighted average of the MERs of the investments in your portfolio. We always disclose the MER of your portfolio to you through our online platform. 

Foreign Exchange Fees

You may be charged up to a thirty-five (35) basis point (0.35%) foreign exchange fee by the custodian of your account on currency conversion if we need to buy or sell foreign currency to trade securities in your account. We primarily use Canadian denominated investments, reducing the likelihood of a foreign currency conversion in your account.

Operating Charges, Transaction Charges and Compensation 

Any operating charges, transaction charges or other compensation, and any other expenses you may be subject to, are set out in your Agreement. 

CI Direct Investing and its employees do not collect commissions from the investments we manage. The only compensation we receive is from the management fee (see the Management Fee section).

If we receive any commissions as a result of products held in your name, they will be credited to your account on a pro-rata basis, based on the holdings in the account and the time the security was held during the billing period. This credit will be reflected on your statement.

CI Direct Investing and its employees do not accept gifts, benefits, compensation, or consideration that creates, or might reasonably be expected to create, a material conflict of interest.

Risks of Investing

As a CI Direct Investing client, you benefit from the expertise of portfolio managers who are dedicated to selecting investments for your specific portfolio. Visit https://help.cidirectinvesting.com/en_US/our-portfolios/risks-of-investing for a summary of some of these risks.

Leverage Disclosure Statement 

Using borrowed money to finance the purchase of securities involves greater risk than 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 remains the same even if the value of the securities purchased declines. 

We do not lend you nor help you borrow money for investing. 

Where Your Assets Are Held

CI Direct Investing does not hold physical custody of your assets or accounts; all of your assts and accounts are held in client name by an external custodian or carrying broker. We do not have access to your assets held by a custodian. This is the primary benefit of having a third-party custodian and minimizes the risk of loss. You have provided us with the authority to instruct custodians to buy and sell securities in your account(s) and debit your account management fees.

In selecting a custodian, we considered such factors as: 

  • ease and cost of trade execution
  • the size, financial stability, and strength of the custodians
  • the reduction of risk of loss to the client assets through the selection of more than one custodian, and
  • the laws and regulations to which each custodian is subject

We believe the selection of large, financially sound, and regulated custodians substantially reduces the risk of loss or misappropriation of client assets and is in the best interest of our clients. 

CI Direct Investing has a written agreement in place with each custodian which outlines the roles and obligations of CI Direct Investing and the custodian. In addition to holding your assets, the custodian is responsible for providing services including acting as a dealer to trade securities as directed by CI Direct Investing, completing tax reporting, providing confirmations and statements, and deducting our management fee.

We have selected one or more of the following companies to act as your custodian: CI Investment Services Inc., Credential Qtrade Securities Inc., and National Bank Independent Network. All of our custodians are Canadian custodians under applicable securities laws and members of both the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Canadian Investor Protection Fund (“CIPF”), which provides limited protection for customer accounts in case of the custodians’ insolvency for up to $1 million per account type category. Visit CIPF to learn more.

We monitor our custodial arrangements and may make changes to or appoint additional custodians should we determine it is in the best interest of our clients.

Conflicts of Interest 

A conflict of interest is any circumstance where the interests of a client and those of CI Direct Investing or individuals acting on our behalf are inconsistent or divergent. We take reasonable steps to identify and respond to material conflicts of interest and conflicts that are reasonably foreseeable. Conflicts of interest may include conflicts between: 

  • you as our client and CI Direct Investing
  • you and other CI Direct Investing clients
  • CI Direct Investing and our related and associated companies and issuers

We respond to conflicts of interest in a fair and transparent manner consistent with the best interests of our clients using three methods:

  • avoidance 
  • control, and 
  • disclosure

Avoiding Conflicts of Interest

We avoid conflicts that are prohibited by law as well as conflicts that cannot be responded to reasonably with controls or disclosures.

Controlling Conflicts of Interest

We have established policies and procedures to control material conflicts of interest, such as the design of our organizational structure and lines of reporting, physical separation of different business functions, and limiting the internal exchange of information.

Disclosing Conflicts of Interest

CI Direct Investing 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.

Personal Trading Policy

CI Direct Investing’s personal trading policy puts the interest of our clients ahead of the interests of CI Direct Investing and our employees. We do not take unfair advantage of our position, knowledge, or relationship with our clients, nor engage in any conduct that is not in the best interests of our clients.

Outside Business Activity

Our directors, officers, and registered advisers may engage in business activities that are outside CI Direct Investing’s securities related business activities (“outside business activity”) only if they have received prior approval to do so. They may also be employees, officers and/or directors of affiliates, or may also be officers or directors of public companies. 

We will, as best possible, monitor all outside business activity to ensure the activity doesn’t impair our ability to serve you and is consistent with our duty to deal fairly, honestly, and in good faith with you. 

We will investigate and follow up on written client complaints relating to an outside business activity. CI Direct Investing makes no representations or warranties and assumes no liability in connection with any outside business activities of our directors, officers, and registered advisers.

Referral Arrangements

We may enter into referral arrangements with affiliated or non-affiliated registrants and non-registrants, some of which are related registrants to CI Direct Investing, so that we may provide portfolio management services to referred clients. We may pay a referral fee to the referrer. A referral fee is any monetary or non-monetary benefits provided for the referral. We negotiate the referral fee with the referrer. Any investment management fee paid by referred clients remains the same regardless of any referral fee paid by CI Direct Investing to the referrer. We will inform all referred clients under a referral arrangement. 

CI Direct Investing may also receive a referral fee for referring its clients to other service providers.

Related Entities and Connected Issuers

In the course of providing services to you, we may from time to time advise you with respect to the purchase or sale of securities from or to, or issued by, persons or companies which are related or connected to us. We will carry out such services in the ordinary course of its business in accordance with its usual practices and procedures and with all applicable regulatory requirements. 

These transactions and arrangements may give rise to conflicts of interest; however, we have adopted policies and procedures to identify and respond to these conflicts. We will only enter into transactions or arrangements where they are permitted under securities laws, where they are consistent with your investment objectives, and where we consider they are in your best interest in the applicable circumstances.

A “related issuer” means a person or company that influences, or is influenced by, another person or company.

A “connected issuer” is a company that has a business relationship with CI Direct Investing that, in connection with a distribution of securities of the issuer, is material to a prospective purchaser of the securities.

CI Direct Investing is a subsidiary of CI Financial Corp. ("CI Financial"), a public company whose shares are traded on the Toronto Stock Exchange. A number of shares of CI Financial may be held by employees and agents who work within CI Direct Investing and other members of the CI Financial group. 

CI Financial is also a direct or indirect principal shareholder of the following dealers or advisers which makes them CI Direct Investing affiliates: CI Global Asset Management, CI Private Counsel LP, Assante Financial Management Ltd., CI Direct Investing Inc., CI Investment Services Inc., Assante Connect Inc., One Capital Management LLC, Aligned Capital Partners Inc., Lawrence Park Asset Management Ltd. and Marret Asset Management Inc.

You can find the list of related and connected issuers of CI Financial Corp. at: https://www.cifinancial.com/ci-financial/ca/en/legal-notice.html.

CI Direct Investing directors also may act as directors and officers of CI Financial and/or its related registrants noted above.

CI Direct Investing may enter into or have service arrangements with its affiliates to utilize their back-office support, product, distribution services and client referrals. Each of CI Direct Investing and the related registrants is a separate legal entity that carries on its business independently.

Conflicts of interest resulting from these service relationships are minimized in a number of ways. Industry regulations and the CI Direct Investing and related entities’ policies and procedures restrict, regulate, and govern the relationships with one another and clients.

This relationship disclosure document is written confirmation of CI Direct Investing’s relationship with CI Financial and the products and services offered through its subsidiaries, including CI Investments Inc. (“CII”) and the funds managed by these firms.

We may from time to time trade in units of a related issuer. By maintaining an account with us, you consent that we may advise a client and/or trade a client account in securities of a related issuer.

Fair Trade Allocation Policy 

We have in place a Fair Trade Allocation Policy (the “Policy”), which discusses the procedures for the fair treatment of all of our clients with respect to the allocation of investment opportunities.

We manage client accounts in accordance with specified investment models. We will allocate investment opportunities that are suitable for client accounts. In determining the suitability of each investment opportunity to a client account, consideration will be given to factors, which include but are not limited to: the client’s stated investment objectives and strategies; investment merits; the client account’s existing portfolio composition; the client account’s existing portfolio composition; and, the target allocations of the models.

When an investment opportunity is suitable for two or more client accounts, we will allocate the investment opportunity on a pro rata basis. Each account involved will receive a percentage of the executed portion of the order based upon the account’s percentage participation in the entire order. This procedure applies to all accounts participating in the trade falling under the same trading deals. Calculating the average price of all executions taken, as well as the expenses incurred pursuant to the particular order, will determine the security selling or purchase price, and the transaction costs incurred upon the trade. 

There may be circumstances where the automatic pro rata apportionment will be inappropriate. Should such circumstances arise, we will determine an allocation on a fair and reasonable basis.

Client accounts, which are managed in accordance with a model portfolio, will maintain the investment composition of the applicable model. We will group similar client accounts based on clients’s investment objectives and strategies to be managed in line with similar models. We review and approve all allocations.

The Policy applies to all client accounts managed by CI Direct Investing and is continuously monitored, reviewed, and updated on a periodic basis.

Brokerage Arrangements

We are responsible for selecting and retaining dealers or third parties for the execution of transactions in respect of your investments and, when applicable, the negotiation of commissions in connection therewith. We pay these commissions on your behalf. These commissions do not increase the management fee you pay. 

Soft Dollar Arrangements

Soft dollar arrangements occur when brokers have agreed to provide other services (relating to research and trade execution) at no cost to CI Direct Investing in exchange for brokerage business from the company’s managed accounts. Although the brokers involved in soft dollar arrangements do not necessarily charge the lowest brokerage commissions, we will nonetheless enter into such arrangements when it is of the view that such brokers provide best execution and/or the value of the research and other services exceed any incremental commission costs.

The name of any dealer or third party that provides research and/or order execution goods and services through a brokerage arrangement to CI Direct Investing will be provided to you upon request by contacting us at [email protected].

Privacy Policy and Use of Confidential Information 

We are committed to respecting and protecting the privacy and confidentiality of the information you have entrusted with us. Our Privacy Notice outlines how we collect, use, disclose, store, and safeguard your personal information. Our Privacy Notice is available at https://app.cidirectinvesting.com/privacy.

Complaint Handling Process

We are committed to providing you with a high level of service. Should you have a complaint related to your account, contact the Chief Compliance Officer, CI Direct Investing by mail at #900 – 625 Howe Street, Vancouver, BC, V6C 2T6; by telephone by calling 1-888-373-7674; by faxing 1-888-373-7674; or by emailing [email protected].

We will endeavour to resolve the matter as quickly as possible and to your satisfaction. Recognizing that investors may not be satisfied with our response or remediation, independent dispute resolution services are available free of charge and coordinated by our Chief Compliance Officer.
 
 In filing a complaint, you should detail what went wrong, when it happened, and what your expectations are. We will acknowledge receipt of a complaint formally within five business days of its receipt. As soon as practically possible within 90 days of receiving a complaint, we will provide a written assessment detailing the results of its investigation, how we have or propose to remedy the situation (or confirmation of no issue) and an explanation of our position and decision. If you are not satisfied, you may seek independent dispute resolution services from the Ombudsman for Banking Services and Investments (OBSI) or from the Autoritè des Marchès Financiers if you live in Quebec.

Alternatively, you may direct your complaint to the OBSI (www.obsi.ca) by email at [email protected], by phone at 1-888-451-4519 or by fax at 1-888-422-2865. OBSI’s recommendations are not binding on you or us. OBSI can recommend compensation of up to $350,000. If you agree to their recommendation, you agree to that limit. OBSI services are available within 6 years from the time you first knew, or ought to have known, about an event causing the compliant. You may only file with OBSI following the expiry of 90 days from the time the complaint was first raised with CI Direct Investing directly and within 180 days following CI Direct Investing’s response to your complaint. If you want to recover more than $350,000, you may wish to consider alternatives to resolve your complaint. You have the option to use your own resolution service at your own expense.

In Quebec, if you are dissatisfied with how your complaint was handled, you may request your complaint file at CI Direct Investing be forwarded to the Autorité des Marchés Financiers, 333 Grande Allée E, Quebec QC G1R 5W3, for examination. The Autorité des Marchés Financiers may act as a mediator only where it determines it is appropriate to do so.


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