H.M. Wise Asset Management

H. Michael Wise, P.Eng.

Mike Wise provides conservative wealth management services to his clients, including financial and estate planning and investment advice.

Mike Wise is registered with Portfolio Strategies Corporation, an independent Calgary-based mutual fund dealer that has branches from coast-to-coast in Canada. Since its inception in 1994, Portfolio Strategies has grown to become Western Canada’s largest independent dealer, and currently manages over $4 Billion in assets on behalf of our clients.

Mike served on the pension committee to a large corporate retirement fund, as an investment advisor with a full-service brokerage firm, and has provided financial advice to individuals and corporations for more than 25 years. His specialty is a client-centred approach to financial planning, using a custom Statement of Guidelines and Objectives to direct investment policy.

Investment Philosophy

"Because of my pension background, I believe in a very disciplined approach to money management, which starts with a formal Statement of Guidelines and Objectives.

This document lays out the ground rules for the investment process: the time frame, income requirements, returns expected, and any portfolio constraints. It also includes a benchmark against which to evaluate performance.

"Pension funds have historically achieved returns superior to those achieved by individual investors. I ascribe that performance to several factors:

• A written Investment Policy Statement;
• Performance measurement, against both a benchmark and the client's objective;
• Separation of the roles of investment manager and performance monitor.

"I provide those clients who have larger accounts with all three of these features.

"At Portfolio Strategies, we believe that the biggest risk that a client faces is failure to meet his or her financial goal. We determine the investment return that our client needs to fulfill his/her financial goals, and find an asset mix that will strive to meet the required return with the least possible uncertainty. We cannot eliminate future risk, but we can estimate it and try to minimize the uncertainty!

The Importance of Independence

“I’m an independent financial advisor. Portfolio Strategies provides back-office services and compliance supervision for me, but otherwise I can operate on a pretty long leash. Independence means that I can offer you advice and provide investment products from a wide range of competing portfolio managers and firms.

“I consider that portfolio management is as much art as science. I look for managers who can consistently outperform their peers across the entire market cycle. Such managers are rare, and seldom are all at the same firm. We also want managers who can treat the client well during good times, but protect the client when things turn ugly. So we look at risk as well as reward.

“When I discuss how I assess managers, I frequently use the metaphor of professional golfers. We are looking for golfers who seem to end up on the leaderboard in every tournament that they play. We want a guy like Tiger Woods in his heyday on our team! Then there are other pro golfers who fill out the rest of the PGA Tour roster. They do OK, and occasionally win a tournament. But there are other professionals who don’t belong on the pro tour at all, but should stay at home as club pros. We want to stay away from those! Similarly, we want to stay away from fund managers who seem to consistently underperform their peers, year after year.

“The chart below shows the risk and reward ratings for every fund that has a 10-year track record that I am authorized to offer to you. There are equity funds (gold), balanced funds (blue), and bond funds (red) shown on this chart. When balancing risk and reward, you want a manager whose results have been as close as possible to the top left corner of this chart.

“The chart vividly shows that not all portfolio managers are created equal. You really want an advisor who can offer you portfolio managers from the wide range of competitors out there.”

Source: Compilation of Data from 18 Mutual Fund Companies

Credentials

Mike Wise is a life member of the Association of Professional Engineers and Geoscientists of Alberta (APEGA).

He earned the designation of Fellow of the Canadian Securities Institute (FCSI) in 1994. This is the highest award available in the investment industry in Canada. He is registered to offer investment products to clients in British Columbia, Alberta and Ontario.

Mike was a director of the Independent Financial Brokers of Canada from 2009-12. The IFB is a professional association representing approximately 4,000 financial advisors. All members are registered and licensed to provide investment and/or insurance advice to their clients.

The hallmark of IFB members is that they are independent advisors who are able to offer a range of financial services in order to best serve the needs of their clients. All IFB members must adhere to a strict Code of Conduct.

Mike is author of Canadian Asset Allocation Strategies, was a contributing writer to Canadian MoneySaver magazine for several years, and has been quoted in the Calgary Herald, Financial Post and the Globe & Mail. Rob Carrick, a features writer for the Globe & Mail, calls on Mike from time to time as a resource person for his articles.

He appeared on CBC Newsworld to speak on retirement planning issues, and was a guest lecturer at a professional society annual meeting and at a national sales conference. Mike was The Investor Learning Center of Calgary’s most frequent guest speaker, with four presentations over two years.

Note for Prospective Clients

"I have been practising for more than 25 years. My method of doing business is quite labour intensive, and I maintain a client base of under 100 families in order to achieve a high level of personal service to all. I am not actively trying to expand my client base, and am seeking only clients with whom I can develop a long-term close relationship.

"New clients that I accept must have current financial assets over $200,000, or the financial ability and resolve to reach that position within a few years.

"I use mutual funds and ETFs for the equity part of the portfolio because the volatility of individual stocks is too high for me to project return and risk for the portfolio as a whole.Clients who hold individual stocks or corporate bonds should hold these within a separate account at a discount broker. These will not be part of the financial plan, and clients will be responsible for buy/sell decisions. I cannot, under the Alberta Securities Act, provide advice or recommendations about individual stocks or corporate bonds.

"I prefer to use a High Interest Investment Savings Account or a government bond ETF for the fixed income side of a portfolio. I use mutual funds and more specialized ETFs for foreign bonds and high yield corporate debt, because I believe it cost-effective to pay a manager to control the currency or default risk.

"Most importantly, I prefer clients with whom I can develop a good working relationship, based upon mutual trust and respect."

Fee Schedule

“I am encouraging my clients to move away from embedded fees to negotiated fees in a nominee account.

“Clients with smaller accounts may find ordinary A-series mutual funds more applicable to their circumstances. A-series mutual funds have 2 layers of embedded fees: one layer is the management fee assessed by the fund company, and is expressed by the Management Expense Ratio (MER). The other layer consists of the advisor service fee, which is the primary way that advisors get paid for the services that they provide to clients. The advisor fee is 1% annually for most equity and balanced funds, and is non-negotiable.

“In a fee-based account, the 2 layers are separated and the advisor service fee is negotiable. Table 1 indicates my fee schedule. The fund companies also typically lower their MER for a fee-based account, and the advisor fee is tax-deductible in a non-registered account.

"The advisor fee is based upon assets under management. We're on the same side of the table: we do better when you do better."

Portfolio Strategies Corporation: Corporate Profile

Portfolio Strategies Corporation is an investment firm composed of ethical, independent financial advisors dedicated to giving their clients the very best in professional, customized, non-biased financial and lifestyle advice. At Portfolio Strategies we believe in balanced and conservative investment strategies that help clients and advisors manage risk.

Portfolio Strategies was founded in 1994 and has roots as a Managing General Agency, so for us client service and advisor support means everything. We appreciate the complexities of an independent advisor's business and provide the tools, training and resources that are required to stay competitive and help clients achieve their goals in the current financial marketplace.

In the three decades since our founding, our firm has grown into one of the largest independent investment firms in Canada, offering advisors Mutual Funds, insurance products, and access to the private capital markets. Our firm has over $4 billion in assets under administration and more than 285 advisors located in offices coast-to-coast: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland & Labrador, and Northwest Territories.

We believe that clients benefit from working with advisors who have an unbiased choice of investment offerings. Our advisors can recommend the best products for their clients without the pressures of proprietary products or recommended funds. We are in the business of providing exceptional support and counsel to our independent advisors to help advisors and their clients achieve their financial goals.

Our company supports the entrepreneurial spirit. We enable our advisors to offer top quality investment advice to clients without telling them how to run their businesses. Clients won't be forced to buy our "in-house" products. Instead, we provide advisors with systems and strategies to help them develop the right combination of products and services for their clients. The client's success and satisfaction are our first priorities.

Our Mission: helping you achieve your most important Life Goals…