2020 Q1 CEO Letter: A Robust Foundation for an Exciting 2020

Insights
January 2020

Changes to our Fee Structure and other Initiatives

 

Last year was a busy year for us and we’re feeling ever more confident that the work we are doing—with support from our new partners at Onex—is enhancing the investment opportunities and service offerings we provide to you and your families in order to help you meet your financial goals. We’ve been listening to you and are implementing many of the ideas we’ve heard to add value and substance to the client experience.

 

I would like to highlight three new initiatives already underway: private market investment strategies, wealth planning services and changes to our fee structure.

 

Private Market Investment Strategies

 

We are expanding our investment offering into private market strategies, giving Gluskin Sheff clients access to investments that have traditionally been reserved for large institutional investors. In the fall, we introduced two private credit strategies managed by Onex Credit Partners: Onex Senior Credit and Onex Senior Floating. In addition, a private debt strategy focused on direct lending will be launched in the coming months. These strategies leverage the Onex Credit team’s expertise in private loan origination, underwriting and credit research. These are timely additions as they’re designed to provide above-average yield at a time when low interest rates have put pressure on the ability to generate income.

 

Wealth Planning

 

We have invested heavily in our wealth planning capabilities. We now have the tools and resources to better understand your financial goals, while providing valuable advice on areas such as tax, estate planning, business succession and philanthropy. All of these services are available as part of your relationship with Gluskin Sheff, on a non-fee basis.

 

It is our pleasure to announce that Tiffany Harding has joined us as Vice-President, Head of Wealth Planning. Tiffany brings over twenty years of experience in the financial services industry, including leading financial planning at The Harbour Group of RBC Dominion Securities for nine years. Tiffany has already added to our growing team with Camille Jordaan and Mark Skeggs.

 

Camille Jordaan is a lawyer who specializes in delivering integrated estate and wealth planning services to high-net-worth and ultra-high-net-worth families. Camille spent the first seven years of her career in private practice working in the Tax, Wealth Management, Investment Management and Charities and Not-for-Profits groups in the Toronto office of Borden Ladner Gervais LLP.

 

Mark Skeggs is an accountant by background who has spent over two decades acting as a trusted business succession and tax advisor to high-net-worth and ultra-high-net-worth families. Mark joins from RBC where he had almost a decade of experience. Prior to joining RBC, Mark spent over 14 years in the Private Company Services tax group of PwC LLP in Toronto.

 

Fees

 

Ultimately, our goal is to offer great value to clients. After a comprehensive review of our fee structure, I am pleased to announce the first stage of modifications to our fees. Additional details will be forthcoming regarding the timing of implementation, but the changes noted below will be retroactive to January 1, 2020.

 

Performance fees will be eliminated for our long-only public equity strategies (Premium Income, U.S. Equity, International and North American All-Cap).

 

– The management fee on International and North American All-Cap will be reduced from  1.5% to 1.0%. As a result, all of our long-only public  equity strategies will have a uniform  1% management fee and no performance fees.

 

– The Blair Franklin Global Credit strategy’s performance fee will be reduced from 20% to 10% of positive net returns.

 

– The management fee of the Enhanced Yield strategy will be reduced from 1.5% to 1.0%, and the performance fee will be eliminated.

 

In addition to the above changes, we are reviewing a broader, tiered management fee structure based on household assets under management that will be applied to our core strategies. We will communicate the details of the tiered structure in the quarters ahead.

 

The entire Gluskin Sheff team is excited by the changes made to date and the opportunity to serve you more comprehensively.

 

As always, thank you for your trust and continued support.

 

Sincerely yours,

Jeff Moody
President & Chief Executive Officer

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