How LGK Investments is Paid

LGK Investments Standard Client Fee Options

At LGK Investments, we believe a simple and transparent fee structure best serves our clients. Clients need to know the fees they are paying and how our office earns this. Advisory fees should always be;

1. Understandable
2. Competitive
3. Aligned with clients’ best interests

Our fees move in tandem with our clients' portfolios. By applying a flat fee percentage to the account, we provide transparent and competitive fees that align with clients’ best interests. The revenue earned moves with the overall portfolio value in a flat fee model. We can lower the overall portfolio fees as our clients' portfolio values grow. Our fee percentage remains the same or decreases as the client’s portfolio value grows.

At LGK Investments, we offer our clients three standard investment management choices.

Traditional Fee Structure

A trailing commission is a residual payment paid to the advisor by the fund companies. This fee is included in each fund's management expense ratio and is always deducted from the fund company's performance.

While this fee structure has been widely used for many years in the financial services business, it does not provide fee transparency to clients or allow for the tax deductibility of any portion of this fee.

We always provide our clients with the most cost-effective solution for their portfolios. A higher management fee does not compensate our office more.

All client accounts show investment performance net of all applicable fees.

• The overall revenue provided to the advisory office is approximately one percent per year. No additional advisory fee is applied.
• Verbal client consent is required to proceed with all investment transactions.

Fee-Based Structure

This structure reduces clients' costs compared to the traditional fee structure. It separates the management expense ratio into two parts: the advisory fee and the fund company expenses.

In this structure, the advisory fee is deducted directly from client accounts each month, while the remaining management fees are deducted from the investment's performance. All client accounts show investment performance net of all applicable fees.

This separation between the advisory fee and fund company expenses allows the client to utilize the advisory fee as a tax-deductible expense for non-registered accounts. If fees are not separated in this manner, the Canadian income tax system prohibits fee deductibility on tax returns. This fee structure also provides transparency to clients, as it clearly shows the revenue paid to the advisor.

• The overall revenue provided to the advisory office is one percent per year for standard account sizes.
• In this model, client fees are reduced due to the lower expenses incurred by the investment companies.
• Tax documents are provided to ensure the advisory fee can be used as a tax-deductible expense for non-registered accounts. This lowers the client's overall portfolio costs.
• Verbal client consent is required to proceed with all investment transactions.

Discretionary Managed Accounts

This structure is similar to fee-based accounts regarding client fees and potential tax deductibility. The advisory fee is deducted directly from the client accounts for better transparency. The remaining fund management fees are deducted from the investment's performance. All client accounts show investment performance net of all applicable fees.

Our discretionary managed model allows for trade execution without client approval, which allows our office to execute trades more efficiently on behalf of our clients.

• The overall revenue provided to the advisory office is one percent per year for standard account sizes.
• Client fees are reduced slightly due to the lower expenses incurred by the investment companies.
• Tax documents are provided to ensure the advisory fee can be used as a tax-deductible expense for non-registered accounts. This lowers overall portfolio costs for the client.
• Verbal client consent is not required to proceed with all investment transactions.

Our three fee structures provide our office with the same level of compensation. The best options for our clients depend on their account structure, net worth, and general preferences. We always want clients to have the lowest-cost fee structure possible.

Our fee models provide the same level of advisor compensation; the differences are in the potential tax deductibility, transparency of client fees, and trading methods.

The choice of fee structure for each client is always based on which is most cost-effective.

Our 1% advisory fee will be reduced as portfolio values grow beyond specific thresholds.

To read more on how LGK Investments earns their fees, click this link: How Does LGK Investments Earn Fees