The investment industry has changed tremendously over the last decade, and the speed of change is only accelerating. There is a shared sense that control is slipping as advisors spend more and more time navigating the increasing complexity of markets and regulatory requirements --areas that clients may not see or appreciate. This growing burden leaves much less time to focus on higher value and higher impact activities. It also means less time is devoted to critical areas such as building relationships with clients... and your business.
Efforts spent on studying markets, researching investments, building and monitoring portfolios, and adhering to regulatory requirements means less less time for the higher impact activities that lead to stronger client relationships and revenue growth.
Working with Quotential supporters across the country for the past 20 years, we have built a suite of support and services that can be adopted and adapted to free up time for what is most important – your clients, your business...and you.
Use insights and education to keep clients invested during bouts of uncertainty
Building client trust is an ongoing process that is never more tested than in volatile markets. We have many resources to help prevent clients from making emotional decisions that put their long-term goals at risk.
Investor Education
Client-friendly tools and videos can be a valuable resource to put market volatility in context and overcome behavioural biases that could derail their plans.
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Articles
Timely market insights on opportunities and risks are available from fixed income, equity, multi-asset, and alternative investment experts in Canada and around the world.
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Events
In-person and virtual educational sessions available on a variety of relevant topics – from practice management to market updates.
Simplify reporting requirements
We can help reduce the time and effort associated with KYP/KYC compliance while ensuring your product recommendations are thoroughly supported and documented before and after purchase.
Investing in Quotential could also result in much fewer commentaries, performance reports, portfolio updates, and regulatory documents to review for client reviews meetings.
An interactive, online questionnaire helps you select the Quotential Portfolio that best aligns with the client’s investment objectives, risk tolerance, and time horizon. The easy-to-use tool generates a personalized Investment Policy Statement for your client and your records.
Franklin Quotential Bestfit Questionnaire
Our quarterly KYP update email provides you with important information on the Franklin Templeton Funds and Quotential Portfolios your clients own. You will be fully prepared for your client meetings with the latest manager commentaries, risk ratings, management fees, performance data, and factsheets.
Subscription Centre
Tap into a range of Quotential support throughout the client lifecycle
For 20 years, we have been building a deep and wide array of services and support for advisors to make prospecting, presenting, on-boarding and servicing clients easier and less time consuming.
Prospecting
Engaging seminars (with promotional emails, invitations) are available to educate clients and prospects on the features and benefits of managed programs
An investor brochure summarizes the benefits of managed programs and the advantages of owning Quotential
A client-friendly flyer allows clients to quickly review the five portfolios, their investment objectives, and strategic and current asset allocations
Presenting/On-Boarding
An interactive tool can help match clients with the appropriate Quotential Portfolio using their goals, investment knowledge, risk tolerance, timelines, etc.
A professional-looking Investment Policy Statement (prepared with the client’s name and date) is generated to help meet documentation requirements. Franklin Quotential Growth Portfolio - Investment Policy Statement
A hypothetical investment tool allows clients to envision how the portfolios can be used to meet current and future cashflow needs. BESTBUILT® Hypotheticals
Servicing
A monthly market review & outlook is produced to update clients on the portfolios’ tactical positioning within asset classes, significant trades, and performance. Download
A quarterly, investor-friendly report delivers an update on major markets, the portfolio’s performance relative to the benchmark and category, key performance contributors and detractors, and a commentary on the team’s market outlook and strategy
A Quotential webpage features updated marketing support and details on portfolio performance and positioning. Visit web page
Timely videos and webinars are produced by the Canadian-based portfolio managers and global investment team to provide the latest views on risks and opportunities on the horizon. Read more
Use Quotential to align to client needs
There are five Quotential Portfolios to meet many clients’ investment objectives and risk appetites. Each portfolio is active-managed based on longer-term strategic views of markets and asset classes as well as shorter-term perspectives on current opportunities and risks.
Turn opportunity costs into opportunities
Time spent meeting the growing demands from areas such as portfolio management and compliance means less time for managing and building your business. It’s a lose-lose situation.
If you did use Quotential to free up your time, how would you use it? Improving your branding and communication? Building a strong referral pipeline? Expanding your social network presence? Increasing your industry knowledge?
Through our online FT Academy resources, webinars, and in-person presentations, we can help ensure that your time is spent wisely…and profitably. Here’s a small sampling of the courses we offer:
Branding/Communications |
Business Building |
Client/Prospect Seminars |
Learn why branding is vital to your success and obtain tools to begin crafting your genuine story. |
What makes you referrable? Examines referrals with a behavioural science lens to understand what can motivate, or discourage, word-of-mouth recommendations from clients. |
This client-friendly seminar introduces six biases that can cloud investors’ judgement – and six simple strategies to overcome them. |
Use social media to tell your story to clients & prospects. Select social strategies & channels to meet business goals. |
Referrals are central to the growth and success of any financial professional’s business. This course explores strategies for developing a repeatable system to acquire client referrals. |
This client-friendly presentation places current market shocks in historical perspective, describes how emotions affect decision-making ability, and identifies three strategies for living with market volatility. |
In this interactive session, you’ll set specific goals and develop a plan to achieve them. Your take-away: a blueprint to grow your practice. |
To learn more or schedule a presentation, contact your Franklin Templeton team, or email us at [email protected]
Analyze & Optimize Client Portfolios
Periods of market uncertainty can be a great time to review portfolios.
Our BestBuilt tool can help you evaluate portfolios using a database of thousands of mutual funds and ETFs in the Canadian marketplace. “Test drive” how additions, deletions, substitutions can lead to better portfolio diversification and enhanced risk/return characteristics. It can also be a great resource to demonstrate your value-add services to prospects looking for advice.
BESTBUILT® Hypotheticals
Taking Action
Quotential is a flexible, versatile solution for clients’ portfolios and advisors’ businesses. There is no “right” or “wrong” way to use Quotential. Here are some of the ways other advisors have chosen to successfully integrate Quotential into their practices.
Grace has been investing on her own since starting her career 10 years ago. Over the years, she has amassed holdings in several equity and fixed income mutual funds.
Grace wants to increase her exposure to technology companies. She believes in the sector’s long-term opportunities but is concerned about the ups and downs of the asset class. In addition, she is hesitant about adding even more funds to her portfolio, given her demanding schedule, and is unsure how to proceed.
At her request, a friend introduces Grace to a financial advisor, Tim, for a professional opinion.
Franklin Quotential Balanced Growth Portfolio
Tim recommends that Grace use Quotential Balanced Growth Portfolio for the core component of her portfolio. By replacing the smaller holdings with this core position, Grace has far fewer funds to track and less statements to deal with. She also benefits from owning a solution that is diversified across asset classes, regions, market caps, sectors, and investment styles. Though the fund has a target 60% equity/40% fixed income asset mix, the investment team actively shifts allocations to take advantage of short-term opportunities as economic and market conditions change.
Using the Balanced Growth solution as the core component, Grace can invest the remaining 20% in a technology-themed fund.
To help walk Grace through the action plan, Tim runs a Bestbuilt analysis of her holdings and the new portfolio he is proposing. Using the resulting report, he demonstrates how the changes to her portfolio can give Grace her the tech exposure she wants while the Quotential core provides the stability her portfolio needs.
Tim also leverages the Why Diversify materials to visually depict the benefits of being invested in several asset classes.
Grace is relieved to have the burden of following multiple investments removed from her busy life, especially given the volatile markets of the past several months. She appreciates and follows the regular updates—investment team insights, fund snapshots and statements—that keep her informed without keeping her up at night.
Andrew’s client base was aging. Increasingly, he was being called upon to find investments that would provide his oldest clients with predictable, reliable income for the rest of their lives.
Longtime clients May and Jon, both in their late 70s, were typical of this trend. Though currently still independent, advancing health and mobility issues were making it increasingly difficult to live comfortably in their three-storey family home. Rather than face extensive renovations and the need to hire others to maintain their property, the couple had begun to consider downsizing to a retirement residence offering assisted living services.
Moving from their mortgage-free house to a retirement residence providing meals, activities and nursing care would inevitably increase May and Jon’s living expenses, which would almost certainly rise further over time as their health declined and one or both required more care. Andrew calculated that an extra $3000 in after-tax income per month would be needed to cover the additional expenses. The strategy was to sell the couple’s home, estimated to be worth $1 million, and invest the proceeds in a conservative, income-producing vehicle that would ensure reliable income for the years ahead.
At the same time, Andrew was concerned about the tax implications for his clients. Low-risk income investments tend to generate low returns and are fully taxable unless held in registered accounts (May and Jon had aged out of that possibility). Andrew was looking for an investment that would provide his clients with both consistent income and tax efficiency.
Series T in Franklin Quotential Diversified Income Portfolio
Andrew was aware that investing through Series T allows mutual fund investors more control over the income they receive, including when capital gains taxes are paid. Comparing several investments that could be paired with Series T, he decided to thoroughly investigate Quotential Diversified Income (QDIP), which generates income from multiple uncorrelated sources in a globally diversified, actively managed portfolio. QDIP is available in Series T and investors can receive their monthly distributions either in Canadian or U.S. dollars.
For 2022, the target annual distribution rate for Quotential Diversified Income Fund – Series T is 5%. Some or all of the distribution may include return of capital (ROC) and taxes on this portion can be deferred to a later date. Taking distributions as ROC gradually reduces the adjusted cost base (ACB) of the portfolio. Once it reaches zero, capital gains tax will need to be paid on subsequent distributions.
This chart shows the results of $1 million invested in QDIP in 2003. Eighteen years later, the portfolio was still worth over $1 million, but in the interim, it had also provided close to $800,000 worth of monthly income through ROC. Moreover, the ACB was still positive.
Franklin Quotential Diversified Income Portfolio – Series T
Growth of a $1,000,000 Investment at 3.5% distribution as of September 30th, 2022
Compared to other income-generating investments that are fully taxed, deferral of capital gains tax through Series T would allow May and Jon to keep a significantly larger portion of the income generated by their investment for many years to come.
Not All Income is Treated Equally
Based on $1,000 Distribution
Source: taxtips.ca (for calendar year 2021). Note: This is a hypothetical example created for illustrative purposes only. Assuming Ontario marginal tax rates for the $50,000 - $151,978 taxable income bracket.
While conducting his due diligence into QDIP-Series T, Andrew drew from extensive information about Series T and the Quotential program, accessible online to advisors and investors.
To ensure this was the best solution for his clients, he ran several scenarios through the Flexible Series T Custom Proposal Tool.
He was pleased to discover that the percentage of ROC distribution could be adjusted up or down to his clients’ needs at any time, simply by completing a distribution change request.
Support would continue throughout the lifecycle of the investment, with regular updates, KYP reports and views from the investment team keeping all parties informed and significantly easing Andrew’s research and reporting workload. With the lower-impact tasks covered by Quotential, he would have time to focus on bringing a new generation of clients to his practice.
For Andrew, the flexibility, transparency and lifecycle of support provided by the Quotential program were key factors in his decision to recommend QDIP - Series T to May and Jon. Given the long-term nature of the investment and the immense fiduciary responsibility involved in acting on behalf of clients in their final years, he reasoned that this level of support was an absolute necessity.
Andrew presented the results of his research to clients, advising them to consult a tax expert before making their decision. The depth of the due diligence process and Quotential’s professional IPS document reinforced Andrew’s value to his clients and their adult children. Outsourcing portfolio management to Quotential using Series T, together with the support offered through the program, allowed Andrew to free up important time to focus on strengthening existing relationships and building his business.
*Monthly Return of Capital only. Does not include year-end income and capital gains distributions.
Distributions are not guaranteed and the proportion of income and return of capital will fluctuate depending on Fund returns. Unlike fixed-income securities, there is no obligation to distribute any fixed amount, and reductions in, or suspensions of, distributions may occur that would reduce yield. Distributions are not an indication of performance, rate of return, or yield. Mutual fund distributions are not guaranteed and are set and may change at the discretion of Franklin Templeton Investments Canada.
Franklin Quotential is a registered trademark of Franklin Templeton Investments Corp. In Canada, the portfolio advisor for the Franklin Templeton Investment Solutions (FTIS) mandates, such as Quotential portfolios, is Fiduciary Trust Company of Canada (FTCC). FTCC is a wholly owned subsidiary of Franklin Templeton Investments Corp.
