Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen LinkedIn Profile

January 3, 2019

The #1 threat to a client by their financial adviser

In managing a client's wealth, the threat of a client outliving their wealth is a far more serious failure than failing to grow the client's wealth at a maximum pace.

However, clients bring their many personal biases to the portfolio asset allocation recommended by the investment adviser. In fact, there are approximately 20 types of biases and even the genders tend to favour the same sets of biases. Each of these biases can seriously compromise a portfolio.

Going back to the question, what is the number one threat to a client by their advisor? The answer is if you are likely to run out of cash and have a hit on your life style.

For your Client Adviser, their challenge is to understand the client's biases and to be able to make sure they are not compromising the performancae of the portfolio.  For example, men tend to be over confident and load up on a stock that is sure to hit it out of the ball park - such as a crypto-currency or marijuana company. An excellent Client Adviser is paid to help you understand your biases and how your behavioural biases impact on the pace of growth of your wealth.  Your biases, if unchecked, could also seriously compromise your retirement money.

 It is how the allocation across your portfolio impacts the day-to-day living if there is a market crash.  Since the market volatility is increasing, this is an important question for anyone working with a Client Adviser to manage their wealth.

Do you really know and understand your own biases?

Your Client Advisor knows the 20 biases and have seen them in many combinations over the years of their career. This natural human behaviour - to follow your own bias - is exactly why you pay your Client Adviser. They are there to save you from your own human imperfections.

If an asset allocation performs poorly due to a client's bias, what will be the impact on their lifestyle? For the investors with $2M and under, the consequences could be dire.  For those with higher levels of wealth, the bias will not have the same consequences.

Every client brings their set of behavioral biases to the investment relationship with their Client Adviser (CA). Pompian and Longo recommend to CAs that they first determine how much they need to adapt to client bias which can be" irrational". As a suggestion, they advise weighing the rewards of sustaining a calculated, profit-maximizing allocation of assets against the possibility of upsetting the client if they try to educate the client about their biases and end up upsetting them instead. If the client is very wealthy, and insists on irrational decision making, there is far less risk for serious damage to lifestyle and retirement plans.

Clients are human and have their natural biases and may be wanting a completely different portfolio. When does the CA try to educate and to modify the client bias and when to let it go?

The key is to look at the worst case scenarios of the investments. If the worst markets happened, would the client run out of money? Would they outlive their cash supply?

If the answer is yes, the client would suffer, then the CA needs to do their job which is to protect the client from their behavioral biases. The CA needs to moderate the client's views on the asset allocation. It takes courage, but the CA needs to step up and explain the potential outcome to the client. Equally, a client needs to realize they are not seeing the whole picture and their Client Adviser may be making sense. Then, together, they can moderate their expectations for the portfolio.

If the client has substantial wealth and their day-to-day living would not be impacted by a market crash, then their biases could be accommodated. Overcoming sub-optimal impact of behavioral bias on portfolio returns becomes a lessor consideration. Adapting to, rather than moderating, the client's behavioural bias is then possible.

December 12, 2018

Why the wealthy are not satisfied with their money

Jacoline Loewen
A business owner and her husband recently sold her family business for $50 million. When we met a few months after the sale, we talked about how her life was unfolding. Keep in mind that she and her husband had worked together for thirty years in their business.  Their favourite saying was, "When the client says JUMP, we say, how high?" You can gather that this couple were A type personalities and the level of adrenaline they created in their business had been enjoyable to them as a couple.  Now that pressure was completely removed. They could also now afford anything they wanted. All those trips they had postponed to keep their business humming were now available and they had the time.

The family went on a high-end cruise which sounds wonderful, but there was not a business for them with its pressures and its processes and people to great them after a relaxation period.  They had not replaced their busy and high pressured lives yet. Hopefully, they will find a new journey to challenge them.

This dissatisfaction with the new wealth and the freedom it brings can also amplify boredom and lack of purpose in people's lives. It is common with people who make sudden wealth. Money magnifies who they are.  If they were workoholics, it will be a while to find new ventures and challenges.
At a certain point, another million dollars doesn’t make anything newly affordable. That’s when other motivations take over.

This article in The Atlantic sums up this man's issue perfectly.


As the number of millionaires and billionaires in the world climbs ever higher, there are a growing number of people who possess more money than they could ever reasonably spend on even the lushest goods.
But at a certain level of wealth, the next million isn’t going to suddenly revolutionize their lifestyle. What drives people, once they’ve reached that point, to keep pursuing more?
There are some good explanations, I found, after talking to a few people who’ve spent significant amounts of time in the presence of and/or researching the really, really rich. Michael Norton, a Harvard Business School professor who has studied the connections between happiness and wealth, had a particularly elegant model for understanding this pattern of behavior.

This article in The Atlantic

December 4, 2018

These 29 Retirement Tips May Surprise You

Tip #12: Beware of Annuities

My clients do not to have annuities in their portfolios, and with good reason. These complicated, lengthy contracts favour the companies that write them, not you. Annuity sales people get high commissions that come straight off the top of your investment savings. You can manage your retirement-income security needs in ways that'll cost you less. Said simply, if someone's going to guarantee you an income in an uncertain world, they're going to charge you enough to ensure the odds are in their favor - not yours.

Jacoline Loewen and Team
Annuities are for those who do not have a clue about how to manage their wealth and do not have a client advisor to assist them.  

If you would like a copy of the 29 Retirement Tips book, send me an email and I will forward you a copy.
Gain unique insight on a range of retirement topics, from investing and financial planning to travel and lifestyle, based on decades of experience working with successful retirees. This entertaining 31-page guide is chock-full of information to help you get the most out of your retirement, including:

•Tips to help you maximize your nest egg and avoid running out of money in retirement

•Ideas for making the most of time with your family and friends

•Methods to generate income in retirement

•Activities to keep your mind sharp and your body active

•Estate-planning steps so you can relax and enjoy life

Created for investors with $2,000,000+ in investible assets 29 Retirement Tips from Jacoline Loewen are for retirees and those planning for retirement. In addition to the tip above, other tips include:

Tip #11: Living abroad can be great

Tip #16: How to discuss your asset allocation and plans with your family

Tip #20: Consider new fields other than the career you retired from

Tip #24: Be diversified, but not too diversified

How many of these tips do you already know? Don’t miss this informative and frequently requested guide!

Jacoline Loewen Can Help You Plan for a Successful Retirement

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November 29, 2018

Loyd Chalmers Prize for Excellence in Journalism 2018

Megan Honan and Jacoline Loewen, Loyd Chalmers Prize for Business Journalism
I was delighted to award the Loyd Chalmers Prize for Excellence in Business Journalism 2018 at Ryerson to Megan Honan, a recent graduate. Megan Honan chose the flower industry of Ontario and how it has developed into a leader in the world. The article, “Growing an industry, one seed at a time.”

The Ticker Club dedicates The Goldring and Chalmers annual award to the memory of one of its founding members in 1929, Floyd Chalmers, former publisher and editor-in-chief of the Financial Post. The prize is available to students in clear academic standing who are enrolled in the bachelor of journalism program in the School of Journalism.

This award celebrates the life and career of Floyd Chalmers and is presented by the Ticker Club. Chalmers became a reporter at the Toronto News when he was only 17. By the time he was 27, he was editor-in-chief of the Financial Post. He became president of Maclean Hunter, which published the Post and Maclean’s,  in 1952, and chairman in 1969. He and his wife Jean helped set up the Canadian Opera Company and the Stratford Festival, commissioned Harry Somers’ opera Louis Riel and set up the Floyd S. Chalmers Foundation in support of the arts.

Visit the Jacoline Loewen, Amazon Author Page

November 12, 2018

How to put purpose in your portfolio with Michael Baldinger

Michael Baldinger, Sustainable Investing with Jacoline Loewen
We were fortunate enough to have Michael Baldinger, expert on Sustainable and Impact Investing, visit Toronto and speak in front of a wide variation of interest groups - ranging from MaRS Capital, the family offices and pension funds wanting to make an impact, ultra-high net worth investors during a private dinner, and finally, The Ticker Club whose members are the leaders of asset management in Canada.

"How to put purpose in your portfolio" was the theme Michael Baldinger tackled at MaRS, The Social Finance Forum, Canada’s leading event for people who believe profits should be paired with purpose.

Every day, billions of dollars are invested with the sole intention of making more dollars, while life-changing social programs and vital environmental initiatives struggle for funding. Impact investing is the fast-growing movement that’s closing that gap by promoting profitable investments in programs and ventures that power progress.

Now in its 11th year, the Social Finance Forum, organized and convened by the MaRS Centre for Impact Investing, attracted more than 600 investors, entrepreneurs, finance professionals, charity leaders and public service visionaries who are reshaping markets and ensuring that every dollar makes a difference.

Later, at a private dinner at The National Club, Michael addressed 40 investors. He made the case that by using new eyes, we can invest to make the world a better place. But what is sustainable? This word lacks a common definition which can make it less attractive for investors who think their charity should be donating to anything sustainable, not as a serious investment case.

Talking about the confusion around the word sustainable, Michael chose to not use green on the cover photos of the sustainable investing white papers.
" It is not just about 50 Shades of Green," quips Michael. "It is about going beyond the public numbers to non-material data. that shows which companies are operating with the best interests of society, but also making the returns our investors seek."
At the Ticker Club, Michael spoke about how to invest, but with the sustainable filter.
Michael Baldinger is a former Wall Street trader intent on making UBS' $800 billion in asset management money greener and more socially responsible.
Since 2016, Michael Baldinger has served as Global Head of Sustainable and Impact Investing at UBS Asset Management (UBS). There, Michael leads a team of investment professionals focused on research and stewardship, client solutions and business strategy. And he is responsible for establishing world-class social and environmental impact investing across asset classes.
With 30 years in the financial services industry and a decade as an investor in sustainability, Michael brings a wealth of experience to all projects. Before joining UBS, Michael served as Chairman and CEO of RobecoSAM’s executive committee.