The Relationship Disclosure Information (“RDI”) provides important information concerning the relationship between OceanFront Investment Counsel Inc. (“OFIC”) and you, the Client. To clarify, when the terms “OFIC”, “Portfolio Manager”, “we”, “our”, or “us” are used in this document, we mean OceanFront Investment Counsel Inc. and its registered employees. When we refer to “Client”, “you”, or “your”, we are referring to you as the Account Holder, and if applicable, anyone who is an authorized individual on the Account. An Account Holder also includes authorized individuals for non-individual entities such as corporations or trusts.
OFIC will provide you with this document along with any other pertinent information either at the time you open your Account or before we purchase or sell a security for your Account. The RDI is regularly reviewed and revised to keep current with regulatory or industry changes. The most recent copy of the RDI can be found on our website at www.oceanfrontwealth.com. We encourage you to carefully review the RDI along with other important disclosure documents and seek clarification on any points of concern.
About Us
OFIC is incorporated under the laws of Canada and has its head office at 1055 West Georgia Street, Suite 2772, Vancouver, B.C. OFIC is registered as a Portfolio Manager in British Columbia, Alberta, Manitoba, and Ontario and as an Investment Funds Manager in British Columbia and Alberta. We may apply for additional registration as required by the business needs. OFIC’s principal regulator is the British Columbia Securities Commission (“BCSC”). The BCSC falls under the Canadian Securities Administrators (“CSA”), the umbrella organization of Canada’s provincial and territorial securities regulators.
OFIC is a wholly owned subsidiary of OceanFront Wealth Inc. (“OFWI”). OFWI also has the following additional subsidiaries:
• Lindsay Insurance and Financial Planning Inc. offers financial planning and insurance services and operates under the trade name OceanFront Wealth (“OFW”), and
• MKCM Insurance Services Inc., offers insurance services.
OFWI has the following related entities:
• Lindsay Holdings Inc.;
• McVit Holdings Inc., and
• Portfolio By Design Inc.
Products and Services Offered
OFIC provides discretionary investment management services, where your Portfolio Manager, following an investment suitability review, has the discretion to make and execute investment decisions on your behalf.
Our portfolio product lineup consists of tailored active and passive investment strategies. We utilize a wide range of investment products such as:
• Bonds;
• Common and Preferred Shares;
• Exchange-Traded Funds;
• Money Market Instruments;
• Mutual Funds;
• Options, and
• Pools.
Our investment philosophy encompasses asset allocation to optimize portfolio diversification and rigorous valuation analysis to identify potential opportunities.
Fidelity Clearing Canada ULC Relationship
OFIC has entered into a service agreement with Fidelity Clearing Canada ULC (“FCC”), an investment dealer regulated by the Canadian Investment Regulatory Organization (“CIRO”). FCC as a regulated entity, is an acceptable securities location for custody of client assets. FCC holds your portfolio assets and must segregate fully paid securities and not co-mingle your assets with other client assets. FCC, at its discretion, may appoint sub-custodians to hold foreign assets in jurisdictions where FCC is not an acceptable securities location. When using a foreign custodian, it is important to understand the potential risks involved including, but not limited to the challenges you may face in enforcing your legal rights and the difficulties
that may arise in repatriating your assets, especially in the unfortunate event of the foreign custodian’s bankruptcy or insolvency.
Under the service agreement, your Accounts are set up with FCC, providing options for cash and registered plan accounts in Canadian and US Dollars. FCC operates and manages your Account on our behalf, facilitating your cash deposits, withdrawals, and other transactions relating to the Assets held in the Account. As well, FCC executes, clears, and settles trades in your Account, based on our instructions. As part of the service agreement, we are required to provide FCC with your personal or financial information and promptly notify FCC of any changes.
FCC located in Toronto Canada, is an independent firm of OFIC. FCC is a member of the Canadian Investor Protection Fund (“CIPF”). CIPF, subject to conditions and limits, safeguards your assets from the insolvency or bankruptcy of a CIRO member firm. You can find additional information about CIPF at www.cipf.ca.
Suitability and Know Your Client (“KYC”)
We must determine that any investment action we take, recommend, or decide on, is suitable for you and puts your interest first. OFIC holds a fundamental obligation to ensure a trade, which includes a purchase, a sale, or any other form of transfer of securities, aligns with your investment objectives, risk tolerance, and time horizon as outlined in your Investment Policy Statement (“IPS”). Your IPS may combine several Accounts, referred to as your “Household” and suitability is determined at a Household level. The collection of personal and financial information, referred to as Know Your Client (“KYC”) will assist us in determining suitable investments for you and as well, satisfy other legal and regulatory requirements. Below is a list of basic information that you will be asked to provide. We may request additional information depending on the type of products and services you require. You will receive a copy of your KYC information when it is obtained from you at the time of account opening or when there are significant changes to the existing information.
• Personal Circumstances: To comply with KYC requirements, we obtain your full legal name, address, date of birth, employment information, document if you are a politically exposed person, and identify any authorized individuals on your Account
such as a Power of Attorney. Your social insurance number and citizenship are collected for tax reporting. Your marital status is a requirement for certain accounts such as spousal plans, along with certain financial and legal considerations. The number of dependents helps establish future planning needs, and we collect your contact information to help us reach you to discuss your Account.
• Financial Circumstances: This includes understanding your source of income, financial assets and net worth, and any liquidity needs.
• Investment Needs and Objectives: Your financial goals help us understand what you need to achieve with your investments. Your objectives could include capital preservation, income generation, capital growth, or investing based on your personal values.
• Investment Knowledge: This is determined based on your past experience and understanding of certain investment products, including the risk associated with each product type.
• Risk Profile: Your risk profile is made up of your willingness to accept risk known as risk tolerance, the ability to endure financial loss known as risk capacity and need. These separate considerations, together make up your overall risk profile.
• Time Horizon: This is the period over which you plan to stay invested before a significant withdrawal of funds is required to meet an investment goal such as purchasing a home, paying for education, or retirement. Time horizon plays an important role in setting return objectives and defining liquidity constraints.
• Identification Verification: The identity of any individuals and non-individuals associated with your Account is verified to satisfy the Proceeds of Crime (Money Laundering) Act and the Terrorist Financing Act (“PCMLTFA”) requirements.
• Insider Inquiry: We document whether you are an insider of a reporting issuer or any other issuer whose securities are publicly traded based on the information provided by you.
KYC is one of the cornerstones of securities regulation. Therefore, it is important that you notify us of any changes to your KYC information, and at a minimum, annually review the information with your Portfolio Manager so that your investment profile remains current.
Trusted Contact Person
When you open a new Account or update your Account information, we may ask you to provide us with the name and contact details of a trusted contact person (“TCP”). It is not mandatory that you do so, but there are several important reasons to give us the name of someone you trust.
What is a TCP?
A TCP is a person or persons that you authorize your Portfolio Manager to contact in limited circumstances. This person is someone you trust, communicate with regularly, and who is familiar with your personal circumstances, such as a family member, lawyer, or another responsible individual who respects your privacy and has your best interests at heart. The TCP is not the same as your power of attorney and should not be your Portfolio Manager or someone involved in your financial decision-making. Naming someone as a TCP does not give that person any authority to act on your behalf, execute transactions, engage in the activity in your Account, or will not have access to confidential information. Only with your consent, the Portfolio Manager may confirm information such as your contact information, health status, or the identity of any legal guardian, executor, or power of attorney. Examples of when your Portfolio Manager may contact your TCP are:
• To verify your contact information if you cannot be reached;
• If there is suspicious activity, possible financial exploitation or fraud in your Account, and
• If there are concerns about potential health issues that may impact your cognitive abilities.
Temporary Holds
If we reasonably believe that suspicious activity is or has occurred, will or has been attempted, or there is vulnerability related to illness, impairment, disability, or aging process limitations such as lack of mental capacity to make decisions involving financial matters, we may place a temporary hold on your Account. When placing temporary holds, we will act in a manner that is consistent with our obligation to deal fairly, honestly and in good faith. We will provide you with notice and the reason for the temporary hold.
Within 30 days of placing the temporary hold, and until the hold is revoked, within every subsequent 30-day period, we will either revoke the temporary hold or provide you with notice on the continuation of the temporary hold and the reasons for the decision.
Risks Associated with Making an Investment
Investments are not guaranteed to be a sure thing and there is a risk that you could lose part or all of your investment. Therefore, it is important that you consider your risk profile when it comes to investing. While there is a strong correlation between the amount of risk associated with a particular investment and its potential to increase in value over the long term, the value of your investments can fluctuate daily, and you could lose money if you decide to sell your investments for less than what you paid. The following is a non-exhaustive list of some common risks that could affect your portfolio value.
• Borrowing Risk:
o Margin Risk: The use of margin allows you to make an investment using a smaller amount of your own capital and borrow the remaining amount. Volatile markets with rapid price fluctuations can lead to substantial losses if the market moves against your position. Margin calls may be issued requiring you to deposit additional funds to cover losses. Failure to meet a margin call can result in a forced liquidation which can lead to even greater losses.
o Leverage Risk is closely related to margin risk, allowing the use of borrowed funds to amplify investment returns. Leverage involves borrowing capital to make larger investments than you could with your own capital. While leverage can enhance profits when investments perform well, it can also carry significant risk due to potential amplified losses.
Using borrowed money to finance the purchase of securities involves a greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.
• Credit Risk: Credit or default risk can impact an issuer’s ability to pay interest or dividends. This can also affect the security’s market value.
• Currency Risk: Is the risk associated with the fluctuations in the value of one currency relative to another.
• Interest Rate Risk: Returns in fixed-income investments can be affected by interest rate fluctuations.
• Liquidity Risk: Some securities may be illiquid, potentially impacting the return if these securities need to be sold quickly. Moreover, certain securities may have restrictions such as hold periods or the absence of a marketplace typical for exempt market securities or proprietary products, which can affect your ability to liquidate or resell the security.
• Market Fluctuation Risk: Fluctuating prices can impact the value of your investments and can last for extended periods.
Best Execution
Best execution means obtaining the most advantageous execution terms reasonably available under the circumstances. When placing orders with brokers and dealers, the Portfolio Manager shall seek to obtain best execution for the Account in accordance with the Portfolio Manager’s policy on best execution and applicable industry practices. The Portfolio Manager may amend its policies with respect to best execution and arrangements involving the use of brokerage commissions at any time without notice to the Client. Trade execution is carried out by FCC, adhering to its obligations concerning order handling and routing practices intended to achieve best execution for Client orders. FCC’s Disclosure of Best Execution Policies is available on its website at: https://clearing.fidelity.ca/content/dam/fcc/en/footer-pdfs-en/fcc_disclosure_of_best_execution_policies.pdf.
Fair Allocation
The Portfolio Manager performs investment management services for various clients and investment funds, including any Funds that it manages. The Portfolio Manager makes investment decisions for each client’s account and for each Fund depending on the circumstances, investment objectives and guidelines of the specific client or the Fund. The Portfolio Manager’s policy and practice is not to intentionally favour or disfavour any client, class of clients, or investment fund in the allocation of investment opportunities and that over time, such opportunities will be allocated among clients and Funds on a fair basis.
When allocating investment opportunities, OFIC applies a methodology that prioritizes fairness and consistency. Our methodology addresses instances such as average price allocations, partial fills on block trades or initial public offerings, and when applicable, applying a pro-rata formula. For combined orders, the Portfolio Managers will use best efforts to allocate orders based on the following fair and equitable practices:
• If executed at the same price, each client account will receive the executed price.
• Each client account will receive the average execution price if executed at different prices.
• For opportunities with limited shares, such as a partial fill on a block trade or initial public offering, the fills will be allocated to each client account on a pro-rata basis. Each account will receive a percentage of the order’s executed portion based on the account’s percentage participation in the entire order.
• Where it is not possible to apply a pro-rata formula, i.e., an order is too small to fill in proportion to a total order, the Portfolio Manager will allocate using other criteria to ensure the allocations are fair and reasonable. Such considerations may include the proportion of the portfolio that the traded security represents, the overall weighting of the asset class or industry sector for the traded security in the account, the cash reserve portion of the account, or the target weighting for the security relative to the total size of the account.
Account Statements and Reports
We will provide the following reports to you electronically through an online portal, accessible with your email address and password, or by mail if you do not have an email account.
• Account Statements: You will receive an Account statement from FCC, for each month there is activity and, in any event, every quarter. The statement will summarize all the transactions during a particular month and the securities you hold at month-end, including the market value and if available, the book cost for each security. For securities that do not have a reliable market value, no valuation will be provided. OFIC and FCC are jointly responsible for ensuring the information on the Account statements is complete and accurate. For any questions about your FCC Account statement, please contact your Portfolio Manager.
• Portfolio Report: You will receive a quarterly report from OFIC summarizing all the transactions during the quarter and the securities you hold at quarter-end, including the market value and if available, the book cost for each security. The report may also include additional information such as asset allocation, investment exposure, investment returns, and other details to help you understand your investment holdings. The investment returns are reported using a money-weighted rate of return and the cumulative returns are reported using a time-weighted rate of return.
• Charges and Other Compensation Reporting: You will receive an annual report summarizing the charges and other compensation that were paid to us for the products and services we offer. You will receive a similar report from FCC, detailing the compensation paid to them.
• Performance Report: You will receive an annual report covering a 12-month period that summarizes the market value of cash and securities during the beginning and end of the period. As well as deposits, withdrawals, and market value changes over the period, and since opening the Account. The performance is reported using a money-weighted rate of return.
• Tax Reporting: FCC will provide all the official tax slips required for the preparation of income tax returns.
You may also receive quarterly consolidated statements and annual performance reports that include all accounts identified on your IPS, including those held by other individuals or entities. Refer to your IPS for a list of combined accounts. You waive the requirement for OFIC to send confirmation of purchases or sales of securities where the regulatory requirement permits waiving such requirements, such as for managed accounts.
We encourage you to regularly review your transactions, portfolio holdings and performance information included in the information. Should you have any concerns regarding the information, please provide details so that we can address and resolve the issue. Your statements and reports are deemed to have been acknowledged as correct and agreed upon by you unless we receive written notice to the contrary within 30 days of delivery.
Performance Benchmark
A benchmark can be used as a valuable tool to evaluate your investment performance.
Benchmarks are typically well-established, widely recognized, and easily quantifiable indices to represent a particular market, asset class, or investment portfolio. Given the different benchmarks, it is important to select a benchmark that offers a meaningful comparison. For example, the S&P/TSX Composite Index follows the share prices of the largest companies listed on the Toronto Stock Exchange. This index would be a good benchmark for assessing the performance of a Canadian equity fund that invests only in large Canadian companies. It would be a poor benchmark if your investments are diversified in other products, sectors, or geographic areas. Benchmarks should be used as a guide only. Speak to your Portfolio Manager if you have questions about what benchmark would be an appropriate comparison tool for you.
Conflicts of Interest:
In providing services to you, there will be situations where a conflict will arise between our interests and yours. For further information, refer to the Conflicts of Interest Disclosure.
Complaints and Dispute Resolution
Client complaints must be brought to the attention of OFIC’s Chief Compliance Officer. Complaints can range from very minor misunderstandings to severe allegations of criminal wrongdoing. As such, all complaints will be treated with the utmost care and concern to rectify the complaint to your satisfaction in a fair and timely manner.
Filing a Complaint with OFIC
Complaints may be delivered in writing to:
Attention: Chief Compliance Officer
OceanFront Investment Counsel Inc. 1055 West Georgia Street
Suite 2772, P.O. Box 11177
Vancouver, B.C. V6E 4N3
or Email: compliance@oceanfrontwealth.com
Tell us
• What went wrong;
• When it happened, and
• What action do you expect? For example, compensation, an apology, or Account correction.
Acknowledging your Complaint
We will acknowledge your complaint in writing as soon as possible, typically within five business days of receiving your complaint. We may ask you to provide clarification or more information to help us resolve your complaint.
Resolving your Complaint
• Help us resolve your complaint sooner by making your complaint as soon as possible;
• Promptly reply if we ask you for more information, and
• Retain copies of all relevant documents, such as letters, emails, and notes of conversations with us or other relevant parties.
OFIC’s Decision
We usually provide our decision in writing within 90 days of receiving a complaint. It will include a summary of the complaint, our investigation results, our decision to make an offer to resolve the complaint or deny it, and an explanation of our decision. In the unlikely event we cannot provide you with a substantive response within 90 days, we will inform you of the delay, explain why our decision is delayed, and communicate with you regarding a new date for our decision.
Dispute Resolution Service
If you are not satisfied with our decision, you may be eligible for the Ombudsman for Banking Services and Investments (“OBSI”) dispute resolution service.
Taking your Complaint to OBSI
You may be eligible for OBSI’s free and independent dispute resolution services if:
• Your complaint relates to a trading or advising activity carried out by us;
• You brought your complaint to us within six years from when you first knew, or ought to have known, about the event that caused the complaint, and
• You file your complaint with OBSI according to its time limits noted below.
Time Limits Apply
• If our substantive response is not provided without prior communication of any potential delay within 90 days after you made your complaint or you are not satisfied with our decision, you can take your complaint to OBSI any time after the 90-day period has ended, and
• If you are not satisfied with our decision, you have up to 180 days after we provide you with our decision to take your complaint to OBSI.
Filing a Complaint with OBSI
Contact OBSI at: 20 Queen Street West, Suite 2400 PO Box 8 Toronto, ON M5H 3R3 Email: ombudsman@obsi.ca Toll-free: 888.451.4519
For additional information about OBSI and its complaint process, visit www.obsi.ca.
Alternative Recourse
An OBSI investigation does not restrict your ability to take the complaint to a dispute resolution service of your choosing at your own expense or to bring an action in court. You always have the right to go to a lawyer, who can advise you of your options. There are time limits for taking legal action, and a delay could limit your options and legal rights later on. We encourage you to carefully consider your choices and seek legal advice if needed. Your satisfaction and understanding of the resolution process are of utmost importance to us.
