Just the facts
Busting some myths about MD
Since the sale of MD Financial Management (MD) to Scotiabank® was first announced, other financial institutions have sought to capitalize by spreading disinformation and, in some cases, outright lies.
Below are some of the fabrications and misinformation being spread about MD by other financial institutions and their advisors, along with the facts.
Myth
MD offers mainly mutual or pooled funds and only limited investment products.
Fact
We offer a wide range of investment choices covering all major asset classes, including alternative investments, and clients can hold a variety of products in their portfolios, such as MD and third-party funds, exchange-traded funds (ETFs), high-interest savings accounts (HISAs), cash, bonds and more.
How MD differs from other financial institutions is that we pride ourselves on listening to—and knowing—our physician clients better than anyone else. That enables us to hold firm to our principles and, rather than chasing niche fund trends, to focus on providing the investment opportunities our clients need to help them achieve their financial goals.
Myth
MD doesn’t customize portfolios to individual investors.
Fact
We offer clients a variety of products, including MD and third-party funds, exchange-traded funds (ETFs), high-interest savings accounts (HISAs), cash and bonds, and can discuss, objectively, the pros and cons of each with clients, enabling us to build portfolios that meet clients’ specific financial goals. MD Private Investment Counsel also meets a variety of client preferences by offering diverse fulfillment options, including alternatives versus no alternatives, passive versus active, and access to private investment strategies typically available only to institutional investors.
Our Advisors are still paid a salary, not commission, and their primary focus remains on delivering the objective, physician-centred advice you need to achieve your financial goals. Our Advisors are not required or incentivized to sell any specific investment products—including Scotiabank’s. Our primary objective—always—is to build a portfolio for you that meets your unique financial needs.
Myth
MD has high management and administration fees, and clients experience issues selling funds.
Fact
Neither claim is true. In fact, MD already has some of the lowest fees in Canada. We’ve always been transparent about our fees and are proud of the fact that our management expense ratios (MERs) are, on average, 29% lower than others in the industry.1 Additionally, in November 2017, clients with portfolios of more than $2 million actually saw their fees go down. As well, unlike most Canadian financial institutions, we do not charge a management and administration fee on the portion of your MD Plus™ account (MD Management Limited) that is invested in cash, the MD Money Fund (Series A), certain high-interest savings accounts (Series A), guaranteed investment certificates and the MD Stable Income Fund. There are also no trading commissions for exchange-traded funds trades in MD Plus™ accounts (MD Management Limited).
Our fees have not changed since the acquisition by Scotiabank and continue to be among the most competitive on the market. Scotiabank has committed to keeping our fees the same—or even decreasing them.
At MD, we work hard to execute clients’ instructions quickly and efficiently, including directions to sell funds and move investments to another financial institution. The majority of our funds are valued daily and, with a few exceptions—such as MD Stable Income Fund and MD Platinum Global Private Equity Pool—there are no restrictions on selling beyond industry norms, for example short-term trading fees, which all financial institutions have in place to protect fund/unitholders.
Myth
MD’s Advisors’ qualifications are below average and resources are lacking.
Fact
We believe our Advisors are among the best qualified in the industry to serve physicians. All of our Advisors must complete MD certified training, which has been specifically developed to help them understand physicians’ unique financial needs. Additionally, all of our Portfolio Managers hold the Chartered Financial Analyst®, Chartered Financial Analyst® Level 1 or 2, and/or Certified Investment Management designations, and all of our Senior Financial Consultants hold the Certified Financial Planner® or Quebec Financial Planner (Pl. Fin.) designation or are Financial Planning Standards Council (FPSC) Level 1 certified. Our Advisors are registered with their specific regulatory body and are overseen by independent regulators. They are subject to strict guidelines, an overarching duty of care and a professional obligation to deal with you honestly, fairly and in good faith.
As well, our attractive approach to compensation and one of the finest work cultures in the industry enables us to not only attract the finest people, but also keep them. That’s why our staff turnover rate is less than half of the industry average.2