Relationship Disclosure

 

As a client of Optimize Wealth Management (“Optimize”), it is important you understand your relationship with us. The  Relationship Disclosure Information document (“RDI”) provides you with important information about our roles and  responsibilities, your accounts at Optimize and the services available to you. We ask that you take the time to read this  document carefully. 

 

Not all information outlined in the RDI may apply to your personal circumstances or your relationship with Optimize, if  you have questions, please contact your Portfolio Manager. 

 

Along with the Portfolio Management Agreement (“PMA”) you entered into with us when you open an account, this  disclosure describes your relationship with us. By accepting the PMA and maintaining an account with us, you confirm that  you have received this disclosure, understand its contents, and acknowledge your consent to both the Agreement and the  information outlined in this disclosure.  

 

A current version of this document will be provided to you at account opening, is available on our website at  www.optimize.ca, as well as online links shared with you. When there is a material change to this document, Optimize will  notify you electronically and provide a link to the updated version on our website. 

 

Optimize Wealth is a people-driven, values-based, future-focused firm. Working together, our people build teams, families,  communities and a better future. 

 

We are the next generation in premier wealth management. We judge our success and value based on how well your financial  goals are achieved, not ours. We provide our clients with personalized financial solutions and advice to help them at every  stage of their lives. Our financial services and solutions cover everything from financial planning and portfolio management  to tax preparation, insurance solutions, debt management, and will preparation. 

 

Our head office is located at 205 Yonge St, Toronto, ON M5B 0C4. You can reach us toll free at 1-866-209-6862 or by email: prosper@optimize.ca 

Optimize is a registered portfolio manager, investment fund manager and exempt market dealer registered under the  securities laws of Ontario. Optimize provides investment advice, discretionary portfolio and asset management services in  accordance with each client’s Portfolio Management Agreement.  

 

As a Portfolio Manager, Optimize provides portfolio management services to private clients and the funds it manages. 

 

As an Investment Fund Manager, Optimize is responsible for the day to day business affairs of the various pooled funds it  manages. 

 

As an Exempt Market Dealer, Optimize allows clients to invest in its own private pools as required. More detail about Optimize can be found on our website at https://optimize.ca/.  

 

Optimize is the trustee, investment fund manager and portfolio manager of a suite of private, pooled investment trusts,  which form the building blocks for the Model Portfolios (the “Optimize Funds”). The Optimize Fund Disclosure Document contains important information regarding fees and expenses, risk factors and other information related to the Managed  Accounts and Optimize Funds. 

 

Optimize acts as a portfolio manager for your discretionary managed accounts, which means we make investment decisions  based on the information you provided us as part of the Know-Your-Client (“KYC”) collection process. The KYC describes your investment objectives, time horizon and liquidity needs for each of the individual accounts you open with us. Your  Portfolio Manager (“PM”) will use this information to invest in a Model Portfolio as agreed to in the Investment Policy  Statement (IPS), as well as the PMA. 

 

In addition to portfolio management services, we offer other professional services through our experts, which are covered  by the management fee you pay us. Included in this service offering is expertise in financial planning, estate planning, will  preparation as well as tax preparation. 

 

 

Optimize offers a suite of private pooled investment funds, used in the construction of the Model Portfolios. You can find  detailed information on the Funds in the Optimize Fund Disclosure Document. 

 

The Optimize Funds are used exclusively in the management of your investment account at Optimize. As they are  proprietary investment products, they are not available at other investment firms. They may not be transferred in kind to  other firms.  

 

 

Accounts are managed on a discretionary basis by Optimize under the direction of an appropriately licensed PM and in  accordance with the mandates established by your KYC information, IPS and PMA. In rare circumstances there may be  assets held in your account which are excluded from the PM’s discretionary authority. For example, you may have deposited  securities (“Legacy” positions) into your account which cannot be sold due to market conditions or other trading restrictions. 

In these circumstances, we will note this fact on your file, and we will only transact on those investments based on your  instructions. Although we are responsible to conduct a suitability assessment on these investments, we are not responsible  for the investment performance of such securities.

 

 

 

You will be charged a management fee regardless of your account performance, as per the Fee Schedule provided to you at  account opening. The fee will be calculated on the value of Optimize Funds and cash weighting held within each of your  accounts, charged to your account monthly in advance. Account level fees will be deducted directly from your account as  per the PMA and appear as a line item on your account statement identified as “management fees”. 

 

We do not charge additional fees to operate or maintain an account with us. All these costs form part of the account level  management fee we charge you; however, you may be charged third-party fees, outlined in the paragraph on Custodial and  other Operating Fees. 

 

We will provide you with at least sixty (60) days notice in writing prior to charging any new or increased charges associated  with the operations, transfer or termination of your Account. 

 

 

Optimize earns Management Fees from the Optimize Funds set at 0.70% of the Net Asset Value (“NAV”) for each class of  funds it manages. In addition to this Management Fee, the Funds may also bear the cost of any appropriate expense  associated with the ongoing operations of the funds. The Fund Management Fee and costs are described in the Optimize  Fund Disclosure Document under “Fees and Expenses”. As fees and costs are charged directly to its respective Fund and  reflected in the calculation of the NAV for each Fund, they will not be included in your fee disclosures on your account  statements or on the Annual Report of Charges and Compensation. They are detailed in the semi and annual Fund Financial  Statements sent to unitholders. 

 

Optimize will earn a Performance Fee on the Optimize Premium Yield Fund and the Optimize Growth Equity Fund. The  fee is set to 20%, calculated each calendar quarter based on the positive difference between the NAV and a High Water  mark. The Performance fees are described in detail in the Optimize Fund Disclosure Document under “Performance Fees  Paid by Optimize Private Opportunities Funds”. 

 

 

Segregated portfolios held at NBIN may be charged additional fees as outlined in the Fee and Service Disclosure sent by  NBIN directly to you at account opening. In addition, we have negotiated preferential custodian fees with NBIN and have  passed the reduced rates on to you as our client. 

 

The fees and expenses described above reflect the value of our portfolio management and other services and will affect the  returns on the investments in your account by reducing the returns in proportion to fees and expenses. Over time, similar  to the compounding effect of performance returns, the compounding effect of these fees and charges will affect how your  portfolio grows. 

 

 

We act as a portfolio manager on your behalf and are required to obtain certain KYC information from you before executing  any transactions. We are required to put your interests first, ahead of our own interests and any other competing  considerations, when making any recommendations or taking any investment action in your account. 

 

To meet our suitability obligation, we are required to collect and maintain current and appropriate KYC information to  ensure our actions are suitable for you. In order to satisfy our regulatory requirements, we require certain personal and  financial data, which includes your name, age, address, telephone number, e-mail address, occupation, financial situation  (income and net worth) and other information pertaining to your family. The information collected will be used: 

Optimize is required to take reasonable steps to confirm that recommendations made to you to invest in the Optimize Funds  are suitable for you and put your interests first. This means we will ask you from time to time to provide us with updated  KYC information. At least annually your PM will ask you to confirm your KYC information, and for you to provide any  updates as necessary. This will ensure that we continue to manage your account in a suitable manner. 

 

We will also assess suitability on a periodic basis, including in the following circumstances: 

1. when there is a change to your PM; 
2. when we are informed about changes to your KYC information; and 
3. in response to certain changes to market conditions. 

 

We encourage you to provide us with the name and contact information of a trusted contact person, who should be an  individual with whom you are comfortable allowing us to discuss your financial or personal circumstances, in specific  circumstances. We may contact your trusted contact person and/or disclose information about you or your account to your  trusted contact person: 

1. if we are concerned that you are being exploited financially; 
2. if we are concerned about your mental capacity as it relates to your ability to make decisions involving financial  matters; 
3. to obtain the name and contact information of your legal representative, if any; and 
4. to obtain your contact information if we cannot get in touch with you. 

When you provide us with the name of a trusted contact person, you confirm to us that you have the consent of that person  to provide us with their name and contact information and that the person knows you are naming them as your trusted  contact.  

 

If we reasonably believe that you are in a vulnerable position and are being financially exploited or that you are experiencing  diminished mental capacity which may affect your ability to make financial decisions relating to your account(s) with us,  we may place a temporary hold on a particular transaction. A vulnerable position includes where an illness, impairment,  disability or aging-process limitation places you at risk of financial exploitation. If we place a temporary hold on a particular  transaction, we will provide you with notice, either written or verbal, explaining our reasons for the temporary hold, and at  least every 30 days thereafter until the temporary hold is revoked. We may also contact your Trusted Contact Person about  a temporary hold. 

 

 

It is important that you actively participate in our relationship. In particular, we encourage you to: 

1. keep us fully and accurately informed regarding your personal circumstances. Promptly advise us of any change to  information that result in a change to the types of investments appropriate for you, such as a change to your income,  investment objectives, risk tolerance, time horizon or net worth; 
2. review the documentation and other information we provide to you regarding your account, transactions conducted  on your behalf and the holdings in your portfolio; and 
3. ask questions and request information to address any questions you have about your account, transactions conducted  on your behalf or the holdings in your portfolio, or your relationship with us or anyone acting on our behalf. 

 

Optimize does not take physical custody of your assets or accounts; all of your assets and accounts are held in your name  by an external custodian. The primary benefit of having a third-party custodian is to minimize risk of loss. 

 

Managed Assets are held at National Bank Independent Network (“NBIN”), who is responsible for holding the securities  and cash held within your Managed Account. NBIN is responsible for the safekeeping and recordkeeping of all securities  and cash, and for providing you with ongoing statements on a timely basis. Although NBIN is responsible for delivering  these statements to you, both Optimize and NBIN are responsible for ensuring the accuracy of the statements. Should you  have any questions related to your statements, you may contact NBIN directly at the contact details provided to you at  account opening or at: 

 

National Bank Independent Network  

130 King Street West #3200 

Toronto, ON M5X 1J9 

 

Attn: Todd Brennand 

 

Telephone: 416-542-2200 Email: NBINinformation@nbc.ca

Optimize has trading authority, granted by you over your assets held at NBIN. We do not have access to those assets and  we are not authorized to transfer securities or cash into or out of your account, except in the limited circumstances as  described in the paragraph below. NBIN is independent to us and is required to segregate client assets from its own assets  and is subject to regulatory oversight, minimum capital and insurance requirements. NBIN may hold securities on your  behalf in its name as your nominee. They may appoint sub-custodians to hold client assets in foreign jurisdictions or to hold  assets other than cash or securities. Client assets are subject to risk of loss: (i) if the Custodian becomes bankrupt or  insolvent; (ii) if there is a breakdown in the Custodian’s information technology systems; or (iii) due to the fraud, willful or  reckless misconduct, negligence or error of the Custodian or its personnel. Optimize has reviewed the Custodian’s  reputation, financial stability, relevant internal controls and ability to deliver custodial services and has concluded that the  Custodian’s system of controls and supervision is sufficient to manage risks of loss to client assets in accordance with  prudent business practice. 

 

NBIN is a Canadian investment dealer and is regulated by Canadian Investment Regulatory Organization (“CIRO”) and is  a qualified custodian under applicable securities law. Each client Managed Account held at the Custodian is insured by the  Canadian Investor Protection Fund (CIPF) in an amount up to $1,000,000. 

 

Although your assets are held by the NBIN, as per the PMA, you have granted Optimize access to your assets in the  following circumstances: 

1. to accept delivery of securities or cash on a temporary basis to facilitate a deposit or the settlement of a trade;
2. authority to transfer cash from your account at NBIN to your financial accounts; 
3. to withdraw funds or securities from your accounts, in limited circumstances;
4. authority to debit your account to pay bills on your behalf, including management fees; or 
5. act as trustees of trusts in which you are the beneficial owner. 

In these cases, you have granted access for convenience and efficiency to Optimize in the management of your assets.  Granting us access, even in the limited circumstances as above, will exposes you as the client to risk of loss: (i) if there is a  breakdown in our information technology systems; or (ii) due to the fraud, willful or reckless misconduct, negligence or  error of Optimize or its personnel. In addition, we are required under applicable securities laws to insure against the  additional risk of loss which arises due to its access to client assets. 

 

 

 

You will receive on at least a quarterly basis an account statement issued by NBIN. It will set out each transaction executed  during the reporting period, including the dates on which these transactions took place, and the names of quantities of the  securities involved. Your quarterly account statement will provide details regarding the names, quantities, costs and current  values of the securities held in your account. 

 

 

On an annual basis, we will provide you with a consolidated report on charges, other compensation and investment  performance. This statement will detail the fees you paid: operating, transaction or other charges related to your managed  account, and if applicable, any charges relating to the purchase or sale of debt securities. The annual report also includes  your money-weighted returns over various time periods and the performance of your accounts net of fees. The money 

weighted rate of returns measure how well your account has performed, taking into consideration the timing of your personal  deposits and withdrawals, as well as most of the cost charged to your account. 

 

 

Optimize has adopted a policy outlining collection, use and disclosure of personal information which can be found on its  website at https://optimize.ca. 

 

If you have a privacy matter you want to report please contact: compliance@optimize.ca or 1-416-900-6604 and we will  respond to your concern in a timely manner. 

 

Securities laws require us to provide all clients with a description of risks that you should consider when making an  investment decision. Depending on the nature of your investment, the type of investment risk will vary; below is a brief  summary of some of the investment risks for you to consider. More details of investment risks applicable to the Optimize  Funds, can be found under “Risk Factors” in the Optimize Fund Disclosure Document.  

 

Capital risk: the risk that you may lose the money you invest. 

 

Business risk: the risk inherent in the operations of the entity or industry in which you have invested. 

 

Currency risk: the risk associated with currency fluctuations if you invest in non-Canadian dollar denominated securities,  or in companies whose businesses are carried out in foreign jurisdictions which create exposure to foreign currency  fluctuations. 

 

Interest rate risk: the risk that the principal of a debt instrument that you’ve invested in will go up or down as the interest  rates in the economy go up and down.  

 

Commodity risk: the risk that exposure to certain commodities, or to companies whose business is dependent on  commodities, may be directly affected by movements in the price of the commodities. 

 

Concentration risk: if you invest in relatively few securities, then this can result in a lack of diversification across all sectors,  regions or countries and may result in higher volatility of your investment performance. 

 

Specialization risk: if you invest primarily in one industry or market capitalization range, then this may cause your  investment performance to be more volatile and strongly affected by the overall economic performance of the area of  specialization. 

 

Risk of loss: investing, in general, has risk associated with it, including the risk that the investor may lose a portion or all of  an investment. 

 

Risk of loss of key personnel: the business you invest in may be dependent on a small number of key officers and employees,  the loss of any of whom could have an adverse effect on your investment. 

 

Leverage risk: the risk of loss associated with borrowing. 

 

 

Optimize does not lend money, extend credit or provide margin to its clients. Margin is available for your account from  NBIN and Optimize may trade on margin for your account if it is considered a suitable investment strategy for you. Any  use of margin would be approved by you in advance in your IPS. 

 

Using borrowed money to finance the purchase of securities or make other investments involves 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 remain the same even if the value of the securities purchased declines. Using borrowed money to  purchase securities can magnify the gain or loss on the cash invested. It is also important that you are aware of the terms of  any loan that is secured by securities or other investments. The lender may require that the amount outstanding on the loan  does not rise above an agreed percentage of the market value of the securities or other investments. Should this occur, you  will be required to pay down the loan or sell the investments so as to return the loan to the agreed percentage relationship.  

 

Please note that Optimize may use margin when managing the Optimize Private Opportunities Funds, as described in the  Optimize Fund Disclosure Document. The use of margin within an Optimize Fund does not constitute the use of margin for  your Account, and will not impose any loan obligations on you or your Account. 

 

 

A conflict of interest exists when there are circumstances where: (i) your interests, and the interests of Optimize or its  personnel (including PMs and Wealth Planners) are inconsistent or divergent; (ii) Optimize or its employees may be  influenced to put our interests ahead of your interests; or (iii) monetary or other benefits available to us or our employees  may compromise your trust in us.  

 

It is our policy to identify conflicts of interests and ensure we always resolve them in your best interests and ahead of our own. If we cannot resolve a conflict in your best interest we will avoid the activity in its entirety. 

 

Optimize will deliver to you a Conflicts of Interest Brochure which provides details on identified conflicts of interest. It will  be delivered to you at account opening, posted on our website and you will be notified as we identify or update any conflicts of interest we have identified. 

 

Potential conflicts of interest include:  

1. Referral arrangements 
2. Sales practices, compensation arrangements and incentive practices  
3. Conflicts of interest in fee-based accounts  
4. Outside Activities  
5. Proprietary products  
6. Relationships with issuer 

Optimize will provide you with information about any conflicts of interest that may reasonably affect the services we provide at the time of account opening and in certain situations before investing your account. Disclosure will be provided in a  timely manner so that you have a reasonable amount of time to assess the conflict. 

 

 

In addition to investment management, and as part of our Family Office Service offering, Optimize provides clients  supplementary services, such as financial planning, tax and will preparations as well as estate planning. These services are  delivered through a Wealth Planner, who will be the primary contact for your account, with the exception of investment  management. Your PM will continue to manage your investments in the Optimize Private Client Program. The  supplementary services are available to all clients of Optimize and are included with the fees you already pay. 

 

The Wealth Planners are responsible for: 

In some circumstances your Wealth Planner may also be your PM, if they have attained the required accreditations. In those  instances where the Wealth Planner does not have the registration to act as a PM, one will be assigned to manage the  investments of your account. 

 

Schedule “A” describes the complaints and dispute resolution service available to you.  

 

 

We do not believe that money should be managed with relative performance in mind, but that absolute wealth creation and  its sustainability are of the utmost importance. As a result, we do not benchmark the performance of our Managed Accounts  against any indices, but measure our success against the benchmark of producing long-term after-tax returns that are greater  than inflation in order to increase our clients’ purchasing power. Some clients may find that comparing their portfolio to a  benchmark is a useful exercise for monitoring purposes. Benchmark comparisons can help you determine if your investment  approach is delivering the desired results, or whether changes might be called for. Investment benchmarks are also helpful  for developing realistic expectations about returns your portfolio can generate over the long-term. Investment benchmarks  usually provide a broad measure of the return generated by specific asset classes over a given period. They are often referred  to as reference indices since the most common form of investment benchmark is an index - such as a stock or bond index. A benchmark must replicate the security or portfolio you are monitoring as closely as possible for the comparison to be  meaningful. Examples of benchmarks would include the S&P/TSX for Canadian stocks, the DEX Universe for Canadian  bonds and the S&P 500 for U.S. stocks. For a portfolio composed of securities from several different asset classes, the  appropriate benchmark would be a blend of indices weighed according to the portfolio’s asset mix.  

 

 

Optimize has established referral arrangements and offers (and/or accepts) payments to (or from) third parties for the  introduction of potential clients and the provision of financial services. Where you are receiving services which fall under  such arrangements, you will receive specific disclosure regarding the nature of the agreement between Optimize and the  person or company that is making or receiving the referral. 

 

 

 

Optimize has policies and procedures for handling client complaints outlined below. If you have a complaint related to any  advising or trading activity of Optimize or one of our representatives, we would like to hear from you. Complaints should  be in writing and to the attention of the Chief Compliance Officer. Please include any details that would be pertinent to the  complaint including, the date, what happened and your expectation. Any complaints with respect to the services provided  by Optimize should be directed to Optimize at: 

 

Optimize Inc. 

Toronto, Ontario, M5B 0C4

Phone: 1-866-209-6862 Fax: 416-840-4939 

 

Email: compliance@optimize.ca 

 

 

Optimize will acknowledge your complaint in writing, within five (5) business days after receiving your complaint. We  may ask you to provide clarification or more information to help us resolve your complaint. In order to help Optimize  respond as quickly as possible you should make your complaint as soon as possible after the event occurs, reply promptly  if we ask you for more information and keep copies of all relevant documents, such as letters, emails and notes of  conversations. 

 

Optimize will provide written notice of its decision within ninety (90) days of receiving your complaint which will include: 

1.  a summary of the complaint; 
2. the results of Optimize’s investigation; and 
3. Optimize’s decision to make an offer to resolve the complaint or deny it; and an explanation of our decision.  

If Optimize cannot provide you with its decision within ninety (90) days Optimize will inform you of the delay, the reason  why and provide a new date for our decision 

 

 

If you are not satisfied with our decision, you may be eligible for the independent dispute resolution service offered by  OBSI. Bringing an action to OBSI will not restrict your ability to take a complaint to a dispute resolution service of your  choosing at your own expense, or to bring an action in court. Keep in mind there are time limits for taking legal action.  

 

If you are a Québec resident, you may consider the free mediation service offered by the Autorité des Marches Financiers. 

 

OBSI’s services are provided free of cost and is an independent dispute resolution service available should Optimize not  provide its decision within ninety (90) days after you made your complaint, or you are not satisfied with Optimize’s decision. Please keep in mind that OBSI can only recommend compensation of up to $350,000, which you must agree to when you  decide to use their resolution services. There is also a time limitation of 6 years from the time that you first knew, or ought  to have known, about the event that caused the complaint. If you are not satisfied with Optimize’s decision, you have up to  180 days after Optimize provides you with its decision to take your complaint to OBSI. 

 

Filing a complaint with OBSI  

 

Contact OBSI  

Email: ombudsman@obsi.ca 

Telephone: 1-888-451-4519 or 416-287-2877 in Toronto  

 

For more information about OBSI, visit www.obsi.ca 

OBSI works confidentially and in an informal manner. It is not like going to court and you do not need a lawyer. During its  investigation, you may be interviewed, along with representatives from Optimize.  

 

Once OBSI has completed its investigation, it will provide a recommendation. OBSI’s recommendations are not binding to  either party, and if you are not satisfied with the recommendation, please keep in mind you may opt to take the compliant  to a dispute resolution service of your choosing at your own expense.