One of life’s fundamental concerns that keeps many people awake at night is worrying about whether they are saving enough money for large expenditures and their golden retirement years. Prairie Wealth Management of Saskatoon is a full-service, fee-based, wealth management firm that caters to – and alleviates – those concerns and ensures individuals embark on a healthy, sustainable path to financial success.

As part of the renowned HollisWealth national network, PWM is completely independent on decision making with investments, insurance and taxation planning. The company is headed by founder Kevin Hegedus and Kevin Haakensen, who came together as business partners in 2008 and who officially branded the company as Prairie Wealth Management in 2012. Both are senior investment advisors and Portfolio Managers. HollisWealth is a division of Scotia Capital Inc. and serves as the dealer for Prairie Wealth, meaning PWM does its trading through them, which includes back-office support. HollisWealth is well equipped to provide top-notch support services with about 800 advisors from coast to coast.

“Prairie Wealth is our own particular trade name that brands us apart from some of the other HollisWealth advisors that aren’t doing exactly what we’re doing,” Haakensen says during a recent interview with The Canadian Business Journal. “We aren’t tied to any one single brand. We can go across multiple spectrums, so for example if we are looking at insurance products we can use Canada Life, Sunlife, Manulife, Industrial Alliance just to name a few – kind of the whole suite of insurance companies.”

In addition to Hegedus and Haakensen there are about a dozen office employees, each of whom plays an integral part in ensuring the business runs smoothly on a daily basis. The main office is located in Saskatoon and there are also satellite locations in Prince Albert, Regina, Lloydminster and Swift Current, which comes in handy when meeting clients in those parts of Saskatchewan.

Within the PWM office are talented and dedicated individuals providing expert advice and services whose professional backgrounds include a Chartered Accountant, a Certified Financial Planner and a couple Chartered Financial Analyst charter holders, all of whom help to craft customized individual financial plans. Other business services include preparation of corporate and personal tax returns, business reorganization, and estate planning and wealth preservation.

“What we’ve really prided ourselves on is finding the key experts on every single aspect of wealth management,” Haakensen says. “The only thing we don’t have in-house is a lawyer but we’ve developed good relationships so we have some good choices for clients who require those professional services as well.”

Diversified Portfolio Stategies

At PWM there are six different portfolios, of which three are primarily used by the vast majority of clients; balanced, income growth and high growth. Each comes with its own distinct risk spectrum. The portfolios are managed in groups but there is always that touch of individualism applied to ensure every client is getting the maximum benefits.

Prairie Wealth Management has already firmly established itself as a major player atop the financial services industry throughout Western Canada. More often than not, corporate success begins with people, and Haakensen feels that is in fact the main ingredient with the firm.

“From a holistic perspective I think we have the best planning and portfolio management team in Saskatchewan,” he proudly states. “You can come in and get expert advice independently on your portfolio, insurance and estate planning, business succession, financial planning, and tax planning just to name a few. Some people want all of those things but some may need just one or two.”

The staff at Prairie Wealth Management welcomes each client with the same level of professionalism and dedication. Of note, the company takes tremendous pride in working closely with the agricultural farming community, which is a business sector both Haakensen and Hegedus hold near and dear to their hearts. Haakensen estimates more than 50% of the work the company handles is on behalf of farms, farm families and business owners.

“Kevin and I both come from a farming background,” he reveals. “He grew up on a farm and I grew up on a farm and a ranch so it’s a natural fit for us and is a major passion of ours. It’s fun to advise on something you’ve been in before and to help farm families and business owners thrive and survive.”

Integrity and Trust

The professionals at PWM are equipped to provide a preeminent portfolio for each individual based on factors such as available finances, risk tolerance and the expected duration of a plan. It is vitally important to the company that each client feels they can trust their wealth management advisor, and that is best achieved by educating clients on what portfolio plans are being undertaken and ensuring they understand what it is that the PWM management team is doing on their behalf. Earning trust with clients is all about full disclosure and keeping them informed all the way through the process.

“In our fully managed discretionary accounts clients see in the accounts everything we own,” Haakensen continues. “It’s not like a mutual fund where they might just seethe unit price, the number of units they own and dollar value – they actually see each holding in our accounts.”

With a number of highly qualified, experienced employees, taking on some of the more challenging opportunities is something PWM thrives upon. People with investment assets of more than $250,000 and a net worth topping $750,000 would be considered an excellent fit for the services provided by Prairie Wealth Management, where the staff thrives on taking on challenges that are not straightforward and simple.

Benefits of Discretionary Wealth Management

“When most people start out in the business they sell mutual funds,” Haakensen says. “Sometimes they may be independent, which means they can sell many different brands of mutual funds and sometimes they are not independent where they will be tied to one particular brand.”

The next industry step is for someone to obtain a brokerage licence where they may use some stocks, ETFs or individual bonds. The third stage involves becoming licenced Portfolio Managers – which is where Prairie Wealth is situated. In fact, they are the only firm in all of Saskatchewan with the HollisWealth association.

“We discretionarily manage a client’s assets. We can treat all of our clients as equals.

Under all the old models you had to physically make phone calls to each and every individual client to make a trade, making business much more cumbersome, sometime leading to missed opportunities. I really feel like we can manage the risk reward trade off extremely effectively now.”

Prairie Wealth Management spends considerable time with clients to make sure they get the risk right for each individual client.

“We’ve developed different portfolios and then we manage the mix. It might mean making six or seven trades in a month or it might mean making no trades in a month,” Haakensen remarks.

The client essentially hands the keys over to the group of highly skilled financial professionals at PWM, which allows them the freedom to manage the money within their chosen risk in a very efficient and effective manner.

“I also love that under the discretionary mandate the fees are visible,” Haakensen continues. “This can also make the fees in non-registered and corporate accounts tax deductible.”

Another attractive aspect is that it provides Prairie Wealth access to alternative investments.

“There are certain accredited products that can only be purchased under certain exempt rules which means you have to have $1 million of liquid net worth, you have to make $200,000 in earnings for at least two years or $300,000 with your spouse or you need $5 million in total assets (there are other exemptions but those are the main ones). Not everyone fits under those rules but some of the investment products are absolutely incredible from a risk-reward standpoint and really help us to effectively manage money.”

Under the discretionary licence of being portfolio managers, Prairie Wealth Management has the ability to put those particular assets in every single client’s account. Whether you have $250,000 with them or $5,000,000 you can have an allocation to those particular alternative assets.

3 Pillars of Financial Success

The primary goal is to provide comprehensive, integrated planning and investment advice. To that end, the company staunchly stands by three main pillars for success and they all tie in to one another: wealth maximization, tax minimization and capital preservation.

Tax Minimization: “When we’re doing a comprehensive financial plan, part of that plan always has what we call a tax version where we look for specific strategies over a period of maybe 10, 20 or 30 years to get taxes under control and minimize them as much as possible, which might mean something as complex as restructuring a company to be more effective or as simple as using tax advantage products or showing a client how their wealth can change provided they draw from different accounts in the right order,” Haakensen states.

Further to that, it may mean pulling RIFs early to avoid old-age security claw-backs or discussing some tax advantages investments such as flow through shares or developmental oil and gas drilling projects provided they fit the clients risk tolerance.

“In my opinion, the tax planning is the free money,” Haakensen continues. “To get the taxes right, we just need to play within the rules and do things creatively but properly. If you can save thousands of dollars per year in taxes that takes a lot of heat off other areas of retirement planning and cash flow.”

Wealth Maximization is using all the tools made available, which includes having all the right people in place to describe the various options available. It could come down to something as simple as making sure that within your portfolio you’re maximizing the return for the risk you as an individual want to take on.

“Wealth Maximization might mean educating someone on the difference between a tax-free savings account and an RRSP; when you put the money in, when you take it out. It may even encompass a discussion on certain life insurance concepts that are great wealth creators when utilized in the right situations.”

Capital Preservation may refer to having certain assets in a portfolio that add major protection when markets slide, which Haakensen referred to as “mini insurance policies for your portfolios health”. It can also refer to having a discussion with a farm or business client about options Prairie Wealth Management can put in place so the business can successfully transition to the next generation with a lesser tax burden, or an insurance concept where it may be structured such that if, for example, there is a family cabin worth $1 million and there is $200,000 in taxes to be paid on it, those taxes get paid because of the liquidity the insurance policy provides, avoiding the possibility of the cabin needing to be sold under financial duress.

“Part of our rooted philosophy is that if you can capture the free money, which to me is doing tax planning appropriately, then you don’t have to take as much risk with the other money in your portfolio.”

Expanding Horizons

Hegedus and Haakensen look to continue to grow the company as more opportunities arise. For the past four years Prairie Wealth Management has been given the top financial planning designation in the city of Saskatoon and there’s a strong desire to keep that in place. For Haakensen, there is another obvious telltale sign that PWM is on the right track.

“It’s always flattering if you’re getting referrals,” he notes. “Success comes from doing things properly and referrals often come from doing that. Because we’re portfolio managers it gives us a better ability and scale to manage larger portfolios than we did four or five years ago. For example, we could decide today to sell $10,000,000 of one stock or ETF and reposition it into $10,000,000 of another stock or ETF and we can do that within minutes and we can do it for all of our discretionary clients at the same price.”

Business ethics and accountability are driving forces that Hegedus and Haakensen always promote both internally and externally at PWM. There is no better endorsement than having a strong reputation in the community that you serve.

“If someone asked 100 of our clients what they thought of us, I’d want them to be able to say we’re good honest people who come to work each and every day and try and do a good job for our clients and are always looking to maximizing their wealth.”

It’s also inherently important for Hegedus and Haakensen to ensure that Prairie Wealth continues to give back to the community that has given so much to them. It’s this unwavering resolve that has led to a number of philanthropic initiatives which have definitely been noticed and appreciated by the people of Saskatoon and beyond.

“In 2014 we started the PWM Community Fund, which is a not-for-profit that we are using to try and give back to the community. We are planning on choosing many different initiatives and are trying to do our best to give as many resources as we can back to our community” Haakensen says. “We look for sponsors to help us with those particular things as well. In October there was an event supporting Saskatchewan schools based on Dr. Stephen R. Covey’s The Leader in Me program. As we grow as a company we want to give more back to the community.”

In the words of Hegedus and Haakensen: finding the right wealth management advisor to help with your financial planning and investment management is as critical as choosing the right doctor or lawyer for your needs.

Success in this industry is a combination of trust, dedication, experience and positive results. If you have that, you’ve got yourself a solid financial wealth management guide watching out for you and your financial and retirement dreams.

www.prairiewealthmanagement.com