Polaris RDI

Relationship Disclosure Information

Background

This document provides you with important information concerning your relationship with Polaris Financial Inc. (Polaris or the Firm).

Polaris is registered in the category of Portfolio Manager in the provinces of Alberta, British Columbia, Nova Scotia, Ontario and Québec. The Ontario Securities Commission is the Firm’s principal securities regulator. The Firm’s office is located at 343 Preston Street, 11th Floor, Ottawa Ontario, K1S 1N4. Polaris provides fee-based investment advice and discretionary portfolio management services to individual investors. The aim of our discretionary portfolio management service is to create an environment that incorporates clients’ needs with a disciplined investment approach.

The document describes the services that we offer, the costs to operate an account with us, the types of risks that you should consider when making an investment decision and other important information. This document also describes material conflicts of interest that arise or may arise between the Firm, individuals acting on its behalf and its clients, or between the differing interests of two or more of the Firm’s clients to whom the Firm owes a duty. We have provided disclosure about material conflicts of interest to help inform your decision when evaluating our business practices, conflicts management and overall performance on an ongoing basis.

Other important information you need to know about your relationship with us and the operation of your account will be contained in the Portfolio Management Agreement you enter into with the Firm, as well as the Investment Policy Statement which will be developed to summarize your general investment goals and objectives, as well as the strategies that the Firm will employ as a result.

If there is a significant change to any of the information contained in this document, we will provide you with an update as soon as possible.

1. Account types offered and their nature

a) Cash accounts

Cash accounts are non-registered accounts.
Investments in cash accounts generally include, but are not limited to: cash deposits, money market securities, equities, exchange-traded funds, mutual funds, real estate and other investment trusts, guaranteed investment certificates, corporate bonds and government bonds.
Income and capital gains (losses) generated from cash accounts are taxable events.
The value of cash accounts will fluctuate with market conditions.

b) Margin accounts

Margin accounts are similar to cash accounts except borrowing is allowed up to prescribed margin limits.
Investments held in these accounts are the same as for cash accounts.
Allowable margin is calculated based on each individual security. Different securities have different margin rates depending on a number of factors. More information is available on request.
Income and capital gains generated from cash accounts are fully taxable.
The value of these accounts will fluctuate with market conditions.
All non-registered accounts opened with our custodian CI Investor Services (CIIS) will be margin accounts. Further, when clients open registered accounts at CIIS, a related margin account is automatically opened, even if it may not be used.
Margin accounts are available at our other two custodians (NBIN and LBIS) but will not be opened unless specifically requested by our client.
See Section 14 for more information relating to our custodial relationships

c) Registered Accounts

These include Registered Retirement Savings Plans (RRSPs), Locked-in Retirement Accounts (LIRAs), Registered Retirement Income Funds (RRIFs), Life Income Funds (LIFs), Locked-in Retirement Income Funds (LRIFs), Registered Education Savings Plans (RESPs), Tax Free Savings Accounts (TFSAs) and First Home Savings Accounts (FHSAs). Generally, registered accounts can hold the same investments as cash accounts, however margin is not allowed. Income and capital gains (losses) generated within registered plans are not taxable events. Withdrawals from these accounts are fully taxable. The value of these accounts will fluctuate with market conditions.

RRSPs are tax-deferred accounts where investors are allowed to save money on a tax-deferred basis. Contributions to these accounts are tax-deductible and withdrawals are fully taxable. Investors use these accounts to save for retirement. Deposits to these accounts are limited to prescribed maximums. There are no limits to withdrawals, however they are fully taxable in the year withdrawn.
LIRAs are used to hold assets when an individual leaves an employer where he/she had a pension. Additional contributions and withdrawals are not allowed. Once certain requirements are met this account may be turned into a LIF or LRIF where withdrawals can be made.
RRIFs are accounts that were formerly RRSPs. When an individual turns 71 years of age their RRSP is converted to a RRIF and regular withdrawals are mandated. There is no maximum amount that can be withdrawn, however minimum withdrawals are required each year. RRSPs can be converted to RRIFs before age 71 if the individual requires regular income.
LIFs are accounts that were formerly LIRAs. They are similar to RRIFs in that they have mandated minimum withdrawals. However, there is also a prescribed maximum amount that can be withdrawn each year.
LRIFs are essentially the same as LIFs except a different name is used depending on the applicable provincial pension legislation.
RESPs are accounts that are used to save for the education of a designated beneficiary. Family RESPs are available where multiple beneficiaries are allowed. Contributions to the RESP benefit from a 20% Canada Educational Savings Grant. This grant is subject to a maximum of $500 per year, per beneficiary. The maximum lifetime contribution to the plan is $50,000 per beneficiary.
TFSAs are accounts where a government determined annual dollar limit can be contributed and allowed to grow tax-free. The contributor does not receive a tax deduction for the contributions. Withdrawals can be made at any time and are non-taxable.
FHSAs are accounts similar to RRSPs. Individuals who have not yet purchased their first home can use an FHSA account save for this purchase. The amounts contributed annually are limited to prescribed annual and lifetime maximum amounts; but these amounts are in addition to their normal RRSP contribution limits. Contributions are deductible from earned income. If the account is used to purchase an individual’s first home the money can be withdrawn tax-free for this purpose. If the account is not used to purchase a home within the prescribed time period, the FHSA can be transferred to an RRSP account, thereby increasing the individual’s lifetime maximum RRSP contribution amount.

2. Products and Services Offered

a) The primary service offered is discretionary portfolio management implementing a value-biased, broad market investment discipline. We tailor each portfolio to a client’s individual needs. Products used include exchange–traded funds (ETFs), funds from Dimensional Fund Advisors (DFA), preferred shares, guaranteed investment certificates, corporate bonds, government bonds, real estate and other investment trusts, as well as money market investments. Polaris does not distribute nor invest client assets in proprietary funds or products. Securities purchased for a client’s account will generally be listed on an exchange, although Polaris would caution that a listing on an exchange does not ensure that a security will have liquidity at a desirable price. To the extent a security purchased for a client’s account is subject to specific resale or transfer restrictions, the Firm will take that factor into consideration as part of its determination as to whether the security is suitable for the client.

b) Polaris offers financial planning and estate planning services as needed.

c) Polaris is registered with the Financial Services Regulatory Authority of Ontario (FSRA) as a provider of life and disability products for clients.

3. Types of Risk a client should consider when making an investment decision

a) General.

There are various general risks a client should consider when making an investment decision. Clients should consider whether an investment is appropriate in light of their experience, objectives, financial resources and other relevant circumstances. Clients should understand the nature of their investments and the extent of their exposure to risk. Depending on the nature of a client’s investments, the type of investment risk will vary. Risk profile is one of the factors that Polaris must take into account when assessing the suitability of an investment for each of its clients. The Firm monitors the risk of the investment portfolios of its portfolio management clients to ensure that they are meeting their objectives and remain within their risk constraints.

b) Market Risk

Market risk is the risk associated with declines in stock markets as a whole. Individuals investing in stock markets must recognize this risk and be prepared to endure losses or be patient until markets recover.

c) Liquidity Risk

Liquidity risk is the risk associate with investing in securities that are thinly held or traded. These types of securities can fall more than securities where large liquid markets exist.

d) Reinvestment (Interest Rate) Risk

Reinvestment risk is the risk associated with investing or reinvesting a fixed income product such as a bond or GIC. If a fixed income product is purchased and interest rates rise, the value of that product may fall. Conversely, if interest rates decline, and income is required, the income generated on renewal may be much less than what the investor was accustomed.

e) Concentration (Security-Specific) Risk

Concentration risk is the risk associated with investing only one or a small number of securities. If the value of this position falls, the effect is much more dramatic than it would be versus a more diversified approach.

f) Currency Risk

Currency risk is the risk associated with holding investments in foreign currencies. An investor holding a foreign investment may see the value of their investment fall when the value of the foreign currency declines versus the Canadian dollar.

g) Leverage Risk

Leverage risk is the risk associated with using borrowed funds to invest. Investment losses are magnified by the amount of money borrowed. For example, for an investor making a $100,000 investment and experiencing a 20% market decline, the loss would be $20,000 (i.e. 20%). However, if the investor borrowed half of the $100,000 initial investment, the loss would be $20,000 on a $50,000 investment – or a 40% loss. Carrying charges on the borrowed money is an additional hurdle and reduces returns/magnifies losses further. It is also important to realize that a lender may call the loan or ask for addition cash deposits (margin calls) if the value of the portfolio or security falls below certain levels. An investor could be in a situation where the loan is worth more than the underlying security and the lender is asking for more money.

4. Conflicts of Interest

General. Under applicable Canadian securities laws, Polaris is required to address and manage existing, as well as reasonably foreseeable, material conflicts in the best interest of its clients. A conflict of interest can include any circumstance where:

(a) the interests of different parties, such as the interests of the Firm and those of a client, are inconsistent or divergent;

(b) the Firm or one of its registered representatives may be influenced to put their interests ahead of a client’s interests; or

(c) monetary or non-monetary benefits available to the Firm or a registered representative, or potential detriments to which they may be subject, may compromise the trust that a reasonable client has in the Firm or the individual.

Whether a conflict is “material” or not depends on the circumstances. In determining whether a conflict is material, Polaris will typically consider whether the conflict may be reasonably expected to affect the decisions of the client in the circumstances, and/or the recommendations or decisions of the Firm or its registered representatives in the circumstances.

In addition to other measures that will be taken to address existing and reasonably foreseeable material conflicts of interest, Polaris will typically provide clients with disclosure in respect to the potential conflict. It is important that clients read this disclosure to help inform their decision when evaluating our business practices, conflicts management and overall performance on an ongoing basis. The Canadian Securities Administrators (the CSA) note that conflict disclosure is critical to a client’s ability to make an informed decision about how to manage and evaluate its relationship with a firm. If you have any questions with regards to our conflicts of interest disclosure or, more generally, in respect to conflicts, please contact your Advising Representative with the Firm.

A summary of the specific material conflicts of interest identified by Polaris are set out below.

Referral Arrangements – From time to time, Polaris may enter into referral arrangements where another party refers clients to us or where we refer clients to a third party for a fee.

When referring a client to a third party, or accepting a referred client, Polaris must ensure that such a relationship is in the best interest of the client. Polaris should not enter into a referral arrangement solely because of the referral fee that they will receive from that party. Furthermore, if a client pays more for the same, or substantially similar, products or services as a result of a referral arrangement, Polaris would not be seen as appropriately discharging its obligations to its clients.

In order to mitigate any actual or potential conflicts, Polaris will bring the referral relationship and the terms of that referral relationship to the attention of the referred client. In addition to client disclosure, Polaris has adopted several procedures to ensure it determines that accepting a referral is in a referred client’s best interest. These procedures include: (i) requiring Chief Compliance Officer approval of any referral arrangement; (ii) conducting due diligence on potential third-party referrers; (iii) ensuring that the referred client does not pay additional fees or compensation for the same service or product provided to other Polaris clients as a result of the referral arrangement; and (iv) keeping a record of all payments related to Polaris’ referral arrangements.

Insurance registration – Polaris is registered with the Financial Services Regulatory Authority of Ontario (FSRA) as a provider of life and disability products for clients. Polaris and its advisors may receive commissions when these products are purchased by a client. These commissions may act as an incentive for a Polaris advisor to recommend an insurance product instead of an alternate investment solution, or in cases where a client may not have adequate financial resources to fund a particular insurance policy. To manage any potential conflict, we use a combination of avoidance, control and disclosure as follows:

Avoidance: investment products such as segregated funds with deferred sales charges would be avoided. Segregated funds would only be used for smaller accounts or when capital preservation or creditor protection is required.
Control: only no-load segregated funds with low MERs are allowed.
Disclosure: the potential for conflict will be disclosed to the client, verbally and in writing, before any insurance products are sold
All insurance policies sold to clients are subject to approval of the Chief Compliance Officer

Conflicts of Interest Relating to Polaris Personnel/Personal Trading – Polaris’ personnel may find themselves in situations where their personal interests are in conflict with those of a client.

Polaris’ Code of Ethics and related policies and procedures establish basic principles for employee conduct which, among other things, prohibit an employee from:

Using confidential information acquired in connection with his or her duties
Accepting gifts, entertainment and compensation that would influence decisions to be taken in the course of performing their duties
Engaging in activities that could interfere or conflict with their duties.

Polaris does not allow any of its personnel to engage in activities outside the scope of their duties, including serving as a director of a company or other entity, without first ensuring that such activities do not compromise the interests of Polaris’ clients.

When Polaris staff invest in the same securities as Polaris’ clients, there is a perceived or potential conflict of interest that the staff person may benefit from opportunities at the expense of Polaris’ clients. Polaris has a Code of Ethics that sets out standards for business conduct to prevent conflicts of interest and has established personal trading policies and procedures for employees, officers and directors who have access to information about client portfolios.

Fair Allocation Among Clients – Polaris is appointed to act as an advisor to many clients. It may aggregate orders for a number of client accounts for the purchase of a particular security. It may also rebalance client portfolios. Unfair allocation of trades by Polaris, and preferential treatment in the order of rebalancing are potential conflicts of interest. To avoid any potential conflicts of interest, Polaris has adopted trading policies designed to ensure fair allocation of securities among clients. A copy of Polaris’ fair allocation policy is provided to new clients before opening an account and thereafter when a significant change to the policy is made. A copy of this policy is available on request.

Other Conflicts of Interest – From time to time, other conflicts of interest may arise. Polaris will continue to take appropriate measures to identify and respond to such situations fairly and reasonably and in the best interests of its clients.

5. Disclosure of all costs for the operation of the account

The costs for the operation of the account include the Firm’s management fee, the custodial fee and HST. These fees are tax-deductible for non-registered accounts.
The management fee is the fee paid to the Firm for the investment management of the customer account. This fee is dependent on the amount of assets a client holds and typically declines for large accounts. This fee is stated in the customer’s Investment Management Agreement and is subject to applicable tax.
For accounts custodied at National Bank Independent Network (NBIN) a custodial fee is paid. This fee is applied at the household level as follows: 0.15% on the first $1 million, 0.10% on the next $4 million, and 0.05% on amounts in excess of $10 million. HST applies to this fee.
Polaris provides a Report on Charges and Compensation detailing all charges paid by the client each year to Polaris – see Portfolio Manager Dealer Service Arrangements (PMDSA) section for more details.

Impact on Investment Returns

In general, the management fees you are charged by us, as well as any third-party expenses you pay in connection with your account as outlined above, lower what would otherwise be the investment returns you may earn from your investments. Additionally, while you do not directly pay the fees or expenses that are charged by a third-party investment manager to an investment fund in which you are invested (as the case may be) or the expenses that are charged to any such investment funds, they affect you because they reduce an investment fund’s returns.

The payment of fees and expenses also affect the return that could otherwise be earned on an account due to compounding interest. Compound interest is a process by which interest is earned on the principal balance in an account. If this interest earned is retained and reinvested into the principal balance of the account, it thereby generates incremental interest on the prior interest generated in the account. That is, compounding refers to generating earnings on previous earnings. The effect of paying fees or expenses in a client account is to reduce the principal balance of the account. Therefore, the effect of paying fees and expenses is the cost of the fees and expenses themselves in addition to the fact that there is less principal in the account subject to the effects of compounding returns in the future.

6. Description of the costs a client will pay in making, holding and selling investments

Some investments may have embedded fees that are not visible on client statements.
Investments in this category include the Management Expense Ratio (MER) for exchange traded funds and mutual funds.
These costs typically range from 0.07% to 0.75% and apply only to the particular investment vehicle – not the entire account.
For example, a portfolio with 50% ETFs averaging 0.40% in embedded fees and 50% direct holdings with no embedded fees would have total embedded fees of 0.20% (50% of 0.40%).
A list of embedded fees is available on request.

7. Compensation

The Firm derives revenue solely from the management fee. No other forms of compensation are accepted or allowed.
Polaris will provide 60 days written notice to clients before introducing a new operating charge or altering an existing operating charge.
The Firm does not receive, or expect to receive, benefits from any third-party in connection with a client’s purchase or ownership of a security through the Firm.

8. Portfolio Manager, Dealer Service Arrangements (PMDSA)

Polaris has entered into arrangements with three custodians: National Bank Independent Network (NBIN), Laurentian Bank Institutional Services (LBIS) and BBS Securities/Virtual Brokers (VB). The custodians are responsible for custody of client assets as described below. The material terms, obligations and services of each arrangement are the same with the exception of fees charged: clients are charged custodial fees by NBIN as per section 5 of this document whereas custodial fees for LBIS and VB are charged to Polaris.

Purpose and material terms of the PMDSA

Polaris has entered into an agreement with each custodian where the custodian provides investment custody services for certain clients of Polaris
Polaris provides instructions (such as account opening, transfer and trading) to the custodian on behalf of clients and the custodian executes these instructions
Polaris does not hold any cash or investments on behalf of clients
he custodian is responsible for the delivery of client statements as per National Instrument 31-103 - Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103)
Since the custodian delivers the client statement, Polaris does not deliver client statements to the client
Polaris may deliver portfolio reports to clients in order to assist in the understanding of the management of client portfolios, but, with the exception of the Annual Investment Performance Report and Report on Charges and Compensation, these are to be considered supplemental to the custodial account statements
The custodian and Polaris are jointly responsible for ensuring the information in the client’s custodial statement is complete and accurate
If the client has any questions about the client statement they should contact their adviser at 613-755-4004, or 877-755-4004
The collection and updating of KYC information as well as client suitability determination is the sole responsibility of Polaris
Polaris is responsible for the delivery of an Annual Investment Performance Report and Report on Charges and Compensation. These reports will be delivered to clients in January each year within ten (10) days of delivery of the client statement by the custodian

Key Obligations and Services provided by the custodian to the client

establishing and servicing an account in the name of each client
providing certain administrative services, safekeeping of cash and securities and preparation and delivery of confirmation notices if required, and tax slips
trading and clearing and settling
delivery of client statements as required under NI 31-103:

Key Obligations and Services provided by Polaris to the client

collection of Know Your Client (KYC) and suitability information from clients
determination of a suitable asset mix and administration of a suitable investment portfolio for clients
ongoing monitoring and management of investments
delivery of an annual Investment Performance Report and Report on Charges and Compensation within ten (10) days of the custodian delivering the client statement

9. Suitability obligation of the Firm

The Firm has an obligation to determine that any investment action it takes, recommends or decides on, for the client is suitable for the client and puts the client’s interest first.

If a registered individual receives an instruction from a client to take an action that the registered individual does not conclude is suitable for the client, including a transfer-in of unsuitable “legacy securities” or a direction to purchase specific securities on behalf of the client, they may only carry out the client’s instruction if:

a) they informed the client of the basis for the determination that the action is not suitable for the client;

b) if relevant, recommended to the client an alternative action that would instead be suitable for the client;

c) subsequently, received written instructions from the client to nonetheless take the action that was concluded to be unsuitable for the client; and

d) the Chief Compliance Officer then provides written confirmation that the Registered Individual may act on the client’s instructions notwithstanding that it was concluded that the action was unsuitable for the client.

Should the client choose to keep an investment that is not, or that is no longer, suitable for the client, it should be considered whether any changes to other investments held by the client at the Firm should be made in order to maintain the suitability of the client’s overall account(s).

10. Know Your Client (KYC) - collection of information

As part of meeting our obligations, the Firm must collect information to be able to properly establish your identity, determine whether you are an insider of a reporting issuer or any other publicly traded issuer, and to establish your creditworthiness if the Firm is financing your purchase of securities. We must also ensure that we obtain adequate KYC information regarding your personal circumstances and current financial situation, which may include but is not limited to your:

Date of birth.
Annual Income - the approximate annual income of you and your spouse combined.
Net Worth - calculated as your (and your spouse’s) fixed assets less estimated liabilities plus your (and your spouse’s) liquid assets less estimated liabilities.
Investment knowledge and experience - your understanding of investments and your practical experience with investing.
Investment objectives - what you would like to achieve from your account.
Risk Profile (Risk Tolerance and Risk Capacity) - Risk Tolerance is the degree to which you are willing to accept risk, and Risk Capacity is your ability to endure potential financial loss.
Risk Factors - what are the risks associated with the funds and securities in your portfolio.
Investment Time Horizon - generally, investors with a longer investment time horizon may have a greater degree of flexibility when building a portfolio, whereas a short investment time horizon may mean that conservative investments may be a more suitable option.

For the purpose of establishing the identity of a client that is a corporation, partnership or trust the firm must establish the following:

1. the nature of the client’s business

2. the identity of any individual who,

a) in the case of a corporation, is a beneficial owner of, or exercises direct or indirect control or direction over, more than 25% of the voting rights attached to the outstanding voting securities of the corporation, or

b) in the case of a partnership or trust, exercises control over the affairs of the partnership or trust

We will also generally require that you provide us with various information and documents including, to the extent applicable, constating documents (e.g., articles of incorporation, by-laws, declarations of trust, etc.), lists of authorized signatories, corporate resolutions, tax identification numbers, etc. The Firm must take reasonable steps to keep the information required under this section current.

11. Use of trade names/divisions

The Firm allows representatives to operate using trade names or divisions. When a representative operates under a trade name or division, disclosure to this effect is made on the representative’s web site as well as on all client documents and marketing material.

12. Benchmarks

Benchmarks may be useful in comparing investment performance. For example, portfolio returns significantly less than the appropriate benchmark returns may indicate inferior investment performance. Conversely, portfolio returns significantly above the appropriate benchmark returns may indicate superior investment performance. However, there are significant limitations to relying solely on benchmark returns to assess performance: benchmarks do not account for cash flows which may significantly impact performance; benchmarks may be rebalanced at a different frequency than the portfolio resulting in different performance results; target allocation for the client may have changed over time resulting in misleading comparisons; benchmarks using broad market indices do not account for investment style. The use of benchmark reporting is optional at the request of the client.

13. Complaints

As a registered firm, Polaris Financial Inc. is required to be member of The Ombudsman for Banking Services and Investments (OBSI). Please see the explainer below.

What to do if you have a complaint:

If you have a complaint about our services or a product, contact us at:

Polaris Financial Inc.
343 Preston Street, 11th Floor
Ottawa Ontario, K1S 1N4
613-755-4004
Attn: Jim Steel, Chief Compliance Officer

You may want to consider using a method other than email for sensitive information.

Tell us:

What went wrong
When it happened
What you expect, for example, money back, an apology, account correction

We will acknowledge your complaint

We will acknowledge your complaint in writing, as soon as possible, typically within 5 business days of receiving your complaint.
We may ask you to provide clarification or more information to help us resolve your complaint.

Help us resolve your complaint sooner

Make your complaint as soon as possible.
Reply promptly if we ask you for more information.
Keep copies of all relevant documents, such as letters, emails and notes of conversations with us.

We will provide our decision

We normally provide our decision in writing, within 90 days of receiving a complaint. It will include:

A Summary Of The Complaint
The Results Of Our Investigation
Our Decision To Make An Offer To Resolve The Complaint Or Deny It, And An Explanation Of Our Decision

If our decision is delayed

If we cannot provide you with our decision within 90 days, we will:

Inform you of the delay
Explain why our decision is delayed, and
Give you a new date for our decision
You may be eligible for the independent dispute resolution service offered by the Ombudsman for Banking Services and Investments (OBSI).

If you are not satisfied with our decision

You may be eligible for OBSI's dispute resolution service.

If you are a Québec resident

You may consider the free mediation service offered by the Autorité des marchés financiers.

A word about legal advice

You always have the right to go to a lawyer or seek other ways of resolving your dispute at any time. A lawyer can advise you of your options. There are time limits for taking legal action. Delays could limit your options and legal rights later on.

Taking your complaint to OBSI

Polaris maintains a membership with the OBSI (www.obsi.ca), which, subject to certain conditions, provides independent dispute resolution or mediation services to clients at the Firm’s expense.

OBSI contact info: ombudsman@obsi.ca; telephone: 1-888-451-4519 or 416-287-2877 in Toronto.

OBSI’s services will typically be available to a client provided:

the client properly instructed that the Firm resolve the complaint and: (a) the Firm failed to give the client notice of its decision within 90 days of receiving the complaint (unless another timeline has been agreed to), (b) the Firm has provided the client its complaint handling decision and the client is not satisfied with the decision, in which case the client then has 180 days in which to have the complaint forwarded to OBSI for dispute resolution or mediation services;
the complaint relates to an advising or trading activity of Polaris or one its registered representatives;
the complaint is raised within six years of the date when the client knew or ought to have known of the activity (or omission) that caused or contributed to the complaint.

Your ability to use OBSI’s services does 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 also time limits for taking legal action.

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, OBSI may interview you and representatives of our Firm. Polaris is required to cooperate in OBSI’s investigations.

Once OBSI has completed its investigation, it will provide its recommendations to you and us. OBSI’s recommendations are not binding on you or us.

OBSI can recommend compensation of up to $350,000. If your claim is higher, you will have to agree to that limit on any compensation you seek through OBSI. If you want to recover more than $350,000, you may want to consider another option, such as legal action, to resolve your complaint

14. Custodial Relationships

Polaris clients may use one of three custodians for their assets. Information about to each custodial relationship is as follows:

Your assets custodied by National Bank Financial (NBF) acting through its National Bank Independent Network division (NBIN), a qualified custodian, which is an indirect, wholly owned subsidiary of National Bank of Canada (NBC). NBIN’s principal place of business is located in Toronto, Ontario. NBC is a federally regulated Schedule A bank and public company listed on the TSX. NBF is a member of and regulated by the Canadian Investment Regulatory Organization (CIRO) - formerly the Investment Industry Regulatory Organization of Canada (IIROC). NBF is also a member of the Canadian Investor Protection Fund (CIPF). This fund safeguards your assets from the insolvency or bankruptcy of a CIRO member firm, subject to conditions and limits. You can find more information at www.cipf.ca.

You Portfolio Manager (Manager) and NBIN are independent entities and have entered into a Portfolio Manager Services Agreement (the PM Services Agreement) whereby NBIN is holding, in safe custody and duly identified in its books and records, whether in nominee or in client name, the cash and securities in your account over which your Manager has discretionary trading authority, and executes and settles trades in your account based on instructions received from your Manager. The Manager is responsible for ensuring such transactions are suitable for you and for complying with all applicable “know your client” and “know your product” obligations.

Your assets custodied by Aviso, a qualified custodian, which is a wholly owned subsidiary of Aviso Wealth LP, which in turn is owned 50% by Desjardins Financial Holding Inc. and 50% by CU CUMIS Wealth Holdings LP, a limited partnership owned by the five provincial credit union Centrals and The CUMIS Group Limited, which is part of Co-operators Life Insurance Co. Aviso is a member of and regulated by the Canadian Investment Regulatory Organization (CIRO) - formerly the Investment Industry Regulatory Organization of Canada (IIROC). Aviso is also a member of the Canadian Investor Protection Fund (CIPF). This fund safeguards your assets from the insolvency or bankruptcy of a CIRO member firm, subject to conditions and limits. You can find more information at www.cipf.ca. Aviso’s ownership group has combined balance sheet assets of over $740 billion as of December 31, 2023

The Manager and Aviso are independent entities and have entered into a PM Services Agreement whereby Aviso is holding, in safe custody and duly identified in its books and records, whether in nominee or in client name, the cash and securities in your account over which your Manager has discretionary trading authority, and executes and settles trades in your account based on instructions received from your Manager. The Manager is responsible for ensuring such transactions are suitable for you and for complying with all applicable “know your client” and “know your product” obligations.

Your assets are held with CI Investment Services (CIIS), (formerly BBS Securities Inc.), a qualified Canadian custodian and Carrying Broker. CIIS’s principal place of business is located in Toronto, Ontario. CIIS is Canadian-owned and operated, and is registered in all provinces and territories of Canada as an Investment Dealer. CIIS is a member of and regulated by the Canadian Investment Regulatory Organization (CIRO) - formerly the Investment Industry Regulatory Organization of Canada (IIROC). CIIS is also a member of the Canadian Investor Protection Fund (CIPF). This fund safeguards your assets from the insolvency or bankruptcy of a CIRO member firm, subject to conditions and limits. You can find more information at www.cipf.ca. CIIS is a wholly owned subsidiary of CI Financial Corp. CI Financial is public company listed on the TSX.

The Manager and CIIS are independent entities and have entered into a PM Services Agreement whereby CIIS is holding, in safe custody and duly identified in its books and records, whether in nominee or in client name, the cash and securities in your account over which your Manager has discretionary trading authority, and executes and settles trades in your account based on instructions received from your Manager. The Manager is responsible for ensuring such transactions are suitable for you and for complying with all applicable “know your client” and “know your product” obligations.

Information Contained in Account Statements

The custodian will provide clients with account statements monthly in cases where there is activity, or, quarterly where no activity was present. The information contained in these statements is as follows:

Contact information for your wealth advisor
Account numbers
Account types (non-registered, RRSP, RRIF, LIF, LIRA, TFSA, RESP etc.)
Opening and closing cash balances
Activity details for the period including: cash received/sent, transfers in/out, fees charged, interest/dividends received, securities bought/sold, etc.)
Asset details including: security symbols, Quantity, Average Unit Cost, Book Cost, Market Price and Market Value

15. DESIGNATING A TRUSTED CONTACT PERSON

In accordance with applicable securities laws, each individual client of the Firm, regardless of age, is required to complete a Designation of a Trusted Contact Person Form (the TCP Form).

This is required in order for Polaris to comply with its obligation to take reasonable steps to obtain the name and contact information of a client’s trusted contact person (TCP), as well as the client’s written consent for Polaris and its representatives to contact the TCP in prescribed circumstances.

While we would strongly encourage you to appoint a TCP, as provided by the TCP Form, you can choose to refuse to provide us with a designated TCP.

Why appoint a TCP and when will Polaris contact them?

We cannot share private information about you without your permission. By making this appointment you allow Polaris to contact and share information with TCP (or your alternate TCP if we are unable to contact your primary TCP) in the following circumstances:

we are concerned about your mental capacity as it relates to financial decision making;
we need to know or confirm the identity and contact information of your legal representative (if any);
we need to confirm your current contact information; or
we are concerned that you might be subject to financial exploitation, which could include fraud, coercion or unauthorized transactions.

Polaris is not obligated in any circumstance to contact your TCP. Your TCP has no authority to instruct Polaris unless he or she is also your legal representative – that is, your Guardian or Attorney for Property.

Who should I designate as my TCP?

You should designate someone who you trust, is mature and has the ability to communicate and engage with us in conversations about your personal circumstances if we call them in the circumstances described above. We encourage you to select an individual who is not involved in making decisions about your account(s) (i.e., someone who is not already your legal representative). We encourage you to contact your TCP.

Can I change my mind?

If you want to replace your TCP and appoint a new one, please contact us and we will send you a new form to allow you to identify your new TCP. By designating a new TCP, you will revoke all prior designations. We will rely on the most recent appointment in our files.

What if I choose not to designate a TCP?

You are not obligated to designate a TCP. In making your decision, please consider that the purpose of the TCP is to allow us to release confidential information to someone you have selected if we have concerns about your welfare. Without your permission, if a situation arises where Polaris has concerns about your welfare, we will not have the option of trying to resolve these concerns by communicating them to the TCP. In the worst case, this could lead to a situation where Polaris is obligated to stop or refuse transactions in, or place a hold on, your account(s) while we take the steps necessary to meet and address our concerns.

16. TEMPORARY HOLDS

Under applicable securities laws, we are permitted to place a temporary hold on all or a portion of the assets in your accounts with us in certain circumstances as described below. In these circumstances, we may place a temporary hold regardless of whether or not you have designated a TCP. The decision to place a temporary hold will be made by our Chief Compliance Officer.

A temporary hold on the basis of financial exploitation may be appropriate in instances where our Chief Compliance Officer reasonably believes a client has become a vulnerable client and financial exploitation in respect of its account(s) has occurred, is occurring, has been attempted or may be attempted. A “vulnerable client” is a client who might have an illness, impairment, disability or aging-process limitation that places the client at risk of financial exploitation.

A temporary hold on the basis of a lack of mental capacity may be appropriate in instances where our Chief Compliance Officer reasonably believes that a client no longer has the mental capacity to make decisions involving financial matters.

There may be other circumstances under which a temporary hold can be placed on an account.

If a temporary hold is placed on your account, we will promptly provide you with written notice of the temporary hold and the reasons for such hold being placed on some or all of the assets of your account(s) with us. We will then notify you when the temporary hold has been terminated. Within 30 days of placing a temporary hold, and unless the hold has been previously terminated, within every subsequent 30-day period, we will be required to terminate the temporary hold or to provide you with notice of our decision to not terminate the hold and the reasons for that decision.

17. PRIVACY POLICY

To protect your personal information, Polaris has adopted a Privacy Policy which can be found below in Appendix A. This policy is followed by all Polaris employees.

APPENDIX A - PRIVACY POLICY

1.0 Principles:

1.1 Principle 1 -- Accountability

Polaris Financial Inc. is responsible for personal information under its control and shall designate an individual or individuals (see 2.0 below) who are accountable for the organization's compliance with the following principles.  

1.1.1 Accountability for the organization's compliance with the principles rests with the designated individual(s), even though other individuals within the organization may be responsible for the day-to-day collection and processing of personal information. In addition, other individuals within the organization may be delegated to act on behalf of the designated individual(s).  

1.1.2 The identity of the individual(s) designated by the organization to oversee the organization's compliance with the principles shall be made known upon request. It is also available on the Polaris Financial web site (www.polarisfinancial.ca).  

1.1.3 Polaris Financial is responsible for personal information in its possession or custody, including information that has been transferred to a third party for processing. Polaris Financial uses contractual or other means to provide a comparable level of protection while the information is being processed by a third party.

 1.1.4 Polaris Financial has implemented policies and practices to give effect to the principles, including 

(a) implementing procedures to protect personal information; 

(b) establishing procedures to receive and respond to complaints and inquiries; 

(d) developing information to explain the organization's policies and procedures.

1.2 Principle 2 -- Identifying Purposes

The purposes for which personal information is collected shall be identified by the Polaris Financial at or before the time the information is collected.  

1.2.1 Polaris Financial shall document the purposes for which personal information is collected in order to comply with the Openness principle (Clause 1.8) and the Individual Access principle (Clause 1.9).  

1.2.2 Identifying the purposes for which personal information is collected at or before the time of collection will allow Polaris Financial to determine the information it needs to collect to fulfill these purposes. The Limiting Collection principle (Clause 1.4) requires Polaris Financial to collect only that information necessary for the purposes that have been identified.  

1.2.3 The identified purposes should be specified at or before the time of collection to the individual from whom the personal information is collected. Depending upon the way in which the information is collected, this can be done orally or in writing. An application form, for example, may give notice of the purposes.  

1.2.4 When personal information that has been collected is to be used for a purpose not previously identified, the new purpose shall be identified prior to use. Unless the new purpose is required by law, the consent of the individual is required before information can be used for that purpose. For an elaboration on consent, please refer to the Consent principle (Clause 1.3).  

1.2.5 Persons collecting personal information should be able to explain to individuals the purposes for which the information is being collected.  

1.2.6 This principle is linked closely to the Limiting Collection principle (Clause 1.4) and the Limiting Use, Disclosure, and Retention principle (Clause 1.5).

1.3 Principle 3 – Consent

The knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate. Note: In certain circumstances personal information can be collected, used, or disclosed without the knowledge and consent of the individual. For example, legal, medical, or security reasons may make it impossible or impractical to seek consent. When information is being collected for the detection and prevention of fraud or for law enforcement, seeking the consent of the individual might defeat the purpose of collecting the information. Seeking consent may be impossible or inappropriate when the individual is a minor, seriously ill, or mentally incapacitated.  

1.3.1 Consent is required for the collection of personal information and the subsequent use or disclosure of this information. Typically, Polaris Financial will seek consent for the use or disclosure of the information at the time of collection. In certain circumstances, consent with respect to use or disclosure may be sought after the information has been collected but before use (for example, when an organization wants to use information for a purpose not previously identified).  

1.3.2 The principle requires "knowledge and consent". Polaris Financial will make a reasonable effort to ensure that the individual is advised of the purposes for which the information will be used. To make the consent meaningful, the purposes must be stated in such a manner that the individual can reasonably understand how the information will be used or disclosed.  

1.3.3 Polaris Financial will not, as a condition of the supply of a product or service, require an individual to consent to the collection, use, or disclosure of information beyond that required to fulfill the explicitly specified, and legitimate purposes.  

1.3.4 The form of the consent sought by Polaris Financial may vary, depending upon the circumstances and the type of information. In determining the form of consent to use, Polaris Financial will take into account the sensitivity of the information. Although some information (for example, medical records and income records) is almost always considered to be sensitive, any information can be sensitive, depending on the context.

1.3.5 In obtaining consent, the reasonable expectations of the individual are also relevant. For example, a client of Polaris Financial should expect that Polaris Financial, in addition to using the individual's name and address for mailing and billing purposes, would also contact the individual to participate in client appreciation events. In this case, the organization can assume that the individual's request constitutes consent for such purposes. Consent shall not be obtained through deception.  

1.3.6 The way in which Polaris Financial seeks consent may vary, depending on the circumstances and the type of information collected. Polaris Financial will generally seek express consent when the information is likely to be considered sensitive. Implied consent would generally be appropriate when the information is less sensitive. Consent can also be given by an authorized representative (such as a legal guardian or a person having power of attorney).  

1.3.7 Individuals can give consent in many ways. For example: 

(a) an application form may be used to seek consent, collect information, and inform the individual of the use that will be made of the information. By completing and signing the form, the individual is giving consent to the collection and the specified uses; 

(b) a checkoff box may be used to allow individuals to request that their names and addresses not be given to other organizations. Individuals who do not check the box are assumed to consent to the transfer of this information to third parties; 

(d) consent may be given at the time that individuals use a product or service.   

1.3.8 An individual may withdraw consent at any time, subject to legal or contractual restrictions and reasonable notice. Polaris Financial shall inform the individual of the implications of such withdrawal.

1.4 Principle 4 -- Limiting Collection

The collection of personal information shall be limited to that which is necessary for the purposes identified Polaris Financial. Information shall be collected by fair and lawful means.  

1.4.1 Polaris Financial will not collect personal information indiscriminately. Both the amount and the type of information collected shall be limited to that which is necessary to fulfill the purposes identified. Polaris Financial will specify the type of information collected as part of their information-handling policies and practices, in accordance with the Openness principle (Clause 1.8).  

1.4.2 This principle is linked closely to the Identifying Purposes principle (Clause 1.2) and the Consent principle (Clause 1.3).

1.5 Principle 5 -- Limiting Use, Disclosure, and Retention

Personal information shall not be used or disclosed for purposes other than those for which it was collected, except with the consent of the individual or as required by law. Personal information shall be retained only as long as necessary for the fulfillment of those purposes.  

1.5.1 When using personal information for a new purpose, Polaris Financial shall document this purpose (see Clause 1.2.1).  

1.5.2 Polaris Financial has developed guidelines and implemented procedures with respect to the retention of personal information. These guidelines include minimum and maximum retention periods. Personal information that has been used to make a decision about an individual shall be retained long enough to allow the individual access to the information after the decision has been made. Polaris Financial may be subject to legislative requirements with respect to retention periods.  

1.5.3 Personal information that is no longer required to fulfill the identified purposes should be destroyed, erased, or made anonymous. Polaris Financial has developed guidelines and implemented procedures to govern the destruction of personal information.  

1.5.4 This principle is closely linked to the Consent principle (Clause 1.3), the Identifying Purposes principle (Clause 4.2), and the Individual Access principle (Clause 1.9).  

1.6 Principle 6 -- Accuracy  

Personal information shall be as accurate, complete, and up-to-date as is necessary for the purposes for which it is to be used.  

1.6.1 The extent to which personal information shall be accurate, complete, and up-to-date will depend upon the use of the information, taking into account the interests of the individual. Information shall be sufficiently accurate, complete, and up-to-date to minimize the possibility that inappropriate information may be used to make a decision about the individual.  

1.6.2 Polaris Financial will not routinely update personal information, unless such a process is necessary to fulfill the purposes for which the information was collected.  1.6.3 Personal information that is used on an ongoing basis, including information that is disclosed to third parties, should generally be accurate and up-to-date, unless limits to the requirement for accuracy are clearly set out.  

1.7 Principle 7 -- Safeguards  Personal information shall be protected by security safeguards appropriate to the sensitivity of the information.  

1.7.1 The security safeguards shall protect personal information against loss or theft, as well as unauthorized access, disclosure, copying, use, or modification. Polaris Financial will protect personal information regardless of the format in which it is held.  

1.7.2 The nature of the safeguards will vary depending on the sensitivity of the information that has been collected, the amount, distribution, and format of the information, and the method of storage. More sensitive information should be safeguarded by a higher level of protection. The concept of sensitivity is discussed in Clause 1.3.4.  

1.7.3 The methods of protection include (a) physical measures, for example, locked filing cabinets and restricted access to offices; (b) organizational measures, for example, security clearances and limiting access on a "need-to-know" basis; and (c) technological measures, for example, the use of passwords and encryption.  

1.7.4 Polaris Financial makes their employees aware of the importance of maintaining the confidentiality of personal information.  

1.7.5 Care shall be used in the disposal or destruction of personal information, to prevent unauthorized parties from gaining access to the information (see Clause 1.5.3).  

1.8 Principle 8 -- Openness  

Polaris Financial will make readily available to individuals specific information about its policies and practices relating to the management of personal information.  

1.8.1 Polaris Financial is open about its policies and practices with respect to the management of personal information. Individuals shall be able to acquire information about Polaris Financial policies and practices without unreasonable effort. This information shall be made available in a form that is generally understandable. Individuals can have access to this information by visiting the Polaris Financial web-site (www.polarisfinancial.ca) or by contacting any employee.  

1.8.2 The information made available shall include (a) the name or title, and the address, of the person who is accountable for the organization's policies and practices and to whom complaints or inquiries can be forwarded; (b) the means of gaining access to personal information held by the organization; (c) a description of the type of personal information held by the organization, including a general account of its use; (d) a copy of any brochures or other information that explain the organization's policies, standards, or codes; and (e) what personal information is made available to related organizations (e.g., subsidiaries, custodian, reporting provider).  

1.8.3 Polaris Financial may make information on its policies and practices available in a variety of ways. For example, Polaris Financial may choose to make brochures available in its place of business, mail information to its customers, provide online access (www.polarisfinancial.ca), or establish a toll-free telephone number (877-755-4004).  

1.9 Principle 9 -- Individual Access   

Upon request, an individual shall be informed of the existence, use, and disclosure of his or her personal information and shall be given access to that information. An individual shall be able to challenge the accuracy and completeness of the information and have it amended as appropriate.  Note: In certain situations, Polaris Financial may not be able to provide access to all the personal information it holds about an individual. Exceptions to the access requirement are limited and specific. The reasons for denying access will be provided to the individual upon request. Exceptions may include information that is prohibitively costly to provide, information that contains references to other individuals, information that cannot be disclosed for legal, security, or commercial proprietary reasons, and information that is subject to solicitor-client or litigation privilege.  

1.9.1 Upon request, Polaris Financial will inform an individual whether or not the organization holds personal information about the individual. Polaris Financial will indicate the source of this information. Polaris Financial will allow the individual access to this information and will provide an account of the use that has been made or is being made of this information and an account of the third parties to which it has been disclosed.  

1.9.2 An individual may be required to provide sufficient information to permit an organization to provide an account of the existence, use, and disclosure of personal information. The information provided shall only be used for this purpose.  

1.9.3 In providing an account of third parties to which it has disclosed personal information about an individual, Polaris Financial will attempt to be as specific as possible. When it is not possible to provide a list of the organizations to which it has actually disclosed information about an individual, Polaris Financial will provide a list of organizations to which it may have disclosed information about the individual.  

1.9.4 Polaris Financial will respond to an individual's request within a reasonable time and at minimal or no cost to the individual. The requested information shall be provided or made available in a form that is generally understandable. For example, if Polaris Financial uses abbreviations or codes to record information, an explanation shall be provided.  

1.9.5 When an individual successfully demonstrates the inaccuracy or incompleteness of personal information, Polaris Financial will amend the information as required. Depending upon the nature of the information challenged, amendment involves the correction, deletion, or addition of information. Where appropriate, the amended information shall be transmitted to third parties having access to the information in question.  

1.9.6 When a challenge is not resolved to the satisfaction of the individual, the substance of the unresolved challenge shall be recorded by Polaris Financial. When appropriate, the existence of the unresolved challenge shall be transmitted to third parties having access to the information in question.  

1.10 Principle 10 -- Challenging Compliance  

An individual shall be able to address a challenge concerning compliance with the above principles to the designated individual or individuals accountable for Polaris Financial compliance.  

1.10.1 The individual accountable for an organization's compliance is discussed in Clause 1.1.1.  

1.10.2 Polaris Financial will put procedures in place to receive and respond to complaints or inquiries about their policies and practices relating to the handling of personal information. The complaint procedures should be easily accessible and simple to use.  

1.10.3 Polaris Financial will inform individuals who make inquiries or lodge complaints of the existence of relevant complaint procedures.  

1.10.4 Polaris Financial will investigate all complaints. If a complaint is found to be justified, the organization will take appropriate measures, including, if necessary, amending its policies and practices.  

2.0 Designated Privacy Officer  

The designated Privacy Officer at Polaris Financial is Jim Steel. Any concern, request or inquiry should be made in writing or e-mail to:  

Jim Steel, Privacy Officer 
Polaris Financial Inc. 
343 Preston Street 
11th Floor 
Ottawa ON K1S 1N4
e-mail: jimsteel@polarisfinancial.ca 
telephone: 613-755-4004 
toll free: 877-755-4004