Gerry talks REITS and digs into all you need to know

For the next installment of our Financial Vlog series, our Founding Principle Gerry J. Hogenhout CPA, CGA, CFP, AMP talks about the various benefits and considerations of Real Estate Income Trusts (REITs).

Smarter Mutual Funds Investment with Canadian Investment Services

At Canadian Investment Services, it’s no secret that we prefer to lean towards real estate and other non-traditional investment options to empower our clients with broad access to financial growth opportunities. 

We primarily tap into the ‘private assets’ investment marketplace, which includes Real Estate Income Trusts (REIT), real estate fix & flips, and private mortgage lending, to name a few. You can find out more about the numerous lucrative factors for this alternative investment approach on our website.

Having said this, we do recognize that some people like the potential upside of investing in ‘public assets’ which involve mutual funds and stocks. If you are one of these investors, then this article is directed at you.

Take our advice, it’s free

It is important to be aware that mutual fund investing is a very self-serving industry, and many financial advisors are only motivated to sell you on the product offered by their company, rather than focusing on what may be best for your personal situation. 

At CIS, we want to set our clients up with the investments they actually want to be invested in, and for that reason we have established a few strategies that allow our clients to stay invested in mutual funds while mitigating the negative aspects of this type of investing.

Mutual fund investment considerations

In our opinion, there are two main issues regarding investing in mutual funds: market volatility and high management fees.

Market volatility

There are inevitable fluctuations in the market and no level of experience or expertise will allow anyone to accurately predict and take advantage of them - despite what some financial advisors might tell you. 

Extremely high management fees 

Often, these management fees are not well communicated to investors by banks and investment companies and can be as high as 2.5% - 3% regardless of whether the investor is actually experiencing any return from their investment in the mutual fund.

When most investors are presented with these facts, they inevitably begin the process of searching for new investment opportunities that do not have these issues. But before you do, consider the CIS difference, as follows:

The CIS difference

At CIS, we use two separate strategies to individually combat each of these issues: 

  • Dollar-Cost Averaging 

Dollar-Cost Averaging is a strategy in which an investor places a fixed dollar amount into a given investment on a regular basis (usually common stock or mutual funds). The investment generally takes place each and every month regardless of what is occurring in the financial markets. Making these predetermined monthly investments allows the investor to take advantage of inevitable market fluctuations in value, and be much less susceptible to losing money as a result of these fluctuations. 

The graph below shows the beauty of Dollar-Cost Averaging, as even during the most turbulent and unpredictable economic times (such as the 2008 market crash), your investments will continue to grow.

The benefit of Dollar Cost Averaging is that if and when the market goes down, you are actually bringing more “units” or “shares” with your monthly investment. So, when the investments eventually go back up you have more “units” or “shares” that go up accordingly. 

  • Robo Advisors

For clients who like the idea of being invested in mutual funds, we will often suggest they switch their investments to be managed by a robo advisor - a digital entity that provides financial advice based on mathematical rules or algorithms.

Robo advisors allow our investors to keep their money in similar mutual funds, but with a significant reduction in management fees. Traditional management fees with banks or other investment companies usually cost up to 3%.

But when investing with CIS through our roboadvisor network, our investors enjoy a management fee of only 0.5%. Therefore, if you were investing $100k, the difference in management fees could be saving you $2,500 a year. 

The robo advisor mimics moves made by other investment portfolio managers, so our investors normally experience similar growth to what they might see with their previous investment company (but since the management fee is much lower they actually experience a much higher growth).


Trust the investment specialists

Overall, using one or both of these strategies can be a great way to improve the returns and stability of your current mutual fund investment. It has allowed many of our clients to continue with the simplicity and convenience of investing in mutual funds, while at the same time combating the negative aspects by taking advantage of fluctuations and reducing money lost to high management fees. 

I hope you have found this article both informative and helpful. Please feel free to share it with your friends and family.

Until the next time,

Gerry J. Hogenhout, CPA, CGA, CFP, AMP

Founding Principle, Canadian Investment Services


Get in touch

Are you looking for smarter ways to invest in mutual funds? To find out more, visit our website to book a free consultation today. 

Real Estate Income Trusts (REITs): the BEST investment option you’ve NEVER heard of


At Canadian Investment Services, we aim to inform and educate our clients about the best and most rewarding investment opportunities available. After all, CIS = EIS, remember? In-keeping with this philosophy, this article is devoted to broadening your access to an amazing investment opportunity that has been kept a well-guarded secret - until now.


Real Estate Income Trusts (REITs) are incredible investment options that most people have never about before. Why? Because when you strike gold, you tend to keep it to yourself. Not us though, because investment success for you means business success for us.


What are Real Estate Income Trusts (REITs)?

Quite simply, a REIT owns and manages properties. At CIS, we primarilry work with REITs that focus on multi-unit residential properties. These REITs therefore hold a portfolio of rental properties that generate rental income, usually apartment buildings. 


How does it work?

Our partner companies, Pulis Investments and Centurion Asset Management Inc., strategically purchase undervalued real estate (apartment and townhome properties) in up-and-coming markets and renovate these properties in order to increase rental income. 


Real estate in these markets is one of the safest and most profitable investment options available. I am sure we are all aware of this as we have watched housing prices and rent steadily skyrocket over the last few decades. The revenue from these properties will then be used to purchase additional properties, and the REIT portfolio continues to grow exponentially through this strategy. 


REITs allow you to enjoy the stability and growth potential of real estate investing without the headaches that come along with owning rental properties yourself. This, along with many other reasons, are why REITs are a fantastic investment option. 


Why it works

In many ways, REITs can provide the ideal balance between investing in public stocks and private real estate, as it is much less risky than stocks but requires much less maintenance and stress than real estate. 


As the REITs we work with are limited partnerships, this allows our investors to further lower their risk: with a limited partnership, an investor’s liability is limited only to the amount they have contributed


Long-term investment

Another important factor to consider when comparing investment options is liquidity. This is one area where real estate can be more limited, and is therefore usually viewed as a longer term investment. 


REITs can provide a significant advantage in this regard, as it is much easier for an investor to sell their units and access their money as they need it. With that being said, REITs should still be seen as a longer-term investment. Often, the initial profits from net rental income are reinvested by the REIT in order to complete further renovations and purchase new properties, which leads to greatly increased unit value in the long run. So, for this reason we usually recommend our clients keep their money invested for at least 3-5 years in order to experience the best possible returns. 


REITs: a breakdown

Investors/unit holders will receive distributions of a portion of the net rental income generated within the trust, based on the number of units purchased. However, as the value of the properties within the trust increases and the mortgages are paid-down, investors will see the value of their units increase as well. 


Therefore, there are 3 potential avenues for generating income/value within REITs: 

  1. Net rental income
  2. Increase in property value
  3. Mortgage pay-down


In addition, REITs will also pay out distributions to their investors as a “return of capital”. Now, here’s the great part: return of capital distributions are considered a non-taxable income for the investor


That’s right, non-taxable. 


A prudent investment choice

Overall, REITs are a very prudent and tax efficient investment. During the initial stages of the investment, it is not uncommon for REITs to be experiencing a net loss (total rent - total expenses) as they use the rent money to purchase and renovate additional properties. While this can limit distributions to investors initially, in reality it is greatly increasing the value of each unit the investor owns, and allows them to see much better returns in the long-run. 


Think of it like a normal real estate renovation investment: initially you spend money to buy/redo a property, which allows you to sell it for a huge return on your investment in a few years. In addition, investors continue to receive a return of capital each year, so even when the trust is actually experiencing a loss, investors can still enjoy positive cash flow from the distributions they receive. It’s a no-brainer.



In truth, REITs are a low risk and low maintenance investment option that many of our clients have had great success with. If the idea of investing in REITs sounds appealing to you, please get in touch with us at Canadian Investment Services. We will be happy to further educate you on the topic. 


I hope you have found this article both informative and helpful. Please feel free to share it with your friends and family.


Until the next time,


Gerry J. Hogenhout, CPA, CGA, CFP, AMP

Founding Principle, Canadian Investment Services


Get in touch

Are you looking to leverage Real Estate Income Trusts (REITs) as a reliable investment opportunity? To find out more, visit our website to book a free consultation today. 


Private Mortgage Lending as an Investment Opportunity

Private mortgage lending is a very popular way for people with money (lenders) to generate a solid return on their funds, and for people in need of money (borrowers) to acquire funds they are otherwise unable to receive from a financial institution. 


At Canadian Investment Services, we often use this strategy with clients who are in search of capital in order to make additional real estate purchases, which usually allows the lender to secure their loan against a real estate asset. 


In this article, I will provide an overview of the Private Mortgage Lending process from both the borrower and lender perspective to give you insight into how we use this strategy as an investment opportunity for our clients.


Let's start by looking at the different borrowing options available. There are 3 main mortgage lending categories to consider when aiming to secure a mortgage:


  • Banks 

Banks can provide a very low interest rate, and for this reason securing a mortgage with a bank is normally the best choice if you are looking for a mortgage to purchase your principal residence. However, banks have strict requirements which can make it very difficult to qualify for these enticing mortgage rates. Also, they will often only provide these rates for your principal residence, so those purchasing additional real estate usually have to look elsewhere.


  • Alternative lenders 

Alternative lenders are essentially any mortgage provider that is not a bank, such as Freedom Capital Inc. These institutions provide a middle ground between banks and private lenders. The interest rates they offer are usually higher than those provided by a bank, but lower than those normally seen in the private lending space. It is easier to qualify with an alternative lender than with a traditional bank, however it is more difficult than if you were simply borrowing from a private lender. 


  • Private lenders

Private lending usually involves borrowing money from an individual who is not associated with a bank or a mortgage provider. This option can provide you with a higher interest rate and the requirements to qualify are far less strict and easily accessible. For this reason, private lending is a very appealing option for people who do not qualify for a mortgage from traditional lenders (be it due to owning multiple properties or a variety of other factors).


From the lender’s perspective, this can be a very beneficial investment opportunity for those looking for the best way to generate a reliable return on a large sum of money. It is also beneficial for those with money tied up in their RRSPs/pension account. This is a well kept secret by the financial industry, but you can actually hold a mortgage in your RRSPs/pension account.


There is also the enticing option of borrowing money from yourself if you have money tied up in your RRSPs/pension account, or even in your corporation. I won’t dive too deep into this option here as I will devote an entire article to it soon. 


Private Mortgage Lending with CIS

At CIS, we facilitate private mortgages between our clients in need of money and our clients in need of a solid investment option. Most of the time, our clients who borrow money through a private mortgage do so in order to purchase real estate. In many cases, these real estate properties are purchased for the purpose of renovation and resale. 


In these situations, it can be very difficult to get approved for a mortgage from a traditional lender. Therefore, we help facilitate short-term (usually one year), and interest-only private mortgages for these clients. 


How it works

Commonly, the lender will register a mortgage against a property which guarantees the repayment of the loan upon the sale of the property. Borrowers will receive a mortgage from a traditional lender (i.e. a bank) which sometimes accumulates to less than the required amount, so they still require additional funds which they access through a private mortgage


We use the loan-to-value ratio on the property to help our lenders find a level of risk that they are comfortable with for these private mortgages. The higher the loan-to-value ratio, the more risk for the lender. Usually, a loan-to-value ratio of 80% or lower is very safe (loaning up to $450k for a $550k house, for example). 


While registering private mortgages against a property provides additional security, it also involves substantial lawyer fees and a lot of paperwork. An alternative option that we have found success with is creating a promissory note from the borrower to the lender, which cuts out the lawyers and reduces your costs. This option provides more risk for the lender, so it is only feasible if there is a high level of trust between all parties involved. 


Why choose CIS

At CIS, we pride ourselves on helping our clients by pairing investors looking to lend money with a trustworthy party ready to borrow the money at an agreeable interest rate. 


We usually facilitate private mortgages with a one year term, and it can therefore be looked at as a fantastic one year investment option. Indeed, it is very difficult to find other one year investment options with this kind of guaranteed rate of return. 


Of course, we will adjust the terms of any of these agreements in order to find an option that best suits both parties. These mortgages can include an option for renegotiation after the one year period, or the option to pay out the remainder of the mortgage before that date. 


As mentioned above, these will usually be interest-only mortgages, so borrowers will only be required to pay interest throughout the term of the mortgage, and pay the principal in a lump sum at the conclusion of the term. 


This arrangement works perfectly for clients who are borrowing the money for real estate investment/renovation purposes: it allows them to maintain lower expenses through the process of the renovation, and gives them the opportunity to pay back the principal upon the resale of their renovation property - an option that they would certainly not have access to through any traditional mortgage process.


Of course, the key to successful private mortgage lending is finding the right match between someone looking to lend money and a suitable applicant looking to borrow. Finding this ideal match is one of our specialties at CIS, and can result in great benefits for both parties. It has allowed our clients interested in real estate investing to secure a mortgage on additional properties they would not otherwise get approved for, and it allows lenders to see a generous and stable rate of return for a large sum investment. 


I hope you have found this article both informative and helpful. Please feel free to share it with your friends and family.


Until the next time,


Gerry J. Hogenhout, CPA, CGA, CFP, AMP

Return of Capital Vlog

Return of Capital

For the first installment of our Financial Vlog series, Canadian Investment Services’ Founding Principle Gerry J. Hogenhout CPA, CGA, CFP, AMP discusses how to make your Return of Capital work better for you.

Understanding the Canadian Pension Plan (CPP)

We have all experienced the discouragement of receiving our paycheque and seeing that a huge chunk of our money has been lost to taxes and other deductions. For some reason, the government provides no formal education on any of the various processes relating to taxes, pensions, or other related topics (why isn’t this part of the school curriculum?). 


As a result, many of us must do our own research in order to properly understand the tax process and all of the other deductions coming off of our income. Aside from tax, the biggest and most common deduction off a standard paycheque is from the Canadian Pension Plan (CPP). 


What is CPP?

The CPP is a pension plan designed to replace some of your income upon retirement through a monthly benefit. Through this program, Canadian taxpayers make contributions throughout their working life and receive this money back as a monthly pension when they decide to apply for CPP. 


In this sense, it is nice to realize that at least some of the money being deducted off of our paychecks eventually comes back to us in the long run. 


How it works

The amount deducted off of your pay each year for CPP is determined by your employment income. 


  • The minimum yearly income threshold for CPP contributions is $3,500, so taxpayers receive no CPP deductions on their first $3,500 of income. 


  • The maximum threshold for CPP contributions is $58,700, so taxpayers will not have CPP deducted on income earned beyond this amount. 


Let me break it down in detail for easier understanding:


Someone making $120k a year will contribute the same amount to CPP as someone making $58k a year. In 2020, the CPP contribution rate was increased to 5.25% of employment income, as it continues to rise each year. 


This means that taxpayers receiving employment income and a T4 will contribute 5.25% of their earnings between $3,500 and $58,700 to CPP in 2020, for a maximum yearly contribution of $2,898. (Note that this is for those receiving a T4 as contributions are different for self-employed tax payers).


CCP: If you are an employee

The nice thing about being an employee is that your employer is actually responsible for matching this yearly contribution to your pension plan. In other words, you have actually contributed $5,796 to your CPP for the year, but as an employee only half of this is deducted from your income while the other half is contributed by your employer. 


CPP: If you are self-employed

If you are self-employed, you will be responsible for paying the full $5,796 yourself. Self-employed taxpayers have 10.2% of their income between $3,500 and $58,700 deducted and contributed to CPP. 


Many of our self-employed clients will have a balance owing when they file their tax return, but often a good portion of the amount payable is actually just owed to CPP. While taxpayers are normally unimpressed that they have this balance owing at the time, it is important to realize that if a good part of this money is going to CPP you are simply “losing” this money to your own pension plan, rather than losing it to the government as tax. 


However, the fact that all of your CPP contributions as a self-employed taxpayer are directly deducted from your income (versus as an employee where your employer contributes half) is also a factor to consider when deciding to start your own business. That being said, a self-employed taxpayer can deduct half of their CPP payable as an expense to reduce net income. 


How to make CPP work for you

You can also receive CPP contributions back as part of your refund on a tax return if you over contributed through the year. As CPP is normally automatically deducted from employment income, this can happen in a few situations. 


The two most common situations are as follows:


  1. Taxpayers earning a low income for the year (since the first $3,500 of employment income is not eligible for CPP), and;


  1. Taxpayers with multiple T4’s (with each T4 the CPP contributions are normally based on that being the only T4). 


Between age 60-70 you can apply to begin receiving your CPP contributions back as a monthly benefit. The average monthly benefit ends up being around $600/month with the maximum usually near $1100/month. 


The amount you receive is based on your earnings and contributions through your working life, as well as the age you elect to start collecting CPP. Be sure to look out for our related article ‘When should you start collecting your CPP’ in which I will elaborate more on this topic. 


Having a disability on file with CRA will also increase the benefit you will receive, and potentially allow you to begin collecting CPP early as well. To get an idea of how much you have contributed and what type of benefit you might be looking at, you can check your statement of contributions on the CRA website


I hope you have found this article both informative and helpful. Please feel free to share it with your friends and family.


Until the next time,


Gerry J. Hogenhout, CPA, CGA, CFP, AMP

Founding Principle, Canadian Investment Services


Get in touch

To find out more about CPP and how it relates to your personal situation, visit our website to book a free consultation today. 

What they DON’T tell you about the investment marketplace - Part II

What they DON'T tell you about the investment marketplace - part 2


Welcome to Part II of this article series about understanding how the function investment marketplace functions in Canada. If you missed Part I then be sure to go back and read it before continuing - it will make more sense that way.

But to quickly recap Part I: the regulated investment marketplace is structured in such a way that investors are only able to access investment opportunities from either mutual funds, stocks and bonds, private equity, syndicated mortgage investment products, and segregated fund investment products. Due to government regulations, investors are not able to access any real-estate investment opportunities, largely because it is not in the interest of big banks who make a profit off your investments in the regulated marketplace. 

I used the analogy of a shopping mall, where on the left-hand side sits the regulated marketplace (depicted as 5 stores: store #1 sells mutual funds, store #2 sells stocks and bonds, store #3 sells private equity, store #4 sells syndicated mortgage investment products, and store #5 sells segregated fund investment products). On the right-hand side of the mall sits one large store personifying the unregulated investment marketplace - real estate-related investment opportunities.

Okay, let’s jump straight back into it.


How does the OSC and FSCO/FSRA actually ‘trap’ investors?

The OSC and FSCO/FSRA trap investors through the financial advisor licensing system, which the OSC and FSCO/FSRA control. Each of the 5 stores on the left-hand side of the mall require separate and different investment licenses. When a person wishes to work in the investment industry as a financial advisor, they will normally enter the investment industry by getting a ‘license’ and working as a financial planner and/or investment advisor for an investment company (CIBC, Edward Jones, TD, Investors Group, RBC, Money Concepts, etc.). 

If an advisor wants to work in store #1, they need to obtain an MFDA license. To work in store #2 they will require an IIROC license. Store #3 requires a Private Equity license, and store # 4 requires a Mortgage license, while Store #5 requires an Insurance license. Once an advisor gets any of these 5 licenses, they are now stuck in one of the 5 stores on the left-hand side of the indoor mall.


How does this affect me, the innocent investor?

When an investor like you works with a ‘licensed’ financial advisor, it means that they have you ‘trapped’ into one of the 5 stores on the left-hand side of the indoor mall. The unsuspecting investor assumes that their licensed advisor is acting in their best interests but this is impossible for the advisor to do. An investor would think that the fiduciary responsibility of the financial advisor is to them, the client, but unfortunately, this is not the case. In fact, the regulatory system actually prevents the licensed advisor from putting the best interests of their client first

Given the way the investment industry is structured, the advisor must put the best interests of the company that licenses them ahead of their client’s best interests. This is a sad fact which I find to be unbelievable, but unfortunately, it is very true. The regulatory system, created by the banks and large investment companies, require the advisor to ‘trap’ their unsuspecting client into one of the 5 stores on the left-hand side of the indoor mall and, as such, the licensed advisor can only sell the investment products found in that store. Thus, the client (you) becomes trapped.

When investors figure this out, thanks to the help of Canadian Investment Services, they get angry and naturally feel duped. We tell them not to blame their advisors given it is not their advisors’ fault. The fault lies with the regulatory and licensing structure within the investment marketplace, which has been created by the big banks and large investment companies to help them control the financial assets invested in the overall investment marketplace. 

The banks and trust companies do not want you to know this, and they certainly do not want you knowing about the Real Estate store on the right-hand side of the mall. Why? Because if investors learn about the Real Estate store they will move their assets there and away from the banks and investment companies. It’s very sad to say but today's licensed advisors are really glorified salespeople for the companies that license them.


So what is the solution? How does an investor get out of the trap?

To avoid being trapped, the solution is to work with an investment services company that is not restricted by an investment license, which is exactly how Candian Investment Services operates.

The easy way to find out if you are actually trapped is to ask your financial advisor which license they hold. If they hold an MFDA license, you are trapped in Store #1, if they hold an IIROC license, you are trapped in Store #2, if they hold a Private Equity license, you are trapped in Store #3, if they hold a Mortgage license, you are trapped in Store #4, and if they hold an Insurance license, you are trapped in Store #5. There are no if’s and but’s.


How can Canadian Investment Services help you? 

Canadian Investment Services is not tied to any investment license, nor do we want to be. Therefore, we have no fiduciary responsibility to any bank or investment company - or any other company that creates investment products for that matter. We can proudly say that our fiduciary responsibility is to our clients. 

We help our clients navigate the overall investment marketplace, and if we want any investment products from stores #1, #2, and #3, or mortgages and/or insurance from stores #4 and #5, then we just simply use the services of a licensed representative to access that product. Also, by not being tied to an investment license, we have access to the investment products that are found in the Real Estate store on the right-hand side of the mall, many of which we create internally ourselves (such as Real Estate Fix ‘n Flip projects).

Think of it this way: try to avoid going into The Investment Marketplace mall by yourself, you’ll just end up trapped in one of the 5 stores on the left-hand side. Alternatively, let Canadian Investment Services navigate you through the mall, and that way you’ll be able to access all of the investment products available on both sides of the aisle. In addition, we will provide you with the unbiased investment advice and financial planning information that you deserve. With our help, you’ll end up being invested in investment products that you actually want to be invested in, either from stores 1 through to 5 and/or from the Real Estate store.


How much does it cost to use Canadian Investment Services?  

The short answer: nothing! That’s right, our service is free. Here’s why: 

We deal with all your needs before you enter the Investment Marketplace mall by providing you with all the required education and information required for you to make an informed decision as to the direction you want your financial investment to take. We do this because when we enter the investment mall together you are much better equipped to determine which store to go into. 

We help you determine which investment products and financial services you require and then we go into the store and purchase those products from a licensed advisor (the licensed advisor will then pay Canadian Investment Services a portion of the commission they have earned, and that’s how we get paid). That’s why our service to our clients is completely free. Given you deal directly with a licensed advisor, you would have had to pay the same amount of commission anyway. So what’s the difference? There is no added cost to you.

Canadian Investment Services provides you with solid, unbiased financial information, whereas licensed advisors are just trying to sell you what they are licensed to sell.   


Ready to go shopping at the investment mall with us? 

Visit to learn how we can help broaden your access to diverse investment opportunities.  

This concludes Part II of this article topic. I hope you have found this information useful. I look forward to helping you structure and plan your financial future.


Until then, take care.

Gerry J. Hogenhout

Founding Principle, Canadian Investment Services

Edit: On The Run Agency

What they DON’T tell you about the investment marketplace - Part I

What they DON'T tell you about the investment marketplace - part 1


Throughout my extensive career in investment, I have noticed that an overwhelming majority of investors have been left to wonder whether their financial advisors really have their best interests at heart, or if investment products are simply ‘sold’ to them for a commission. As you will see, these concerns are not entirely unfounded. 

Don’t shoot the messenger here, but most investors are being duped by their financial advisors. However, it is not entirely the fault of the financial advisor. The problem, in fact, lies with the investment industry itself and how it functions. In this article, I want to shed some light on this unfortunate problem so that you can better understand what has been happening to you and your investments up to this point.

At Canadian Investment Services (CIS), we strongly believe that educating our clients on how the investment marketplace functions leads to tangible investment results from informed decisions based on detailed knowledge. By informing and educating our clients with ultimate transparency, our investors avoid being duped while they actually become better equipped to determine what investment products and/or financial services they need. More importantly, they become better able to determine what they actually want to invest in within their own personal and/or corporate financial plan. 


Understanding the investment marketplace

The simplest way to explain the investment marketplace is like this: think of the overall investment marketplace as various retail stores selling a variety of different investment products (mutual funds, stocks, bonds, private equity, and real estate-related investments) and/or providing financial services (mortgages and/or insurance). 

Now, picture these retail stores inside an indoor mall, which we’ll call The Investment Marketplace Mall, which has a hallway with 5 retail stores on the left-hand side, and 1 large retail store on the right-hand side. The 5 retail stores on the left-hand side all sell their own investment products, with each store selling a completely different investment

The 5 stores on the left-hand side of the mall sell the following:  product than what is found in the other stores.

  • Store #1 sells only mutual funds
  • Store #2 sells only stocks and bonds
  • Store # 3 sells only private equity
  • Store #4 sells only syndicated mortgage investment products (while their primary focus is to provide mortgage services)
  • Store #5 sells only segregated fund investment products (while their primary focus is to provide you with insurance services)

So what happens on the right-hand side of the mall? Well, that’s a big store that sells only real estate-related investment products that are unfortunately unavailable to the stores on the left-hand side of the mall. And, to let you in on a secret, the investment industry does not want you to know about the real estate store, given it only sells real estate-related investment opportunities.

But there are so many real-estate investment opportunities many investors are gagging for which the traditional investment marketplace (left-hand stores) do not have access to due to regulatory and licensing constraints. The real estate store on the right-hand side offers many real estate investment products such as real estate fix ‘n flips, real estate joint ventures, real estate limited partnerships, private mortgage lending in your RRSPs, and facilitates the Child Home Ownership program as well as offering many other types of real estate-related investment products. 

Apologies for the rather clumsy analogy, but hopefully you get my point: one of the big problems in the investment industry is that the overall investment marketplace is structured to prevent investors from knowing about real estate-related investment opportunities.


How is the overall investment marketplace governed and regulated?

In Canada, the investment marketplace is governed separately by each province. For example, Ontario is governed by provincial regulations established by the Ontario Securities Commission (OSC), as well as the Financial Services Commission of Ontario (FSCO, soon to be renamed FSRA - Financial Services Regulatory Authority of Ontario). 

Back to The Investment Marketplace mall analogy: the OSC and FSCO/FSRA only govern the left-hand side of the indoor mall (stores 1, 2, 3, 4, and 5), and do not govern nor deal with the right-hand side of the mall - the Real Estate store. It may be hard to believe, but the Real Estate store functions without the need for an investment license from either the OSC or FSCO/FSRA. In fact, a person does not need any type of investment license to function within the Real Estate store, but those advisors who do hold an investment license are prevented from functioning within The Real Estate Store. 

So, to clarify: the OSC governs and regulates the investment products found in stores #1 (mutual funds), #2 (stocks and bonds), and #3 (private equity), while the FSCO/FSRA governs the financial services found in store #4 (mortgages) and store #5 (insurance). The Real Estate Store is not governed by either the OSC and/or the FSCO/FSRA.


So what’s the problem?

The problem is that the overall investment marketplace is designed to ‘trap’ investors into one of the “stores” on the left-hand side of the indoor mall, and designed to not let them visit the other stores. And trust me on this, the investment industry does not want you, the investor, to know about the Real Estate store on the right-hand side of the mall (which is where all the real estate-related investment opportunities are found). 

So why doesn’t the investment industry want investors to know about the Real Estate store? Because the big banks and large investment companies make too much money keeping you trapped inside store #1 (mutual funds) and store #2 (stocks and bonds).

The investment industry is strategically structured to keep investors trapped into store #1 and store #2 because this is where the big banks and the large investment companies make a fortune from their investment products, such as mutual funds and stocks. Given the banks and the investment companies control the OSC (just check out who sits on the OSC board of directors), this allows them to make a fortune for themselves off the backs of so many unsuspecting investors who simply do not know any better. This is why we at Canadian Investment Services think it is crucially important for investors to better understand the overall investment marketplace. 

I hope that this newfound information will help you make better, more informed investment decisions based on what is available to you in the real estate investment marketplace.

Visit to learn how we can help broaden your access to diverse investment opportunities.  

That’s all for Part I of this article topic. Be sure to look out for Part II where I continue to explain more about the OSC and FSCO/FSRA and what it means for you.

Until then, take care.

Gerry J. Hogenhout

Founding Principle, Canadian Investment Services

Edit: On The Run Agency

David & Gerry's Real Estate Cafe - COVID 19 edition, Live & Interactive. All About Real Estate & Investments.

In this session, we discussed Real Estate Development & Financing Real Estate Development during COVID 19, Why Residential REIT's (Real Estate Investment Trusts) are hot and much more.

David & Gerry's Real Estate Cafe - How to Add Investment Services to your Tax Practice

Description: In this session, we discuss how to add value to your current business model using investments.