A good cautionary tale makes a person stop and take a look at their own circumstances.  Bernard’s story may encourage your clients to take stock of their assets and consider whether they’ve properly planned for the distribution of those assets.

Share Bernard’s story with your clients to help them see that there are nuances involved in naming beneficiaries and heirs, and that seeking good advice, communication, and documentation when planning can help to ensure their wishes are carried out as hoped.   Continue reading “Learning From Experience: Bernard’s Story” →

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Learning From Experience: Bernard’s Story

Lately, we’ve all been experiencing a few less dollars in our bank accounts. Between the cost of fuel, groceries and the overall cost of living, there’s no denying that everything is just so much more expensive. Your clients may want to know why and although “inflation” is the one-word answer, we’re diving a little deeper into why inflation occurs and how it can affect interest rates and your client’s investments. Continue reading “Inflation, Interest Rates and Your Client’s Investments” →

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Inflation, Interest Rates and Your Investments

Investors are frequently instructed to own a well diversified portfolio in accordance with their risk tolerance and hold it through all market conditions until their situation changes or they are facing a life event. This is all well and true, but for investors entering their retirement years, generating a high return, while important, is only one factor which ultimately influences how long their savings will last. Another important factor is the order in which returns are earned. To put it simply, regular withdrawals diminish the dollar value of a portfolio, and it is precisely this dollar value upon which future returns are compounded. In fact, experiencing negative returns early on can result in running out of savings much sooner than if the portfolio experienced positive returns at the outset. Continue reading “What is Sequence of Returns Risk and How Does it Affect Your Client?” →

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What is Sequence of Returns Risk?

2020 was a volatile year for investment portfolios – and for life in general. While we hope the worst is behind us, we know that market volatility is nothing new. Remember the Y2K tech bubble, the sub-prime crisis of 2007/2008 and the Chinese stock market turbulence in 2015/2016? Each of these events saw index declines as great or greater than what we experienced in Q1 2020 as a result of the Covid-19 pandemic. This sort of market volatility can be extraordinarily distressing for your investor clients, particularly those in or nearing retirement.

Segregated (seg) funds, an investment product (invested in one or more underlying assets,such as mutual funds or ETFs) combined with an insurance contract, can be appropriate for investor clients who are concerned about volatility, market corrections or long-term bear markets, but don’t want to forsake the possibility of higher returns. By offering guarantees of all or a portion of the principal, seg funds protect invested capital while providing upside exposure. If, during the life of a seg fund contract, the value of the underlying assets grow, your client, or in the case of death their beneficiary, will reap the gain. However, if upon maturity, or the death of the contract holder, the market has fallen, losses can be capped or wholly eliminated. And 100% death benefit guarantees are available to your client investors up to the age of 90 (without medical review requirements). It’s no surprise that seg funds experienced increased popularity in 2020. Continue reading “Seg Funds – Protecting your Client from a Volatile Market” →

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The Best of Both Worlds: Segregated funds in a volatile markets

If your clients dabble in the world of investments, they should know about the power of compounding interest on their investment accounts. That is, the money they invest today – let’s say $100 at a 5% annual interest rate – will earn them $105 in one year. Likewise, if they take that $105 and re-invest it yet again at 5% the following year, your client will earn $110.25, and so on, year after year.

Yes, it is a fairly simple concept but one that your clients should be aware of. The key reason for your client to invest is to earn money on that investment. However, when those savings are increased via monthly deposits or PACS (pre-authorized cheques), they can help your client save on an even larger scale. Continue reading “The Power of Compound Interest for Your Client” →

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The Power of Compound Interest

An estate wedge is a planning strategy that can provide tangible solutions for your clients and provide you, as their Advisor, with an excellent opportunity to demonstrate your value.

As your clients age, their financial goals are likely to change and their focus may shift from asset accumulation and growth to estate preservation and wealth transition – an estate wedge can help in this scenario. The strategy involves allocating a portion of your client’s non-registered assets into a segregated fund contract, giving them more control over these assets from an estate planning perspective. This can result in several benefits, such as:

• Contract owners maintain control over their assets
• Payout options can be tailored to the needs of the estate – lump sum payments, annuity style settlement or a combination of these can be structured into the contract
• Clients can employ strategies to address the issue of cognitive decline
• Payouts are made directly to named beneficiaries following the death of the annuitant, bypassing probate if there is appropriate documentation and expediting the process of asset distribution
• Distributions are not subject to the terms of the annuitant’s will, which provides privacy and lowers overall settlement costs

Continue reading “The Estate Wedge” →

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The Estate Wedge – Your Peace of Mind Option

If your client has a child, they may be interested in a Registered Education Savings Plan (or RESP). This plan is a smart way for them to help lay the groundwork for their child’s learning while maximizing their investments via federal government grants* and tax-deferred growth of the investments within the RESP. It’s a win-win for you and your client!

Share this video with your client, part of our SMART TALK series, to help them learn more about how RESPs can maximize their investments while providing their child with the opportunities for a bright future. Continue reading “SMART TALK… about registered education savings plans (RESPs)” →

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SMART TALK… about registered education savings plans (RESPs)

Your client has been diligently putting some money away for their retirement, contributing to their RRSP or their TFSA. Perhaps they even have a defined contribution pension or, if they are lucky, the defined benefit version. In either case, there are two very distinct stages within the retirement planning rubric that your client should be aware of.

As you are aware, the accumulation phase is typically the easier of the two and occurs during your client’s working years – this is where they try to allocate as much as possible to an RRSP, TFSA, pension plan or some combination thereof. The main objective here is to accumulate assets for retirement and can be as simple as making regular deposits to an efficiently diversified portfolio and keeping fees in check. Straightforward, right?

The decumulation phase is a little more challenging and refers to the stage in your client’s life when they are no longer earning income from work. During this stage, the main objective is to use the funds that were saved or accumulated to set up income sources for the remainder of their lifetime. The challenge arises through a host of different issues, some predictable and others not so much. Continue reading “Accumulation and Decumulation – Preparing your Clients for Retirement” →

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Changing Gears – From Accumulation to Decumulation

Segregated funds have several uses as a financial planning tool, primarily in the area of estate planning. As you may know, segregated funds (or seg funds for short) combine the features of a mutual fund with elements of an insurance contract. One of those insurance elements is the death benefit guarantee, which ensures that a specific percentage of the value of your client’s investment pays directly to their beneficiaries at the time of death. This death benefit payment may even bypass probate, which streamlines the process of estate settlement and makes it easier for your client to pass investment assets on to those they love. Seg funds must provide at least a 75% death benefit guarantee, but the guarantee can be up to 100%.

The death benefit guarantee also adds a level of security that is not available in a mutual fund. This can be increasingly powerful for clients who are in retirement or approaching retirement – it allows them to participate in funds with potentially higher returns than guaranteed options such as GICs. The death benefit guarantee forms a “safety net” that provides an element of protection against market risk in these funds. Continue reading “A Convo with your Client about the Death Benefit Guarantee in Seg Funds” →

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Segregated Funds and the Death Benefit Guarantee

If your client is looking to retire soon, facing the prospect of retirement can be both exciting and stressful for them. Thank goodness you are here to help! Let’s have a look at the basics of retirement withdrawal products including RRIFs and LIFs, so you can help your client retire with ease. Continue reading “Making Your Client’s Retirement Simple with RRIFs and LIFs” →

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Making Your Retirement Easy Breezy with RRIFs and LIFs