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I can help you or your organization to achieve financial security

Few things in life are as important as planning for the future. Yet, not many of us actually take the time to plan for life’s major events. Financial planning is a process I use to ensure that preparing for these events is given paramount importance. This involves taking the time to think about what you want out of life (financially and personally) and to plan strategically how you’re going to get there.

Financial planning helps us find the answers to questions such as:

"When I retire, will I be able to live according to my needs?"
"What are the best options for my pension if I retire early?"
"Will I be able to support the educational needs of my children/grandchildren?"
"Can my family support themselves if I’m no longer able to work?"
"What is the best way to structure my assets to minimize or defer tax?"

Or, if you represent an organization:

“Will our foundation have access to the cash we need when we need it?”
“Are we maximizing our endowment’s long-term returns in the most cost-effective manner?”

I can facilitate the family planning process by helping you to better understand your current situation, set realistic goals and objectives, identify investment opportunities, allocate resources to meet these goals, and invest in a tax-efficient manner.

A financial plan takes you where you want to go.

My comprehensive, customized financial plan consists of four pillars: retirement planning, tax planning, estate planning and investment planning.

Each of these pillars acts as an independent building block while remaining dependent on the others. In fact, building a financial plan is not unlike building a house; it is critical to have a blueprint as a guide. Your financial plan is the blueprint we follow to help you achieve your retirement, tax, estate, and investment goals and objectives. 

Asset-based fee

I work on a fee-for-service basis rather than a transactional approach (in which a commission is paid for every trade). By charging one single, transparent fee based a percentage of your total assets, my interests are perfectly aligned with yours, and I am free to develop comprehensive strategies objectively, without bias.

 

The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances.

Treat your retirement savings seriously. 

Every year, Canadian financial institutions reveal the results of various studies on investor behaviour. One alarming study showed how many people take money out of their RRSPs early. While there are plans for using RRSP savings to purchase a first home or fund further education, over 20% of Canadians dip into their plans to cover day-to-day living expenses.

Recent studies also show people spend more time planning for their vacations or a major purchase than they do planning for their retirement! Considering that many of us will spend 30 to 35 years in retirement, this statistic defies logic.

Here are my answers to some of my clients’ most frequently asked questions about retirement.

“How much do I need to retire?”

This number is different for everyone. It really depends on your lifestyle but also takes into account your various sources of retirement income. Canada Pension Plan, Old Age Security, employment pensions and savings all come into play. Taxes are also a factor, as you need to know your net income. And let’s not forget about inflation.

If you would like a more detailed look at how much you will need when you retire, email me.

“What about my transition to retirement?”

Retirement planning is about more than money. It is a huge lifestyle change for which many of us do not plan. I counsel people to see retirement as more than just taking time off: it is about maintaining a healthy and engaged life.

“What happens to my RRSP when I retire?”

Your Registered Retirement Savings Plan (RRSP) is a tax-deferred account that helps you to save for retirement. During your working years, the main objective is to grow your investment portfolio. But when you retire, the focus changes and the options are many. As you approach this phase of your life, it is time for a major review of your holdings.

The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances.

 

Estate planning

For many, estate planning sounds lofty and complicated, but it really isn't. You should give careful consideration to the financial, legal and tax issues that will affect the transfer of your assets to your beneficiaries. At any age, an estate plan can help you:

1. Set a value on your estate through an analysis of your assets and projected estate values over time.
   
2. Assess and address current and future liabilities, such as mortgages or bank loans, probate fees (estate settlement legal proceedings), taxes, legal fees, executor's compensation, and any personal guarantees that will be payable by your estate.
   
3. Determine how best to meet the needs of your beneficiaries.
   
4. Protect your estate and your intended beneficiaries from costly legal red tape, competing interests, and unnecessary taxation. This is reason enough to give it some serious consideration.

The risks of delaying estate matters

As the average life span increases, so does the probability of acquiring a critical illness, requiring long-term care or becoming mentally incapacitated during your lifetime. A forward-looking estate plan would provide for these health conditions using insurance†.

Incapacity or ill health raise another estate planning issue: what if you aren't capable of making crucial decisions concerning your health, finances or the care of your children? To prepare for such a possibility, you need to name a Power of Attorney (called a Mandate in Quebec), both for personal care and for property and asset management. The individual(s) or trust company you name as your attorney will have the power to make these decisions for you.

If you have minor children, you should take great care to nominate a Guardian for them —someone who shares your values and who is physically, emotionally and financially capable of taking responsibility for your child(ren) if necessary. Your estate plan should protect you and your assets from the risks of financial and legal mismanagement and excess taxation.

I have the knowledge, experience and resources to help you develop a plan that offers these protections, to ensure greater peace of mind for you, your family and your beneficiaries.

 

 

Investment solutions

We find that investors fall into two broad categories: those who prefer to delegate the day-to-day decision making and those who prefer to be more hands-on but also value professional advice.

Both groups need a strategic investment plan that dovetails with their financial and estate plans. To create this plan, we first decide upon an Investment Policy Statement (IPS), a strategic roadmap we create together that helps us stay on track when making decisions or recommendations for your account.

For those clients who prefer to delegate their day-to-day investment decisions, Macquarie Private Wealth has two managed asset programs: The Macquarie Integrated Managed Account (IMA) and The Macquarie Advised Portfolios.

The IMA Platform

The Macquarie Integrated Managed Account Platform (IMA) provides you with a multi-manager, multi-asset class portfolio that is tax-efficient and tailored to your goals. Unlike many managed asset offerings, with IMA you are not pooled with other investors. Rather, you own a separate account holding the individual securities. The advantages include maintaining your own cost base and the flexibility to manage your tax liabilities. In creating this program, we have partnered with a leading third-party consultant to help us screen some of the best investment managers in the world and ensure that only the most suitable are recruited.

Designed for the investor who appreciates a sophisticated and efficient global investment solution, IMA was the first platform of its kind in Canada and is still one of the country’s best. IMA portfolios are designed for accounts with a minimum of $100,000.

The Macquarie Advised Portfolios

The Macquarie Advised Portfolios remove the cost of individual transactions and replaces them with a single competitive fee based on your total assets under administration. The advantages include tax efficiency, transparency, flexibility, and the removal of any perceived conflicts of interest, among others.

Click here for more information on The Macquarie Advised Portfolios.

For clients who prefer to maintain hands-on involvement with their investment portfolio, we offer advisory services on a full range of investment vehicles, including:

• Stocks
• Bonds
• Treasury bills
• GICs
• Mutual funds
• Principal protected notes
• Hedge funds

The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances.

Commissions, trailing commissions, management fees/expenses may be associated with mutual fund investments. Read the prospectus before investing. Mutual funds are not guaranteed, their values will change and past performance may not be repeated.

Trusts

Back in the fifties, trusts were set up by working men — most often the main (or sole) income earners, they wanted to know their wives would be taken care of in the event that they died or became incapacitated. Spousal trusts are still being used, but in today’s more complex families, carefully drafted trusts are often required to ensure that the desired course of one’s money is honoured after death.

For example, if you have divorced and your spouse has remarried and has had other kids with a second spouse, a trust can protect your kids by ensuring that your wealth is transferred to them and not to your spouse’s other children.

Another example might be that you wish to leave your money to a son or daughter who suffers from addiction problems. A trust can ensure that a certain amount of your money flows regularly to your child to support a reasonable lifestyle, but the entire inheritance is not made available all at once, eliminating the chance that the lump sum might be spent immediately on harmful substances or activities, leaving your son or daughter poorly provided for.

Trusts are also invaluable when you wish to leave money to some, but not all, of your children, or to someone other than your children. Many provinces, including British Columbia, favour the rights of all children to an equal portion of their parent’s inheritance, but a carefully drafted trust ensures that your wishes will be carried out. A trust cannot be easily overturned in a court of law. However, here in BC, a child who did not inherit what they consider to be their fair share can apply to the courts for the right to claim it, and often, unless there is a trust in place, the courts will find in favour of the child.

If you are childless and have no nieces and nephews to whom you wish to bequeath your money, you can set up a Charitable Remainder Trust. This provides you with steady income plus tax relief today and benefits your favourite charity when you pass away. You commit to giving your money to charity upon your death and continue to live off the interest for the remainder of your life. You get a tax credit that eliminates the taxes you would otherwise owe on your income. When you die, your charity receives the remainder of your wealth, which has been subject to a minimum of estate tax.

Effectively implemented, trusts can help you avoid the expense and bother of litigation. Trusts provide good protection for your funds because, when you create them, you have legally already given away your money; whereas with a Will, the funds have not yet been disbursed and remain subject to dispute and legal challenge.

Here's how a trust works

You appoint a secure and reliable third party (an individual or a trust company), as your trustee to look after certain assets for the benefit of your beneficiaries. To make the trust legal, you must transfer title or ownership of those assets to the trustee. The trustee in turn invests the assets, manages the growth, and sees that the assets are distributed to beneficiaries according to your instructions.

A trust may operate while you are alive, after your death, or both, and may be used to ensure that your assets are always managed according to your wishes.

 

 

Committeeships

Committeeships (pronounced commit-táy-ships) are a little-known but very useful financial planning tool. Applying to the courts to set up a committeeship enables you to act freely on behalf of a relative who has become incapacitated and has not established a Power of Attorney.

For example, if your Mother owns a house and has suffered a sudden stroke or head injury, her house may need to be sold so she can afford a nursing home. You can apply for a committeeship, which means you have been approved and appointed by the court to sell your Mother’s house on her behalf. The terms of the committeeship require you to report annually to the court on how you have spent your Mother’s money.

Being named in a committeeship requires caution on your part due to the strict legalities and fiduciary responsibility they carry with them. As your Mother’s fiduciary, you must keep a careful paper trail to prove that you have acted ethically and protect yourself from liability.

Used judiciously, the committeeship is the ideal solution for people who have elderly parents as it can give them the license to act effectively in their family’s best interest when a Power of Attorney has not been appointed.

The Macquarie Private Wealth client gifting program

If you dream of making a difference - whether you wish to support the arts, conserve natural resources, advance medical research or help the world’s underprivileged children — giving back speaks volumes about who you are and the values you stand for. I can help ensure your gift complements your overall wealth management strategy and supports your cause in a way that is effective and lasting through the Macquarie Private Wealth Client Gifting Program.

It’s like having your own charitable foundation

The MPW Client Gifting Program delivers a customized and coordinated approach to philanthropic giving. When you work with me to establish a Donor Advised Fund (DAF) through the Client Gifting Program, you will be rewarded with:

• Tax savings — You will get a tax receipt for all donations of cash or publicly listed securities. Plus, if you donate securities, you avoid the tax liability typically associated with the realization of accrued capital gains.
   
• Efficiency — You achieve all the financial advantages and personal satisfaction that comes with establishing your own charitable foundation, with significantly less cost and complexity.
   
• Control — You decide how the donation is to be used, that is, which — and how many — charities will benefit. We provide regular, measurable feedback on the positive impact of your gift.
   
• Legacy — The program allows you to create lasting change by adding to your fund, either by placing a bequest in your will, donating an RRSP or RRIF, transferring a paid-up life insurance policy, or inviting family, friends and colleagues to get involved in your cause.

The Client Gifting Program takes care of all the details by:

• issuing a tax receipt when your donations are made;
• distributing grants to charities you choose;
• managing the administration of funds; and
• reporting how donated proceeds are put to use.

Contact me for more information on the Macquarie Private Wealth Client Gifting Program.