Monthly Archives

October 2018

Sandwich Boomers: Easing the Squeeze

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Today’s baby boomer generation faces a new challenge: the dual role of taking care of children and aging parents. Currently, many baby boomers provide some form of care to aging parents but also provides support to children. Increasingly, boomers are finding themselves “sandwiched”, as children take longer to become self-sufficient and elderly parents live longer. However, there may be ways to ease the challenges for those who face this dual-support role.


Caring for Parents 

The planning process is best started when parties are healthy and not in a position of crisis. Often, conversations are avoided until a crisis occurs, which forces the need
to make quick decisions under stressful conditions with insufficient information.

Discussions may be difficult and should be addressed
with sensitivity, care and the full cooperation of all parties, especially the parents. Be prepared for the possibility of non- cooperation — talking to elders about new circumstances, particularly those involving money or lifestyle, may be
met with suspicion or hostility. Each situation will differ: some may require several low-key approaches over time; others may be better supported by the services of outside professionals. Engaging all siblings may be helpful as they will likely be involved as time passes.

Having access to the financial information of aging parents may be an excellent start in order to determine what is feasible and where help may be required. If a comprehensive estate plan exists, it may be possible to offer assistance within its context. Such a plan will focus on achieving set retirement-planning objectives, maximizing asset value and minimizing taxes until the time that assets are passed on

to beneficiaries. An estate plan should include a will, have defined beneficiaries and executors (or liquidators/estate trustees, depending on province/territory of residence) and may also consider the use of a trust.

A power of attorney should be drawn up if one doesn’t already exist. There may be separate documents for health care and financial decisions. Depending upon the province or territory of residence, these documents may be known by different names. They should be reviewed periodically to ensure they remain relevant.


Considering Your Children’s Needs

In the event that you will need to care for your elderly parents, it is important to discuss the changing situation with your children. Children will likely have questions or concerns that may need to be addressed.

As you try and balance your family’s needs, you may consider having conversations with teenagers about taking a more active role in meeting the future costs of their education; or, for older children, expectations of timing for their departure from home.

Recognize that this may be a difficult and stressful time for children and do not forget the importance of your ongoing responsibility to them.


Looking After Yourself

The dual role of caring for elderly parents and supporting children
may be physically, emotionally, and financially challenging. However, in order to be a support to others, you must first be able to look after yourself.

Many informational resources and support organizations are available to help you make the best decisions for your family. Government assistance may also be available, including the Employment Insurance Compassionate Care Benefit, for individuals who have left work temporarily to provide care

to a gravely ill family member, and the Caregiver Tax Credit, for individuals living with a qualifying dependent.

Finally, it may be necessary to revisit your own financial plan when support needs change as your own financial well-being should always remain the priority. Don’t hesitate to contact us for assistance with any financial or investment matters.


Contact us today at 204-259-2859

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The Gamma Factor: The Value of Advice

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Does good advice translate into value? The “gamma factor” — the discipline associated with longstanding financial advice — has been shown to make a notable difference to an investor’s wealth accumulation over the longer-term.

A recent study has suggested that an increased saving rate is one of the most significant components influencing the gamma factor. The other component is the ability to stay disciplined through both positive and negative market cycles. According to the study, Canadian households with a financial advisor for more than 15 years accumulated 290 percent more assets than households who did not use the services of an advisor. This was largely attributed to the gamma factor.

Beyond saving, there are many ways in which receiving good advice can translate into value. Here are some perspectives on how investors should be leveraging the expertise of an advisor.

Portfolio Management — One of our most important roles is to manage risk within a portfolio according to an investor’s specific risk tolerance levels. This includes having appropriate portfolio guidelines in place, such as maintaining a level of diversification and managing to a certain asset mix, while keeping individual needs in mind. Risk management often results in moderating volatility — not only on the downside, but also when higher returns are driven by higher risk. As well, we are constantly navigating through the changing investing landscape. Today’s challenges include low interest rates and slower growth; tomorrow’s may be different.

Behavioural Coaching — Emotions can be an investor’s worst enemy. A study by Dalbar, a financial services market research firm, attributed between 45 to 55 percent of an average investor’s underperformance to psychological factors.2 Why? According to the study, the average investor may react to short- term noise and trade at the wrong time, buying at highs and selling at lows. As advisors, one of our objectives is to help remove the emotion from investing.

Tax Strategies — Tax strategies can make a significant difference to overall wealth. This includes understanding and adapting to changing tax law and investing in tax- advantaged ways, such as using registered plans, or optimizing asset location.

Withdrawal Strategies — The way in which an investor withdraws investments from different accounts, as well as prioritizes different sources of income (such as government tested benefits like the Old Age Security, etc.), may help to minimize taxes and maximize wealth. This depends upon each individual investor’s situation. As the time approaches where investors need to access income, we are here to help put a plan in place.

Total Wealth Management — Wealth management extends beyond an investor’s portfolio. This may include business succession planning, estate planning or insurance planning, as examples. Managing wealth across all aspects of an investor’s life can improve an investor’s wealth position. Along with our broader team, we can act as a resource for many other wealth management activities.

We remain committed to you and are here for you to leverage our expertise.

Where Advisors Help

Canadians who work with an advisor have been shown to be more successful at building wealth and achieving their goals.

The support of an advisor can make a difference to the success of an investor, including helping to increase net worth, fostering good saving habits and improved investment habits, as well as achieving personal financial goals.

Building Wealth — Investors who were supported by an advisor were shown to have three times the net worth and four times the investable assets of those who didn’t work with an advisor. In this study, the majority of Canadians had investable assets of under $25,000 at the beginning of the advisory relationship.

Fostering Saving — Saving continues to be one of the cornerstones in investing success. Advised Canadians have been shown to have a greater savings rate than non-advised Canadians. Advisors help investors stay on track by helping investors to save and invest on a regular basis.

Helping to Achieve Financial Goals —Professional advice can help investors to stick to their financial plan, even through the volatile markets. Removing the emotion from investing can play an important role in helping investors stay focused on achieving long-term goals.


To get your portfolio reviewed, contact us today at 204-259-2859

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Asset Allocation is Important

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From an investment perspective, asset allocation deals with the way in which your securities are allocated within broad categories.

It may not just be about equities or bonds. For example, some people may have restricted their investments to include only real estate. They may own rental properties in the U.S., with the hope that the value of the underlying property will rise in price and cover any operating costs to provide a real return over time that can be realized and used during future years for personal purposes.

During the commodity super-cycle that peaked during the first decade of the new millennium, some investors may have focused their purchases on commodities-based investments, with the hope that this tactic would result in a positive return or “outperformance” over time.

Both of these asset classes (and others) have experienced changes over time, which highlights the value of maintaining an appropriate asset allocation within a portfolio.

What is Asset Allocation?

Asset allocation is the manner in which your investments are proportioned within each investment category, such as stocks, bonds, real estate, commodities, cash and other asset classes.
Generally, the goal of asset allocation is to help you plan to meet your financial goals by adjusting and rebalancing your allocations based on a variety of factors, including such things as your age, current financial position, risk tolerance or size of estate. The risk associated with your portfolio should reduce over time as the portfolio reaches its end point.

Determining Your Asset Allocation

The process of defining an appropriate asset allocation will depend on a number of important factors. A general first step should be identifying realistic financial goals and time horizons. These may include education expenses for your children, the purchase of a house, vacation or car expenses, your retirement goals, and others. You will need to understand the timing and the amount of money needed to achieve these goals, as well as your ability to generate the required resources.

Once you have determined your goals, prioritize them according to a time frame. Short-term goals should have less risky investments and longer-term goals can have more risky investments.

Discussing these objectives is important, especially when it comes to your overall wealth management plan. The process may result in the abandonment of some of your current “wants” as being out of reach at the moment and may require you to rethink your priorities.

Changing Your Mix

Once you have your basic investment plan in place, you should try to adhere to it. Be disciplined to ensure that you don’t take unnecessary risks. Don’t be afraid to stick to a plan that has been well-thought out for your circumstances.
However, you should also consider reviewing your asset allocation each year. With the passage of time comes change in the time horizon for each of your investment goals. Longer- term goals now become intermediate or shorter-term goals. As well, different events in your life may also trigger the need for change in your allocation mix, such as marriage, the birth of a child, an inheritance or the death of a spouse.

Seek Expert Advice

Worth repeating: Investors should seek advice about any aspect of the investment process, but particularly about asset allocation. Don’t be afraid to discuss the merits of different asset classes or securities in meeting your own personal investment objectives.

To get your portfolio reviewed, contact us today at 204-259-2859

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