Daily Archives: August 1, 2018

Many don’t believe that life insurance is there to help you out when you least expect it. When you purchase term insurance, the purpose of it is to simply give you peace of mind with the hopes that you’ll never have to make a claim. However, the importance of it really comes through when one of the persons insured passes away prematurely leaving behind their loved ones to deal with the finances and children’s education.

Permanent insurance on the other hand can have multiple purposes because of its unique features. It can be a retirement income fund, estate planning tool, children’s education fund or just simply used as life insurance. Due to its ability of building up a tax-sheltered cash value, you can use it to loan from years down the road when something unexpected happens. This feature is especially useful when you’ve already maximized your Registered Retirement Savings Plan (RRSP) and Tax Free Savings Account (TFSA), looking for another tax-sheltered investment option.

Take the Page’s story for example. They purchased a Whole Life insurance policy when they were in their 20’s not knowing how much it was going to help them in few years when their child was born with spina bifida. Read more about their story and how life insurance helped them.

Disclaimer: While this is a story about an American family the same “Whole Life” policies are available to Canadian families as well.

Chelsey Chartren,
B. Com
Financial Advisor

The McClelland Financial Group
of Assante Capital Management Ltd.

What Cottage Owners May Want to Consider Sooner Rather than Later

The summer is coming to an end quicker than we would like.  And for many, that means closing down the cottage. For myself, and many of my clients, summers at the cottage are a break from the hustle and bustle of “city living”.  Having a place to retreat to in the warm months is just one of the many benefits of having a cottage in the family.

However, with benefits, come challenges as well.  And the most frequent challenge I hear about is what to do with the cottage before death.  Simply put, there is no right answer. Many situations are similar, but all family dynamics are different.  Coming up with a solution that benefits everyone equally is easier said than done.

Without giving specific advice, here are some things to consider when attempting to make this decision:

  • Tax implications
  • Loss of control
  • Exposure to creditors
  • Schedule family meeting

Tax Implications

Obvious issue.  Capital gains can occur upon the sale or change of ownership of a cottage. Depending on the purchase price (plus any improvements) and the fair market value, you could be looking at a significant tax liability.

Loss of Control

Whether planned or not, making one person (or many) joint owners of the property will reduce your ownership stake in the property and possibly any benefits of a sale.

Exposure to Creditors

The cottage now becomes an eligible asset for any of the joint owners’ creditors.

Family Meeting

To avoid issues arising with your heirs after your death (when you cannot explain your reasons), why not have a conversation with them while you still can.

Cottage decisions, especially in a larger family, can be very stressful.  We’ve seen it time and time again where clients avoid the topic because there is no right answer.  Speak with your TMFG advisor today to help lay out a plan or at least start the conversation.

Carlo Cansino,
FMA, FCSI, CFP
Senior Financial Advisor

The McClelland Financial Group
of Assante Capital Management Ltd.

Here’s a great article by James Burton of Wealth Professional magazine I’d like to share with you today:

Fees have hit rock bottom thanks to Fidelity but good advisors will always have the ammunition to prove their value, according to an industry veteran.

The US division of the investment giants this month launched two index-tracking mutual funds at 0% expense ratio, winning the race to the bottom and sending shockwaves through the profession.

Rob McClelland, founder and president of The McClelland Financial Group of Assante Capital Management Ltd, believes a segment of the investor market will be enticed by low fees and the mistaken belief they can do it solo.

“But they are the very person that needs me the most because they are the very person that wants to deviate from the plan,” he said. “It’s like Noah’s Ark, you can’t save everyone.”

Fidelity’s aggressive strategy, said McClelland, is not so much about investors getting something for free but more the firm asset gathering, increasing its ability to attract investors to its whole fund line-up.

No one does anything for free, he said, adding that there are other ways for Fidelity to make money on those funds through cash balances, security lending and trading costs.

Plummeting fees also have a knock-on effect on the industry, with clients now increasingly inclined to question the value of an advisor. McClelland said he is asked more regularly whether he will lower his charges given the extra competition.

He said: “My response is no, we’re increasing our value. We’re making sure we use those funds that we know provide great value for the price they charge and you’ll pay that price. And in terms of what we’re doing, because we’re fee based, we’ll charge what we believe we provide in terms of value.

“It’s always a tough one because the real value that a financial advisor provides you is lumpy. It never happens year by year even though you pay the fee year by year. It happens when you prevent a client from making a 10% or 12% or 20% mistake. That’s where you earn your keep.”

He said: “We go back and say, remember a year and half ago, you were worried about the US, or you wanted to get out of all US equities and we talked you out of it, well here’s why. There is always ammunition you can use to defend your position to why you create the fees you do.

“Everyone thinks that the US and Trump market is going to be poor but that hasn’t worked out, or that bonds are guaranteed to lose money because interest rates are moving up. They haven’t been great but they haven’t lost money.

“So there are always opportunities to explain the value you provide as an advisor, and a big part of what we do is behaviour management.”

View Original Article

Rob McClelland RFP, CFP, HBA
Vice President, Co-Branch Owner,

Senior Financial Planning Advisor

The McClelland Financial Group
of Assante Capital Management Ltd.

Here’s a great article by James Burton of Wealth Professional magazine I’d like to share with you today:

Fees have hit rock bottom thanks to Fidelity but good advisors will always have the ammunition to prove their value, according to an industry veteran.

The US division of the investment giants this month launched two index-tracking mutual funds at 0% expense ratio, winning the race to the bottom and sending shockwaves through the profession.