FORUM Magazine - May 2023

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The Magazine of Influence for Financial Advisors

Stepping

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Meet the next generation of advisors

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FORUM

VOLUME 53, 1 | MAY 2023 | ISSN 1493-826X

FEATURES

12

Clear Skies Ahead

These young financial advisors are earning their clients’ confidence and navigating toward success, finds Kira Vermond

DEPARTMENTS

COLUMNS

6 EDITOR’S JOURNAL

24 TAX UPFRONT

9 OPENERS

Supporting gender transitions in policy documentation; should EI change prompt benefits plan adjustments?; engage with video

31 ADVOCIS NEWS

Association updates and events

35 THE FINAL WORD We Are Listening

BY GREG POLLOCK

20

Who Comes Next?

Making the most of new and old registered plans

BY JAMIE GOLOMBEK

If you’re like most advisors and don’t have a succession plan, Todd Fithian shares strategies to get started

25 ESTATE DILEMMAS

A cautionary tale for Holdco/Opco structures

BY KEVIN WARK

28 CORPORATE INSURANCE

Lessons from Simpson v. Zaste

BY GLENN STEPHENS

29 STRATEGIC PHILANTHROPY

Find Accidental Philanthropists in your practice

TM

BY MARK HALPERN

30 LEADERSHIP & GROWTH Break the rules to develop great teams

BY JONATHAN SCHJOT T

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4 FORUM MAY 2023

22

Protecting Privacy

Michael Callahan explores common situations that may breach client confidentiality

COVER PHOTO: ISTOCKPHOTO

How 20-somethings approach financial planning

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EDITOR’S JOURNAL

BY ALISON MACALPINE

PUBLISHER: Peter Wilmshurst advocisforum@gmail.com

Young, Then and Now

EDITOR: Alison MacAlpine alison@amcommunications.ca COPY EDITOR AND PROOFREADER: Alex Mlynek ART DIRECTOR: Giselle Sabatini gisellesabatini@rogers.com ADVERTISING: Peter Wilmshurst advocisforum@gmail.com Tel: 416-766-4273 Fax: 416-760-8797 TFAAC BOARD OF DIRECTORS CHAIR Catherine Wood, CFP, CLU, CHS

I

’m Gen X, so when I was in my 20s the investing landscape was very different (my husband quips that we had RoboCop, not robo-advisors), but what I thought would be the same is the trepidation I felt about approaching a financial advisor with just a few thousand dollars in savings. Many years later, it’s the younger Millennials and the older Gen Zs who are in their 20s. It turns out they aren’t nearly as shy about asking for financial advice — and that’s serving them well.

In fact, a higher percentage of Millennials work with a professional financial advisor than either Gen Xs or Baby Boomers, according to a 2022 U.S. study by Natixis Investment Managers. Working with an advisor is going nicely for them, too, with 92% saying they trust their advisor. Interestingly, 46% do not trust artificial intelligence or algorithms. That might explain why just 5% use an automated advisor without a human advisor to go along with it.

Meanwhile, many Gen Zs (33%) are still leaning on guidance from financial influencers and social media when making investment decisions, according to a 2022 BMO survey, but they’ve also got some excellent financial habits. Based on their experiences during the pandemic, 98% of Gen Zs are “actively making plans to strengthen their financial resilience,” reports a 2021 Canadian Bankers Association survey, which also found Gen Zs saving an average of 9% of their income.

Be welcoming when these young adults come knocking, because among them may be tomorrow’s top clients. Of course, you may have Millennials and Gen Zs on your side of the door, too — and the cover story on page 12 explores some of their tales.

Kira Vermond reached out to early-career advisors to find out how they started and where they’re headed, and what shines 6 FORUM MAY 2023

FORUM

VICE CHAIR Eric Lidemark, CFP, CLU, CH.F.C., CHS PAST CHAIR Rob Eby, CFP, RRC SECRETARY Stephen MacEachern, CFP, CLU, CH.F.C., CHS TREASURER John W. Hamilton, CLU, FEA, CPCA CHAIR, INSTITUTE Ejaz Nadeem, CFP, CLU CHAIR, CLC Will Britton, CFP

through is their passion, ambition, and dedication to helping clients achieve financial goals.

It’s a good thing they’re out there, too, because the average age of financial advisors across Canada is 49.6, according to Investment Executive’s 2022 Advisors’ Report Card. That’s down ever so slightly from the previous year’s 50.1, but still means a lot of advisor retirements are looming. On page 20, Todd Fithian looks at advisor succession planning, essential to smooth the transition to the new generation of advisors. As he points out, most advisors don’t have a plan to transition their practice at retirement — but he shares tips on where to start.

In this issue, you’ll also find Michael Callahan’s exploration of privacy and client confidentiality on page 22, and we’re very pleased to welcome Mark Halpern as a columnist with the first in his regular series about strategic philanthropy on page 29.

***

On a sad note, one of FORUM’s regular contributors, Susan Yellin, passed away on January 12, 2023. I had the privilege of working with her on the December 2022 issue, for which she wrote the cover story, the Symposium feature, and several pieces for the Openers. Her experience and professionalism will be missed by all of us on the FORUM team.

DIRECTOR AT LARGE Wendy Playfair, CFP, CLU, CHS DIRECTOR AT LARGE Arun Channan, MASc, MBA, CSP, CFP DIRECTOR AT LARGE Kelly Gustafson PUBLIC DIRECTOR Sara Gelgor, LLB, LLM, MBA, ICD.D PRESIDENT & CEO Greg Pollock, CFP FORUM is published three times annually

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FORUM EDITORIAL ADVISORY BOARD LEONY DEGRAAF HASTINGS, CFP, EPC deGraaf Financial Strategies NICHOLAS LANDRY, CEBS, CHS, RCIS BFL Canada - CSI IZUMI MIKI-MCGRUER, CFP, CLU, CH.F.C., CHS Freedom 55 Financial MICHAEL SUSKA, CFP, CHS Helkie Financial & Insurance Services Inc.

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OPENERS Fodder for the Water Cooler SUPPORTING GENDER TRANSITIONS IN POLICY DOCUMENTATION

R

ecently, the grandchild of one of Certified Financial Planner Léony deGraaf Hastings’s clients transitioned from identifying as male to identifying as female. Since the grandchild was a beneficiary on her client’s life insurance policy, deGraaf Hastings, of deGraaf Financial Strategies, inquired with the insurance company, Empire Life, about how to handle this change.

“Since my client is still able to update her beneficiary designations, it was recommended that she simply sign a new beneficiary designation form, and where it asked for the ‘relation,’ she could update it from her grandson to her granddaughter, or she could update it to ‘grandchild,’” she explains. “If she did not have the capacity to make this update, at the time of claim the beneficiary may be asked to provide ID.” More generally, Empire Life director of communication services

SHOULD EI CHANGE PROMPT BENEFITS PLAN ADJUSTMENTS?

PHOTO: ISTOCKPHOTO

E

ffective December 18, 2022, the federal government extended employment insurance (EI) sickness benefits to 26 weeks from 15 weeks. Clients who are plan sponsors may be considering adjusting their benefits plans to take advantage of this change if they have a long-term disability (LTD) elimination period shorter than 26 weeks.

That’s not necessarily the best move, says Nicholas Landry, senior benefits consultant with BFL Canada.

“EI is a rather limited benefit.

Employers that understand the balance of protection and employee responsi-

Karen Smith says it’s straightforward to change a gender and/or a name with a written request and a legal document that supports the request.

The company provides a confirmation notification to clients and asks them to keep that with their policy contract.

Canadian Life and Health Insurance Association (CLHIA) assistant vice-president of strategic communications and public affairs Kevin Dorse adds that while there is no standard approach across the industry, some insurers have updated their forms and applications to include a category other than male or female — generally, adding “non-binary” or “other.”

“The life and health insurance industry is very sensitive to the concerns individuals have with being able to define the gender they identify by when they are applying for life and health insurance, or in any other interaction with their insurer,” Dorse says.

“Our members respect the rights of people who are transgender and non-binary and are always making efforts to accommodate how individuals wish to identify.” – Alison MacAlpine

bilities generally don’t want to change their long-term disability elimination period. As an employee, if you are entitled to some form of compensation, they would prefer that you are able to access benefits as soon as possible,” he says.

One downside to lengthening the LTD elimination period is that employees won’t have access to early intervention and case management that has the potential to shorten the time they spend receiving LTD benefits.

That said, when the LTD elimination period starts before 26 weeks, there could now be overlap with EI and this may mean employees have to return some of their EI benefits.

Importantly, that’s not the case when employees close their EI claim as soon as they get approval for LTD — so there’s an easy remedy.

More of a case can be made for adjusting short-term disability plans that have an EI carve-out provision.

These plans pay benefits early in an absence and then again after EI payments stop. That second stage may now overlap with the longer duration of the EI sickness benefit. As with LTD, the problem with overlapping benefits is that employees may have to pay back some EI benefits.

Whether plan sponsors opt to adjust their plans or not, Landry says the EI change gives advisors an opportunity to share an important message with business owner clients: “Make sure you’re reviewing your benefits plan regularly, and that what you have is aligned with your total compensation strategy and your risk sharing strategy with employees.” – AM

MAY 2023 FORUM 9

OPENERS BRANDING & SOCIAL MEDIA

BY ERIN BURY

ENGAGE WITH VIDEO

I

n 2023, video is king when it comes to social media content. And, for financial advisors, video can be a crucial tool in your marketing toolkit, helping you attract new clients, build thought leadership and trust, and keep existing clients educated about a fast-changing landscape. But with so many platforms and options to leverage video, just thinking about where to start can be overwhelming. Here are tips and tricks for integrating video into your social media and marketing strategies.

VIDEO CATERS TO CLIENTS WHO PREFER TO WATCH, NOT READ

As a former journalist, my preferred communication method is the written word, which is why I love contributing articles about estate planning to publications across Canada. But not everyone wants to read an 800-word article. As our attention spans get shorter, sometimes digesting a two-minute video is preferable. The key is to give clients choice. Maybe you have email newsletters and blog posts, complemented by a video summary embedded in both places. It’s not about choosing one lane or the other. For example, personal finance expert Jessica Moorhouse has a YouTube channel with more than 18,000 subscribers where she shares bite-sized videos on investing and estate planning — but she also has a blog where you can read articles if that’s your preference.

CHOOSE A MEDIUM THAT MATCHES YOUR PERSONAL STYLE

I love following personal finance experts like Alyssa Davies (@mixedupmoney) on TikTok because she really gets that channel and the type of content that does well there — engaging, casual, and current. If you’ve never opened the TikTok app, then don’t force yourself to create content for a channel you’re not comfortable with and an audience you may not resonate with. Focus on developing video content for channels you already spend time on. For example, maybe that means creating YouTube content to embed in your existing marketing campaigns or in Instagram Stories. This doesn’t mean you should ignore new apps when they come out. I experimented with leveraging TikTok to educate Canadians about estate planning and found I had great traction within a couple of weeks. However, it was time-consuming, and I know that “TikTok creator” is not in my future. So, instead, I’ve focused on webinars for our customers and partners, as well as YouTube videos that augment our internal education centre. Lean into your strengths, but make sure you’re learning about new platforms to stay current.

10 FORUM MAY 2023

EMBRACE LIVE VIDEO TO CAPITALIZE ON TODAY’S NEWS

A great video can take months to go live — from concepting, to mapping out key points, to filming and editing, to marketing the final product. But not every video has to be perfectly pre-planned. Video is an amazing way to provide education on topics you know clients are worried about today. For example, you could host a live client Q&A where you hop on Zoom and answer questions about mortgage rate hikes, or you could go live on Instagram or TikTok to field questions and share your thoughts on what inflation means for the average Canadian. These live videos don’t need to be as polished as pre-planned content. They’re more about filling the knowledge gap now. A great example is personal finance expert Bridget Casey (@bridgiecasey), who holds Instagram Live Q&A sessions every Wednesday to answer common questions from viewers. These sessions are unscripted and conversational, and help her audience build a relationship with her over time.

GO OFF SCRIPT TO SHOWCASE YOUR PERSONALITY AND EXPERTISE

The most valuable thing you have with clients is your relationship, which you’ve built over time. But how do you showcase your personality and your style to someone who’s never talked to you live? Video is really the key. This could be an unplanned reaction video on Instagram Live when the Bank of Canada makes an interest rate decision and your clients want to know how it will affect them. Or it could be a planned video series on a topic such as mortgages that breaks down the key elements into several YouTube videos.

Regardless of the format you choose, avoid the tendency to read off a script. Video needs to showcase your personality, not make you look like a robot. Map out your key talking points in advance, and do a few practice takes to get comfortable with the content. Ultimately, keeping it structured but unscripted will ensure your personality shines through.

THREE FINAL TIPS FOR VIDEOS

1. Ensure your videos look professional. Invest in a ring light, use a professional and engaging background, and ensure you have an editor who can add intro and outro graphics and music where appropriate.

2. Include captions in your videos. Many people like to watch videos with the sound off, and this also caters to any viewers with accessibility issues.

3. Keep your videos short. Unless you’re building an educational series with purposefully long-form content, try to keep pre-recorded videos to a maximum of a few minutes.

ERIN BURY is the CEO at Willful.co, a platform that provides an affordable, convenient, and easy way for Canadians to make a will online. Willful works with financial planners across Canada to help their clients get a solid estate plan in place.

DID YOU KNOW? When asked about their biggest financial regrets, just 3% of Canadians wished they had sought advice from a financial professional — yet those who used a financial professional were more likely to have no financial regrets. It would seem there’s still room for improvement in communicating the value of financial advice.

BIGGEST FINANCIAL REGRET Invest more/earlier/more wisely

20%

Save more money/start saving earlier

19% 13%

Spend less Should have obtained a better job/ better-paying job

8%

Should have bought a house/ condo/property Should have acquired a better education

PHOTO: ISTOCKPHOTO

Get advice from a financial professional

I don’t know

8%

99% said AI has a part to play

7%

98% said AI is transforming the creation,

delivery, and consumption of advice

3% 18%

Nothing/don't have any regrets

4%

SOURCE: FP CANADA, 2022 FINANCIAL STRESS INDEX

How big a role will artificial intelligence (AI) play in the future of financial advice? When Accenture surveyed 500 North American financial advisors in 2022:

83% said AI will affect the client-advisor

relationship in a direct, measurable, and consistent way within the next 18 months

SOURCE: ACCENTURE, AI IN WEALTH MANAGEMENT: A FINANCIAL ADVISOR STORY

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COVER STORY

Clear Skies Ahead

12 FORUM MAY 2023

These young financial advisors are earning their clients’ confidence and navigating toward success, finds Kira Vermond

W

hen Emma Lang envisions her future career as an advisor, she sees it taking off.

Literally.

Lang scored her private pilot’s licence back when she was 17 and looks forward to a day when she’ll fly her family’s float plane to visit clients in the northern Ontario regions near her hometown of Vermilion Bay, Ont. Oh, and she completed her Canadian Investment Funds Course back in high school, too, before going on to take the Life Licence Qualification Program (LLQP) and joining Freedom 55 Financial at age 18. She’s since earned her Certified Financial Planner (CFP) designation, making her one of the youngest holders in Canada.

At a time when many of her peers are launching careers weighted down with a mountain of student debt, Lang, now 23, is an associate advisor with Branstone Financial Strategies working alongside her mother, Debbie Lang, CFP. Watching her mother work solidified her own career goals.

“I saw the book that my mother built for herself from scratch, and I thought that was very inspirational,” she says.

Emma Lang, 23

MAY 2023 FORUM 13

COVER STORY Lang is just one of the young advisors changing the face of the industry in Canada. Forget status quo and doing things one way because they’ve always been done that way. Today’s upstarts are building success their way while encountering the typical challenges of those new to the industry: finding clients and gaining their trust. No small feat when you look young enough to be their son, daughter, or even grandchild.

THE TRANSFORMATIONAL GENERATION For Sanjay Gupta, though, youth is a superpower.

The veteran Professional Financial Advisor (PFA) says he’s brought on about a dozen young people in their 20s and early 30s to work at Mode Money Managers Inc. in Surrey, B.C., calling them the “transformational generation” — those who arrived with a tablet or smartphone in hand and will embody the industry’s future as young clients age, too.

“The beauty is that they have excessive energy levels,” he says, laughing. “They never get tired! You talk about a lower backache, and they don’t know what that is.”

Jashanpreet Kaur, 22, is one of his newer hires.

Coming to Canada from India a couple of years ago as an international student, she earned her diploma in business administration with a focus on accounting.

“It was always a dream of mine to advise people,” she explains on a Zoom call alongside Gupta. “I see many people who dream about doing something, but do nothing to pursue it. They spend their money on things they do not need. I chose this career to advise people to pursue their dreams.”

Jashanpreet Kaur, 22 Kaur says she’s already had a taste of what it’s like to see a client follow her advice and come away better for it. She recently helped a woman buy a protection plan for her mother who was visiting Canada. Not long after, the Halpern give a business talk at a Jewish youth event, something mother fell, fractured her leg, and required medical treatment. clicked. Halpern didn’t speak about the usual: goals, dedication, and drive. He discussed how work and family intersected.

Not only was she covered, but she was seen without delay. Both “The way he was talking about having a family, I was like, women were so thankful.

“I’ve learned that when you have a good relationship with ‘Wow. Hold on. This is like a whole different perspective on life people, you can help them with everything,” Kaur says. here,’” says Wexler.

Wexler thought he wanted to be a doctor to help people. But Halpern later brought up a point he hadn’t thought of.

“He says, ‘Well, you might have missed a crucial thing. As a doctor you can only help and build relationships with people Relationships are at the heart of how Zakary Wexler, 27, if they’re sick. Whereas I get to build relationships with people conducts business, too — starting with the relationship he’s while they’re alive and well, and everything’s exciting — and forged with his boss, Mark Halpern, founder and president of we get to grow with them through different life events,’” Wexler WEALTHinsurance.com in Toronto. remembers.

Back in 2018, Wexler was a kinesiology student planning to He changed course, despite all the people telling him he was go on to medical school and become a doctor. But when he heard in for a challenging time.

MAC AND CHEESE TO MASERATI

14 FORUM MAY 2023

“What I would tell new advisors is don’t try to pinch someone for a few dollars and sneak in a few extra things.

I really try to hammer that kind of honesty.

Yeah, you might forfeit a few dollars, but you’ll go to bed every night knowing you did right by the people you’re working for.”

— Zakary Wexler

Zakary Wexler, 27

The initial years were challenging, but it was the right decision.

Wexler quickly worked his way up, moving to accounts of $2 million from accounts of $20,000. Today, he proudly displays photos of his wife and newborn son alongside his Master of Financial Advising and Philanthropy certificate in his office.

And he’s changing lives. One man he helped was nervous leading up to retirement. He assumed he’d have to pinch pennies and eat mac and cheese to get by. But when Wexler ran the numbers, the reality was quite different. Between his properties, RRSP, and pensions, he would still have half a million dollars at 90.

“So you’re saying I can technically buy a Maserati?” the man asked him, floored.

“I just watched this weight fall off his shoulders,” says Wexler.

“He was over the moon.”

Wexler later heard through the grapevine the man became a whole new person. He planned vacations and embraced living.

It’s a great story and shows how Wexler is truly helping people, no stethoscope required.

“Right? From mac and cheese to a Maserati,” Wexler says now.

“It makes a good life.”

CLIENTS SEE PAST AGE DIFFERENCE Alysha To, 30, started in the investment industry when she was 19 years old.

To was working multiple part-time jobs at the time so she could pay for her own schooling. “Discovered” by a fixed-income trader while working a restaurant shift, she began her career in financial services as a part-time administrative assistant at a small independent brokerage firm. At the time, she had no clear career path in mind.

Continued on page 18 MAY 2023 FORUM 15

HERE’S TO TWO INSURANCE GUYS WHO BROKERED NEW GROUND Jim Burton

John McKay

One tough act to follow, Jim Burton leaves a legacy as the leading force at PPI ever since he founded Prairie Pacific Insurance back in 1978. Under his direction, we’ve successfully brokered new ground in all aspects of life insurance, particularly in its design and custom application. Hailed as a pioneer, Jim raised the standards for Advisors across the entire industry. He founded the Conference for Advanced Life Underwriting (CALU), serving as Chairman until 1994 and as honorary board member ever since. In 1990 Jim joint-ventured to form the Prudential of America Life Insurance Company (Canada) and served as Vice Chairman.

Jim’s flair for getting the big things done extends far beyond PPI. He helped found and later chair Family Enterprise Canada, a national organization for business families and their professional Advisors.

In 2018, he formed the James A. Burton and Family Foundation to create a multi-generational legacy of philanthropy, to work with his children and be actively engaged in community.

Over the course of a nearly 50-year career in the insurance industry, John McKay has seen and done it all. Revered for his prowess as a math whiz, John is a highly respected actuary who led the design and pricing of a wide range of innovative insurance products. Graduating from Dalhousie University with his B.Sc. in Mathematics, John started out as an actuary in 1974. He earned his Fellowship in the Canadian Institute of Actuaries (FCIA) while holding membership in its US counterpart. He held senior roles in product development with national insurance companies before joining PPI in 1984. He served on taxation committees for the Canadian Life and Health Insurance Association (CLHIA) and the Conference for Advanced Life Underwriting (CALU). John also took on a greater industry leadership role, lending his expertise and credibility to help effect positive change in the tax rules to benefit all Canadians.

THANKS FOR SHOWING ALL OF US WHAT IT MEANS TO LEAD It’s never easy when two such dynamic leaders make the decision to retire.

They truly made PPI what it is today. Fortunately for us, both Jim Burton and John McKay leveraged the power of foresight throughout their entire careers – and this moment is no exception. They long planned for this succession to ensure a seamless transition and prepare the next generation leadership team to take us forward.

Our senior team brings more than 150 combined years of experience at PPI and beyond to our business and strategic planning. We strongly believe in the essential value of independent Advisors and the value of the insurance solutions you deliver to further the goals of your clients. Working together with our friendly team of over 350 professionals, we’ll do everything possible to open new markets and enable your practice to prosper and thrive.

Meet some of the PPI leadership team (from left): Jim Virtue, Executive Chairman and CEO, Keith Newhook, SVP, Sales, Cathy Hiscott, President, Barbara Elder, EVP and COO, and Anne Topping, SVP Advisory.

For whatever the future might bring, our entire team at PPI stands ready to serve the interests of independent Advisors. Depend on us to follow in Jim and John’s footsteps and lead by example, all the while staying true to PPI’s core beliefs. We can’t wait to show how it can work for you.

Contact us at PPI to learn more about everything we can do to help you elevate your practice. www.ppi.ca

Unparalleled resources. At your command.

COVER STORY “Develop your communication skills. You’ll need to be able to effectively communicate complex financial concepts to clients, and that will help with credibility when you’re so young.”

— Alysha To Alysha To, 30

Continued from page 15 Fast forward 11 years. To is now a family enterprise advisor specializing in holistic tax and estate planning at Richardson Wealth in Vancouver, B.C. She’s worked hard to get there. To remembers the early days of her career arriving at 5 a.m. before markets opened and volunteering extra hours.

As a young advisor with a focus in estate planning, she works with a lot of older clients. Recently, she helped a 65-year-old woman gain her financial footing again after a disastrous divorce settlement.

“Clients are able to see past the age difference if you have confidence in the advice you give and you know what you’re talking about,” she explains.

Jenna Wilmot-Anderson, 27

READY TO TAKE OFF Jenna Wilmot-Anderson, 27, a financial advisor with Wilmot Financial Insurance & Investments in Fergus, Ont., says she’s excited to start serving clients. She passed the LLQP exam in December 2022 and, with her newly minted government-issued licence in hand, is ready to get to work. She already has a few potential clients lined up.

“I kind of feel like one of those toy cars you rev backwards and when you let go it just takes off!” she says.

This is career number two. With a university background in health administration and human resources, she worked for a retirement home for a couple of years. But by 2021, she was ready to leave. For the first time ever, she hated her job.

Fortunately, her parents, Del and Suzanne Wilmot, had an idea. With 30 years in the industry, they persuaded her to try working for the family business. At first she wasn’t convinced, but eventually she decided to give it a try. It turned out that many of her skills from health care were transferable. For example, products enabling home care can make a huge difference for elderly clients and their families.

“I’m able to pursue my passion for geriatrics through financial advising, so that’s been really awesome,” she says. “I’m incredibly excited to be in this industry!”

Lang at Branstone has learned plenty by working alongside family, too. She and her mother often spend 16-hour days together as they drive to Red Lake, Dryden, Kenora, and Fort Frances for in-person meetings. But every bit of experience helps her gain confidence and respect.

“I’ve been doing this for six years now, and I’ve changed [clients’] opinion of young advisors in the business,” she says.

“Clients really know I’m here to stay.”

KIRA VERMOND is a writer and editor based in Guelph, Ont.

18 FORUM MAY 2023

CHS DESIGNATES

www.iafe.ca

By obtaining the CHS designation, you have demonstrated a significant commitment to your career and your clients.

Adriano Beghin, CLU, CHS Pankaj Bhatia, PFA , CHS Nannette V. Britanico, CLU, CHS Shelley R. Chanut, CHS Tyler Clark, CHS Delicia B. Drever, CHS Sam Dutta, CLU, CHS Katherine F. Ellis, CHS Dongwen Huang, CLU, CHS Muhammad Arshad Hussain, CLU, CHS Sarah Jarjour, CHS Li Jiang, CLU, CHS Laeya Sooyeon Kim, CHS Frances F. Kwok, CLU, CHS Mark T. Livingstone, CHS Tyler Allan Martin, CFP, CHS Yinghui Meng, CLU, CHS Anitab W H Mok, CHS Boopathy Padmanaban, CLU, CHS Lianne Y. Pereux, CLU, CHS, BSW

Adam Daniel Peros, CHS Michael Radakovic, CHS, BSc. Nalini Rajendram, CLU, CHS Joel Robertson, CHS Sarah Robertson, CHS Paula Rooney Keane, CHS Oliver Ruivo, CFP, CLU, CHS Matthew S. Ryper, CHS Yin Shen, CLU, CHS Yin Shen, CLU, CHS Andrew H. Sheppard, CFP, CLU, CHS Zachary A. Sikorski, CHS Scott A. Skjei, CFP, CHS Luke J. Steeden, CHS James Francis Stewart, CHS Tatyana Subbotina, CLU, CHS Naz Sukhram, CLU, CHS, CEA Nicholas B. Thompson, CHS FenFang Tong, CLU, CHS Travis Blake Witt, CLU, CHS Ya Nan Ruby Zhang, CHS

The Institute CHS

AWARD 2022 SPECIAL CONGRATULATIONS TO

SARAH JARJOUR CHS ON ACHIEVING THE 2022 CHS AWARD FOR THE HIGHEST MARK IN THE ADVOCIS CHS EDUCATION PROGRAM.

The Institute for Advanced Financial Education (The Institute) is the leading designation body in Canada for financial services practitioners in the specialty areas of Advanced Estate and Weatlh Transfer, and Living Benefits. The Institute provides a platform of standards and advanced knowledge through designation programs and accreditation services. The Institute for Advanced Financial Education (The Institute), CLU® and CH.F.C.® are trademarks of The Financial Advisors Association of Canada (TFAAC). The Institute is a wholly owned subsidiary of Advocis®. Copyright © 2019 TFAAC. All rights reserved. Unauthorized reproduction of any images or content without permission is prohibited.

PRACTICE MANAGEMENT

Who Comes

Next?

If you’re like most advisors and don’t have a succession plan, Todd Fithian shares strategies to get started

F

inancial advisors often help clients build retirement and succession plans, but don’t have a plan for their own succession. In fact, according to research conducted by the Financial Planning Association in 2018, just 27% of financial advisors have a plan for transitioning their practice when they retire.1

WHY IT’S IMPORTANT

For retirement and in the event of unexpected illness or departure, it’s essential to have a plan in place to ensure business continuity for four main reasons.

1. It Ensures That Clients Receive Uninterrupted Service

This is critical to maintain trust and loyalty among clients, who rely on you for your advice and guidance. If you’re on the back half of your career, it’s only a matter of time before clients start wondering, “What happens to us if something happens to you?” It’s essential to get ahead of this question and share your plan to maintain sound relationships.

A well-designed succession plan helps preserve the value of the enterprise you’ve worked to build and ensure it continues to thrive beyond the departure of its founder or key team members. This can be particularly important for smaller firms or those with a strong personal brand.

1 2

www.financialplanningassociation.org/sites/default/files/2020-05/The-Succession-Challenge-2018-White-Paper-sm.pdf www.advisorsmagazine.com/trending/23521-aging-advisor-workforce-highlights-need-for-succession-plans

20 FORUM MAY 2023

PHOTO: ADOBE STOCK

2. It’s Important for the Long-Term Viability of the Firm

3. It Can Help to Ease the Transition Process for Clients, Staff, and Successors

By offering transparency and creating a roadmap for the future of the firm, succession planning can help minimize disruption and uncertainty.

4. It Allows You to Maximize the Value of Your Business

As a for-profit entity, you owe it to yourself to make the most of everything you’ve created. Your business is an important retirement asset, and perhaps even a legacy asset, so it’s crucial to put the proper people, process, and systems in place to enhance value.

WHERE TO START

A comprehensive succession plan requires many detailed steps, but here are six to get you on the right track.

1. Start Early

Ideally, succession planning should begin several years before you plan to exit the firm. There are many decisions to make that will affect your firm’s value, client relationships, staff job security, and your lifestyle. Beginning the process well in advance will give you time to identify potential successors, train them, and prepare them for leadership roles within the firm. It will also make it more likely you’ll achieve your goals.

2. Define Your Vision

You can’t hit a target you can’t see. When you’re clear on your vision and goals, your brain starts to know what to look for and finds resources all over the place to help. Most advisors we work with haven’t sat down to think about the desired future state of their business or their personal life. Take some time to consider and document what really matters to you.

These questions can help you get started on defining your vision: • Do you have a sense of what you want the future to look like for your business? What’s happening? What kinds of clients? What kind of team? What kind of experience or impact?

• How would you know if you created a successful business?

• If you were guaranteed to succeed at building the business you really want for the future, what would you do?

• What are five things about your business that you want to be proud of in the future?

• What is it that you want the business to have, be, and do?

• What will be happening in the business in 10 years?

What won’t be happening?

Review your answers and consider this: is this really what you want? You’re going to pay for it in time, money, attention, relationships, and energy. You’re going to trade whatever future you’re pointed toward for the future you’re mapping out, so take the time to get really clear about what it is you want to achieve.

3. Emphasize Repeatability

“Again” is the shortcut to excellence. Have you ever been accused of stopping something that worked? Are you guilty of saying, “this client is different, an exception”? Repeatability is key to growth and creates operational efficiencies for your business.

Without processes, you can’t measure results or know what needs to evolve. You need to systematize how you meet, engage, onboard, and secure clients for generations. Successors will want to see if your firm’s processes are consistent, streamlined, documented, and scalable. Too often firms build their business around a lead advisor’s ability to engage clients, without standardizing that proven process. Take time to document the most common repeatable actions in your business.

4. Identify and Develop Potential Successors

Identifying potential successors can be challenging, especially for smaller firms. Aside from technical skills, look for someone with leadership potential and a cultural fit with the firm and your clients. Once you’ve identified potential successors, focus on developing their skills and provide them with opportunities and a clear path to succession.

Here’s why this is so critical: according to Cerulli Associates, about 10% of wealth managers are under age 35, while the average age of wealth advisors is 51. Furthermore, 38% of advisors expect to retire within the next 10 years.2 We see this gap as a significant challenge. We encounter situations all the time in which future successors are doing side-by-side comparisons to evaluate firms they want to join for succession purposes. Who has the upper hand?

While some firms have potential successors on site, in many cases it’s necessary to look outside the firm. Consider options such as mergers, acquisitions, or partnerships with other firms to help identify and create potential successors.

5. Communicate with Clients and Staff

Communication is key when it comes to succession planning.

Discuss your plans with clients and staff well ahead of any changes. Happy clients mean long-term revenue and an overall healthy business for future successors, and that requires trust, transparency, and effective communication. Keeping staff in the loop ensures that everyone is on the same page and working toward a common goal.

6. Update Your Plan Regularly

As you’re already aware from the work you do with your clients, succession planning is not a one-time event. Regularly reviewing and updating your plan so that it remains relevant and effective will help ensure your firm is well positioned for the future.

Succession planning is not only about you and your future.

It’s also about designing a future that will capture what matters most to you and seeing it continue forward in time. It’s about making an impact beyond you.

TODD FITHIAN is the co-founder and managing partner of The Legacy Companies, which help advisors grow their businesses. He can be reached at todd@think-legacy.com. Advocis and The Legacy Companies have formed a partnership to bring Legacy’s courses to Advocis members.

MAY 2023 FORUM 21

COMPLIANCE

Protecting

PRIVACY C

onsider the sheer volume of sensitive information advisors typically have on their clients — social insurance number, date of birth, photocopy of driver’s licence or similar identification, notice of assessment, age, home address, marital status, and more. This is a treasure trove for online hackers and fraudsters. What are the requirements to keep an advisory practice in compliance with privacy rules? And how can advisors navigate

22 FORUM MAY 2023

common scenarios without causing a breach?

Many regulatory and accreditation bodies within the financial services industry have guidelines pertaining to client confidentiality. Advocis’s Code of Professional Conduct, which governs all Advocis members, states that “an Advocis Member shall respect and protect the privacy of others and the confidentiality of client information.”

Beyond the industry, advisors are already familiar with the federal govern-

ment’s Personal Information Protection and Electronic Documents Act (PIPEDA), which outlines how organizations, including financial advisory practices, may collect and use personal information in the course of conducting business.

Now, there’s new federal legislation coming. PIPEDA is about to be superseded by Bill C-27: The Digital Charter Implementation Act. “Major changes to Canada’s privacy laws are on their way,” says John Waldron, founder of Learnedly and industry

PHOTO: ISTOCKPHOTO

Michael Callahan explores common situations that may breach client confidentiality

speaker on advisor-related compliance issues such as privacy regulations, cybersecurity, and topics related to clientfocused reforms. “Bill C-27 introduce[s] new frameworks for protecting personal information, including new rules for developing and deploying artificial intelligence.”

Waldron says advisors need to tread carefully in many situations to protect clients’ privacy and confidentiality.

For example, they need to be cautious when disclosing information to a client’s trusted contact person (TCP) and ensure they’re following the rules in the fine print of the client agreement.

They must also be extremely careful when sharing client information with third-party service providers.

“Data breaches and identity theft are a constant threat, and the safety of client information is only as good as those who protect it. Before you share information with a third-party service provider, don’t be afraid to ask for their security and privacy policies, compliance certifications, and incident response plan,” says Waldron. “Identity theft in particular has risen sharply in Canada in recent years.”

THREE EVERYDAY SCENARIOS Advocis asked Kelly Gustafson and Brandon Chapman to share their thoughts on how advisors can protect themselves and their clients when they encounter three common scenarios.

Gustafson is a financial advisor technology consultant in Calgary. Chapman is a principal with SaaS Wealth Insurance in Vancouver. Both are founding members of the Advocis Technology & Innovation Committee.

SCENARIO 1: WORKING OFF SITE Leila is an investment advisor who works primarily from her home office. She often goes to a local coffee shop on her lunch break. On this occasion, she brings her laptop with her so she can continue working on a client’s financial plan at

the coffee shop. Has Leila done anything wrong?

“Yes, there are potential risks of privacy breach in this scenario, as both the digital space and the physical space need to be considered. For example, can anyone see any of the personally identifying information in a notebook, client file, or on a device screen? The proximity to others may result in a potential privacy breach,” says Gustafson.

Chapman adds, “Leila should avoid using public Wi-Fi for client work, as hackers can easily intercept sensitive financial information for identity theft, fraud, or other malicious purposes.

Instead, Leila should use a secure and private network connection, such as a Virtual Private Network or a mobile hotspot. She should ensure that her laptop’s operating system and security software are up to date and use multifactor authentication to protect her clients’ information.”

SCENARIO 2: SPOUSAL CONFIDENTIALITY Johann is a financial advisor with clients who are husband and wife. The spouses typically meet with Johann together, but today only the wife is present. Johann mentions several items related to the husband’s finances in this meeting. Has Johann done anything wrong?

“Johann has potentially breached client confidentiality by discussing the husband’s financial information in the absence of the husband, and this could lead to both reputational damage and legal liability for Johann and the financial institution,” says Chapman. “It comes down to consent, and Johann must obtain the husband’s consent before sharing any information.”

From Gustafson’s perspective, “Advisors must still be careful not to presume they have consent to disclose confidential information about one spouse to the other. Even between spouses or other family members, advisors must obtain explicit consent before sharing any information about one client to another. Communicating with the husband ahead of time and obtaining

consent in writing will help insulate Johann from a potential breach.”

SCENARIO 3: PERSONAL EMAIL SECURITY Siena is a life insurance advisor who sent herself an email from her work account to her personal account so she could work on a client’s life insurance proposal at home later that evening. The email contained the client’s personal information and account statements. Has Siena done anything wrong?

According to Gustafson, “Siena has put her client’s personal information at risk by sending it via email to a personal device. Even if you encrypt your email as a sender, the same encryption protocols must be followed on the other end.

In this case, she is creating additional opportunities for a privacy breach, as both the body of the email and attachments pose a potential risk.”

“Siena should avoid sending sensitive client information to her personal email account due to the high risk of email-related cyberattacks, such as phishing and hacking,” adds Chapman.

“Cybercriminals often target personal email accounts because they are generally less secure than work email accounts. Instead, Siena should only use her secure work email, and should limit access to authorized recipients.”

HANDLE CLIENT INFORMATION WITH EXTREME CAUTION The bottom line is that inadequate awareness of confidentiality obligations can compromise clients’ privacy and have significant consequences for advisors, including financial penalties, disciplinary action, and reputational damage. Protect yourself and your clients by keeping up with privacy and confidentiality guidelines and making it a high priority in your practice to treat client information with the utmost care.

MICHAEL CALLAHAN is an advice and planning strategist with Edward Jones Canada.

MAY 2023 FORUM 23

TAX UPFRONT

BY JAMIE GOLOMBEK

Setting Priorities Making the most of new and old registered plans

W

ith the Tax-Free First Home Savings Account (FHSA) joining the registered plan lineup in 2023, clients may need even more of our help determining which tax-preferred registered vehicle to prioritize, assuming there’s not enough budgeted savings to maximize all plans.

Before laying out my prioritization preferences (hint: go for the “free money”), let’s take a brief look at each plan, and the 2023 limits and amounts.

18 years of age, with a lifetime limit of $7,200 per child, can be paid into an RESP. Tax is deferred on investment income earned within an RESP. When RESP earnings and CESGs are paid out for post-secondary education purposes, they are included in the beneficiary’s income.

By claiming the recently enhanced Basic Personal Amount ($15,000 in 2023) along with tuition credits, the beneficiary may pay little or no tax on the RESP withdrawals.

REGISTERED RETIREMENT SAVINGS PLAN (RRSP)

REGISTERED DISABILITY SAVINGS PLAN (RDSP)

For 2023, tax-deductible RRSP contributions can be up to 18% of the prior year’s (2022) earned income, up to a maximum contribution of $30,780. Taxes are deferred on any income and growth while funds are held within the plan, and tax is only paid when the funds are withdrawn from the RRSP, from its successor, the Registered Retirement Income Fund (RRIF), or through a registered annuity.

TAX-FREE SAVINGS ACCOUNT (TFSA)

Although contributions made to a TFSA are not tax-deductible, no tax is payable on income and growth or on withdrawals.

TFSA contribution room carries forward indefinitely from year to year, so if an individual is at least 32 years old in 2023, and has been a resident of Canada since 2009 but never contributed to a TFSA, they could contribute $88,000 in 2023.

REGISTERED EDUCATION SAVINGS PLAN (RESP)

An RESP allows individuals to save for their child’s post-secondary education by contributing up to $50,000 per child. Canada Education Savings Grants (CESGs) equal to 20% of total annual contributions, generally up to a maximum grant of $500 per year per child who is under 24 FORUM MAY 2023

RDSPs are designed to help build longterm savings for people with disabilities.

Individuals may contribute up to $200,000 on behalf of a beneficiary who qualifies for the disability tax credit. There is no tax on earnings or growth while in the plan. When disability assistance payments are made to the beneficiary, based on a pro-rated formula, original contributions are not taxed, but earnings, growth, and government assistance, discussed below, are included in the beneficiary’s income.

In addition to the power of tax-deferred compounding, Canada Disability Savings Grants (CDSGs) with a lifetime maximum of $70,000 per beneficiary, and Canada Disability Savings Bonds (CDSBs) with a lifetime maximum of $20,000 per beneficiary, may be received up until the end of the year in which the beneficiary turns 49, depending on family income.

TAX-FREE FIRST HOME SAVINGS ACCOUNT (FHSA)

Finally, a new registered plan arrives on the scene in 2023: the FHSA for firsttime homebuyers. The FHSA combines the benefits of both the RRSP and the TFSA, as contributions to an FHSA are tax deductible and income earned in an FHSA is not taxable while in the plan nor when withdrawn as long as the funds are used to buy a first home within 15 years.

Annual contributions can be up to $8,000, up to a maximum limit of $40,000.

A SUGGESTED APPROACH TO PRIORITIZATION

While there’s no magic answer for all client scenarios, as each situation is different owing to the specific savings priorities of each family, my general advice is to go for the “free money” first.

The RDSP, depending on the age of the beneficiary and family income, can provide up to $90,000 in grants and bonds, so I would begin there, if applicable.

For clients with kids, I would then prioritize the RESP by contributing at least $2,500 per beneficiary per year to get the 20% CESG match. This can provide up to $7,200 for each beneficiary.

Next, if the client qualifies as a firsttime homebuyer, I would choose the FHSA, since there’s a tax deduction on the way in and no tax on the way out. Also, there’s no downside if they don’t buy at home — they can move the funds into an RRSP. Finally, for any excess funds, discuss the client’s short-, medium-, and long-term savings goals. For example, if the goal is to save for a wedding reception or a new car in three to five years’ time, perhaps the TFSA is the best vehicle. On the other hand, if the goal is long-term retirement savings, we would go back to first principles: if the client is in a high(er) tax bracket now than they expect to be in when they retire, they should prioritize RRSP contributions over TFSAs, and vice versa.

JAMIE GOLOMBEK, CPA, CA, CFP, CLU, TEP, is the managing director, tax & estate planning with CIBC Private Wealth Management in Toronto.

He can be reached at Jamie.Golombek@cibc.com.

CONNECT WITH US

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ESTATE DILEMMAS

BY KEVIN WARK

Gestion Case A cautionary tale for Holdco/Opco structures

W

hen a shareholder establishes a holding company/operating company structure, the holding company often owns life insurance coverage on the life of the shareholder that is required for business or estate planning purposes.

Typically, the holding company (Holdco) is also the beneficiary of the policy, and the premiums can be funded with tax-free intercorporate dividends paid to Holdco by the operating company (Opco). The tax results of this structure are relatively straightforward: on the death of the shareholder, the insurance proceeds are received by Holdco and a substantial portion of those proceeds will be credited to its capital dividend account (CDA). The holding company can retain the insurance proceeds or flow part or all of the insurance proceeds to either Opco (as a shareholder loan) or the shareholders of Holdco (as a tax-free capital dividend).

However, there may be circumstances in which it is advantageous to have Opco be the direct recipient/beneficiary of the insurance policy owned by Holdco — for example, when there is a buy-sell agreement with arm’s length shareholders. In this case, Opco will be entitled to the CDA credit and will use the funds for buyout purposes as specified in the agreement.

That said, as demonstrated in a recent Tax Court decision, Gestion M-A Roy and 4452712 Canada Inc. v. The King (the “Gestion case”), complications can arise under this structure when Opco directly pays (or reimburses Holdco) for the insurance premiums on policies that are owned

by Holdco.

FACTS OF THE GESTION CASE The Gestion case involved the tax assessment of two different holding companies (“Gestion Roy” and “445 Canada”). Mr. Roy was the controlling shareholder of both companies. Gestion Roy was the

majority shareholder of an operating company (“R3D”), with 445 Canada being the majority shareholder of another related operating company (“R3D International”). As part of a shareholders’ agreement involving Mr. Roy and a large number of arm’s length employees of R3D and R3D International, Gestion Roy and 445 Canada collectively acquired six insurance policies on the life of Mr. Roy. R3D was designated as revocable beneficiary under each policy and directly paid the insurance premiums. Also, upon the subsequent surrender of those policies, the cash surrender values were paid to R3D and it declared the income arising from the disposition of those policies.

The Canada Revenue Agency (CRA) assessed Gestion Roy for a shareholder benefit under subsection 15(1) of the Income Tax Act on the basis of R3D having paid the premiums under the policies that Gestion Roy owned. Similarly, the CRA assessed a taxable benefit to 445 Canada for the premiums paid by R3D on the policies that it owned, this time using an “indirect tax benefit” provision since it was not a shareholder of R3D. The taxpayers appealed these assessments, arguing there were valid business reasons for structuring the life insurance arrangements in this manner. The Tax Court responded that while there may be bona fide reasons for this arrangement, the real question was whether a taxable benefit had been conferred on the taxpayers.

The taxpayers also took the position that despite the holding companies owning the policies, R3D should in effect be treated as the beneficial owner of the policies, since it paid all the premiums under the policies, claimed the proceeds on their surrender, and paid the related taxes. The Tax Court did not accept this argument either, taking the view that the taxpayers were clearly on title as owners, and R3D was merely the beneficiary and

could not exercise any contractual rights under the policies.

Finally, the taxpayers took the position that they did not “benefit” from this arrangement as they did not either receive any death benefits or the proceeds arising from the surrender of those policies.

The Tax Court once again dismissed these arguments, noting that the taxpayers benefited as they did not have to pay the substantial premiums they were otherwise obligated to pay as owners of these policies.

The Tax Court therefore upheld the CRA’s assessment of taxable benefits to the taxpayers.

SOME OBSERVATIONS It is important to note that the taxpayers have appealed this case, and the Federal Court of Appeal may ultimately overturn the decision. However, based on recent CRA interpretations and the Gestion case, taxpayers should avoid establishing arrangements in which the corporate beneficiary (whether revocable or irrevocable) directly pays the insurance premiums or reimburses the owner of the policy (whether an individual or corporation) for payment of the insurance premiums. In particular, when there is a Holdco/Opco relationship, the safer route would be for Opco to pay dividends to Holdco to assist in the payment of the insurance premiums.

In addition, a number of other issues must be considered when establishing insurance as part of a Holdco/Opco arrangement, including how best to creditor protect the policy and insurance proceeds, what happens to the policy if Opco is sold, what the most tax-efficient way to pay the insurance premiums is, and how rights and interests of other shareholders will be affected by the ownership structures.

Implementation of these arrangements often requires a co-ordinated approach involving the client’s tax, legal, accounting, and insurance advisors.

KEVIN WARK is managing partner of Integrated Estate Solutions and a tax advisor to CALU. He is the author of several tax/estate planning books entitled “The Essential Canadian Guides” that are available through Amazon.ca and Kindle.

MAY 2023 FORUM 25

CLU DESIGNATES

John A. Tory

AWARD 2022

Sara A. Colantonio, CLU

Alaeddine Jabri, CLU

Stefanie Conradi, CFP, CLU

Garima Jain, CLU

Jonathan Michael Corrigan, CFP, CLU

Jigna D. Jani, CLU

Susan M. Creasy, CLU

Korey B. Jennings, CLU

Robert D’Angelo, CLU

Rosemarie M. Kambo, QAFP, CLU

Dan D’Silva, CLU

Karim Kherani, CFP, CLU, CHS

ROSSELLEN WILTSE, CFP, CLU

Zijing Dai, CLU, CHS

Zhoulyana Kiani, CLU

FOR ATTAINING THE TOP MARK IN CANADA.

Andre M. Daisy, CFP, CLU

Sanjeev Kochhar, CLU

Karalyn S. Day, CFP, CLU

Frances F. Kwok, CLU, CHS

Laura De Sousa, CFP, CLU

Cila (Sze Nga) Kwong, CFP, CLU, CHS

THE INSTITUTE CONGRATULATES 2022 JOHN A. TORY AWARD WINNER

Mark Defalco, CFP, CLU, TEP

Mike Leung Yin Lam, CFP, CLU

Sandy Alfonsi, CFP, CLU, CHS

Anne M. Delves, CFP, CLU

Darwyne K. Lang, CLU

Luis Alvarez, CFP, CLU

Alexandra L. Dineen, CLU

Ryan Leung, CFP, CLU

Steve Ambeault, CLU

Sam Dutta, CLU, CHS

Peggy Pui Kei L, CLU

Doris D. Amenyo, CFP, CLU, CHS

Philip R. Evenden, CFP, CLU

Yun-Jih (Billy) Liao, CFP, CLU

Donald Anderson, CLU

Neil Feigelsohn

Xu (Leo) Liu, CLU

Blaine Anhel, CLU

Darrin Joseph Friedt, CFP, CLU

Chao Liu, CLU

Sunil Kumar Arora , CLU

James Roderick Nathaniel Gallagher, CLU

Xin Liu, CLU

Grant Atwood, CFP, CLU

Sean George, CLU

Li Qin Ll. Liu, CLU

Carla A. Ayles, CLU, CHS

Jagdip Singh Ghuman, CLU

Anthony Ma, CFP, CLU, CPA

Deep Bajwa, CLU

Tony Gill, CFP, CLU

Xia MacDonald, CFP, CLU

Sean R. Baker, CFP, CLU

Tracey L. Goldie, CFP, CLU

Trent C. MacKeen, CLU

Andrew V. Bay, CFP, CLU

Florence Jennie Gomes, CLU

Harpal K. Mann, CLU

Sarbjit Kaur Bedi, CLU

Elyce A. Harris, CLU, CHS, CFA

Nicolas Manuel, CLU, RHU

Shannon D. Bennett-Parisotto, CLU, CHS

Ilkin Hasanzade, CFP, CLU, CFA

Robin E. Marshall, CFP, CLU

Trevor B. Bernes, CLU

Tom Hay, CLU

Maria I. Martins, CLU

Ryan Bevelander, CFP, CLU

Lukas C. Hayes, CFP, CLU, CHS

Raymond Mathieu, CLU

Richard P. Beyer, CLU

Sylke Hickey, CLU, CFP

Amritpaul S. Mavi, CLU, CFP

Adam J. Bornn, CFP, CLU

Marc Nelson Hoe, CLU

Scott R. McDonald, CLU

Jackson J. Brailean, CLU, CIM

Ling (Melinda) Hu, CLU

Timothy McMartin, CFP, CLU

Nannette V. Britanico, CLU, CHS

Yu Qi Huang, CLU, CHS

Mohammad S. Mehmood, CLU

Umarpreet Chawla, CLU

Michael J. Hughston, CFP, CLU, CHS

Timmothy D. Meng, CLU, CHS

Trevor Chew, CKA, CFP, CLU

T. Geoffrey Hull, CLU

Mona Mengi, CLU

Alpna Chopra, CLU

Muhammad Arshad Hussain, CLU, CHS

Jake Milligan, CLU

Vaneesa Shay Dawn Cline, CLU, CHS, PFA

Lisa Hyman, CFP, CLU

Sergio Montano, CLU

The Institute for Advanced Financial Education (The Institute) is the leading designation body in Canada for financial services practitioners in the specialty areas of Advanced Estate and Weatlh Transfer, and Living Benefits. The Institute provides a platform of standards and advanced knowledge through designation programs and accreditation services.

By obtaining the CLU® designation, you have demonstrated exceptional commitment to your career and clients, and have elevated your practice to a level that distinguishes you among your peers. www.iafe.ca

Lindsay P. Morton, CLU

Dianna Ryan, CFP, CLU

Lee William Vallier, CLU

Edward S. Noakes, CFP, CLU

Almer Sanson, CFP, CLU

Gurtej Singh Varn, CFP, CLU

Dominic Remi Noel, CFP, CLU

Paul Santos, CLU

Maithily Veluppilai, CLU

Trishna Noor, CLU

Scott Schroeder, CFP, CLU

Kristopher Viel, CLU, CIM, Pl. Fin

Paula Ondrasek, CLU, QAFP

Laura Lee Seekings, CFP, CLU

Patricia Wing Ching Wan, CFP, CLU

Yogeeta Page, CFP, TEP, CLU

Austin Mackenzie Alex Service, CLU

Xin Wang, CFA, CLU

Namrata Patel, CLU

Varsha Shah, CLU

Roulin (Lynn) Wang, CFP, CLU

Stephen Pietro, CFP, CLU

Ben Sharma, CFP, CLU

Jennifer L. Weeks, CLU

Harper Price, CFP, CLU, CHS

Yin Shen, CLU, CHS

Wei Wei, CLU

Eric D. Pritz, CFP, CLU

Bei Sheng, CLU

Scott Weisner, CLU

David Samuel Pullman, CLU

Andrew H. Sheppard, CFP, CLU, CHS

Scott B. Weston, CLU

Wei Qi, CLU

Michael Singh Sidhu, CFP, CLU

Omari N. Whyte, CFP, CLU, CIM, PFP

Zuyuan Qian, CLU

Michael L. Skube, CLU

Jason A. Willock, CLU

Nalini Rajendram, CLU, CHS

Michael T. Smith, CLU

Rossellen Wiltse, CFP, CLU

Mark Ramme, CFP, CLU, CHS

Jennifer A. Spallin, CFP, CLU, CIM, TEP

Michael Lawrence Winters, CFP, CLU, TEP

Yusudan Ren, CFP, CLU

Andrew Ray Mark Stewart, CLU

Wai Mun Timothy Wong, CFP, CLU

Jordan Joachim Rodrigues, CLU

Tatyana Subbotina, CLU, CHS

Ann Wong, CFP, CLU

James Paul Rogers, CLU, CHS

Harjot Takhar, CLU, CPA

Wei Hua Xiang, CFP, CLU

Vibert Lawrence Rosemin, CLU

Tsung Lin (Andy) Tsai, CFP, CLU

Henry Lap Shun Young, CLU, CFA

Nathaniel B. Rosenkrantz, CFP, CLU

Salini Uthirakumaran, CLU

Olivia Ruoyi Yu, CFP, CLU

Oliver Ruivo, CFP, CLU, CHS

Shaun Valeriote, CLU

Meng Zhao, CFP, CLU, CHS, CFA

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AWARD 2022 THE INSTITUTE SPECIALLY RECOGNIZES THE 2022 DUNSTALL PRIZE WINNERS FOR ATTAINING TOP MARKS IN THEIR RESPECTIVE PROVINCES:

ALBERTA Dianna Ryan, CFP, CLU

ONTARIO Ryan Leung, CFP, CLU

NEW BRUNSWICK Korey Jennings, CLU

SASKATCHEWAN Scott Schroeder, CFP, CLU

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CORPORATE INSURANCE

BY GLENN STEPHENS

Consistency Matters Lessons from Simpson v. Zaste

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usiness owners should ensure that the various elements of their estate plan, including any shareholders’ agreements, wills, and life insurance policies, are consistent with one another. The recent British Columbia case of Simpson v. Zaste illustrates how the failure to have co-ordinated planning can lead to litigation among surviving family members.

The deceased in this case, John Simpson, died in August 2018. He was a 50% shareholder of North American Gantry & Equipment Services Co. Limited (Gantry).

The other 50% interest was owned by an arm’s length party (Lawler). Simpson and Lawler had a shareholders’ agreement that provided, among other things, for a mandatory transfer of a deceased’s shares to the surviving shareholder.

The price payable under the agreement was the shares’ fair market value (determined in Simpson’s case to be $268,750) less the amount of any proceeds payable under policies each shareholder was required to obtain on his life. The relevant policy in Simpson’s case had proceeds of roughly $156,000, payable to Simpson’s widow, Ingrid Zaste, as beneficiary.

The above terms were clear enough, but unusual (the peculiarities of the agreement will be addressed later in this column). The legal issues arose from the fact that, notwithstanding the terms of the shareholders’ agreement, Simpson’s will purported to gift his Gantry shares to his children from a previous marriage, Kirsten and Christopher. This ultimately led to a trial and subsequent appeal.

The trial judge determined that Simpson wanted his children to have an amount representing the full fair market value of the shares, including the $156,000 paid to Zaste from the insurance policy.

He stated that the will failed to carry out these intentions because of an “accidental slip or omission.” This led the judge to rectify the will under B.C.’s Wills, Estates and 28 FORUM MAY 2023

Succession Act (WESA), and to order that the children receive $268,750, the full fair market value of the shares. Zaste appealed this decision.

In writing the majority decision for the Court of Appeal, Justice Grauer stated that “rectification aligns the will with what the will-maker intended to do, and not what, with the benefit of hindsight, the will-maker should have intended to do.”

Accordingly, it was decided that Simpson had intended for his children to have the shares, but not necessarily an amount representing the shares’ full value. Had Simpson wanted his children to receive the larger amount, he could have named them as beneficiaries of his life insurance policy. It was clear to the Court of Appeal, however, that it was always the intention that Zaste receive the insurance proceeds.

In the end, Simpson’s will was rectified by the Court of Appeal, but only to the extent that it permitted his children to receive the purchase price payable

by Lawler. Net of certain debts owed by Simpson, this amounted to about $91,300.

WESA is a provincial statute, and the decision itself is only applicable in B.C. However, there are aspects of this case that are instructive for estate planners and insurance advisors in any jurisdiction. Here are some key takeaways.

The first and most obvious point is that wills and shareholders’ agreements should be consistent with one another.

This should involve input from the client’s lawyer, accountant, and insurance advisor. The insurance advisor can review the relevant documents, determine they are meeting client objectives, and ensure the insurance is structured appropriately.

Will rectification issues aside, the interplay between the shareholders’ agreement and life insurance in this case was unusual to say the least. The shareholders’ agreement relied on each shareholder insuring himself, with any proceeds reducing the amount payable by the surviving

shareholder. Although the arrangement did seem to work in this case, it is not a recommended structure as it leaves the shareholders vulnerable if one or more of them fails to obtain the necessary insurance or keep it in force.

Under a more conventional approach, Gantry would be the owner and beneficiary of a policy on each shareholder. Each policy’s face amount would approximate the fair market value of the insured person’s shares. The agreement would provide for the proceeds to be used, in conjunction with the capital dividend account, for buyout purposes on a shareholder’s death. In Simpson’s case, he could have supplemented this coverage with personal insurance for his wife and/or children.

Certain income tax issues arise in this case. As noted, Lawler’s purchase price for the shares was netted against the amount of insurance proceeds paid to Zaste, which meant that he was able to purchase the shares for significantly less than fair market value. Would the Canada Revenue Agency characterize the insurance proceeds as proceeds of disposition to Simpson’s estate, or consider the estate and Lawler not to be dealing at arm’s length? If so, there could be unintended and potentially punitive tax consequences.

Another tax issue relates to the premiums themselves — which, according to the judgment, were paid by Gantry.

Assuming the policies were personally owned, the premium payments could constitute a taxable shareholder benefit, which would not be a deductible expense to the corporation.

GLENN STEPHENS is a retired vice-president of planning services for PPI Advisory and is now an independent consultant in the life insurance industry.

He can be reached at gstephens520@gmail.com.

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STRATEGIC PHILANTHROPY

BY MARK HALPERN

Save Tax, Give More Find Accidental PhilanthropistsTM in your practice

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trategic philanthropy minimizes taxes and allows people to transition from “success” to “significance” — yet many advisors don’t know the myriad ways it can be applied. In this new column, I’ll share tried-and-true strategic philanthropy concepts drawn from 31 years of professional practice helping successful business owners, affluent families, retirees, and professionals.

To start with, I want to help you recognize the people we call Accidental Philanthropists. These are clients who have accumulated considerable assets but don’t yet realize that strategic philanthropy can help them both pass along more wealth to beneficiaries and leave a sizeable charitable legacy.

How does strategic philanthropy achieve that? In every estate, there are three possible heirs: family, charity, and the Canada Revenue Agency (CRA). The “aha” moment for many of my clients comes when I explain they can pick two out of three.

Of course, most choose family and charity.

These custodians of family wealth for future generations become philanthropists when we show them how to make their legacy about family and charity, instead of a big tax bill.

WHO’S MOST LIKELY TO BECOME AN ACCIDENTAL PHILANTHROPIST?

1. Widowed, divorced, or single. Without

proper planning their assets will be highly taxed (at 26% to 70%) when they die. In Ontario, for example, a $1-million RRSP or RRIF shrinks to $460,000 when there is no spouse to receive a tax-free rollover.

Strategic philanthropy can preserve that money for family, with charitable giving dramatically reducing the tax liability.

2. People who have sold (or will be selling) a business, investment real estate, or appreciated securities. The year of a

big capital gain is the best time to make a

large charitable donation to offset taxes.

And, with life insurance, these people can eventually recapture all the donated money and leave it to their family.

3. People who have done (or will be doing) an estate freeze. These clients can donate

private company shares to convert taxes into a substantial charitable legacy and get money out of their company on a tax-free basis for heirs like children and grandchildren.

4. People with a private foundation or donor-advised fund (DAF). Most don’t

realize that life insurance can be purchased, owned, and paid for using foundation or DAF funds.

5. People who have already specified a charitable gift in their will. There are

better strategies available that amplify their generosity in a more cost-efficient and tax-efficient manner.

6. People with a large tax bill due in April and appreciated non-registered securities. They can convert taxes into

charity by depositing appreciated securities (or cash) into a foundation or DAF. They’ll pay no capital gains taxes and use the charitable receipt to offset current taxes due. The donated money is now a legacy fund, professionally invested and available for future giving to registered charities in Canada.

7. People with existing life insurance policies they no longer need. Donating

a permanent or term insurance policy can generate a charitable tax receipt for the fair market value to offset taxes. When donors continue to pay the premiums, they can get donation receipts each year.

8. People who will have an estate tax bill on death. One hundred per cent of estate

taxes can be mitigated through charitable

donations. Clients should consider acquiring a life insurance policy for twice the anticipated estate tax bill. Designating a charity, foundation, or DAF as the beneficiary generates a donation receipt that mitigates estate taxes, and the cost is pennies on the dollar — or less if you use a financing arrangement.

STRATEGIC PHILANTHROPY MAKES EVERY GIFT GO FURTHER

Even on a smaller scale, it’s often possible to give more for less. Most Canadians give to charity using cash, cheques, or credit cards, but these are the least tax-efficient ways to donate. Donating appreciated securities is just one of more than 20 more cost-efficient, tax-friendly ways we’ve identified in a one-page PDF that you can pass along to your clients.

We’ve also identified 15 core life insurance strategies advisors can use to create transformational gifts that make a major difference in people’s lives — ask us for this PDF, too. One of the main tools we use is tax-exempt life insurance. Used appropriately, it works magic when applied to philanthropy.

We want to see strategic philanthropy used more widely because it benefits both families and charities — and we have ambitious philanthropic goals of our own. We’re aiming to develop a national network of 100 advisors and charities committed to working with clients and donors to create $10 million of planned gifts annually. That will add up to $1 billion a year. We’re confident we can get there. In just the last few months, more than a dozen professionals and charities have stepped forward to join.

Let’s do good and do well together.

MARK HALPERN, CFP, TEP, MFA-P, is CEO of WEALTHinsurance.com and has developed the Power of PlatinumTM program with Jim Ruta to train, coach, and mentor insurance and investment advisors. Connect with him on LinkedIn, where he shares case studies and success stories.

MAY 2023 FORUM 29

LEADERSHIP & GROWTH

BY JONATHAN SCHJOTT

Be Unconventional Break the rules to develop great teams

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onventional wisdom in management and leadership often leads managers astray, resulting in missed opportunities to grow people or, worse, repelling great talent from the organization. Conventional wisdom is easier, but not better. It’s easy to believe each person possesses unlimited potential. It’s easy to think fixing weaknesses is the path to greatness. It’s easy to treat everyone the same to avoid charges of favouritism. The truth is the best managers break the rules of conventional wisdom.

One element of conventional wisdom I hear often is that “happy employees are productive employees.” The reality is productive workers are happier. They are happier because they are more productive.

They feel the fulfilment that comes with pursuing excellence and knowing they’re bringing value to their organization. As leaders, we must learn and appreciate that a person’s happiness is not our responsibility.

It is, however, our duty to create the conditions in which the people we manage will grow and succeed. So, how do we create the conditions of higher performance?

The single greatest motivator is the feeling of daily progress: knowing you are better today than you were yesterday.

Leaders must own the development of their team, and I offer a simple three-step framework to accomplish this.

1. SET CLEAR GOALS

Taking the time to learn the personal and professional goals of team members gives leaders a greater awareness of what genuinely matters to each person. The best leaders artfully marry personal and professional passions with business objectives.

Goal-setting should be a collaborative process. You know the opportunities, but it’s the people on your team who are learning and growing. Constructive goals share three characteristics: • A clear behaviour or result to achieve 30 FORUM MAY 2023

• A way to measure quality • A deadline to achieve the goal Here’s an example: by December 31 (deadline), I will achieve my CHS designation (result) with a combined mark of 85% or higher (quality measure).

Conventional wisdom says you need a SMART goal. Some managers tell their people that impressive and well-targeted goals are not in the right format (not SMART enough). This is counterproductive. Instead, clarify the behaviour to master or result to achieve, decide how to measure quality, and set a deadline.

When leaders know their team members’ goals, they can inquire about those goals and offer resources to support them.

They should also give team members flexibility to pursue goals in the way they want.

2. BUILD DEVELOPMENT PLANS

As a leader, you’ll likely be expected to coach on goals you haven’t accomplished and skills that are not your personal strengths. The good news is that you do not need to have done something yourself to lead team members toward achieving it. What you need is a process.

Start by taking a few minutes together to brainstorm resources. Encourage a firm commitment to two or three ideas. Team members should have significant input in choosing resources because they will be the ones doing the work.

Next, create just the first few weeks of the plan. Like the goal, steps should include a behaviour and a deadline. For example, steps for someone who wants to improve public speaking skills may include: • By July 15, email me a receipt for your order of the book Talk Like TED • By July 21, send me registration confirmation for your local Toastmasters • At our July 30 one-on-one, share with me what you’ve learned from the first three chapters of Talk Like TED

Here’s something that surprises many managers: we’re not going to plan for six or more months. It takes too long, we don’t know enough, and things will change many times between now and then.

3. TRACK PROGRESS AND PUSH FOR MORE

Because you’ve set a clear goal and built a plan with milestones, accountability and follow-up are expected. In this part of the process, you’re getting regular updates in the form of task completion emails or confirmation and debriefs during your one-on-ones. Since you’re only planning two to three weeks at a time, you can easily course-correct if someone falls behind.

When someone is tracking ahead, or it becomes apparent a goal is too conservative, your opportunity to lead really shines through. This is the moment to challenge your team member to push for more and increase the goal.

BUILD A PRODUCTIVE AND HAPPY TEAM

Fully supporting each person’s goals deepens connections, builds resilient relationships, and creates unbreakable bonds. Other forms of encouragement pale in comparison. With the backing of their leader, team members will come to believe they can do anything.

Great managers and leaders are needed in our industry. People join organizations for many reasons, but the biggest factor in how long they stay and how productive they are is the relationship they have with their manager or leader. Creating a culture of development and support is the most effective way to amplify the strengths of your team and your organization.

JONATHAN SCHJOTT, CLU, CFP, CHS, is regional vice-president, Insurance Brokerage, at RBC Insurance, and president of the GAMA Global Canada Board of Directors. He also serves on the GAMA Global Advisory Council. He can be reached at Jonathan.schjott@rbc.com.

Advocis News ASSOCIATION UPDATES AND EVENTS

CHAPTER NEWS 2022 PETER W. NEWTON AWARD

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es Zacharias is a financial advisor of significant accomplishment, and it shows through his dedication to his clients and his community. He not only takes an active role as a member of Advocis, but he has also served as a board member for the Vancouver, Kootenay, and Thompson Okanagan chapters. Les is actively working to bridge the gap between the Kootenay and Thompson Okanagan chapters while helping to bring quality education to our members as part of the Greater BC chapter collaboration.

Peter W. Newton was a longtime career agent for Canada Life, who for many years was the only Canada Life agent in Kelowna. He was motivated by his love of people and genuine desire to help them, and Advocis Thompson Okanagan is Advocis Thompson Okanagan would like to congratulate Les proud to continue presenting Zacharias, the 2022 winner of this award in his memory. the Peter W. Newton Award.

Golden Triangle Chapter president David Reeve hands over the cheque.

FIGHTING CYSTIC FIBROSIS

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t its recent Christmas Gala, Advocis Golden Triangle was pleased to support Cystic Fibrosis Canada with a $3,000 donation of proceeds from the chapter’s 2022 Charity Golf Tournament.

SUPPORTING ADOPT-A-TEEN

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dvocis Edmonton has a multi-year relationship, actively supported by our members, with community partners at Christmas Bureau of Edmonton. Specifically, members support the Adopt-A-Teen program, which provides gifts to less-fortunate teens aged 13 to 17. In 2022, Advocis Edmonton raised $12,345 at its annual Christmas Luncheon in support of Adopt-A-Teen. The Chapter Board was also pleased to contribute time over the holiday season to the Edmonton Food Bank. Thank you to all who attended and contributed!

Edmonton Chapter Board: Pat Souliere, Jason Desaulniers, Natalia Teplova, Cecelia Clarke, Amanda McCloy, Jolee Kerr, and Kelly Smith.

MAY 2023 FORUM 31

Advocis News

ATLANTIC WEALTH SUMMIT

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resented by Advocis New Brunswick and Advocis PEI, the 2023 Atlantic Wealth Summit brought together more than 100 advisors to hear a wide variety of presentations from speakers across the industry over an enjoyable two days of connection and conversation. Requests from attendees to continue the event on an annual basis have been pouring in, and both chapters are looking forward to even more successful collaborations in the future to provide members with exceptional programming.

2023 Atlantic Wealth Summit in session.

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GAMA GLOBAL CANADA MANAGEMENT AWARDS CALL FOR ENTRIES The 2023 GAMA Global Canada Management Awards recognize the highest leadership achievements in Canada’s financial services industry.

Learn more: gamacanada.com/awards

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NOTICE OF ANNUAL GENERAL MEETING OF MEMBERS The Annual General Meeting (AGM) of Members of The Financial Advisors Association of Canada carrying on business as Advocis (“the Association”) will be held exclusively online. Online voting for the 2023 AGM will be available from no later than May 31, 2023.

Items for approval by the membership include: • Minutes of 2022 Annual General Meeting • Appointment of the Auditor for the next fiscal period • Election of Directors • Receive the audited financial statements for the financial year ended December 31, 2022 and the Auditor’s Report • Any other business The AGM of Members of The Institute will be held exclusively online. Online voting for the 2023 AGM will be available from no later than May 31, 2023.

Items for approval by Institute Designation Holders include: • Minutes of 2022 Annual General Meeting • Appointment of the Auditor for the next fiscal period • Receive the audited financial statements for the financial year ended December 31, 2022 and the Auditor’s Report • Any other business

Todd Boyd with his new Apple Watch.

APPLE WATCH CONTEST WINNERS Advocis would like to thank all members who entered the Apple Watch contest by renewing their membership for 2023. We congratulate our winners, Todd Boyd of Advocis Sudbury and Ian MacLean of Advocis Greater Vancouver.

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Advocis News

IN MEMORIAM Ken Cassis, 1939–2023

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dvocis was saddened to learn of the passing of Ken Cassis on February 4, 2023.

Ken joined Advocis (LUAC) in 1974 and was proud to hold CFP, CLU, and CHFC designations until retirement. He filled many volunteer roles during his years of membership, including teaching LUA to new agents. Ken also served as president of the London Chapter in 1988, ending the year with the chapter qualifying as a Totem Pole Finalist. He was a staple at local monthly Advocis meetings in London until his retirement and was frequently asked to speak at various events at his local chapter and at chapters across the country. Ken was proud to be an Advocis supporter and volunteer. We send our condolences to his family and friends.

Eileen Jennings, 1958–2023

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dvocis was saddened to learn of the passing of Eileen Jennings on January 29, 2023.

Eileen joined Advocis in 2004 and was most recently the regional vice president – Manitoba at HUB Financial after a long and successful career with earlier tenures at Daystar Financial Group and Manulife Financial. Eileen served Advocis Winnipeg as program chair in 2009. We send our condolences to her family and friends.

THANK YOU TO OUR LAMP 2023 SPONSORS GOLD SPONSORS

SILVER SPONSOR

FINAL WORD

We Are Listening

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BY GREG POLLOCK

n 2022, Advocis dedicated itself to developing our processes and offerings to better meet the needs of our membership in a rapidly evolving post-pandemic world. In 2023, our focus will be on ensuring that we get it right. This means not only listening to your feedback, but responding to it with actions you can see the impact of — and encouraging you to continue engaging with us on where things go from there.

Some of this encouragement comes in the form of empowering members and volunteers to be the first to test such features as our new online renewal process — congratulations to Todd Boyd of Advocis Sudbury and Ian MacLean of Advocis Greater Vancouver on winning the prize draws we had for those folks. But I believe it begins first and foremost with honesty: your honesty about what you want from Advocis, and our transparency about the challenges we face and how we can meet your expectations while remaining responsible and accountable.

For example, we heard clearly from you that member services were not meeting your expectations, with the aforementioned renewal process a particular sticking point. Today, thanks to the substantial overhaul of that process on the IT backend and with the renewal of much of our frontline administrative team, your collective rating of this experience now averages 4.6 out of 5 stars, with comments that are almost uniformly positive. Here’s a brief sampling: “Excellent online process.”

“Staff is very professional and courteous.”

“Great job. Simple.”

We are also moving forward with developing new features and refinements to this process in response to your criticisms. We will survey you throughout the year so we know if we’ve done well.

At the same time, listening goes in both directions.

We need to be equally candid about the cost and impact of modernizing our systems and expanding our support staff — especially during the challenging economic times we’re all facing. Membership fees increased for 2023, and

while it is to be expected that an increase in fees is never greeted enthusiastically, I know from my own experience that what matters most is that these kinds of increases are not seen as arbitrary or unfair. When you look at the kinds of improvements we are bringing to the member experience, our expanding slate of educational offerings, and our successful efforts in the advocacy space, it might seem that the rationale for an increase in fees is self-evident — but we also know from listening to your feedback that you want to see more value from your membership on an individual and day-to-day basis.

We will be looking closely at that feedback and how to act on it in 2023, but when we listen to members who are deeply engaged as volunteers or through their local chapters, we also see a different and more satisfied perspective — one that reflects an experience of Advocis that I wish all our membership could share. As you know, Advocis has served financial advisors in Canada as a professional association for nearly 120 years, and many of those advisors have been members of Advocis for decades. I do not believe that their memberships or the organization itself could have persisted for these lengths of time if the greatest underlying factor was the shifting sands of annual fees.

Advocis endures and will continue to endure because it means something to advisors, both personally and professionally. The question is not one of cost, but of value.

Accordingly, if the fee increases of 2023 have made you reconsider your membership, my advice would be this: take the next step in getting even more out of it. Whether that means attending chapter events to network with your peers and build lifelong friendships, joining a chapter-based study group for your next course, or volunteering for a provincial advocacy committee to impact the profession itself, I am confident that Advocis has everything you need to create the membership experience you want.

And, if there is more we can do, we are listening.

GREG POLLOCK, CFP, is the president and CEO of Advocis.

MAY 2023 FORUM 35

The “Philanthropic Conversation” that will give your business an edge!

More affluent donors are giving to charity than ever before. Discover how wealth Advisors can deepen their relationship with clients when the topic of philanthropy is raised.

By Abundance Canada

As a Wealth Advisor, we know that fostering the relationship you have with your clients is important. Starting a conversation with clients about their philanthropic goals may create a win-win situation for you both.

Starting the Conversation Research shows that wealthy donors are open and interested in having a conversation about their charitable giving with Advisors – and the

Charitable giving in Canada has changed over the years. This is partly due

sooner, the better. We know Advisor’s play a key role in helping their

to the decline in the number of active donors. However, total donations

clients focus on their financial goals and how it relates to their current

continue to increase as more affluent philanthropists are giving more.

situation.

Market research has identified that tax planning and charitable receipts are not their primary reason for giving. Their main motivation is the desire to help others and make an impact. Having said that, tax considerations are still high priorities when donors consider their charitable giving strategy.

The best way to start the philanthropic conversation is to simply ask, “Are there any charitable considerations you would like to discuss?” Then proceed based on how they respond.

Further questions you can ask are:

Once you choose to start the philanthropic conversation, the outcome can be extremely rewarding.

• Which causes have you supported that give you the greatest satisfaction?

• Are your partner, parents, children, or grandchildren involved in your philanthropy?

• Do you have personal values that you feel you can express through charitable giving?

Deepening Client Relationships

There are many benefits when Advisors raise the topic of charitable giving with their clients. While it may seem counterintuitive to do so,

Some Wealth Advisors may be reluctant to begin the discussion about

it can also deepen the relationship and open the door to greater trust.

philanthropy, but you may be surprised by how much your client will

Once you choose to start the philanthropic conversation, the outcome

appreciate the help and advice. The philanthropic conversation allows

can be extremely rewarding.

you to have deeper discussions with clients about all their financial considerations. Exploring their charitable aspirations will give you a window into their values and may open the door to conversations with

Questions?

their friends and family who have similar values. It may also help you to

Abundance Canada is a public foundation with a long history of

present a more comprehensive and strategic financial plan that takes into consideration all of their wishes.

assisting professional advisors and their clients with significant and complex charitable gift planning scenarios. Contact us if you have

Furthermore, you can proactively respond to triggering events such as

questions on how to support your client’s charitable giving. Call

the sale of a business or a large capital gain. It is times like this when a

1.800.772.3257 to speak with a gift planning consultant or explore

charitable gift might be something your clients could consider.

the resources available at abundance.ca.