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FORUM FEBRUARY 2020 • $5.50

The Magazine of Influence for Financial Advisors


Gig How to help clients with variable income stay on track Mortgage broker Lois Volk is one!



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ISSN 1493-826X



Generation Gig

Susan Yellin explores how you can help the growing numbers of people who are part of the gig economy





EDITOR’S JOURNAL Reflecting on advice in the decade ahead

Will BPA changes truly provide tax relief? BY DOUG CARROLL


OPENERS The nuances of accepting life insurance policies as donations; financial concierge services; underwriting trends

33 ADVOCIS NEWS Association updates and events

35 THE FINAL WORD 2020 and beyond: the future of professional financial advice BY GREG POLLOCK

29 ESTATE DILEMMAS Finance Canada offers taxpayer relief BY KEVIN WARK

30 PROSPECTING PURSUITS How asking for referrals can go sideways BY BRYCE SANDERS

31 CORPORATE INSURANCE The impact of amalgamations and windups on corporate-owned life insurance policies BY GLENN STEPHENS

32 LEADERSHIP & GROWTH Next issue: Financial messes

Leadership lessons from the barnyard to the boardroom BY CATHY HISCOTT

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16 20

Cannabis Risk

Michelle Roussin provides details on the factors underwriters consider when it comes to cannabis

Rich Thinking

How can you improve your practice — and yourself? Barbara Stewart reports on her findings from successful women around the world


Heading South


Senior Protection

Snowbirds can face devastating financial consequences without the right travel medical coverage. Stephen Fine and Michael Camacho walk us through the issues

Have senior clients who want more insurance? Richard Parkinson has some suggestions FEBRUARY 2020 FORUM 3


Forward Thinking


’m often asked what the future looks like for financial advisors in the next decade. My short response is “more of the same, with some tweaks.” My longer answer is as follows. We’ll still be debating, discussing, and fine-tuning regulation. When I started covering this industry back in 1999, advisors were not regulated. Will they be in 2030? I hope so. Ontario is moving forward with title protection for “financial advisor” and “financial planner,” and this idea is slowly moving to other provinces such as Saskatchewan (read Greg Pollock’s column on page 35 for more details). But the fine print still needs to be worked out, and it may take a few years to do so. Will title protection be effective in protecting the consumer in the long run or will other issues crop up? I believe that more people will be willing to pay for niche advice. Firms like the New School of Finance drill down and offer advice on how to “babyproof ” your financial plan, pay back your student loan, and still save for your future. And they offer targeted advice for sole proprietors. Our cover story by Susan Yellin on page 10 addresses advice for those who don’t have that biweekly paycheque. The reality is the gig economy is growing as companies downsize and contract out work, and we can expect it to continue through the coming decade. That means traditional advice needs to change. When receiving variable income, the self-employed often cannot manage a monthly or biweekly “preauthorized contribution” that has been an advisor recommendation forever. Gig workers’ needs are different, so what can you bring to the table? Robo-advisors and artificial intelligence aren’t going anywhere, but advisors will learn how to use them and other upcoming technologies to their businesses’ advantage. Robo-advisors will not replace advice, as studies still show that Millennials prefer having a live person to help them make sense of their financial challenges and portfolios. A recent study from Apex Clearing


FORUM PUBLISHER: Peter Wilmshurst advocisforum@gmail.com EDITOR: Deanne Gage dgageforum@gmail.com COPY EDITOR AND PROOFREADER: Alex Mlynek ART DIRECTOR: Giselle Sabatini artdirector@forum-mag.ca ADVERTISING: Peter Wilmshurst advocisforum@gmail.com Tel: 416-766-4273 Fax: 416-760-8797


Corp., a U.S. digital wealth solutions company, found that the average U.S. Millennial purchases investments based on what they actually use (think Uber or Apple). The problem is they don’t tend to diversify their investments or consider issues such as earnings growth or valuation in their investment picks, Apex found. An advisor can help to explain the error of their ways with portfolio management. The life insurance industry also paints a dire picture. According to a survey from New York Life, just 10% of U.S. Millennials say they have enough life insurance in place to fund any debt if they were to pass away suddenly. The average Millennial has a $100,000 insurance policy, but based on their debts and assets, needs about $452,000, so that creates a $352,000 shortfall. Part of this life insurance deficit may come down to the fact that there’s a disconnect between how life and living benefits insurance are traditionally sold versus how Millennials like to buy and research the product. On page 8, Sharon B. Smith explains the evolution of insurance underwriting, which has been driven in part due to Millennials. The industry hasn’t completely sorted out how to capitalize on what Millennials need, but if you’re able to figure it out, your business will explode. Remember, Millennials (ages 24 to 39) now make up 27% of Canada’s population — more than any other generation. 

DIRECTOR AT LARGE Wendy Playfair, CLU, CFP, CHS DIRECTOR AT LARGE Patricia Ziegler, MBA, FLMI, CHS, EPC, ACS, ARA, AIAA DIRECTOR AT LARGE Kevin Williams, CFP, CLU, RHU PUBLIC DIRECTOR Geoffrey Creighton, BA, LL.B., C.DIR., CIC.C PRESIDENT & CEO Greg Pollock, CFP FORUM is published four times annually by The Advocis Publishing Group, 10 Lower Spadina Avenue, Suite 600, Toronto, Ontario M5V 2Z2 TEL: 416-444-5251 or 1-800-563-5822 FAX: 416-444-8031 FORUM is mailed to all Association members, the subscription price being included in the annual membership fee. Address changes can be made through info@advocis.ca or by calling member services at 1-877-773-6765. The opinions expressed in articles and advertising are those of the authors/advertisers and not necessarily those of FORUM or the Association. Material of a technical or semi-technical nature may become invalid because of later changes in law or interpretation. The Association is not responsible for obsolescence of FORUM articles whose content should be checked by the reader before implementation. Requests for permission to reprint articles are to be addressed in writing to the editor of FORUM. ™ Trademark of The Financial Advisors Association

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CLHIA Seeks Help from Governments to Expand Retirement Products



he British Columbia Financial Services Authority has thrown a disconcerting wrench into a long-standing practice by financial advisors to sell life insurance policies to their clients who then donate them to charity in exchange for charitable tax receipts. Vancouver-based law firm Norton Rose Fulbright Canada has interpreted a recent decision by the regulator to mean that accepting life insurance policies as donations is considered trafficking in insurance contravening the province’s Insurance Act. The law firm has suggested that registered charities in B.C. consider removing information for these kinds of gifts from their websites. It also says the charities may want to consider suspending discussions with potential donors of life insurance policies until more information is available. “This situation is unfortunate because donations of life insurance policies have been very commonplace for charities in Canada,” says Ruth MacKenzie, president and CEO of the Ottawa-based Canadian Association of Gift Planners (CAGP). “It’s concerning to us that that may no longer be the case.” In essence, says MacKenzie, the B.C. regulator has ruled that charities can no longer accept life insurance policies as charitable gifts. In the past, clients purchased a life insurance policy and put the charity as the owner of that policy. Clients then received a tax receipt for the premiums paid. But it appears that is no longer allowed, explains MacKenzie. Another often-used method of using life insurance for charity comes into play if the policy owner no longer wants to pay the premiums on a policy. The person then transfers ownership of the policy to the charity. The charity continues to make the monthly payments and the estate receives the benefits of that as a charitable gift. That too, MacKenzie notes, is currently illegal. To be clear, she says, designating a charity as the beneficiary of the life insurance policy is still allowed. While CAGP is looking for more clarity from the B.C. regulator, advisors are concerned that this ruling may spread across the country, resulting in the loss of hundreds of millions of dollars in charitable life insurance donations. “We are asking our members to wait patiently while we attempt to get answers from the insurance regulator, and to really try to understand what brought this whole issue on and what the real concern is so that we can open up a dialogue with the regulator,” MacKenzie says. — Susan Yellin 6 FORUM FEBRUARY 2020

he Canadian Life and Health Insurance Association (CLHIA) is calling on the federal and provincial governments to expand the list of financial products that will help ensure aging Canadians receive a sustainable income in retirement. Specifically, it is asking for more flexible types of annuities for registered pensions, RRSPs, RRIFs, and TFSAs, including that: 1. The federal government should allow Canadians to waive liquidity requirements of their TFSAs to use these accounts to provide sustainable, secure, retirement incomes without tax penalties; 2. The federal government should expand on the proposed tax legislative changes so that freestanding variable payment life annuities (VPLAs) are permitted to pool participants from all registered plans used to save for retirement; and 3. Provincial governments should introduce corresponding legislative changes as soon as possible. Ottawa introduced changes in its 2019 budget to allow the use of advanced life deferred annuities (ALDAs) for money purchase plans. However, the budget proposal put some limits on them and excluded the use of TFSAs. That budget also introduced VPLAs, but restricted their use to certain limited pension plan designs. “CLHIA believes that these initiatives are a good first step, but without further reforms, these amendments are likely to fall short of expectations,” the organization notes in a recent paper. In the same paper, CLHIA says these measures should be expanded to provide the broadest possible access for Canadians. For example, as TFSA balances grow, they become an increasingly useful source of retirement income. Canadians should be permitted to use their TFSAs to supplement retirement income savings via life annuities in the same tax-effective manner as for individuals who draw down TFSA balances as a source of retirement funding. CLHIA says it is concerned that only a limited number of Canadians can benefit from the introduction of VPLAs, and in fact they would only be commercially viable for plans exceeding 20,000 active members. It is asking that Ottawa expand its proposal so that free-standing VPLAs are permitted to pool participants from all registered plans used to save for retirement. In order for the budget measures to be fully implemented, changes to both federal and provincial pension laws need to be made, says CLHIA. — S.Y.



Jill Chambers, president, Financial Concierge™ Inc., which has locations in B.C., Alberta, Manitoba, and Ontario

FORUM: What’s a financial concierge? JC: We pay bills for people who can’t, don’t, or shouldn’t. An example would be a senior who has developed arthritis and is having great difficulty writing and paying bills, and isn’t tech savvy. So we thought if we can help seniors stay independent financially, then they can also stay in their own homes longer with the supports and services around them. FORUM: How are you paid? JC: We charge $150 an hour. We may spend two or three hours to find out what all the

bills are, what we can automate, how to figure out what we need to do, and get it set up. After that, maybe it’s an hour in a month to visit with the individual and review what’s happened during the past month. Sometimes, family members of a senior — particularly if they live far away — quite like the fact that there’s a second set of eyes on everything. A really surprising thing that has come up is that the majority of the individuals we work with have been financially abused in the past.

FORUM: How do people know they can trust you? JC: We do complete background checks of our concierges, including a vulnerable sector screening. We look for good-to-excellent credit scores, and they must abide by the American Association of Daily Money Managers code of ethics. The first time we meet with clients, I ask them to have a friend or a family member or someone else there for the interview. If they don’t, I’ll ask them, “Have you talked to your sister or your child? Do they know that we’re working together?” Because I really encourage that and I would like them to be part of the conversation. If I’m doing an actual ongoing bill payment, then I always try to find someone else that I

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can provide a report to on a monthly basis. We always have a trusted contact person on file. When you’re dealing with older populations, cognitive changes are going to occur. So the way I frame this fact is: “If for some reason I can’t get a hold of you, or I have concerns about your well-being, whom can I talk to?” FORUM: Why is this work important? JC: We did focus groups with caregivers who work with seniors and one need that came up was assistance with bill payments and someone to help them to get their important documents organized. This was particularly important when somebody had been widowed suddenly or lost a partner to one of the three Ds: death, dementia, or divorce. Most couples — it doesn’t matter what generation — are quite role specific in that one person manages the finances; everything from the investing to the insurance to the bill payments. And the other person is responsible for other areas of their lives. When the person who has been doing the financial management is gone, the surviving spouse doesn’t know where to start. And there often isn’t a family member or someone else around to do it. — Deanne Gage




49% say they do not invest because they don’t know enough about it


61% do not know the options available to them for getting investment

Paying down debt:


60% are not confident in their ability to make investment decisions

Keeping up with bills and getting by:

Growing investments or wealth:

Saving for a vacation:

Saving for retirement:





information and advice

65% do not know what investment products and services are available to them 41% don’t think they have enough money to get advice from an advisor 28% don’t think they can afford to get advice SOURCE: IIROC WITH THE STRATEGIC COUNSEL, DECEMBER 2019





aving spent 35 years as an underwriter, I’ve done my share of anticipating, shaping, and reacting to change. When I’m asked to opine on the future of underwriting, I typically point to the evolving client experience as the catalyst for change. Yes, underwriting is about assessing and managing risk. But we have always focused on the client experience. It’s our job to identify these trends and be ready with the solution. Here’s what I’m seeing:

TREND 1: Client-centred approach We spend more time listening to our clients than ever before. The way we prioritize the needs and wants of our clients has never been this profound. This trend will only accelerate, driven by individuals accustomed to speed and customization and who aren’t afraid to tell you what you want (thank you, Amazon!). Just look at the difference 10 years makes: If a client was applying for life insurance a decade ago, they would meet with their advisor to fill out an application. The advisor would determine the additional underwriting requirements by reviewing an “age and amount” matrix. The client might be required to undergo one or more of the following: oral fluid tests, urine tests, blood tests, resting ECGs, stress ECGs, and medical exams. The process was onerous and intimidating. The applications were long and questions were needlessly verbose. The underwriter would manually review the information. The policy could take weeks to be delivered. Fast forward to the present day and the experience is completely different. It’s quicker (not quite “Amazon” quick, but we’ve made big strides). Underwriting rules engines — built on decades of experience and reams of data — are now accepting many risks without human underwriter intervention. For risks not accepted by the rules engines, artificial intelligence (AI) can augment existing processes enabling the underwriter to make a decision in a fraction of the time — in some cases reducing a


process from 23 minutes to just a few seconds. Today, there’s a good chance that someone could apply for a life insurance policy and, thanks to the use of embedded advanced analytics and predictive models, not be required to submit any lab work. In fact, with the introduction of accelerated underwriting at Sun Life, we expect to test around 35% of our clients in 2020, down from more than 60% a decade ago.

TREND 2: Better data in, better data out It’s a great time to be an underwriter. Applications of AI and machine learning expedite the underwriting decision, which allows us to improve the client experience. Rule engines free up valuable underwriting resources that we can redeploy to other high-value work. That means better outcomes for everyone. By high-value work, I mean: • Complex and large cases • Working with data scientists to test and refine predictive models • Collaborating with product development teams to create new and innovative products • Working with behavioural scientists to transform draconian questions into language that’s concise

TREND 3: Lifestyle as a predictor You might think we’ve reached the pinnacle of streamlined underwriting requirements, but we’ve got room to grow. As we continue harnessing the power of analytics, lifestyle data will inform more of our decision-making, especially as we get better at monitoring activity. Wearables like smart watches and Fitbits are already commercial hits. Integrating advanced wellness and physical activity information into the risk selection process is the next logical step for the industry. Not only does it provide a more holistic picture of an individual’s health, but it’s also a powerful motivator! If sitting is the new smoking, then isn’t it convenient that a Fitbit can remind you to stand up and stop staring at the screen? These are just some of the ways technology is already changing the industry and enabling underwriters for the future. The driver, however, must always be the client experience. SHARON B. SMITH recently retired from her role as chief underwriter and claims risk officer at Sun Life.

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Susan Yellin explores how you can help the growing numbers of people who are part of the gig economy


your advice adapted to serve this changing demographic of workers? Unlike those in the traditional workforce, advising gig clients to put aside a certain sum of money every month into their RRSPs, for instance, no longer works, says Melissa Mills, vice-president, financial planning at BMO Financial Group. In fact, Mills says advisors should have already changed the way they provide advice to these investors, primarily by asking questions around the client’s job stability, their risk tolerance, and liquidity. They should then build in a thorough financial plan with a number of “what-if ” scenarios. “If we’re going to take high risks with money that we need



eet Lois Volk. Ever since she began her career as a mortgage broker 32 years ago, Volk has been juggling non-steady income with ongoing bills, trying to keep her financial house in order, the same as thousands of other Canadians in the so-called “gig,” on-demand, or temporary workforce. Like a real estate agent, Volk’s income varies, so something as basic as saving is fundamental — but potentially dicey, as she discovered. “When my ex and I were together, we were on track working with an advisor then for ‘Freedom 55.’ That went all to hell when we separated,” says Volk, who lives in Toronto. Her current husband is a securities trader who looks after the personal books now. Volk herself has gained some insight into the insurance industry after she not only took some courses but also had to go on disability. Unusual for many in the gig economy, when Volk began working at national company Invis in 2004 she was offered an optional insurance package. She instinctively knew insurance was a must with two young children at the time. “And it came in very handy for the last year and half when I had to go on disability … otherwise I wouldn’t have any income.” While Volk is lucky enough to contract work for an organization that provides an optional insurance package, most gig workers are pretty much left alone to fend for themselves. The job economy is changing and with it, the way people invest, save, and plan to achieve their financial goals. Has

Lois Volk

in less than two years, for example, that’s certainly not the best practice,” she says. Goal setting and management of cash flow, debt, and risk are cornerstones of all good financial plans, but for gig economy workers, staying focused on finances trumps everything else. Without an employer to make automatic payroll deductions for everything from taxes, EI, and CPP to health benefits, accounting for these costs can be easily overlooked by gig workers but is critical for a solid financial plan. “The gig economy requires the person to be disciplined on their own and budget accordingly,” notes Tonya Campbell, regional vice-president, Mobile Advice Team, at Scotiabank.

Advisors can help play a strategic role in sitting down with a gig worker who has a $5,000 cheque and help them determine how much should go to taxes, how much for their own needs, and how much for various savings plans. “That’s the real challenge — the discipline that’s required,” says Campbell. For their part, advisors need to be curious and ask about the type, amount, and frequency of income a gig worker makes and if there are any required deductions needed to protect their financial plan — such as taxes and insurance, she adds. Still, cash flow is probably the number one challenge entrepreneurs face daily, says Al Nagy, CFP, an associate FEBRUARY 2020 FORUM 11

COVER STORY consultant at IG Wealth Management in Edmonton. “When you’re in the gig economy, that cash flow is unpredictable, so it’s very important to create a cushion to fall back on when times are slow. Consider a TFSA,” he notes. Gig economy workers are often concerned about when their next job will come, which means that they need to stockpile more “emergency” cash than is necessary for traditional employees, says Liz Schieck from the New School of Finance in Toronto. At the same time, they can’t put the money into a longer-term investment if they’re not sure whether their contract will be renewed in two months. “This can prove to be really frustrating when they want to move their plan forward,” she says. Many gig workers are so concerned about the near term that they can’t always think far down the road. But with no employer socking away money into a defined benefit or defined contribution pension plan, they need to do their best on their own to put away the maximum in their RRSP, Nagy says. While traditional employees often count on companies to include benefits, not so in the gig world. That’s why risk management — a key plank for any worker — is even more crucial for those who work for themselves. “You have to ask yourself: What would happen if you become disabled?” Nagy says. “What would happen to your family if you are unable to perform the obligations to the business? These are things suddenly that you’re not getting from an employer and you have to think of this yourself.” Because income is “lumpy,” some gig workers may simply add an unexpected cost or two onto their credit card when they don’t have the money immediately, says Dennis Tew, head of national sales at Toronto-based Franklin Templeton Canada. Instead, he suggests workers have access to a line of credit with a reasonable interest rate that they can use to smooth things over. So many issues can arise for gig workers that Tew believes the best thing they can do for themselves is get a qualified financial advisor. Striking out on their own doesn’t mean they have to do everything for themselves, especially when it comes to unfamiliar financial particulars. “I think these individuals are actually way more needy than your traditional 9-to5er,” Tew says. “You really have to make sure that they get their financial house in order, and that’s on both sides of the ledger: lumpy income coming in and expenses going out. I think 12 FORUM FEBRUARY 2020

Shachi Kurl



ccording to a November 2019 Angus Reid Institute survey, one in three Canadian workers said they had done some gig work in the past five years and have done so mostly to earn extra spending money. Members of the gig economy can range from freelancers to independent contractors, and may make decent money when all is counted up at the end of the year. A recent Angus Reid survey indicates that just over 30% of those with household incomes of more than $150,000 have also been members of this temporary workforce. Men and women between the ages of 18 to 34 are most likely to have taken part in the gig economy in the past five years, according to the Angus Reid survey. But a healthy 25% of those over age 55 have also acknowledged their participation. While some may suggest that gig work is often used by young people to increase their networking opportunities and find a foothold toward a full-time job within their career path, the numbers say that’s not the main motivating factor, says Shachi Kurl, executive director of the Angus Reid Institute in Vancouver. “The two primary reasons why people engage in gig work in this country are both driven by strictly monetary policies — either because it affords extra savings or extra spending money, or because it is their primary source of income,” Kurl says. “There are a significant number of people working in the gig economy, and for many, it’s not a ‘nice to do,’ it’s a ‘must do.’ ” Small business owners have slightly different reasons for taking on contract, or gig work, according to a July 2018 study by BMO Wealth Management. These included the need to have autonomy and control (49%), make extra money on the side (49%), balance career and family needs (42%), or because it was the only way to make an income (27%). “These are folks who really need the services of a good financial advisor to help them manage risks,” says Evelyn Jacks, founder and president of the Knowledge Bureau in Winnipeg. — S.Y.

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COVER STORY it’s a challenge for some advisors, but there are more and more of these gig jobs out there.” Some might see the increase in gig economy jobs as a death knell for full-time work, but it didn’t happen with automation and it’s unlikely to occur now, says Stephen Harrington, director of workforce strategy, advisory, Deloitte Canada in Ottawa. Hiring freelancers can be seen as an option for employers looking for everyone from specialized high-tech work to a trade, but who aren’t sure whether they want a task done internally. “It’s not an either-or, it’s an ‘and,’ ” explains Harrington. “If the

contingent workforce is used for short-term thinking it could erode jobs and it could also erode organizations. It could start to give away skill sets and talents that are critical to the success in the future and hollow out their organizations. But I don’t think Canadian firms are broadly doing that.” He says if people believe the gig economy is good for the country overall, then employers need to increase the awareness of these workers and take advantage of them more often. As well, Canadians themselves need to know these options are available to them.  SUSAN YELLIN is a Toronto-based writer who specializes in financial services. To receive a PDF of this article, email dgage@advocis.ca.



hether contractor, freelancer, doctor, lawyer, or entrepreneur — when you work for yourself there’s a whole new game in town when it comes to dealing with the Canada Revenue Agency (CRA). “For you, CRA is ever present,” says Evelyn Jacks, founder and president of the Knowledge Bureau in Winnipeg. That’s because CRA expects a variety of on-time tax remittances. While personal or corporate instalments are a starting point, as the business grows, gig economy workers may find themselves collecting sales taxes and payroll source deductions for the government, says Jacks. The self-employed, including gig economy workers, always bear the burden of proof, with the onus to keep accurate records for all their income and deductions. Some in the gig economy may receive a T4A at year-end for all the income earned from a specific company over a year, but unlike “regular” workers, it’s up to gig workers to ensure they’ve set aside enough money for taxes and other tax obligations. “Your chances of being audited are greater because [CRA is] not getting a T4 slip from you; they are counting on you to self-assess and to report and remit properly,” cautions Jacks. Liz Schieck from New School of Finance in Toronto categorizes this as one of the top issues gig workers need to understand right from the start. 14 FORUM FEBRUARY 2020

Evelyn Jacks

Some freelancers and contractors may not make that much money in the early days, but once they hit the $30,000a-year mark, they may have to collect and remit HST/GST. Those who are unincorporated will file their business income with their annual personal tax return, as well as calculate and send in their Canada Pension Plan contribution, says Jacks. On top of that, they will have to make quarterly tax instalments if taxes owed upon filing are $3,000 or more. It’s all part and parcel of some rudimentary knowledge that all gig workers should have and can get from qualified advisors. “We believe there’s some really solid, basic knowledge that everybody wants, and there is very sound basic product knowledge that everybody needs to understand. But life isn’t sound or basic ever, especially for the self-employed,” says Jacks. “Throughout our life cycles, as we venture into various areas of financial complexity there are a number of different triggers that cause us to want

to make decisions about our money. Tax is one of those triggers, as are changes in how we work, earn, and save. In those times, advisors who have access to deep, involved knowledge really add value.” Even if advisors don’t know the ins and outs of certain issues, a good advisor will bring in a specialist to help out, she says. It’s this kind of essential knowledge that the New School of Finance imparts during occasional workshops on the importance of business finances and how to run a sole-proprietorship shop. Everything from knowing the difference between a business and a personal expense to how much gig workers should set aside for taxes and for themselves, is on the list of topics during the free workshops, which Schieck has been holding since 2016. Other topics include paying quarterly taxes, the nitty gritty of saving with an inconsistent paycheque, and what to do if you can’t pay on time. “There’s this whole part of building your financial plan for the rest of your life that comes after making sure you know what to do with the business finances,” she says. “It’s different for everyone and that’s the trick.” Most of those attracted to the workshops are Gen Xers, but Schieck says she does see a number of people who are trying to ease into retirement. These Boomers don’t want to work full-time anymore, or they want to pick and choose and are either freelancing while they go into retirement or taking contract work after retirement. “This is more of something they would like to do, unlike Millennials and Gen Xers who need to do it.” — S.Y.









Cannabis Risk Michelle Roussin provides details on the factors underwriters consider when it comes to cannabis



annabis use has increased since the federal government legalized the product in October 2018. If they haven’t already, more clients may ask how cannabis use affects their application for life insurance and living benefits. Here are some facts and best practices to keep in mind. Whether the cannabis is used for medical or recreational reasons, it will not cause an automatic uninsurable/declined risk. No matter how they use cannabis, the client can receive a standard, rated, or declined decision. The final decision will depend on a combination of the purpose of use, the amount consumed, the client’s current and past mental health and lifestyle, and the underlying medical condition.


There are four crucial dots to connect for clients who use cannabis: 1. Smoker or non-smoker: Do they use cannabis with tobacco products? 2. Do they use cannabis for medicinal reasons or is it for recreation? 3. If it’s recreational, do they have a strong history of drug or alcohol use, or depression? 4. Are they self-medicating with cannabis? Cannabis, when used with tobacco, results in smoker rates. Cannabis used without tobacco products will result in non-smoker rates. You’ll find this rule to be consistent across most insurance companies. Most, if not all, insurance companies will automatically check for cotinine during the urinalysis testing. Cotinine is a by-product of nicotine, which is the chemical found in tobacco. Testing for cotinine is a standard test for al l applicants — not just those involving cannabis. It’s important to continue to practise full disclosure of tobacco use. Being clear on the reason your client uses cannabis is a strategic move. Always ask if they use it for a medical reason or for recreation. This distinction is critical for the underwriting process and the underwriter’s risk analysis. Without a doubt, being upfront will help ensure a high quality, timely underwriting decision. Once this information is received, the underwriter's next move is to analyze the information and decide if anything else is required. If the cannabis is prescribed and used for a medical condition, the underwriter will then focus on underwriting that underlying medical condition that requires treatment with cannabis. In almost all cases, they’ll ask for an attending physician’s statement (APS). Be proactive and clearly document who is, or has been, prescribing the cannabis. Take the time to document details about the condition. For example, what condition is being treated with cannabis? When did the client receive the diagnosis? How long has cannabis been the treatment of choice? You may want to consider adding a note on how they’re doing with this treatment. This level of detail will mark the status of the condition as up to date, which adds value to the risk analysis process. Next, the underwriter will focus on underwriting the usage amount and assess the lifestyle risks. This includes any history of drug use, alcohol use, or mental health issues, such as depression or anxiety. Given that cannabis can be purchased legally without a prescription online or in stores, you may have some clients who selfmedicate. This means some Canadians are deciding to switch their ibuprofen or acetaminophen tablets for cannabidiol (CBD). CBD is the non-psychoactive part of the cannabis plant. In these situations, help the client disclose the reason behind their decision to self-medicate with CBD. For example, some Canadians are using CBD for their common headaches, menstrual cycle pain, or situational insomnia. What is key in these cases is helping the client be clear on the reason for switching to CBD. Confirm they are self-medicating a long-standing benign symptom, versus a brand new uninvestigated symptom. Any client self-medicating for a new symptom may be considered an uninsurable risk until the symptom is fully investigated by a doctor. This underwriting decision is understandable, but it isn’t black or white. The underwriter will base their decision on

the details in the application. And each case will be different. For example, a client who decides to switch their current painkiller for a small dose of CBD to treat long-standing menstrual pain will most likely be approved. This isn’t necessarily true for a client who’s just starting to experience a brand-new symptom and is self-medicating with CBD. There’s an understandable difference in risk to the insurance company here. As the insurance advisor, you need to guide your clients in disclosing the right level of detail regarding symptoms. This engagement can make all the difference in the underwriting decision and how your client experiences the process.  MICHELLE ROUSSIN, AALU, ALMI, CHS, is a field underwriting expert with 23 years of experience.


If your client uses cannabis, include the following in their application:

Medical Use • Why is the cannabis being prescribed? • Who is prescribing the cannabis? • What’s the dosage and frequency of the treatment? • Is the cannabis mixed with tobacco? • Has the client’s medical condition improved since starting this treatment? • When was the last medical follow-up for the condition, and what were the results? Recreational Use • What is the cannabis consumption: daily, weekly, monthly, or yearly? • What is the amount of cannabis consumed per use • Is the cannabis mixed with anything else, e.g., tobacco or other drugs • Consider including the insurance company’s drug questionnaire • Does the client using cannabis have a strong history of other drug, alcohol use, or mental health issues? Get the full details, then pause and consider connecting with your field underwriting expert of choice to determine your next steps. Self-Medicating • When did the CBD treatment start? • Why is CBD being used? • How were the symptoms or condition treated before the CBD? • Is the CBD being used for a long-standing symptom, or a brand-new uninvestigated symptom? • Is the CBD being mixed with tetrahydrocannabinol (THC)? If yes, what is the mix ratio? — M.R.


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I’ve interviewed more than 800 professional women worldwide in the past decade. My interviewees are diverse in terms of age, industry, geography, ethnicity, and profession. These women are smart, successful, and aren’t shy to share information about how they built their businesses and broke barriers to get to the next level of success. Let’s look at three lessons junior- to mid-tier advisors can use to apply to their own practices.

Barbara Stewart, CFA

1. COMMUNICATE EFFECTIVELY Advisors need to pay better attention to client preferences. Some don’t take the time to ask their clients how they prefer to communicate, and this seemingly little thing can make or break client satisfaction. In today’s world, we have so many choices when it comes to modes of communication, and our preferences are personal. We need to ask each and every client individually: Do you prefer a phone call, email, text, direct tweet, a message over Facebook Messenger, WhatsApp, Instagram, or Skype call? You need to meet people where they are. Besides preferences, do clients truly get what your plan is for their financial challenge? Corinne Ways is an advisor at CBC Banque Privée in Brussels, Belgium. When I spoke with her, she pointed out that if clients don’t understand your financial strategy, business doesn’t get done. As she puts it: “In my work advising private clients on their investments, I try hard to use plain language. Many advisors talk in technical jargon because they want people to think that they are a ‘professional,’ but if the client doesn’t understand the strategy they won’t do anything! The secret to my success is that I know that both men and women prefer to learn through stories or clear examples. I never focus on pricing or technical terms; just the concept. The client-advisor relationship works well when there is good communication.” 20 FORUM FEBRUARY 2020

How can you improve your practice — and yourself? Barbara Stewart, CFA, reports on her findings from successful women around the world

Sharing stories can also aid with communication. April Tan is with COL Financial Group in Manila, Philippines. She finds that sharing personal stories helps to build trust. She says: “I’ve been with the same firm since 1996. We are the largest online stockbroker and Philippines-based stockbroker on the Philippine Stock Exchange, with 70% of the retail clients in this country. We try hard to engage our clients by teaching them about the importance of investing in stocks and sharing stories about the companies rather than only talking about financial ratios.” Ways encourages her clients to let her know how they feel. She notes: “One of my clients received a tip about a big supermarket in Belgium, but she told me she was reluctant to buy the stock because she prefers buying her own basics from the local discounter. She thought others would probably feel the same way and it made her uncertain about investing in the company. She didn’t want to invest in something that she didn’t understand. Most people don’t need a complicated strategy; they need one that makes sense.”

April Tan

Christina Peng

2. TAKE CARE OF YOURSELF Nothing matters more than health. Take Christina Peng at Paradigm Asset Management Co. Ltd. in Taipei, Taiwan. To handle the demands and stress of the financial industry, she started focusing on endurance training and building physical strength. “I’ve run more than 10 marathons, including the Tokyo Marathon, and raced more than 10 triathlons, including the Challenge Championship,” she said. “I am also the captain of the Taiwan CFA cycling team. Through these experiences I was not only able to maintain good health and mental sharpness, but also to build amazing friendships with other athletes. These experiences in turn prepare me to better handle the constant challenges at work.” Maggie Marcotte works for a New York-based asset management firm. She learned the hard way about how it feels when you don’t take care of yourself: “Recently I have been observing my parents’ generation, and it has been a real eye-opener for me. I don’t see many who are aging well — quite a few of them were smokers and they have a lot of full-fat milk, cream, and butter. I worked as an investment banker for two years and had no time for myself and I gained 15 pounds. I made a conscious decision to change my priorities and live a wellbalanced lifestyle with a focus on my health. It feels so good to be working out again and eating great food. I now have better strength and endurance than I did in my early 20s. It is so empowering to feel healthy — I am much more confident, I stand up straighter, I sleep better, and I am generally in a good mood.”

3. GET PAID WHAT YOU ARE WORTH There is a wild amount of variation in both how advisors get paid and how much advisors get paid. Compensation packages vary based on the size of firm, the type of firm, the culture of the firm, and the leadership mentality of the firm. Importantly, when seeking out “the best package” there are other factors to consider that can be just as valuable as salary or commission income.

Blair DuQuesnay

Blair DuQuesnay is with Ritholtz Wealth Management in New Orleans, Louisiana. She spoke with me about her experience with negotiating and the implications this has had on her career: “I didn’t start out confident in negotiating until five or six years into my career. I’ll never forget the first time I asked for a higher salary when I was given a job offer. I said ‘Can you do better?’ And guess what happened? They did! I also asked if I could be evaluated after six months rather than the normal one year. This worked well because I got more money at the six-month point as well. This experience was empowering and I haven’t looked back. I now have the confidence to expect more and to ask for more. I tell younger people that your first job is so important: If you start out in a lower position it can affect you for years — it can really have an impact on your lifetime earnings. Always ask for more.” I haven’t interviewed myself, but if I did, I would base my answer on 20 years working as a portfolio manager at different firms: I spent time at a big bank, moved to a small boutique firm, then on to a mid-sized asset manager. In terms of compensation there were pros and cons to each firm’s offering but it is only in retrospect that I understand just how much the non-salary or commission forms of compensation matter. Consider the following: • While you will probably earn less at a bank in terms of annual income, you will find it relatively easy to meet ultra-wealthy clients that already trust the organization. What if some of them follow you to your next firm and they become your “paying” customers for your entire career? • What about taking company stock in lieu of salary or commission? Will the risk pay off? Maybe, maybe not. • What happens when the time comes to sell your book? Will you be paid a percentage of the fees on your client assets over one or two years, or will this be a perpetual deal?  BARBARA STEWART, CFA, is one of the world’s leading researchers specializing in women and finance. Her 2020 Rich Thinking white paper Top Tips for Business Success will be available to download at barbarastewart.ca on March 8 — International Women’s Day. FEBRUARY 2020 FORUM 21





Snowbirds can face devastating financial consequences without the right travel medical insurance coverage. Stephen Fine and Michael Camacho walk us through the issues


ome of your clients have no doubt left Canada and temporarily relocated to warmer destinations until spring arrives. But while these fortunate snowbirds are enjoying the warm weather in places like Florida, Arizona, California, Mexico, and beyond, many of them may have inadequate travel medical insurance coverage. Unfortunately, myths and misinformation about travel medical insurance are far too common, which is why educating your snowbird clients is vital to protecting both their physical and financial well-being. Let’s examine the most important issues snowbirds need to consider when it comes to emergency travel medical insurance coverage, and how to successfully navigate those issues.



In Ontario, the provincial government recently eliminated out-ofcountry travel medical insurance coverage under the Ontario Health Insurance Plan (OHIP). Prior to January, OHIP covered up to $400 a day for emergency in-patient services, and up to $50 a day for emergency out-patient and doctor services for Ontario residents travelling outside Canada. As of January, these costs will no longer be covered by OHIP (although OHIP will continue to cover out-of-country dialysis treatments up to $210 per treatment). While these amounts may seem significant, they are actually quite minimal when you consider the cost of medical treatment for Canadians travelling abroad. For example, the typical cost for an in-patient stay in a U.S. hospital can be $10,000 per night, so in most situations an individual without supplemental travel medical insurance would still only have been able to recover approximately 3% to 5% from OHIP. A common misconception among travellers is that their provincial health insurance plan will cover most or all of the costs of emergency medical treatment while travelling abroad, when in reality they only cover a small percentage of these expenses. The recent changes in OHIP coverage provide an opportunity to remind your clients that regardless of which province they live in, they should: • never rely on their provincial health insurance plans to cover emergency medical treatment expenses while travelling abroad; and • always consider private travel medical insurance coverage if they don’t have coverage through their employee benefits plan.

bypass surgery in Florida. His medical costs were nearly $313,000, which was covered by his travel medical insurance. A 77-year-old woman wintering in Mexico fell down the stairs while at a restaurant and was taken to the emergency room with an injury to her right knee. X-rays identified a fracture that required surgery. Her medical costs were nearly $80,000, which was covered by her travel medical insurance. Getting the right travel medical insurance coverage can be much more complex for snowbirds than other travellers due to several factors that may affect their premium and coverage. Age: The cost of travel insurance increases with age, so many snowbirds can expect to pay more for coverage than younger travellers. Some providers also won’t cover individuals over a certain age. Medical conditions: Many snowbirds have one or more preexisting medical conditions, which can increase the cost of coverage, are subject to “stability clause” requirements, and, in some cases, may make them ineligible for coverage. Medical questionnaires: Once your clients reach a certain age, typically between age 55 and 60, they will be required to complete a medical questionnaire when applying for travel insurance. Trip duration: Travel insurance premiums increase as trip duration increases, which can mean higher costs for most snowbirds who spend several months outside Canada.

SINGLE VERSUS MULTI-TRIP ANNUAL PLANS When it comes to travel medical insurance, snowbirds generally have the option to choose between single-trip and multi-trip annual plans. Single-trip plans provide emergency medical coverage for a single trip beginning on your departure date and ending on your return date. On the other hand, multi-trip annual plans provide emergency medical coverage for an unlimited number of trips over a 12-month period. However, multi-trip plans limit the number of days you can travel per trip. Limits vary depending on the provider and policy, but commonly start at 10 days and go up to 30 days or more. Once you reach your limit, you must return to your home province before travelling again for your coverage to continue. Most multi-trip annual plans allow clients to be covered for a longer period on a particular trip by purchasing “top-up” coverage for the extra time they want to spend away. It’s best to compare both options, as the right choice will depend on a traveller’s specific travel plans.



Not having the right coverage can be financially devastating if your client suffers a medical emergency while travelling outside Canada, as treatment costs for serious medical issues can total several hundred thousand dollars, and even treatment for mild to moderate medical issues can easily climb into the tens of thousands of dollars. The following examples of recent travel insurance claims by snowbirds demonstrate just how expensive these costs can be: A 78-year-old man spending the winter in Florida was admitted to a local hospital with chest pain. Testing determined that he had three significant heart blockages that required surgery. He could not be repatriated back to Canada for surgery and underwent

One reason why travel medical insurance claims are denied is not meeting a policy’s stability requirements. Standard travel medical insurance policies contain what is commonly referred to as a “stability clause.” These clauses require pre-existing medical conditions to be “stable” (i.e., have no changes) for a specific period of time before a policyholder travels. Stability periods vary across providers and policies but are often 90, 180, or even 365 days. If there are any changes to a pre-existing medical condition during the stability period, that condition will be excluded from coverage, meaning the policy will not cover any expenses FEBRUARY 2020 FORUM 23

incurred that are related to that condition while travelling. And any changes really does mean any changes, including some your clients may not think of, such as starting or stopping medications, changes in medication dosages, and having diagnostic tests for possible medical conditions not yet diagnosed. If your client has a standard insurance policy with a stability clause, they should ensure all pre-existing medical conditions meet the stability requirements. Alternatively, they should consider a personalized policy with no stability requirement for pre-existing medical conditions. Personalized travel medical insurance policies are a great coverage option for individuals who either don’t meet the stability requirements found in standard travel insurance policies or want the peace of mind of not having to worry about stability clauses all together. Personalized policies (unlike standard policies) base coverage eligibility, and premiums exclusively on one’s personal medical history and characteristics, and provide coverage for pre-existing medical conditions with no stability requirement. They also don’t require clients to complete a lengthy medical questionnaire. Rather, they simply need to answer a few pre-screening questions and disclose all of their past and current medical conditions at the time they apply (they may also be asked followup questions about each of those conditions). As long as their conditions are eligible for coverage, they’ll be covered for all pre-existing medical conditions, regardless of how long they have been stable.

In many situations, the cost of a personalized policy is the same or less than a standard policy, because personalized policies are tailored specifically to your client’s conditions and risks — so they won’t be grouped into a category with other travellers who may have more serious or numerous medical conditions. Of course, there are situations when a personalized policy will cost more than a standard policy, but this is usually due to certain pre-existing medical conditions being covered that would otherwise be excluded

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from coverage under a standard policy. Note that personalized policies aren’t offered by all insurance providers.

FULL AND ACCURATE DISCLOSURE Failing to fully and accurately disclose medical history and other required information is the top reason for a denied travel medical insurance claim. Whether your clients are applying for a standard or personalized policy, they must always complete their insurance application truthfully and accurately. Failure to do so can be grounds for the insurance company to deny any claim made under a policy, even if the claim is unrelated to a medical condition your client failed to disclose. Be aware that it doesn’t matter if the failure to disclose is intentional or unintentional, which means that even an honest mistake may result in their policy being voided or their claim being denied. If your clients are unsure, advise them to speak with their doctor for assistance in completing the medical questionnaire. And if your client is tempted to intentionally provide inaccurate or incomplete information in the hopes of getting a lower premium or coverage for an ineligible medical condition, don’t let them. Once a claim is reported, the insurance company will review their medical records and become aware of the missing or inaccurate information. Your clients’ disclosure obligations don’t stop after they purchase a policy, as their policy will require them to inform their insurer of any changes to their pre-existing medical conditions or new medical conditions that arise: • After they have purchased their policy and prior to their departure date.

• At any time while they are in their home province during their coverage period (i.e., if they have travelled back home after departing on their trip, but their coverage period hasn’t ended) When your client informs their insurer of a change to their health after purchasing a policy it can result in one of three outcomes, depending on the change: 1. No change in premium or coverage; 2. An increase in premium; or 3. The cancellation of the policy and a refund of the premium if the new condition is severe enough that the insurer won’t cover it. While price is obviously an important factor when choosing a travel insurance provider, it shouldn’t be the deciding factor. Other important factors include coverage features, expertise, customer support, and track record. Buying travel insurance based on price alone can be dangerous, as any upfront savings could end up costing your client much more down the road if it doesn’t cover them when they actually need it. Ultimately, your client’s goal should not be to just find the cheapest travel insurance policy possible, it should be to find the least expensive policy that provides the coverage and assistance they need should they ever require it.  MICHAEL CAMACHO (MBA, CFP, CLU, CHFC, CHS, FLMI) and STEPHEN FINE (LL.B) are the co-founders of Snowbird Advisor Insurance Inc., a travel insurance brokerage that specializes in assisting Canadians snowbirds, Boomers, and seniors with their unique travel insurance needs. Visit www.SnowbirdAdvisorInsurance.ca.

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Senior Protection

Have senior clients who want more insurance? Richard Parkinson offers some suggestions


ver the last 17 years, I’ve received many prospects leads for people over age 65. They want to explore their options for insurance, or conduct an insurance review. While life insurance is the predominant request, critical illness and disability insurance inquiries pop up as well. Let’s examine what’s available.

LIFE INSURANCE The older our clients are the more likely they will have a medical issue, so that’s a good place to start a discussion. After all, there is a plan available for anyone, with some age limits (e.g., age 85 is the oldest I am aware of). Whether the senior client will want to pay the monthly premium is yet to be determined. Three forks in the road exist for those who would prefer to not have to go through the detailed medical questions and tests, or who have a medical or lifestyle issue that might complicate obtaining coverage: Medically underwriting generally involves a nurse who will visit your client for blood and urine samples, and for those over age 70, an ECG, lifestyle report, and generally an attending physician’s statement. The benefit of this plan is they get the most coverage for the least cost, and the widest selection of plans. The downside is that people with

some medical issues run the risk of a rating, (i.e., the insurer may want clients to pay two to three times their standard rate, or they could decline to make them an offer). Non-medical/simplified issue plans don’t ask a lot of questions, and no paramedical tests are taken. The price for this is rates approximately 1.5 to two times more than medically underwritten plans for limited coverage amounts up to $500,000. The appeal of these plans is your client will know upfront whether they qualify or not. Some of these plans are “deferred,” which means that if they were to die from something other than an accident in the first two years, their beneficiary would only receive a return of the premiums they paid. After two years, the benefit amount is paid, irrespective of cause. The appeal of these plans, from companies such as Canada Protection Plan (CPP), Industrial Alliance, or Assumption Life, is they ask a series of questions, and as long as your client can answer “no” to all of them, they will be approved, though these plans cost around 50% to 100% higher than the medically underwritten plans, before they assess any surcharges. This often makes these plans the ideal no-hassle solution, if you feel the client will likely be rated. No-questions-asked plans have even more limited coverage, typically $50,000 or less,

and have hefty premiums, especially for those over age 60. People in this category typically opt to self-insure, as these too are deferred life plans. Also be aware that there are several online only plans, so we have lots of competition from insurance companies dealing directly. Going over these particulars with senior clients gets a dialogue going, which generally leads me to email them some insurance companies’ medical questions. Sadly, I sometimes receive a lead from a prospect that was abandoned by their agent due to being declined for a medically underwritten plan. Sixty per cent of the time, I have successfully gotten a decline reversed to either a rated policy or a standard rate if the reason for the rating is not clearly understood. If you have a client that was declined, make sure the insurance company sends their doctor documentation detailing the reason for the decline, and follow up. In one case, the report back to the doctor noted the client had syncope, a temporary loss of consciousness. The client was unaware of this condition. We pursued the matter with the insurance company, which asked the client to get a Holter test. After doing so, he received a policy offer with a 50% rating and accepted. One company that is unique in the products they offer is Hunter McCorquodale www.acceptionallife.com, which offers medically underwritten policies for hard-to-insure people with medical or lifestyle issues that would cause them to be declined elsewhere. For clients who are declined or rated, we have at simplified issue or guaranteed issue policies at our disposal. I am only aware of four companies that offer guaranteed-issue plans as shown below, which we brokers can sell. There are several more as mentioned already, which are available directly from the insurance companies themselves. Many people who are over 70 and can only qualify for the guaranteed issue plans may be better off self-insuring themselves using a Tax Free Savings Account. There are several companies offering simplified issue/non-medical plans. Both imme-




Min. age to apply

Max. age to apply

Coverage to age

Max. coverage

Cash values?

Med. questions?

Accelerated pay

Canada Protection Plan

Guaranteed Acceptance

Guaranteed Issue





Yes in year 5



Edge Benefits

Final Expenses

Guaranteed Issue



to age 75





Empire Life

Guaranteed Life Protect

Guaranteed Issue





Yes in year 5


Pay to age 95

Specialty Life Insurance

Guaranteed Acceptance

Guaranteed Issue








Note for Empire Life: $50,000 for ages 40–50, $25,000 ages 51–75



most of these plans ask a build question, and for those that exceed the height and weight tables in these applications, consider Assumption Life’s Golden Protection, which does not ask about build.

After a certain age, life insurance becomes very expensive as your age approaches life expectancy. Starting in January 2009, a new program called the Tax Free Savings Account (TFSA) began, where deposits up to $6,000 (as of 2019) per year can be added to the account. While there is no deduction for the deposit, there is no tax payable on the gain either. This calculator assumes you would either apply for a life insurance policy, or pay the equivalent, monthly into a TFSA. Of course the risk of self-insuring is that you will experience a premature demise long before the savings account's balance is equal to the life insurance benefit. In the senario below for a 75-year-old nonsmoker male, assuming a 3% return on the TFSA investment, the point when the TFSA balance is equal to the life insurance benefit is just over 4.25 years. You need to decide whether you will be lucky or unlucky, i.e., live longer than 4.25 years, and receive at least 3% compound return on the TFSA per year. Meet a premature demise before the breakeven years, and the TFSA would have been a bad idea.

LONG TERM DISABILITY INSURANCE (LTDI) Once a person is over age 65, but is still working, the options for disability insurance reduce considerably. I’m aware of the following LTDI plans for those over age 65 shown in the table below. Is LTDI insurance worth it for someone over age 65? Consider Manulife’s personal accident disability insurance (PADI). The monthly premium for $1,000 of monthly LTDI is $54.05 a month or $648.60 a year for a 66-year-old male. An approved claim would pay out $1,000 a month for two years, which equals $24,000 of benefit. I have had clients who feel this is worth taking the chance. For clients with unusual circumstances, coverage is available from Hunter & McCorquodale www.hunmcc.com/ solutions.

However, if you take into account the monthly premiums you pay, the breakeven is actually 2.33 years, and you are age 77. Client age: Life insurance coverage: Monthly life insurance premium (CPP Guaranteed Acceptance): Annual life insurance premium: Monthly deposit into TFSA: Estimated rate of return for TFSA investment:

75 $25,000.00 $449.33 $4,992.56 $449.33 3.00%

AFTER-TAX VALUE OF LIFE INSURANCE VS. TFSA Year when TFSA balance equals life insurance death benefit: Net after-tax value of life insurance: Net after-tax value of TFSA: Life insurance value over TFSA : Year/age when life insurance minus premium paid equal to TFSA balance:

male non-smoker

4.25 years $25,000.00 $24,958 $42 2.33 years/age 77

Life expectancy based on current age of 75:


Stats Canada provides a table to show life expectancy given you have reached a certain age. The age shown above is based on your current age. The older you are, this age becomes greater than the traditional statistic for the population in general. 160,000


• Life insurance • TFSA • Life-net benefit





Once a person is over age 65 before applying, critical illness coverage appears to not be available from any of the mainstream insurance companies. Chubb is one company that does offer CI to people up to age 69, but it expires at age 75. I’m not sure of the practicality considering the monthly premium for a 67-year-old male is $343.20 for $25,000 of coverage. This plan is available from brokers contracted with Chubb, and Specialty Life brokers. In summary, for senior clients, we have lots of options for life insurance, much fewer for disability insurance, and for all practical purposes, none for critical illness that make any financial sense. 

$111,166.08 100,000 $94,300.44 80,000



$63,418.05 $35,979.45





$18,374.79 $11,600.61

$0 1




















& Total Protection, Canada Protection Plan, Industrial Alliance, Access Life, and Wawanesa. It is worthwhile to have their application forms available when speaking with prospects, as the wording of the questions differ, and I have found clients with a specific medical issue qualify for a plan from one company where they would not from another. Also,

diate payment and deferred plans are available, depending on how the questions are answered. Essentially with these plans, the client needs to answer “no” to a group of questions, and the more questions where they can answer “no,” the better the rate. Companies I use regularly for these plans include Assumption Life’s Golden Protection

RICHARD PARKINSON, CPCA, is an independent insurance broker based in Vancouver.



Edge Benefits


Industrial Alliance AcciJet

SOLO Essential

Loss of Income

Personal Accident

Injury only





Injury and illness





Age when illness no longer available





Min. age to apply





Max. age to apply

69 injury / 64 illness




Age when coverage expires

75 injury / 70 illness




$6,000 class dependent

$6,000 class dependent

4k age 65–68, $1k 69–80


5 years or to age 70

to age 70

2 years

5 years or to age 70


Maximum coverage Maximum benefit period > age 66




Basic Personal Amount Will BPA changes truly provide tax relief? The most common non-refundable credit is the basic personal amount, sometimes called the basic personal credit. Either way, it’s referring to the same thing — effectively negating tax on income from zero up to the set level. For instance, when you file your upcoming return for the 2019 taxation year, you’ll claim this credit on your first $12,069 income. At the 15% rate, the value of the credit is $1,810. While it may seem an obvious point, note that the amount is larger than the credit value, since it is multiplied by the credit rate. Keep this in mind as we turn our attention to the change in the amount, and contemplate the value of that change.


Over the course of the next four years, the BPA will be bumped beyond its usual inflation indexing until it reaches $15,000 in 2023. The rollout schedule is shown in the first three columns of the table here, reproduced from the Department of Finance backgrounder. The two right-hand columns are my own calculations for the sake of some analysis to follow. The additional BPA will initially yield $140 in annual tax savings, rising to about $300 in 2023, as featured in official communications. In that last year, the $15,000 amount will equate to a full value for the BPA of $2,250, a 13% improvement over what current indexing would have given. However, it will be almost four years until early 2024 tax filing when that extra $300 may be claimed. Using the approximate 2% indexing employed by the Department of Finance, that discounts back

Most non-tax professionals likely don’t pay too much attention to the difference between a tax deduction and a tax credit. Both can reduce a person’s tax bill, but in a very real sense they are applied at opposite ends of the income spectrum. A deduction reduces the amount on which tax is calculated. Because we have a progressive personal tax system (i.e., higher rates applying to income at higher brackets), a deduction reduces tax exposure at a person’s uppermost or marginal rate. In terms of tax credits, a non-refundable credit reduces your initially calculated tax due, whereas a refundable credit is more like a subsidy in that it is paid even if you don’t owe tax. In either case, a maximum amount is legislated for a given purpose, against which the appropriate credit rate is applied. With a few exceptions (mainly charitable and political donations), the credit rate most often is at the lowest bracket rate. For federal tax calculations the lowest rate is 15%, but a person’s own income dictates the marginal rate, which may be as much as 33%. Connecting those dots, a deduction is generally more valuable than a credit. 28 FORUM FEBRUARY 2020


to about $277 in current dollar value. To be clear, I’m critiquing, not criticizing; my aim is to couch expectations of the practical implications for individual and household budgets. That last point is especially important, as there are parallel changes to the spousal and eligible dependant amounts, the effect of which will be to double the impact to as much as $600 for families claiming either of those credits.

INCOME CEILING AND TIME HORIZON Not everyone will enjoy this enhanced BPA. Extra components will be added to the BPA definition to reduce the enhancement as income enters the 29% fourth bracket, until it is eliminated for someone whose income exceeds the 33% top/fifth bracket. For 2020, those thresholds are $150,473 and $214,368. For your curiosity, a $300 loss across this range is a clawback contribution to a marginal effective tax rate of just under 0.5%. The BPA and brackets will continue to increase each year according to the existing indexation formula, but the BPA enhancement will remain at $15,000 after 2023. This means that the value of the enhancement will continually erode each year thereafter. Using that 2% index factor as a proxy, the BPA would overtake the enhancement by about 2030. Whether this will still be a feature of our tax system a decade from now is anyone’s guess.  DOUG CARROLL, JD, LLM (Tax), CFP, TEP, is a highly respected tax and estate consultant to financial advisors and their clients. He can be reached at doug@douglascarroll.com.


Existing BPA1

Proposed BPA

BPA difference

Value at 15%






















Based on Department of Finance Canada projections for indexation for 2021–2023 period



he federal government recently put a key piece of their tax platform in place: an increase in the basic personal amount (BPA). This is expected to lower taxes for close to 20 million of us, and eliminate any federal tax liability for almost 1.1 million Canadians. To deliver on this promise, the government will increase the BPA to $15,000 by 2023. On the face of it, that’s a nice, round, substantial figure, and no doubt many of us will experience tax savings. Still, to give it some proportionality and context, let’s take a closer look to understand how, when, to whom, and to what extent this will provide tax relief.



Comfort Letters Finance Canada offers taxpayer relief


here may be situations where a taxpayer identifies a problem or unintended effect created by existing tax legislation. A submission on the issue can be made to the Department of Finance (Finance Canada), and if they agree with the taxpayer’s position, a “comfort letter” can be issued that outlines their intent to propose technical amendments to address the specific concern. While Finance Canada does not guarantee that the technical amendments will be enacted by Parliament, the Canada Revenue Agency (CRA) will normally administer the Income Tax Act based on the terms of the comfort letter. Let’s review three comfort letters issued in 2019 that will be of interest to financial advisors.

Life Underwriting (CALU) on behalf of affected policyholders. Finance Canada responded with a comfort letter issued in June 2019, indicating its intent to amend the LIA policy rules to confirm that grandfathering is available to commercially reasonable arrangements that were in existence before budget 2013. In addition, where certain conditions are satisfied, the refinancing of such arrangements will not subsequently result in a loss of grandfathering. It is important for affected policyholders to seek tax advice to confirm that their arrangements meet the grandfathering criteria and will continue to do so in the future.


Tax changes were recently enacted that create additional limits on the availability of the principal residence exemption (PRE), commencing in 2017. In particular, these rules restrict the ability of “personal trusts” to claim the PRE to the following types of trusts: • Life interest trusts (which includes alter ego, joint partner, and spousal trusts) • Certain trusts for minor children of the settlor where one or both parents are deceased; and • A qualified disability trust (QDT) where the beneficiary is the spouse, former spouse, or child of the settlor. Since a QDT can only be testamentary trust (one which arises on the death of the testator) this rule change now prevents inter vivos trusts established for a disabled person from qualifying for the PRE. Finance Canada has indicated that it recognizes the potential unfairness of this limitation, and in September 2019 issued a comfort letter recommending changes that would permit an inter vivos trust to qualify for the PRE, if it meets the following conditions: • The beneficiary is a Canadian resident and qualifies for the disability tax credit • The beneficiary is the spouse or com-

Tax changes that took effect in 2013 limit or eliminate many of the tax benefits previously available to leveraged insured annuity (LIA) strategies. By way of background, these arrangements typically involved a corporation purchasing a life insurance policy and life annuity on the life of a shareholder. The corporation would then borrow funds using the life insurance policy and annuity payments as collateral security. Before the LIA policy rules were enacted, potential tax benefits included a reduction in the capital gain arising on a deemed disposition of the shares in the corporation upon the shareholder’s death, as well as a large credit to the corporation’s capital dividend account from the life insurance proceeds. The new legislation was not intended to apply to arrangements in place before the budget date (March 21, 2013). However, subsequent CRA interpretations expressed the view that certain changes in the terms of the loan, including a refinancing, could result in a loss of grandfathering. Representations were then made to Finance Canada by the Conference for Advanced


mon-law partner, former spouse or common-law partner, or a child of the settlor; and • No person other than that beneficiary may receive or otherwise obtain the use of the income or capital of the trust during the beneficiary’s lifetime. These changes are intended to be effective for taxation years after 2016.

INVESTMENT MANAGEMENT FEES — REGISTERED PLANS During a tax conference in late 2016, the CRA was asked whether investment management fees (IMFs) payable on securities held in a registered plan would be subject to the advantage rules in the Income Tax Act in circumstances where the plan holder paid those fees directly. The CRA confirmed that the advantage rules would apply (resulting in a 100% tax) if the IMFs were not paid by the registered plan. To provide time for taxpayers and plan administrators to adjust their administrative practices, the CRA also indicated that the advantage tax would not apply until 2018. This implementation date was then deferred to 2019 to allow more time for review by Finance Canada. In a comfort letter released in August 2019, Finance Canada indicated that it could not conclude that plan holders are tax motivated when entering into arrangements to directly pay the IMFs. As a consequence, Finance Canada has recommended amendments to the definition of “advantage” in the Act to ensure it does not apply to “payments for investment management fees by a controlling individual of a registered plan on behalf of the plan,” provided such fees are reasonable in amount. These changes, if enacted, would be effective for the 2018 taxation year.  KEVIN WARK, LLB, CLU, TEP, is the author of The Essential Canadian Guide to Estate Planning (2nd Ed.) and The Essential Canadian Guide to Income Splitting. FEBRUARY 2020 FORUM 29



Refer Madness How asking for referrals can go sideways


veryone talks about the importance of asking clients for referrals, but there’s a reason why advisors often hesitate. Sometimes, the referral process can bring unintended negative consequences. Let’s examine 10 different kinds of client situations where referrals can go wrong.

1. The enthusiastic client. They think you are the greatest. They have good reason to feel that way. You helped them develop a financial plan. Their retirement savings are on track. They are setting aside money for their children’s education. They tell everyone they know you are the financial advisor for them. They follow up, asking, “Have you called her yet?” What could go wrong? They are so persistent, friends assume you are paying a finder’s fee to get new clients. They suspect your friend has a personal stake in the outcome. 2. The loose-lipped client. You keep client identities confidential. You also host client recognition events and conduct seminars. Your client recognizes high-profile people in the crowd. They tell their friends to do business because you advise the local movers and shakers. They freely volunteer several names. What could go wrong? Those people think you ignore confidentiality and freely talk about your clients. 3. The litigious prospect. There are people who buy investments in volatile markets, then attempt to sue. These are the types of folks you don’t want over to your house for drinks, especially on a snowy day. Your client has a friend who has been through three advisors already. Each relationship ended with a lawsuit. They told your client they are looking for a new advisor. They brought up your name. What could go wrong? It’s an accident waiting to happen. Although you are careful, document everything, and follow the rules, 30 FORUM FEBRUARY 2020

they might sue anyway, figuring they might get something just to walk away. 4. Unrelated business. You just moved your practice upmarket. Retirement planning is your major focus. Your client knows someone who trades commodities. Their advisor retired. What could go wrong? Your client talked you up. Now you need to explain you have neither the expertise nor the licences required to trade commodities. 5. The small-account client. Either you moved your practice upmarket or your firm segmented the market, intending that local advisors work with larger relationships. A client sends a neighbour to you whom she says is more well-off than her. What could go wrong? The neighbour doesn’t meet your minimum. You need to explain, “I’m sorry, but you are too small.” Everyone is embarrassed. 6. The needy client. Your client refers a friend, neglecting to mention you will be their fourth advisor in 12 months. What could go wrong? Now they are your problem. Although this might be tolerable if they do a huge amount of business, but they probably don’t. 6. The know-it-all client. They feel they understand how every kind of insurance works. They understand every type of investment and the fundamentals of every industry. They think financial professionals are order takers. They feel you fulfill a key role of taking the blame when something doesn’t work out. What could go wrong? They don’t understand the value you bring to the relationship. Their attitude implies they should be a self-directed investor. But then something goes wrong. 7. The cheapskate. They question every fee. They see the advisor in an adversarial

role. They want an enormous amount of service and attention for free. What could go wrong? Mutual resentment develops. You give all your clients a high level of service. This person wants as much as they can get for as little as they can get away with paying. They resent you for “trying to make money off them.” 8. All day, every day client. Your client is your friend. You were roommates at school. You enjoy hearing from them. The social and business relationships are intertwined. Because of your friendship, you are available to them 24/7. Your client sends a friend along. They explain you provide this level of service for all your clients. What could go wrong? You explain business contacts take place during business hours. They feel you should be on call, like a doctor. 9. The whiff of inside information. You do some investment business. You hold the proper licences. You enjoy doing research. You take advantage of research made available by the firm. You read a lot. The stock market has also been moving in your favour. Your client is doing well. Unfortunately, all this goes over their head. They send a friend in your direction. “He tells me what to buy. It works out. I don’t know how he does it. Maybe he has inside information.” What could go wrong? When word gets around, it sounds like you are doing something illegal. It attracts attention from regulators. You are in the awkward position of needing to prove your innocence. These 10 types of clients mean that advisors need to let their clients know the type of people they would like to add to their practice. When meeting with prospects, you need to draw them out with questions to see if the relationship is a good fit or not.  BRYCE SANDERS is president of Perceptive Business Solutions Inc. His book, Captivating the Wealthy Investor, can be found on Amazon.



Tricky Windups The impact of amalgamations and windups on corporate-owned life insurance policies


revious FORUM articles have addressed the tax issues that can arise where life insurance policies are transferred between shareholders and corporations. In the case of transfers from a shareholder to a corporation, the rules as implemented by the 2016 budget are relatively straightforward (see June/July 2016 issue, page 24). In the case of transfers from corporations to shareholders, however, the rules are anything but simple, and can create both confusion and unintended tax consequences (see Nov/Dec 2017 issue, page 24). The rules on amalgamations and windups follow a similar pattern. Where corporations amalgamate, or where a subsidiary corporation is wound up into a parent corporation, the rules are relatively simple and generally do not create onerous income tax consequences. In other cases, such as the winding up of a corporation owned by an individual shareholder, the tax consequences can be catastrophic. Let’s address each of these scenarios.

AMALGAMATIONS Where two or more corporations amalgamate, section 87 of the Income Tax Act (the “Act”) recognizes that the predecessor corporations essentially continue as one amalgamated corporation (“Amalco”). For tax purposes, this means the tax attributes of any property owned by the predecessors continue after the amalgamation. A specific provision within section 87 ensures this “rollover” tax treatment for any life insurance policy owned by a predecessor corporation. The adjusted cost basis (ACB) of the policy to Amalco will therefore be the same as it was when owned by the predecessor corporation.

WINDUP INTO PARENT CORPORATION A rollover is available under the Act (subsection 88[1]) where a subsidiary corporation is wound up into a corporation that

owns at least 90% of each class of shares of the subsidiary. The parent corporation will receive the subsidiary’s assets at their cost amount. As with an amalgamation, there is a rule that allows a rollover for any insurance policies owned by the subsidiary.

WINDUP WHERE SHAREHOLDER IS AN INDIVIDUAL This is best illustrated by using an example. Let’s assume that Opco is a private corporation in which Jasmine, a Canadian citizen and resident, is the sole shareholder. Jasmine’s health has been poor and she wishes to retire. Opco’s business has been declining steadily and there are few remaining business assets. Jasmine’s accountant has therefore suggested that she consider winding up the corporation so as to eliminate the annual fees associated with maintaining it. In addition to its business assets, Opco is the owner and beneficiary of $5 million of permanent insurance on Jasmine’s life (the “Policy”). The ensuing discussion assumes that, in addition to its $5 million face amount, the Policy has the following attributes: Cash surrender value (CSV) $600,000 Adjusted cost basis (ACB) $50,000 Fair market value (FMV) $2,000,000 Where there is a windup in these circumstances, the general rules provide for a deemed disposition of the corporation’s property for FMV. The shareholder is considered to acquire the property for a cost equal to the same amount. The CRA has stated on more than one occasion (most recently in 2015) that a life insurance policy would generally be subject to these rules, although it indicated that it “would want to review the facts of the particular case to ensure that this provides a reasonable result.” Based upon the CRA’s views described above, Opco would be deemed to have disposed of the policy for its FMV of $2 million. After subtracting the policy’s $50,000 ACB,

Opco would have taxable income of $1.95 million, with an applicable tax rate of about 50%. It is likely that Opco and Jasmine would be jointly and severally liable for the payment of Opco’s tax. If the corporation had insufficient assets available for this purpose, a significant portion of the liability could fall on Jasmine’s shoulders. From Jasmine’s perspective, she would be deemed to acquire the policy for its FMV of $2 million. She must account in some way for having received property of this value from her corporation, either as a taxable dividend or as a shareholder benefit. The applicable tax rate would be in the range of about 45% to 54%. Compare this catastrophic tax result to what would apply if Opco was not wound up and continued to hold the policy until Jasmine’s death. At that time, the proceeds would be received tax free by Opco, and could (net of the policy’s ACB) be distributed as a tax-free capital dividend to Jasmine’s estate. A less disastrous result may be available if the policy is distributed as a dividend in kind prior to the windup. In that case, under subsection 148(7) of the Act, the disposition proceeds would not exceed the policy’s CSV. While this could reduce the corporation’s tax liability, the FMV of the policy would still be treated as a taxable dividend in the shareholder’s hands. As the above illustrates, caution must be exercised in cases where the corporation owns one or more life insurance policies and a windup of the corporation is contemplated. Even policies with little or no CSV could have value that results in onerous and unexpected income tax consequences. This tax cost could be significantly greater than the cost of maintaining an otherwise redundant corporation.  GLENN STEPHENS, LLP, TEP, FEA, is the vice-president, planning services at PPI Advisory and can be reached at gstephens@ppi.ca. FEBRUARY 2020 FORUM 31



Farmer’s Daughter Leadership lessons from the barnyard to the boardroom


Bad things happen, get over it, and move on. I always remember a quote from

my neighbours after their barn burned to the ground: “It is OK to rent a place in Pityville, just don’t live there for too long.” Their deter32 FORUM FEBRUARY 2020

mination to rebuild and plan so their farm would survive them was inspiring. Time and again, through challenges I chose to rebuild my career with great organizations that have provided me with opportunities that have allowed me to attain levels I didn’t realize I could. My mom always says, “What doesn’t kill you, makes you stronger.” Be a thoroughbred in a pasture of ponies. Attracting and developing talent

requires you to be unique and strong. When you are given a new portfolio, you need to quickly engage the team you’ve been asked to lead in order to identify their strengths and development needs. As the leader, you set the pace and the pace sets the standard. Make sure you’re setting a high standard for those who have chosen to be on your team. Leadership is about recognizing high potential talent and developing that talent to become the next leader(s). Grab a seat at the table. After the chores were done and it was time for a meal, I grabbed a seat at the dining room table. I spoke up with relevant and intelligent contributions to the family conversation. No

different today, I take my seat at the boardroom table, prepared and ready to contribute to the discussions that will help our leadership team make the decisions we need to make in order to grow our business. Don’t go out in your dirty boots and messy coveralls. When we went out for

groceries, to visit friends and family, or to school, our parents expected us to dress presentably. It’s important to remember “dressing for the day you’re having” may be different than the day your colleagues are having. As my dear mentor and friend Arlene M, has often said, “Your day may not be the day I’m having, and I’m having my top client into the office today.” Regardless of where or how you grew up, there are lessons you’ve learned that have been impactful on your career. You may not have recognized them yet, but this is a great time of year to reflect and move forward.  CATHY HISCOTT, CFP, CHS, is senior vice-president at Financial Horizons Group and a board member of GAMA Canada. Reach Cathy at cathy.hiscott@financialhorizons.com. For more information on GAMA visit www.gamacanada.com.


rowing up on a farm north of Toronto, I learned many skills that were transferable to my senior leadership career. Be decisive. The road I lived on was covered with indecisive wildlife. This taught me that once you’ve decided to implement a strategy following a thoroughly thoughtout plan, including input from key stakeholders, don’t procrastinate. GO! People want to follow a leader who isn’t afraid to make bold, educated decisions and accepts the outcome. Below is a model I follow to help me make decisions. • Who will benefit, and who have I heard from? • What is another perspective, and what is the best/worst case scenario? • Where would we see this in the real world, and where do we go for help? • When is the best time to take action, and when will we know we’ve succeeded? • Why is it relevant to me and others, and why has it been this way for so long? • How does this disrupt things, and how does this benefit us and others? Work ethic counts. On my family farm, the pitch fork, hay bales, and livestock didn’t differentiate between genders. Whether it was stacking hay, mucking out stalls, or feeding the animals, my two older brothers and I were expected to do our job. Our parents showed us what to do and supervised us until we demonstrated we knew what and how to do it properly. We were given clear expectations, we were held accountable, and we understood the consequences of not completing the job. When I took the agency management training course from LIMRA in the 1990s, we followed a similar model: prepare, explain, show, observe, and support the person so they can accomplish the job.



Chapter raises $28,000 for Adopt-A-Teen


n support of Adopt-ATeen, 200 people attended the 7th annual Edmonton Andrea Peyton, chair of Adoptchapter Christmas Luncheon A-Teen, and Steve Peckitt, co-chair for the Christmas luncheon. on December 5 — more than $28,000 was raised. This brings the total to $97,000 for the six years that the chapter has been sponsoring AdoptA-Teen, which is a program of the Christmas Bureau of Edmonton that provides a $50 Walmart gift card for Edmonton teens aged 13 to 17 years. The chapter was also recognized by the Bureau for their work to date.

(From left to right) Advocis board members David Roche, Linda Gratton, and president Judy Ruttle, join Lesley Heighway, PRHC Foundation president and CEO, along with Jacquelyn Ruttle and Alex Fischer, to celebrate the completion of the Peterborough chapter’s $50,000 pledge to the foundation.


Advocis Peterborough raises $50,000 in support of cancer care


Advocis Edmonton recognized on National Philanthropy Day


dvocis Edmonton was recognized on National Philanthropy Day on November 21. The chapter was represented by Pat Souliere, chapter vice-president, and Nathan Souliere. Advocis Edmonton was nominated in the social service category that recognizes people, companies, and groups that have charitably given their time, talent, and resources to ensure that the immediate needs of vulnerable populations within our community are being met.

he Peterborough chapter of Advocis has been a generous supporter of the Peterborough Regional Health Centre (PRHC) Foundation. PRHC, a hospital that serves 600,000 patients across a region of central Ontario, received their first pledge of $50,000 from the chapter to the Foundation’s “Closer” campaign in 2011 — a donation that helped bring radiation therapy to PRHC for the first time. Funding from the chapter has also contributed to new mammography units, the replacement of aging equipment with state-of-the-art technology, and bringing a brand-new threedimensional diagnostic option known as tomosynthesis to the hospital. The chapter’s most recent gift, which marks the completion of their pledge, will help fund the Robotic IV Automation (RIVA) system, which automatically reads, checks, and prepares chemotherapeutic prescriptions, providing increased patient safety and consistency of medication preparation without any deviation. Supporting great patient care at PRHC has been the purpose, promise, and passion of the PRHC Foundation for 40 years. The foundation works with the community to invest in the stateof-the-art equipment and technology that PRHC’s healthcare professionals require to deliver outstanding patient care. FEBRUARY 2020 FORUM 33



n December 9, the Advocis Peel Halton chapter celebrated the holiday season in partnership with the Community Foundation of Mississauga at its 10th Annual Holiday Luncheon, hosted at the Credit Valley Golf and Country Club. The event, which has raised more than $32,000 since 2010, featured a speech by Toronto Raptors Superfan Nav Bhatia.



he Advocis Windsor chapter held its annual Christmas luncheon on December 6 at the Ambassador Golf Club. Each year the event brings together all chapter members in an opportunity to network, socialize, and recognize individuals for milestones and accomplishments. Those who were in attendance helped raise more than $1,000 worth of canned goods for the Windsor Goodfellows, a service organization that lends a helping hand to homeless shelters.


Advocis Winnipeg launches Financial Literacy Month with noted author


o kick off Financial Literacy Month, Advocis Winnipeg held a Lunch ‘n’ Learn in conjunction with the Manitoba Financial Literacy Forum on October 30. Dr. Moira Somers, who is the author of the international bestselling book Advice that Sticks: How to give Financial Advice that People Will Follow, was a special guest at the event, and delivered a well-received presentation entitled “Advice that Sticks, Advice that Slips.”


2020 and Beyond: The Future of Professional Financial Advice



s a new decade begins, a trend toward the professionalization of financial advice is continuing to emerge not only in the regulatory environment, but also in how advisors can define the unique professional value of what they have to offer to clients. Through title protection, new designations, and an understanding of the holistic benefit that a good advisor creates, the need for Advocis members to lead the way in raising the bar and living up to genuinely professional standards will be more critical to the growth and development of the profession than ever before. In December, Advocis was delighted to see Don Morgan, the justice minister and attorney general of Saskatchewan, introduce the Financial Planners and Financial Advisors Act. This bill aligns closely with similar legislation already passed in Ontario, and we believe that this alignment reflects a positive development for the association and the profession. In addition to giving Canadians equal protection regardless of the province they call home, this kind of harmonization will make it far more efficient for organizations such as Advocis to oversee the standards and obligations that title protection will offer. Of course, Advocis is also no stranger to the essence of professionalism that these new pieces of legislation are now enshrining into law. In Ontario, section 15 of the Financial Professionals Title Protection Act clearly defines the need for protected titles to include the types of educational programs, ethical codes, and other standards that have been the driving force of Advocis since its inception more than a century ago. Legislation in Saskatchewan expresses this same spirit, and we anticipate that legislation introduced in other provinces will do so as well. Thankfully, Advocis also stands ready to help advisors bring these new standards into practice through designation programs that focus on the shifting needs of advisors and the public alike. The future of financial advice will require designations that can fill significant gaps in the marketplace, shepherd newer and younger advisors through the beginnings of their careers, and create a strong foundation for the more focused, advanced designations an advisor may additionally or ultimately want to pursue. This last point is particularly important, as the needs of clients are changing over time, specialized niches are continuing to develop, and a designation that an advisor can use

as a launching pad toward further qualifications will be invaluable in the years to come. To this point, you may recall that we began the pilot of our new Professional Financial Advisor (PFA) designation last year with a small group of candidates through our PFA Advanced Launch Program. Advocis has been closely monitoring and collaborating with these candidates, refining the program as they progress through its educational requirements, and supporting them as they prepare for the first sitting of the PFA examination this spring. In 2020, we look forward to not only announcing these candidates as the inaugural holders of the PFA but also formally opening registration for a finalized educational path that will take future cohorts of advisors through the process. As more PFAs emerge, we are confident that the public interest will be greatly served — both through the designation itself and the underlying momentum toward additional certifications. All in all, the importance of professionalism over the next decade cannot be overstated, especially as the industry faces pressure to reduce the margins of compensation that advisors receive generally. There is an evolution happening, and while there continues to be a significant opportunity around the provision of financial advice, the “2020s” will not be business as usual. The good news is that new technology and tools will enable smart, flexible, and adaptable advisors to increase their productivity far beyond any decrease in margins that the overall profession may face. Even more importantly, research continues to indicate that the personal touch of a professional advisor can influence the decision-making behaviour of clients in a way that guides them toward financial outcomes that are quantitatively superior. Simply put, it is difficult to imagine that anything could take the place of an advisor whom a client knows to be professional, qualified, and trustworthy — especially in the moments where clients face decisions that are difficult, complex, and emotionally counterintuitive. As advisors, Advocis is proud to stand with you in meeting the challenges and opportunities that the years ahead will present — and supporting you in achieving the professionalism that will make the difference.  GREG POLLOCK, CFP, is the president and CEO of Advocis.


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Profile for Forum Magazine

FORUM Magazine - February 2020  

FORUM is the magazine of influence for financial advisors across the country. First published in 1914 as Office and Field, FORUM has evolved...

FORUM Magazine - February 2020  

FORUM is the magazine of influence for financial advisors across the country. First published in 1914 as Office and Field, FORUM has evolved...

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