Tuesday, December 2, 2014

Holiday Gift Giving Tips from Lise Andreana

This week I had the opportunity to participate in a radio interview for Marketplace Weekend at the University of Arizona PBS station. This proved to be a very interesting opportunity, not only to see the inner bowels of a radio station, but to hear from listeners about their gifting concerns. This was insightful as many of their concerns may be shared by you. 



1.       Q. Do you have any tips on how to balance your finances during the holidays?  

A.      The most important thing to know about gifting is: can you afford to do it? If your answer is yes, how much of your annual budget should you allocate to gifting? Considering the average family spends 60%-70% of their after tax income on the necessities of life, that leaves 30%-40% to spend at your discretion. Discretionary items include personal care, clothing, entertainment, holiday travel, gifts and charity. A realistic budget for gifts is 1%-3% of your after tax income. A similar amount can be used for charitable causes. If you have a lot of debt, or are not saving at least 10% of your income each year, it’s best to stick to the lower range.  

The best way to plan for gifts is to set up a Gift Savings Account in advance. This is a special bank account to which you contribute a preset monthly percentage of your income. You contribute an amount you can afford and you wish to devote to gifts. This way when the holiday season rolls around you are ready.


Thursday, November 27, 2014

Should parents dip into their savings to help adult kids?




In this videoLise Andreana and Rob Carrick of The Globe And Mail answer questions about parents using their savings to help their adult children.

Lise explains the financial drawbacks of moms and dads helping their kids with a house down payment, and with basic living costs.

The 'Sandwich Generation' faces a financial squeeze



See video of Lise Andreana speaking with Rob Carrick of The Globe And Mail about the financial squeeze facing the 'sandwich generation.'

As Lise and Rob explain, this is the generation of people who are helping their adult children become financially independent, while also helping their aging parents with their financial needs.



Thursday, November 20, 2014

The Cost of Caring for Aging Parents





In this video, Lise Andreana talks to Rob Carrick of The Globe And Mail about the cost of caring for aging parents.

Lise explains that in Canada medical costs are likely not the primary expense. Rather, the focus is on the time and effort parents will need as they age, and the impact this has on their adult children’s earnings.

Tuesday, November 18, 2014

7 tips to help you maximize your child’s RESP

1.      Start contributions early
  • You can open an RESP as soon as your child has a SIN number. This can be applied for just after birth and many of our clients start their child’s plan around 2 months of age. 
2.      Make contributions regularly 
  • Prepare for your child’s education by contributing monthly to an RESP. A little goes a long way. Even if you start off small (around $25 a month) it adds up over time.
  • Regular contributions help smooth market fluctuations.
  • Anyone can contribute to an RESP – a child’s parents, grandparents, aunts and uncles, or close family friends who may be able to contribute if you can’t right now. 


3.      Take advantage of the considerable benefits
  • The federal government adds to your contribution up to a maximum of $500 per year, per child.  This is the Canada Education Savings Grant (CESG) and it is payable up to the year your child turns 17. For a full explanation of eligibility requirements, see the Government of Canada's CanLearn website.
  • As long as your contributions remain in the plan they continue to gain interest income and are not taxed.
  • RESPs are taxed in the hands of the student who uses them, so the tax rate is typically low.
  • Flexibility of withdrawals: it’s up to you to decide how much money you withdraw and when. Withdrawals can be used for everything from tuition and books to living expenses.
  • Family Plans are a great way to pool education funds for families with more than one child.
 4.      Plan early 
  • Your child may be in diapers or just starting school but planning early for their education is the best route.
  • We recommend, as a start, to take the monthly $100 Child Care Tax Benefit (for children under the age of 6) from the government, and put it straight into their RESP.  When you do this right away, from birth, you can come close to funding a good portion of your child’s education, completely funded by the government. If you can’t afford to use the entire $100 for an RESP contribution, something is better than nothing. Even $25 a month is a good start.
  • If your child is under 17 it’s not too late to open an RESP
 5.      Don’t worry – RESPs cover a widerange of post-secondary options
  •  Traditional college or university
  • Technical or vocational school
  • Typically all you need is proof of enrollment in a qualifying program.
  • Leave the money in the RESP for future use.
  • Replace the beneficiary with another child.
  • Transfer the money to your RRSP.
  • Close the RESP and withdraw the money. Any grants will have to be returned to the government.
7.      Team work – Personal Saving and Government Contributions 
  • Don’t leave money on the table. Some people have enough money set aside for their child’s education without having to contribute to an RESP. Make sure to examine all the benefits of an RESP: See tip # 3.
RESPs are highly underused in Canada. Be sure to start early to maximize the benefits of compounding growth, government grants and tax sheltered savings. If you have questions about how an RESP works, or how an RESP fits into your overall financial plan, contact us.

Saturday, November 1, 2014

The Benefits of Fee-For-Service

In this video, Peter Andreana explains how the Fee-For-Service approach to wealth management and investing provides many advantages for clients of Continuum II Inc.

Find out the positive impact this approach can have on your bottom line in this short video.

Peter also explains how he outlines the pros and cons of investment decisions to his clients and finds the "happy medium" for their financial plan.


Wednesday, October 1, 2014

The 70/30 Rule

Contrary to popular belief, financial planning is not just about saving.

Many people think that good financial planning is all about making sacrifices now and saving as much as possible in the present.

Peter explains how you can find a very effective balance between saving for later, and enjoying life now, with his 70/30 rule.

Find out more in this short video below:



Friday, September 12, 2014

Checks and Balances: A few tips to help you get financially focused



Working towards your financial freedom takes planning. It is important to make sure you are covering all your basis and not leaving any step out of the process. Working with a financial planner is important but you must also do your own work to make sure you are heading in the right direction for you life and lifestyle.

Sometimes creating checklists and to do lists that are tied to the seasons or quarterly can help you stay on track and focused on the end goal of financial freedom.

Here are just a few tips to help you achieve your financial goals.

1. Create a financial calendar
If you don't trust yourself to remember to check in on your investments regularly, check credit reports or pay your quarterly taxes then think about setting appointment reminders. There are lots of great online tools to help you with this but even just simply going into your calendar on your smart phone and setting reminders that will go off to prompt you to do a financial check in is enough.

2. Rebalance your portfolio once a year.
It is important to look at your account  every once in awhile to make sure your investment allocations still match your greater investing/financial goals. It is important to schedule meetings with your financial advisor to do the same. You need to be engaged and involved in your financial planning.

3. Verify your account beneficiaries to make sure your instructions are current
When was the last time you looked at who you set as a beneficiary on your insurance policies? Or your banking investments? Take some time to have a look at those things and make changes if necessary.

4. Review your progress on your financial goals to ensure you are on track
You may have made some financial New Year's resolutions when 2014 rolled in, such as increasing your retirement savings. How are you doing with that? Now might be a good time to re-evaluate and make some changes before the end of the year rolls around.

5. Get Organized
Don't leave all your papers, receipts and documents in disarray until the end of the year. Fall is a great time to start getting organized. Organizing your papers and accounts not only leaves you better prepared for tax season in the new year but also lets you know whether you're on track to reach your financial goals.

6. Here is a handy check list from the Government of Canada's Financial Consumer Agency of Canada. Check lists can help you see what you have already done but also helps you see what you still need to get done or at least consider.







There are so many resources available from your financial advisor and on the Internet to help you manage your finances, investments and retirement planning. Checking in on your finances and investments a few times a year at least makes sure things are still on course and if they are not then you have time to correct them and work with your advisor to make sure you are working towards the same goal.




Friday, September 5, 2014

Money Magazine: One Size Doesn't Fit All

http://money.ca



Our own Lise Andreana has a wealth of information. This month she is sharing her perspective on financial planning and how there is no one-size-fits-all solution to retirement. It is important  to come up with a plan that is uniquely yours. Lise reviews a few steps that could help you work with your advisor to come up with the plan that fits you. You can also check it out at Money.ca



Thursday, September 4, 2014

Team Feature: Lise Andreana





The Continuum II team always enjoys sharing when someone from our crew is featured. Everyone loves to toot their own horn sometimes. Recently our own Lise Andreana was featured on the front page of Investment Executive. 


In the feature article, Lise shares her story and how she made the transition from fashion to finance. It is a great story of how making transitions and learning new things that expand your horizons and your opportunities can lay out a road map to success. Lise blazed her own trail as a female entrepreneur.



If you want to learn more about Lise Andreana check out the article in Investment Executive.
Follow this link to read it online. 

Monday, September 1, 2014

The Planning Horizon

In this video, Peter Andreana, CFP at Continuum II Inc. in Burlington, Ontario, explains how their team uncovers the very unique needs, values, and goals that are essential to uncover before building a successful and individualized financial plan.

Find out how they do it, what "The Planning Horizon" is, and more in the short video below: 



Wednesday, August 13, 2014

Employment Standards Act - What You Should Know




There is that saying ... Knowledge is Power. There is so much truth in that, especially when it comes to employees and employers. There are rights afforded to all workers and it is important for everyone in the workplace to know the rules and rights.

At Continuum II Inc. we wanted to share some very important information about workplace rules, rights and regulations.

The Employment  Standards Act, also known as the ESA, is a law that sets minimum standards for workplaces in Ontario. It covers a range of employment standards including:  minimum requirements for workplaces; provisions to assist employees with family responsibilities; increased flexibility in work arrangements; and mechanisms for compliance and enforcement.



Friday, August 8, 2014

Book Excerpt: Financial Care For Your Aging Parent



Lise Andreana recently released her latest book Financial Care for Your Aging Parent, published by Self-Counsel Press. Last month The Globe and Mail printed an excerpt of the book. We wanted to share that with you here as well.


Contributed to The Globe and Mail

Excerpted with permission from: Financial Care for Your Aging Parent by Lise Andreana, Published by Self-Counsel Press.

The Five Wishes

Five Wishes is a tool for developing an advance directive document, including the living will, and was developed in the United States. It talks about the person’s emotional needs, medical wishes, and spiritual needs. Developed in part by the American Bar Association to help people deal with the legal problems in end-of-life care, this model can also be used informally in Canada as a starting point for discussion.

If you are working with your elderly parents, choose a quiet moment to introduce a conversation about the five wishes concept. You may be surprised by their answers. It is a good idea to document the answers. American readers can formalize the five wishes as part of their legal documents. Canadian readers may add a signed and dated letter outlining their five wishes to their Power of Attorney and will documents.
Five Wishes allows a person to spell out exactly how he or she wants to be treated should he or she become seriously ill. Note that specific funeral instructions, memorial services, and burial requests may be included in this document. Give your parent time to think about the following questions.

Wednesday, August 6, 2014

A Case For Consolidation


Are you putting all of your financial eggs in one basket?




There is that old saying don't put all your eggs in one basket BUT in this blog post we want you to reconsider that old adage. Sometimes there is something to be said for putting many eggs in one  basket.  Several studies have shown an overwhelming majority of investors intend to consolidate all their assets with a single adviser upon retirement. As noted in a recent Globe and Mail article, "According to the World Wealth Report 2013 from Capgemini and RBC Wealth Management, 55 per cent of Canadians who had $1-million or more in investible wealth said they preferred to work with only one firm to manage all their finances. Only 13 per cent wanted to deal with multiple firms." The article discusses the benefits of consolidation. The idea of consolidation really comes down to simplifying your financial plan, again it is the idea of putting many, diverse eggs in one basket.

LINK: http://www.theglobeandmail.com/globe-investor/advisers-view/many-eggs-one-basket-the-case-for-merging-your-accounts/article19329384/


There are a number of key takeaways from the Globe and Mail article. 


Friday, August 1, 2014

A Financial Plan is Like a Good GPS System

Peter Andreana, CFP with Continuum II Inc. in Burlington, Ontario, uses the analysis of the GPS system in your car to explain how the financial planning process is quite similar: you need to know where you are starting from and where you want to go before you start driving.

Most importantly, if you have a great map, you can be confident that you will get to your destination.


Hear more of Peter's insights in this short video.


Tuesday, July 15, 2014

Tips to Maximizing your Employees’ Potential - Avoid Common HR Pitfalls



Guest Post by Jodi Pasavad


Hire Slowly – Fire Quickly
The number one way to avoid employee headaches is to hire great people right off the bat.  Unfortunately, most companies don't spend enough time and resources on hiring future employees.  Take the time to screen applicants, conduct first and second interviews, add a practical component to validate their highlighted skills/experience and follow up with references. 

Once you have made the decision that the employment relationship is no longer viable, act fast.  The majority of the time the employee senses that the relationship is off.  Ensure that you adhere to legislative standards but a quick and clean exit is the best practice.

Employment Contracts
A well drafted employment contract is an essential tool to start the employer and employee relationship off on the right foot.  It clearly spells out the rights and obligations of each party, protects the job security of the employee and protects the employer from certain risks such as the release of confidential employer information after the term of employment ends.  No matter what the employment relationship, permanent, contractual etc., a contract is needed and takes the guess work out of terms and conditions.

Thursday, July 10, 2014

Five Things To Do For Your Aging Parent Before Heading South For The Winter





As a retiree you may be responsible for an aging parent and have some trepidation about leaving them behind.  With a little advance planning you will be able to head south with a clear conscience and confidence that your elderly parent is well looked after.  My husband and I are the primary care givers for his Mother who is in her mid-80’s.Though she still lives independently in a home of her own, we recognize she has limitations with mobility, reduced energy levels and understanding and managing her finances.


For the past several years, my husband has ensured his mother's safety and comfort, while we are in the sunny south, by following the five tips below.


1.      Have up to date Power of Attorney with a substitute decision maker, if you are out of the country. You want to be certain there is someone local who can act on your parent’s behalf should the need arise

Tuesday, July 8, 2014

Aging Parent? 5 Common Fears You May Have & How to Address Those Fears





Age is a state of mind, or more accurately, a state of health.  Healthy seniors are forever young. Take my tennis partner in Tucson, for example, she is 90 years old and I, in my early 60’s, have trouble keeping up with her! However, once chronic illness sets in, aging can take place very quickly. Many of us, in our 60’s, 70’s and even 80’s, are caring for parents in their 80’s, 90’s and beyond. While it is never too early to talk to your parents about their care wishes, once your elderly parent loses the ability to perform one or more of the activities of daily living, it is time to step in and address your worst fears. 

Here are five common fears and some ways to address them

5. Driving safe 

Afraid your elderly parent is a danger to themselves and the public when they are on the road? You are not alone. It is important to bring the topic up early with your parents, as part of an ongoing discussion about aging and independence. Let them know you support their wishes to live independently as long as they can do it safely.  Suggest a complete physical to rule out health related issues related to safe driving. Remember in Ontario seniors have to re-qualify for their driver’s license once they reach 80 years old. 


Tuesday, July 1, 2014

How We Turn Your Hopes and Dreams into a Plan

In this brief video, Certified Financial Planner Peter Andreana shares why Continuum II is unique in their approach to individual financial planning and wealth management.

Peter explains that he and his colleagues have the ability to skillfully handle emotional conversations, and have deep and meaningful discussions that uncover a client's aspirations for the life they want and the experiences they desire.

Continuum II's team of experts help take hopes and dreams and turn them into viable financial plans clients can act on.

Hear Peter talk about some of the initial questions the team at Continuum II will ask you to uncover the best way to help you build the lifestyle and retirement of your dreams.


Tuesday, June 10, 2014

Do You Have a Will?



Planning and preparation are the key to estate planning. 


Making a Will is something everyone should do but is often something people don't like to do and some people put it off until it is too late. No one would ever say that drafting a Will is fun but it is necessary. It is an essential  estate planning document no one over the age of 18 years old should be without. It is even more crucial if you have children.

When you make a Will it ensures your money, property and your children will be taken care of exactly how you wish. Without a Will there is no way to ensure that your wishes will be followed. In fact, what is guaranteed to happen, without a Will, is your estate will be distributed based on the laws in your province. 

Many people put off making a Will because they think it is complicated, or they just don't know what to do with their money, property, pets and especially their children. Who will look after their children when they are gone? Naming a guardian for your children, choosing an executor, deciding how to distribute your assets can make it easy to put off creating a Will. Of course, the other big issue for many people is that they just don't want to think about death. Let's be honest here, planning your Will doesn't mean you are planning for your death, or even that you are planning to die any time soon, it just means that you are making sure that everything you have worked for is protected and that your family will be taken care of when you are no longer around to care for them.

Check out a few great resources that we have collected to help you get started with planning your Will. If you have already made a Will it might be a good refresher for you because making a Will is not a one-and-done kind of thing. Wills should be refreshed and updated every few years. The first is a great fact sheet and the second is a quick questionnaire

Making a Will doesn't need to be hard and it shouldn't be something you do alone. Ask for help. A Will is just part of creating a solid, well-thought out financial plan. 

Friday, June 6, 2014

Understanding The Benefits of TFSAs



How big is your financial nest egg?


There is no doubt there are a number of ways to protect and grow your money. It is all about knowing what is out there in the market and finding what best fits you and your life. There isn't a one size fits all solution for financial planning.

Today we are talking about TFSAs. The primary purpose of a Tax Free Savings Account is to proving a tax sheltered way to save money. They are registered with the Canadian Revenue Agency which is why they offer tax advantages. While the TFSA is relatively new, they were first made available in 2009, more than fifty percent of Canadians are using them. Despite the growing numbers of Canadians stashing their money in a TFSA, even more people continue to use the older, and likely better known, RRSP to save for retirement.  For example, in 2012, Canadians held roughly $841 billion in RRSPs versus just $81 billion in TFSAs.

There are differences between a TFSA and an RRSP. The key is that you don't need to choose one or the other. The two can work together to help you reach your medium and long term financial goals. Have a look at this great resource that runs through the benefits and difference of both.

Remember you can always get in touch with one of the Continuum II team to help you with your financial goals. We are here to answer questions and help you figure out what is the best financial strategy for you.

Sunday, June 1, 2014

Are You Stressed About Money?

In the video below, Peter Andreana shares his thoughts on the fear and stress that financial issues cause many individuals.

Hear about how your upbringing, family history, and external events have likely shaped your attitudes about money and financial planning.


Reach out to Continuum II Inc. in Burlington, Ontario for help in managing your investments, building your wealth, and planning for retirement.

Tuesday, May 13, 2014

Five Questions to Ask Your Advisor





Good advice is worth it's weight in gold. There is no doubt about that but your advisor can't do all the work alone. You still need to be involved and asking questions about the person managing your investment portfolio and about the advice they are offering.

We recently came across an article in the Financial Post, written by Martin Pelletier. 

In the article, Pelletier talks about FIVE questions you should be asking your advisor to protect your portfolio.

1. How are they being compensated? 

Are they being paid by an investment firm or do they charge a flat fee no matter the investment?

2. Are they selling near-term performance? 

Martin Pelletier says a downside to a commission-based compensation structure is that advisors will focus on what is easiest to sell and that often means those funds with the strongest recent performance.

3. Are they offering near-term predictions? 

Investors are often comforted by near-term predictions. Pelletier suggests advisors will often seek out economists, market strategists and stock analysts who provide positive near-term forecasts. The problem is that no one, even the experts, can predict near-term moves in the market. 

4. What are they doing to manage risk? 

Pelletier points out that the problem with trying to beat the market is that you end up taking on more risk. Of course that in the end could cause more harm than good. Pelletier suggests you ask your advisor for the  historical standard deviation and then divide it into the specific return generated less a risk-free rate such as the current 90-day T-bill rate. That equation will help you figure out how much return was achieved per unit of risk taken.


5. How have they positioned your portfolio in the past? 

In the article, Pelletier suggests you keep a logbook of your portfolio. It is helpful to know what is happening so that you can review things, like the timing of your purchases and sales, with your advisor.

For a full look at the article, check it out HERE in the Financial Post

Friday, May 9, 2014

Investing For Success







There is no doubt the markets can be a roller coaster ride, but those who ride the wave and stay invested make money. Here are a few tips to help you stay focused and keep your financial goals in sight.


1.     Think Globally
 When it comes to investing, many people feel safer sticking close to home. There is nothing wrong with wanting to feel safe but Canada makes up only 4% of the world's markets, investing solely in the Canadian market limits both investment opportunities and diversification. 

Investing abroad can introduce additional risks, like shifts in currency values and political or economic upheaval, but it can also bring real benefits like, rapidly growing economies

2.     The Risks of “Safe” Investments
When it comes to calculating your investment goals, you should always factor in inflation. The risk of inflation is one reason what many consider safe investments, like GICs, may not be so safe after all. 

3.     Don’t Miss Out
There is that old cliche "Buy low. Sell high." A great strategy if you have a crystal ball. Otherwise, every time you buy and sell you can incur additional costs or risk missing out on the markets best days. A better strategy is to stay fully invested. 

4.     Diversification = Less Risk
There is something to be said for not putting all your eggs in one basket. Drop the basket and your lose all your eggs. The same could be said for your investments. It is important to diversify and put your money into different types of investments.

5.     Time is Money
"I just don't have the money to invest right now." It is a common reason people put off investing but there is wisdom in the saying time is money. One of the best ways to build wealth is to start early.  The sooner you invest the more time your money has to grow and benefit from the power of compounding.

6.     Time Heals All
Some investors may shy away from equity investments, fearing volatility. While over the short term that might be true because equity returns can fluctuate, historically, equities tend to become less volatile the longer you hold on to them .


If you have any questions or need advice, remember you can always reach out to the ContinuumII Inc. team. We are always ready to help. 

**information provided in part by Fidelity Investments**


Thursday, May 1, 2014

Top 3 Tips For Business Owners in Managing Group Benefit Plans

In this helpful video, Peter Andreana of Continuum II Inc. shares his top 3 tips for HR Managers when it comes to employee health & dental benefits.

1. Always speak to your benefits broker before offering extended benefits to employees who are no longer with the company.

2. Clearly identify people who are consultants or others who are not eligible for benefits.

3. When terminating employees, the employer has the responsibility to inform the employee of many details related to their benefits.

Find out more detail in the video below, or visit our website at www.c2inc.com for more information.


Wednesday, April 23, 2014

Tax Tidbit: Deductibility of Advisor Fees







At Continuum II Inc. we are always striving to keep you up to date on news and information.   At this time of year, we thought you might be interested in this tax tibit. 

When it comes to the deductibility of advisor fees it is important to know what you can and can not do. 

Here are just a few points to keep in mind when it comes to the deductibility of advisor fees:

  • You can deduct fees only when the advice is for investment counsel

  • MERs are never tax deductible, regardless of whether they are  bundled or unbundled.
F class operates a little different,  the MER charged by the fund company is not deductible, BUT the advisor portion might be.

  • The fees paid for general financial planning advice is NOT tax deductible. You must indicate specifically that the fee was for investment counsel advice.

If you have any further issues or questions when it comes to deductibility please do not hesitate to contact the Continuum II Inc. team. Be sure to check out our website, there you will find more information, tips and resources.

Tuesday, April 15, 2014

Don't Let Your Quest for Low Fees Block Out Big Returns

When it comes to investing many people think price is the only factor to keep in mind when making a decision about where to put their money. Successful investors should consider a number of different factors and not only cost. Value for money should always come into your investing equation.

The Continuum II team is always on the look out for interesting articles for our clients; articles that add information, tips, advice or commentary. Recently we came across an excellent article by Gordon Pape that looks at the importance of value for money when it comes to investing. He is a writer and regular contributor to several newspapers. Pape is also the editor and publisher of The Internet Wealth Builder, The Income Investor and The Canada Report. He has authored several books, including Retirement's Harsh New Realities, Sleep-Easy Investing and Get Control of Your Money.

Check out Pape's recent article, below, as it appeared in The Globe and Mail.
 ________________________________________________________________________



Many investors have become so obsessed with costs that they have lost sight of the bigger picture


The Globe and Mail
By: Gordon Pape
Date: Apr 09, 2014


Think very carefully before you answer this question.

Suppose you only had enough money to invest in one Canadian stock fund. You have narrowed down the possibilities to two choices. One posted a 10-year average annual compound rate of return of 7.66 per cent to Feb. 28, based on net asset value (NAV). The other gained an average of 11.84 per cent a year over the same period. Which would you choose?

Now what if I told you that one fund has a management expense ratio (MER) of 2.27 per cent while the MER of the other is only 0.18 per cent? Would that change your thinking in any way?

For many people, it would. A lot of investors have become so obsessed with costs that they have lost sight of the bigger picture - that what really counts is value for money.

When I look at a wine list in a restaurant, I don't make a selection based on price. I order a bottle that offers good value in relation to the cost. The same principle should apply to investing. If you pay a higher price, you have a right to expect more in return. If you get that added benefit, the price is worth it. If not, save your money.

Let's go back to the two funds. The first is the iShares S&P/TSX 60 ETF, which trades on the TSX under the symbol XIU. It's the oldest exchange-traded fund in Canada, the successor to the original TIPs ETF. It has an excellent track record and a very low MER of 0.18 per cent. It's the one with the average annual compound rate of return of 7.66 per cent.

The second fund is Fidelity Canadian Large Cap (B units) (www.fidelity.ca). Its MER is more than two percentage points higher, at 2.27 per cent. Yet despite the much higher annual expense ratio, this fund has outperformed XIU by more than four percentage points annually over the past decade. (Note that all mutual fund and ETF performance results are shown net of fees and expenses.)

Put another way, every $1,000 invested in XIU a decade ago would have been worth $2,091.91 on Feb. 28. The same $1,000 invested in the Fidelity fund would have grown to $3,061.78. The mutual fund outperformed the ETF by more than 46 per cent over the period, despite its much higher MER. That, to my mind, represents good value for money.

Of course, not all higher-cost mutual funds are going to do better than lower cost ETFs. You have to be selective. The point is that a higher-priced option should not be rejected simply on the basis of cost. There are several other factors that have to be considered.

Yet some investors refuse to look beyond the expense aspect. One of my columns
(www.theglobeandmail.com) updating an IWB portfolio was published recently on Globe Unlimited and drew several comments. Some of them were highly critical of the fact I included Fidelity Canadian Large Cap and some other mutual funds in the portfolio because of their high MERs. One reader accused me of shilling for the mutual fund companies while another described me as a "dinosaur" and suggested The Globe get financial advice from "someone born in this century".

If being a dinosaur means sticking to the basic principles of value for money investing, then I plead guilty and make no apologies. The key word is value. I would never recommend buying a high-cost mutual fund that did not have a proven track record of superior performance. Nor would I advise buying a second-rate ETF because it had a low MER. 

Cost is always a consideration but it should never be looked at in isolation. If a higher price pays off with a superior return, then the extra expense is worth it.

Tuesday, April 1, 2014

Continuum II - The Best Service for Your Group Benefits Needs

As many of you know, as an experienced insurance broker, Continuum II Inc. is a provider of competitive and comprehensive group health & dental benefits plans for business owners and their employees.

One of the reasons we stand out from others in the industry is because we truly offer value-added services that take workload away from both business owners and their valuable team.

Find out more in our short video highlighting the special services we offer our clients, how we lighten your administrative workload, and the 3 golden rules we apply to keep your benefits as competitive as possible.


Wednesday, March 5, 2014

Thinking of Becoming a Snowbird in Retirement?

As far as Ontario goes, along with many other areas of North America, 2014 has been one of the coldest, snowiest winters in decades. If you're asking yourself why you have chosen to live in such a frigid climate, you're not alone. We've shovelled.  We've bundled up in layers of sweaters, warm boots and heavy coats.  We've stayed indoors more than usual. It's felt pretty unbearable this year for many people, and no one would blame you for dreaming of blue skies and sunny beaches.

When it comes to retirement planning, many Canadians are already thinking of becoming Snowbirds: Canadians who spend the winter months of each year in a warmer city in another country. Some of the most common destinations are Florida and Arizona. 

There are many benefits to being a Snowbird and avoiding the coldest months of the year in Canada, such as:

1. The increased health, wellness, and mood benefits gained from being able to spend more time outside walking, jogging, golfing, and swimming.

2. The elimination of the very physically taxing activity of shovelling - something that causes overexertion in many people of advancing years. As you may know, this strenuous activity combined with big drops in temperature can increase the risk of heart attacks.

3. The cost of living is often less expensive in places like the United States.

Lise Andreana, CFP with Continuum II, knows that there are many factors to consider in addition to the enjoyable climate.

Taxes: Canadians are allowed to visit the United States for up to a total of 6 months of the year (or 182 days), but if you stay longer than that limit, or longer than 120 days per year, on average, over a 3-year period, you could be considered a U.S. resident for tax purposes.

Healthcare: Where your Canadian health benefits are concerned, each province has a specified number of days throughout the year that you must be physically present in your Canadian home in order to qualify for provincial health benefits such as OHIP. In Ontario, for example, you must be physically present in Ontario for at least 153 days of the year.

Finances: There are considerations when it comes to having the right retirement portfolio to fund your Snowbird lifestyle, and considerations to keep in mind when considering buying a vacation property.

For more of Lise's insights, read her recent contribution to an article on Snowbirds in The Globe and Mail.

In the meantime, let's all hope spring is just around the corner!


Friday, February 21, 2014

What the 2014 Budget Means to You

As financial advisors, we make a point of keeping current with issues that pertain to the financial health of our clients: you, your business, and your family.

On February 11, Finance Minister Jim Flaherty delivered his federal budget for 2014. Amidst the many points discussed, from increased cigarette taxes to capping domestic wireless roaming costs to increasing funding for recreational trails, it can be difficult to see through all the details and find what is most likely to affect you as an individual investor and/or business owner. 

To help simplify, we have prepared an overview of budget highlights that may affect your financial plan.

Testamentary trusts
  • No longer entitled to graduated tax bracket treatment. This is relevant to those of you who have set up trusts (for your children, for example) as the net impact will mean more taxes taken off the amounts. This may make you want to revisit the gross amounts you are leaving in the trust(s).
Estate donations
  • Greater flexibility for tax reduction when making donations through wills and estates. This is positive news for those of you who are making charitable giving a part of your future financial plan, as the net (after-tax) amount you will end up giving can be higher.
Adoptions
  • Amount for adoption expense tax credit increased to $15,000.
Immigration trusts
  • New Canadians will no longer be able to set up these tax-friendly tools.
GST qualification  
  • No need to apply; CRA will make the calculations and inform those eligible. This is great news as it's always a positive when the administrative load on the individual gets lighter.
Amateur athlete trusts 
  • Fewer restrictions for RRSP contributions.
Search and rescue volunteers
  • New tax credit.
Medical expense tax credit
  • Extension to include cost of preparing a treatment plan.

If you would like to discuss these budget initiatives and how they may affect your existing financial plan, please don’t hesitate to contact us at Continuum II Inc.  New clients are always welcome, so even if we haven't met yet, feel free to give us a call.