FORUM Magazine - February 2021

FORUM FEBRUARY 2021 • $5.50

The Magazine of Influence for Financial Advisors

FAMILY FRICTION How the pandemic has caused financial stresses across generations

KEEPING YOUR TEAM MOTIVATED DURING THE SLOG

MY PERSONAL CI STORY

HOW THE BROAD CONCEPT CLARIFIES CLIENT OBJECTIVES WHY I GOT THE CLU Publication Mail Agreement # 40069004

FORUM VOLUME 51, 1

|

FEBRUARY 2021

|

ISSN 1493-826X

FEATURES

8

Family Friction

COVID-19 has caused financial stresses for parents and their adult kids. Rosalind Stefanac explains how advisors can help them get back on track

16

Why I Got My CLU

The chartered life underwriter, first created in the U.S. in 1927, is Advocis’s premier financial planning designation. Five advisors spoke with FORUM about its appeal

DEPARTMENTS

COLUMNS

4

26 TAX UPFRONT

EDITOR’S JOURNAL Contingency planning means putting out possible fires

6

OPENERS RRSP season and the pandemic; CLHIA joins UN initiative on ESG

32 ADVOCIS NEWS Association updates, events, and memorial tributes

The case for taking Canada Pension Plan at age 70

BY DOUG CARROLL

28 ESTATE DILEMMAS Looking forward through past estates

20

Problem Solver

The Broad Concept can help a prospect clarify the objectives of their estate plan.

Gary Clark explains how

22

Motivation Moves

24

Critical Curveballs

How can you keep your team inspired and focused during a pandemic? Kim Poulin walks us through a plan of attack

BY KEVIN WARK

29 CORPORATE INSURANCE Transferring insurance policies between family members

BY GLENN STEPHENS

34 THE FINAL WORD The future is here

BY ABE TOEWS

30 LEADERSHIP & GROWTH Tips for a successful virtual onboarding experience

COVER PHOTO: ISTOCKPHOTO

BY DONNA STARR

31 GUEST COLUMN Why most women aren’t happy with their advisors

BY JACKIE PORTER

Publication Mail Agreement # 40069004 Return Undeliverable Canadian Addresses to FORUM Magazine Circulation Department, 10 Lower Spadina Avenue, Suite 600, Toronto, Ontario M5V 2Z2

A paid-out critical illness policy at age 73 can be life changing. It was for Richard Parkinson FEBRUARY 2021 FORUM 3

BY DEANNE GAGE

Putting Out Fires M

any moons ago, when I was in my twenties, my former roommate was reading by candlelight in her bedroom. She fell asleep and knocked over the candle. I don’t recall hearing a smoke detector — just my roommate’s scream. I leapt out of bed, and we managed to quickly smother the fire. The damage consisted of a massive hole in my roommate’s mattress, a small carpet burn, and a smoke-infested condo.

To this day, the horrifying experience stays with me. While my household has candles, I can’t say we use them much, save for inside jack-o’-lanterns. I never delay on checking smoke and carbon monoxide detectors, maintaining annual furnace appointments, checking dryer vents, and ensuring my oven and stove elements and fan are clean. I don’t allow anyone to ever have their technology devices on the bed without a stand. If devices aren’t being used, they are left on a hard surface. My husband thinks I’m a bit obsessive but he’s never experienced a fire before.

But one thing we haven’t prepared until recently? Protecting our important papers and items. It’s one thing to have wills, powers of attorney, house deeds, life, living benefits and property and casualty insurance, and family photos. But what if no one knows where to find them and there’s no duplicate in a separate location or somewhere in the cloud?

Before last year, the thinking of “we don’t have to do this now” was the main reason why people delayed contingency planning. You may have performed “financial fire drills” in the past to help clients and prospects realize their financial weaknesses should a crisis occur. Now, one year into the pandemic, clients and prospects who can afford it are buying insurance in droves, drawing up wills, reducing debt, and trying to better establish nest eggs. They’re getting their houses in order. Professional financial advice is in vogue right now, even among younger generations. Do-it-yourselfers now understand the value of advice and realize, 4 FORUM FEBRUARY 2021

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

TFAAC BOARD OF DIRECTORS CHAIR Abe Toews, CFP, CLU, CH.F.C., CHS, ICD.D VICE CHAIR Rob Eby, CFP, RRC PAST CHAIR Al Jones, CFP, CLU, ACCUD, ICD.D SECRETARY Catherine Wood, CFP, CLU, CHS TREASURER Eric Lidemark, CFP, CLU, CH.F.C., CHS CHAIR, CLC John McCallum, CFP, CHS CHAIR, THE INSTITUTE John W. Hamilton, CLU, FEA, CPCA DIRECTOR AT LARGE Stephen MacEachern, CFP, CLU, CH.F.C., CHS DIRECTOR AT LARGE Wendy Playfair, CFP, CLU, CHS PUBLIC DIRECTOR Geoffrey Creighton, BA, LL.B., C.DIR., CIC.C PUBLIC DIRECTOR Sara Gelgor, LLB, LLM, MBA, ICD.D

to their surprise, they would like an actual conversation (virtual for now, natch!) with you instead of dealing with a robo-advisor.

One thing about our new normal: There’s no going back to life pre-March 2020 when the pandemic is behind us.

We’ll move forward, but what that looks like will be from the perspective of what we have learned from this pandemic lens.

Take virtual events. They are currently seen as a temporary replacement for in-person conferences, but make no mistake, they are here to stay. Virtual has suddenly made conferences more accessible to delegates all around the world who can’t travel easily or without great expense.

We’ll explore some of those issues in FORUM. What is it like to be diagnosed with a critical illness during a pandemic?

Our own Richard Parkinson shares his personal story (see page 24). How do you truly motivate a team after a year of being stuck in virtual land? The Personal Coach’s Kim Poulin has many ideas (see page 22).

Finally, Gary Clark is back to explain how you can use the Broad Concept to help clients understand their estate-planning challenges (see page 20).

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

of Canada carrying on business as Advocis.

FORUM EDITORIAL ADVISORY BOARD MICHAEL BERTON, CFP, RFP, CLU, CHS Assante Financial Management Ltd. LEONY DEGRAAF HASTINGS, CFP, EPC deGraaf Financial Strategies NICHOLAS LANDRY, CEBS, CHS, RCIS BFL Canada - CSI ROBERT MCEACHERN, CFP, CLU, CH.F.C. McEachern Financial IZUMI MIKI-MCGRUER, CFP, CLU, CH.F.C., CHS Freedom 55 Financial

PHOTO: DANIEL EHRENWORTH

EDITOR’S JOURNAL

As COVID-19 continues to reshape how we serve clients, many advisors see working from home as an opportunity to sharpen their skills and credentials through online learning – giving them a competitive advantage to excel in both the challenges of this moment and the recovery that lies ahead.

In 2021, Advocis invites you to explore The Power of Professional Development by discovering the virtual licensing, designation, certificate or CE programs that will take your practice to new heights of service and professionalism. advocis.ca

OPENERS Fodder For the Water Cooler

CLHIA Joins UN Initiative on ESG

T

he Canadian Life and Health Insurance Association (CLHIA) has joined with the global insurance industry to collaborate on a United Nations initiative to promote greater environmental and social sustainability.

Called the United Nations Principles for Sustainable Insurance (PSI) Initiative, the alliance builds on insurers’ main business — managing risk — to develop new solutions, improve business performance, and contribute to overall environmental, social, and economic sustainability.

“Understanding and managing environmental, social, and governance [ESG]

6 FORUM FEBRUARY 2021

risks is critical for insurance to remain affordable and accessible,” says Stephen Frank, CLHIA’s president and CEO. Joining the PSI aligns with Canadian life and health insurers’ continuing advocacy for governments to take action to reduce and adapt to the risks of climate change like extreme weather events, altered temperature patterns, and the risks they pose to public health.

Institutional investors around the world are increasingly using ESG principles in their investment approach and decision-making process, according to the 2020 RBC Global Asset Management Responsible Investment Survey.

The survey indicates that 75% of respondents globally integrate ESG principles into their investment approach and decision-making, up from 70% in 2019.

As well, a survey by the Canadian Responsible Investment Association (RIA) found that 89% of respondents believe it is important for Canadian companies to create inclusive workplaces that are free of discrimination, while 85% said Canadian companies should provide more leadership opportunities to qualified women and people of diverse backgrounds.

Investors are definitely interested in responsible investing. In its November 2020 report, the RIA said assets grew to $3.2 trillion as at December 31, 2019 from $2.1 trillion at the end of 2017, representing a 48% increase in responsible investing (RI) assets under management over two years.

Retail RI mutual fund assets increased to $15.1 billion from $11.1 billion, up 36% over two years.

Some 97% of respondents expect moderate to high levels of growth in RI over the next two years.

“This research confirms that responsible investment is not a trend, it’s a paradigm shift,” says Dustyn Lanz, CEO of the RIA. “The investment industry is undergoing a secular transformation, stewarding assets toward more sustainable and inclusive outcomes for society while protecting long-term shareholder value.”

“For asset managers and financial advisors, RI expertise is no longer a ‘nice to have’ — it’s table stakes,” he adds. — Susan Yellin

PHOTOS: ISTOCKPHOTO

More firms integrating ESG

Advisors Look after Array of Financial Needs

C

OVID-19’s double punch of a potentially deadly illness combined with a sharp and prolonged market downturn has touched virtually everyone in one way or another.

How seriously it has affected clients, especially during the RRSP season, depends on the makeup of advisors’ client lists. “No one is getting through this unscathed,” says Benjamin Klein, CFA, CFP, director of financial planning at Baskin Wealth in Toronto.

Klein’s clients, mostly high net worth, run the gamut of professions — from the self-employed and professionals to business owners, film producers, and those involved in the travel or hiring professions.

“The reality is that it’s been a pandemic and economic downturn that has exacerbated inequality,” he says.

A drop, then a comeback At the end of March 2020, the S&P/TSX Composite Index ended its worst first quarter in almost a decade, frightening clients in terms of whether they were making the right decisions in a down market. Since then, the market has made a

remarkable comeback with many stocks higher than their pre-pandemic market values.

“This is the kind of thing that has benefited the people who have the ability to have investments, to be invested in the market, to not need to take money out of their portfolios,” Klein says. “People have been able to hold on to their nest eggs through this.”

On the other hand, some clients required Klein’s expertise and guidance to keep them on the right track.

In Winnipeg, MaryAnn Kokan-Nyhof, CFP, CLU, has been busy talking to her middle-class, pre-retiree clients as well. Most of them have been fortunate enough to continue working despite the pandemic and have not taken vacations. That’s left many of them with a surplus of savings.

Because of this, clients have been calling to ask her advice on good investment ideas, says Kokan-Nyhof, who is vice-president of a Desjardins Financial Security Investments Inc. branch in the Manitoba capital.

A good portion of clients have been able to set aside RRSP funds and are interested in responsible investing ideas primarily because of their concern about climate change and how it is affecting the world. “I commend them for their ideals about responsible investing, which, coincidentally, is far outstripping traditional investments in terms of returns.” — S.Y.

ss Together Investments Passionate Business

nt Insurance? Investments? Life Wor

ss Maybe it’s time to choose. Cl us Compliance Complexities Lo Finding it a challenge growing your core insurance business while managing the increasing complexities and compliance requirements around your clients’ investment needs? We can help. At Polson Bourbonniere Derby, we’ve built a reputation as one of Canada’s premier investment planning advisory firms by staying focused on helping our clients achieve their investment goals and preserve their wealth.

If you want to refocus your own practice on your clients’ insurance needs and work with a wealth management professional that recognizes, supports and respects your business, call or email us and discover the advantages of monetizing your investment book.

Call 1-800-263-0120 or email info@pbfinancial.com to learn more.

HollisWealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Insurance products provided through Hollis Insurance independently and separately from Industrial Alliance Securities Inc. Only the services offered through Industrial Alliance Securities Inc. are covered by the Canadian Investor Protection Fund.

COVER STORY

Family Friction COVID-19 has caused financial stresses for parents and their adult kids. Rosalind Stefanac explains how advisors can help them get back on track

8 FORUM FEBRUARY 2021

PHOTO: ISTOCKPHOTO

T

ina Tehranchian’s long-time clients were excited about their first year of retirement together.

Both in their early 60s, the couple had budgeted to spend 2020 renovating their home and finally ticking off some travel destinations. But then COVID-19 hit, all four of their adult children lost jobs, and the parents felt compelled to step in.

“They never imagined they’d be dishing out tens of thousands of dollars in their first year of retirement to help their kids,” says Tehranchian, a senior wealth advisor at Assante Capital Management Ltd. in Toronto. While the parents were more than willing to divert their budget so they could support their children, she helped them see just how much financial assistance was realistic without permanently damaging their own retirement plans.

Tehranchian points to another client in her 70s who gave her son $50,000 at the onset of COVID-19 to put toward a new home purchase. “She could afford to do this, but when he called back two months later asking for another $50,000, I told her this would really impact her own planning,” she says. “She needed to be reminded to put her own needs in front of her motherly love, and it was a real ‘aha’ moment for her.”

Scenarios like these have become all the more common as Canadians approach another year of pandemic living.

With uncertainly around COVID-19 still looming large, Boomers and Gen X parents are paying the price in financial setbacks to support struggling family members, while their dependants push future life goals back indefinitely.

According to research by FP Canada, only 57% of Canadians surveyed in September 2020 said they were confident they would achieve their financial life goals, compared to 67% who felt that way in 2018. Three in 10 were concerned they’d never recover financially post-pandemic. It’s not surprising then that a Consumer Financial Hardship Study, conducted by TransUnion in November 2020, showed that 30% of respondents were saving less for retirement, while Gen Z and Millennials (the hardest hit with COVID-19-related job losses) reported the greatest negative impact to household income due to the pandemic.

“I know of parents whose children were studying aeronautics and had offers to be plucked out of school for jobs only to graduate with no prospects and major student debt,” says Julia Chung, a Vancouver-based partner and certified financial planner at Spring Financial Planning.

“One of them has moved back home with his parents and is working in a cheese-making store.”

In these uncertain times, what has become crystal clear to Canadians across generations is the need to have a financial plan. “We saw this during the housing crisis of 2009 with people rushing to find interest-bearing

Tina Tehranchian, CFP, CLU, CHFC

“It’s easy to procrastinate on estate planning, and most people need a trigger to start thinking about mortality,” she says. “In normal times, it would be the death of a family member that gets you thinking about this, but in a pandemic you hear about [death] happening every day.” investments and get life insurance, and now it’s happening again,” Chung says. In speaking with the younger set in particular, she notes that they’re “desperately interested in what they should know” because they’re aware of the instability of today’s world and the fact there won’t necessarily be the pension to rely on that their Boomer parents had. “Millennials in their 30s say they’ve been reading the Globe and Mail, and that level of self-taught knowledge is pretty impressive compared to older generations who are used to getting this information at the bank,” she says.

Chung and her team are offering free webinars and articles about cash-flow planning to try and target those who haven’t reached out for help yet. “Often people come FEBRUARY 2021 FORUM 9

COVER STORY to us for cash-flow management and money coaching when their debt is out of control, and those client requests have dropped off to zero some months,” she says. “That makes me think people are struggling, so we’re giving them tools even if they don’t think they can afford to contact us directly.”

After weathering four major financial crashes throughout her career already, Chung says COVID-19 is yet another example of how “the sun is not always going to shine,” and why financial planning is essential to being better prepared for disaster. “It’s like they now finally see the reason behind that emergency fund I’ve always been talking about.”

Emergency Funds Gaining Favour Stephanie Douglas, a partner and portfolio manager at Harris Douglas Asset Management in Toronto, says she’s had more questions about emergency funds in 2020 than in her seven years in financial planning. “We suggest three to six months for living expenses, plus a line of credit just in case, even if you never use it,” she says. “I’ve seen people who want to keep even more cash for peace of mind, especially if they’re more insecure about their jobs these days.”

While much of her client base has been proactive about saving even prior to the pandemic, she expects this latest crisis will encourage many more to do so. “I’m optimistic that people are paying more attention to their finances, and this will be a learning experience for many younger Canadians in starting to think about setting up these funds,” she says. “Lots of people are still employed and spending less money, so it’s a good time to get started.”

Alim Dhanji, a senior financial planner at Assante Financial Management in Vancouver, has several clients in the hospitality and healthcare sectors who have taken a substantial financial hit during the past year. “Having a three- or six-month emergency fund gave them the ability to make the right decisions instead of making decisions under pressure,” he says.

When the pandemic started, a big part of his job was to help his clients (ranging from 40 to 60 years of age) realize what government supports were available to them, including disability tax credits and housing subsidies along with emergency response benefits. “Now it’s more about making sure they have a [financial] plan that will give them structure, hope, and direction,” he notes.

“This is a good time to check off the boxes of what they’ve wanted to do and haven’t, like get their wills done, look at insurance and cash flow, and build an emergency fund.”

When it comes to investments, Dhanji says this could also be the time for younger investors to have more equity exposure in their portfolios so they can stay ahead of inflation and taxes. On the other hand, older and even middle-aged investors may have to take on more risk to achieve their retirement goals. “But if their financial plans say they’re on target, they may not need to,” he adds.

For Tehranchian, whose clients are primarily affluent Boomers, investment portfolios haven’t had to change much at all. “We have been very lucky that all the world markets have recuperated faster than expected, and as long as those who are retired have a good cash cushion in their portfolios, they’ve been fine,” she says, noting that she always recommends clients have three years of 10 FORUM FEBRUARY 2021

Alim Dhanji, CFP

“Having a three- or six-month emergency fund gave them the ability to make the right decisions instead of making decisions under pressure.” cash reserves or very low risk funds to draw from to give markets time to recover. She says those who did panic and got out of the market entirely — or needed income but had no reserve padding — felt the impacts of the last year in a major way. “That’s why now is an ideal time to reassess the risk tolerance of all clients to make sure portfolios are in line with their comfort level going forward.”

Tehranchian also notes that the pandemic has incited more interest in estate planning. “It’s easy to procrastinate on estate planning, and most people need a trigger to start thinking about mortality,” she says. “In normal times, it would be the death of a family member that gets you thinking about this, but in a pandemic you hear about [death] happening every day.”

“This is a little bit of tough love because my husband and I have agreed we will not pay their rent or give them money to move out again,” she explains. “We pay for their education because that is our own personal values system, but the rest is on their own.”

Helping Out at What Cost?

As Tehranchian’s own client experiences have shown her, COVID19 times have also emphasized the importance of helping parents recognize when they can’t jeopardize their own financial plans to bail out their children. “The key role of a financial advisor is to be there to provide the right perspective,” she says, which includes outlining the tax implications of withdrawing funds for others.

“We owe it to our clients to make sure they are well informed about making decisions before they make them.”

Once clients determine they can afford to help, the next step is to create limits and expectations for their children, says Zena Amundsen, a certified financial planner at Astra Financial Services in Regina. Perhaps that means drafting a formal loan agreement to help build a sense of responsibility among adult children, she

Zena Amundsen, CFP, CDF

says, along with introducing them to your financial planner to help them have the coaching and discussions that will keep them on track.

Amundsen recalls one client who retired in September amidst the pandemic and was worried about having to say no to her children because she had been helping them in the past when she could better afford it. “We’ve been practising her response, and it Continued on page 14

REACHING OUT AND CONNECTING Social distancing and stay-at-home orders are straining our personal connections.

But during this pandemic, we need each others’ support more than ever.

Here’s how two independent Advisors affiliated with PPI are reaching out to people in their communities…

EDMONTON, ALBERTA

ST. JOHN’S, NEWFOUNDLAND

Jeremiah Renner, EPC, FIC, QAFP™ Two Pillars Financial Solutions Inc.

Kevin Dunphy, CLU, CFP Dunphy Molloy & Associates Limited

For Edmonton Advisor Jeremiah Renner, good nutrition and community engagement go hand-in-hand. For years, Jeremiah, his team, and his clients have initiated, organized and rolled up their sleeves to feed those at risk within their South Edmonton communities. From bagging sandwiches and juice boxes for school lunch programs to cooking over 700 annual holiday dinners for the less fortunate (yes, turkey with all the trimmings!), Jeremiah encourages a spirit of community and facilitates connections that endure and have a long-term impact.

Strength.

Endurance.

Willpower.

Courage in the face of adversity.

It takes all of these things and more to become a Special Olympics athlete. Perhaps it is all of these things, which made St. John’s Advisor Kevin Dunphy a lifetime advocate and supporter of this initiative and the many exceptional athletes who participate. For many years (until 2019 when Kevin retired from the board), he garnered funds, inspired volunteers, hired coaches and recruited new athletes, becoming a force within the organization and his community. For Kevin, the goal has simply been to ensure that these exceptional athletes live the best life they possibly can.

During COVID, when the need has been even greater, Jeremiah and his team have continued to work with local food programs to provide funds, groceries and meals for those in need.

Yes, those charitable events and activities have been limited, but he has found a way to give back, and connect with people in his community for positive change. Follow Jeremiah’s inspiring community outreach on social media via #buildingcommunity.

Although the current pandemic has put a pause on all athletic events, these incredible athletes have found a way to persevere by engaging online, eating healthy and remaining active.

Today, Newfoundland and Labrador boasts over 600 Special Olympics athletes – a feat to be proud of !

STARTING NEW CONVERSATIONS Reach new prospects and re-connect with existing clients when you share articles and videos from The Link Between.

Now more than ever, you want to stay visible online and help take care of what matters most for your clients. With your own custom URL, a branded site with your logo, and your contact info on every page, The Link Between inspires the conversations that energize your business.

• Free, customizable online tool to promote your brand • A growing inventory of thought-provoking articles and videos, ready-to-send • Simple, fast and easy-to-share via Facebook, LinkedIn, Twitter or email • Focused on financial concepts – not products – to help clients make sound decisions • Clients can subscribe to receive new articles from you, automatically

There are up to 17 client visits to a Link Between site for each article shared.* With over 30 articles published in 2020, including Protecting Your Estate, The Travel Bug – When Travel is Too Risky, and The ABCs of Spousal RRSPs, The Link Between is growing every week.

*Estimate based on ratio of articles shared to total number of site visits, 2020.

Sign up in under 5 minutes and create your own branded site instantly. Start sending articles right away – all at no cost to you. If your MGA isn’t offering you this kind of support, contact us today.

Unparalleled Resources. At Your Command. www.ppi.ca

COVER STORY Continued from page 11 definitely puts the blame on me as the financial planner,” says Amundsen. “I don’t mind using myself as the so-called bad guy that says she shouldn’t help. It is my job to protect her first.”

As a mother of two adult children still in school, Amundsen is prepared to practise what she preaches. When her kids wanted to move out, she drew up a spreadsheet showing them how much more they could save without renting, but they decided to leave anyway. So far, they have jobs and some cash savings that give them some breathing room, but if they’re laid off Amundsen expects they’ll be boomeranging back home looking for support. “This is a little bit of tough love because my husband and I have agreed we will not pay their rent or give them money to move out again,” she explains. “We pay for their education because that is our own personal values system, but the rest is on their own.”

Opportunities in the Chaos As Canadians wait to see how 2021 will unfold, many advisors are optimistic that there’s already a silver lining to the turmoil of the past year, particularly in changing bad habits and pushing younger generations to be more savvy about saving for the future.

“Before the pandemic, disposable income versus debt load was just getting higher and higher, and sometimes we need a wake-up call to shake the complacency,” says Wendy Brookhouse, founder and chief strategist at Black Star Wealth in Halifax. “This gives our clients an opportunity to make lasting changes and be more deliberate in how they spend their money.”

In those first few months she says she wasn’t hearing from new clients at all, whereas now she is regularly working with many who realize they have work to do for what’s ahead. “As we move into phase two [of COVID], they’re looking much more at contingency plans, like how they could survive another big financial shock,” she says. “Together we’re trying to figure out where the gaps are and how we will address them so they can reach retirement.”

Nicole Putz, whose clients are mostly Millennial women, points to one 32-year-old flight attendant now living on government benefits that are half as much as she was making while working.

“She told me it really opened her eyes to the fact she was living beyond her means and needed to focus on finances,” says Putz, a certified financial planner at Wolfond Financial in Regina. “So much of what we do as advisors is scenario-based and now that we’ve gone through something so major, it’s put a real-life perspective to it.”

These tumultuous times have also been a reminder to older clients that their children are going survive — and maybe thrive — even if parents don’t provide the solution. “I think the vast majority of Millennials are hard-working, but they’re used to getting what they want, and in the most important and fundamental ways, life has been easier than their parents’ and grandparents’,” says David Christianson, a senior financial advisor at Christianson Wealth Advisors in Winnipeg. “Plus, parents don’t have 20 or 30 years to recover like their kids do, so they have to take care of themselves first.”

As an advisor with plenty of second- and third-generation clients, he says those facing unemployment or putting their aspirations on hold should be looking for the opportunities that 14 FORUM FEBRUARY 2021

David Christianson, CFP, R.F.P., TEP, CIM

“I think the vast majority of Millennials are hard-working, but they’re used to getting what they want, and in the most important and fundamental ways, life has been easier than their parents’ and grandparents’.” inevitably emerge in disruptions like these. “If you’ve lost your job in hospitality or in the airlines, there are other industries that are booming — and now hiring,” he says. “Hopes and dreams may feel like they’re shattered, but they’ve only been delayed.”

The opportunities abounding extend to financial advisors too, he adds. “This is a chance to forge those lifelong bonds with clients by helping them through the crisis and providing the advice and resources they need to get through this,” says Christianson.

ROSALIND STEFANAC is a Toronto-based writer and editor.

Stand out.

In today’s wealth planning world, being like everyone else won’t cut it anymore. You need a superior line of attack – one that helps you deliver deeper knowledge to diagnose and overcome complex challenges. Be smarter. Instinctual. More agile. Find your fierce with a CLU ®.

Learn how a CLU helps you build unbreakable trust with your clients.

Call 1-877-773-6765 or go online to:

info.advocis.ca/clu

Advocis, CLU, “Chartered Life Underwriter” and “Join the deeper conversation” and their associated design-marks are registered trademarks of The Financial Advisors Association of Canada.

The CLU is conferred by The Institute for Advanced Financial Education.

EDUCATION

Why I Got

My CLU The chartered life underwriter, first created in the U.S. in 1927, is Advocis’s premier financial planning designation. Five advisors spoke with FORUM about its appeal

Nancy Byrne, CLU, CFP, CHS Financial Planning Solutions, Saint John, N.B. Earned the CLU in 2016

I

got the CLU because I thought I was missing something — the ability to humanize all the technical competencies for clients. I wanted to debunk the mechanical approach of using a product focus and the CLU taught me to place proper emphasis on what really matters — understanding what the client is looking for and wants to achieve.

It taught me how to actually listen to a client, learn what is important to them, and recognize the opportunities and potential pitfalls. Only then do we worry about which tool influences the best results. Every single client is different, every situation is different, and the CLU just brings everything together.

The most enjoyable aspect of my role as an advisor is sitting with my clients and learning about them. It was just basically learning every aspect of the full financial picture.

16 FORUM FEBRUARY 2021

Cindy Bowden, CLU, CHFC Cindy Bowden Insurance and Benefits, Markham, Ont. Earned the CLU in 1984

I

Grant Maddigan, CLU, CFP Principal Planning Inc., St. John’s, NL. Earned the CLU in 2020

W

hen people are making financial decisions, it usually comes down to a tax or an estate issue. And the CLU really dives deep into those areas.

I wanted more in-depth knowledge of estate planning and taxation. We advisors need to educate ourselves so if someone has a question, we may not have the answer, but we need to at least know where to go for the answer. And the CLU allows me to work better with accountants and lawyers, and be able to collaborate more with other professionals to better serve my clients.

It covers issues like personal estate planning for people with disabilities, estate considerations for business owners, and corporate reorganizations.

Then the last course, the advanced estate planning course, really ties everything together.

The first two courses give you a lot of foundational knowledge.

The CLU allows me to give clients, especially business owners, a 360-degree view of their finances from a 30,000-foot level. I’m able to hone in on specific estate planning and taxation pieces so that I can make the clients more aware of the impact of their financial decisions from a tax standpoint.

’m a second-generation advisor. Virtually every second- or third-generation insurance advisor that I know has their CLU. It’s because they worked with long-time advisors who recognized that it was a necessary designation to know what you’re doing, especially for the business market. I never thought of it as having a choice.

The CLU curriculum integrates all the different aspects of what a person has to have in place to take care of the risk in their life for death, disability, retirement, and poor health.

When you finish the CLU curriculum, you realize how much you don’t know, how much you must continue to learn, and the many pitfalls if you don’t learn properly.

When I took the CLU, there were two tax courses. You came through those and realized there were a lot of landmines, but also many opportunities for people to structure their affairs to minimize tax. Without the CLU curriculum, you wouldn’t know all the different ways of owning life insurance. It increases your awareness of the complexity of the world, the law, insurance contracts, and the implications of not doing things correctly. Not being aware of the broad number of things we learn as CLUs can impact clients negatively.

The designation also sets you up so that you can work in more specialized areas. For example, I know advisors who became specialists in things like pensions, succession planning, and shareholder agreements. Group benefits became one of my own specialties.

FEBRUARY 2021 FORUM 17

The Certified Executor Advisor (CEA) Designation More than ever before, Canadians want to talk about their estates.

Shouldn’t we be talking to them? Learn how to engage in powerful dialogue and drive AUM and life sales with current and future clients.

Advocis members save $200 Learn more at https://myadvocis.ca/partner-programs/cea/

Register today with Advocis discount at

https://cicea.ca/advocis

EDUCATION Ted Polci, CLU, TEP First York, Toronto Earned the CLU in 1972

T

o me, the CLU has always been the designation for someone who really wants to be taken seriously in some of the more complex areas of insurance planning, such as estate planning or business insurance. I’m talking about things like business succession and shareholder agreements.

The CLU looks at tax issues surrounding trusts and wills, tax rates in different provinces, probate areas, capital gains tax, capital dividends that come out of life insurance proceeds, and shareholder agreements. These are all areas that would not be covered in a more general designation in great detail. The CLU focuses more on taxes on the different kinds of investments for those involved in helping their clients structure an investment program to meet retirement needs, savings, and goals.

Business owners are looking for intelligent, informative conversations on areas that concern them. They want specialized advice.

They’re not looking for someone to say, “I haven’t done much work on that issue, but I have somebody who may know something about that.”

They’re looking for somebody who says, “Yes, I’ve done something similar to your case. Not exactly the same, but I know what you’re talking about. I can help you with that.”

ADDED BON NUS

DITS WHEN

GET UP TO 30 CE CREDITS T THIS CO

YOU TAKE AKE OURSE

Arun Mehra, CLU, CFP Arun Mehra Insurance Agency, Halifax Earned the CLU in 2000

I

wanted to have knowledge of the various financial products and their applications for an individual’s objective.

For business owners, taxes play a big role in their planning for the future and their retirement. So the CLU gave me the in-depth knowledge of all the financial products in my toolkit.

I also learned how the tax system works and gained a legal understanding of how insurance contracts work.

Having it certainly separates you from the crowd because you have in-depth knowledge of your industry. You help people to make sure they are protected against most of the financial risks that they have.

For more information, visit myadvocis.ca/designations-2/ chartered-life-underwriter-designation/

PFP P®

Plus Provincial Insurance e Councils!

www.cicea.ca/advocis FEBRUARY 2021 FORUM 19

INSURANCE

Problem Solver The Broad Concept can help a prospect clarify the objectives of their estate plan. Gary Clark explains how

20 FORUM FEBRUARY 2021

In my opinion, business owners are the most interesting group of clients to work with as there are so many alternatives to succession planning.

Years ago, I had arranged a meeting with a business owner who had already told me that “everything is fine, we have good benefits for our employees and a happy staff.”

Upon introductions and the usual pleasantries, I asked if I could ask a few questions, to which he agreed.

My first question: How did he get started in this business? This is a very important question to get the discussion going. Most business owners haven’t been asked that question very often and are proud to tell their story. I love to tell my story, don’t you?

Turns out, this owner had worked for another company for 15 years and decided he would like to run his own business. He borrowed from a bank, paid off the loan, and, now 10 years later, was happy with the success his business had achieved. See my subsequent questions in italics.

Is she active in the business?

No, she doesn’t know much about it.

Are there any other family members involved in the business?

I have two grown daughters who are not part of the business and have their own careers.

What do you think the business is worth?

Probably about $5 million.

Do you have a will?

Yes. What’s it say?

Everything goes to my wife.

What do you mean by “everything?”

The shares of the business and other investments such as Registered Retirement Savings Plans and Tax-Free Savings Account.

Do you mind if I ask how many shareholders own the business?

So, the shares of the business go to your widow (remember a widow is a different person than a wife)?

Just me and my wife.

Yes.

ILLUSTRATION: ISTOCKPHOTO

T

he Broad Concept is a problem-solving philosophy where an advisor asks soft fact questions that identify attitudes and feelings about what the prospect wants to occur upon their demise.

Each question is based upon the prospect’s last answer. Ideally, the interview becomes a voyage of self discovery for the prospect, revealing attitudes and beliefs they never knew about themselves. Their response to Broad Concept questions is far different from an estate planning questionnaire that relies on facts and doesn’t address what a prospect wants or their objectives.

It made me realize that I was not in the business of trying to sell insurance, but rather identifying and solving problems for business owners with the application of insurance.

In my last FORUM article, “Words of Wisdom” (September 2020 issue, page 24), I briefly mentioned the impact the Broad Concept had on my career. Now, let’s specifically examine how the concept works. Below is an interview I had with a business owner a few years ago that seemed to touch all the bases.

What would you like her to do with the business?

Well, that would be up to her.

If you’re not here, do you think they would try to go after your best people?

They would for sure.

Since she’s not active in the business, could she sell it?

Is there anything else she could do?

I think she could. The business is worth $5 million and we’ve been in business for 10 years.

The employees have always wanted to own a part of this business, so I could sell it to them.

Do you think she could find a buyer?

I had an offer two years ago.

That could be a very good solution.

Do you know if they have any money?

What was the offer?

Not enough for an entire buy-out.

It was for $5 million.

That was a great offer. Was there a management contract involved?

Yes, I would have to be with the company for three years.

If you’re not here, would anyone buy your business right away or would they wait six months to see if they could get it for a steal?

Do you think they could borrow the funds?

I think so.

What kind of terms do you think they could get?

Possibly seven years.

How much would that be per year?

That’s about $715,000 a year.

Of course, anyone would wait. I would.

So then, if you had $5 million the day you died would you leave instructions for your widow to buy a business that had just lost its president? Isn’t that what you are saying?

I guess that’s what I’m saying.

How much would the company have to earn in before-tax dollars to net $715,000? (I could tell him but the Broad Concept aims for prospects to discover the answers on their own.

Otherwise, I’m just leading him.)

(Long pause.) About 25% in tax — the pre-tax earnings would be $953,333.

Does that make any sense?

No. Is there anything else she could do?

I have very good staff. I’m sure they would help her run the business.

That could be a really good situation.

She would continue to own the business and benefit from the income and the employees would keep their jobs. They may work for you, but do you think they would work for your widow?

I think so.

And what about the interest?

Do you think the company could pay out $715,000 plus interest and still stay in business?

No, there is no way.

Can you think of any other solutions?

How about insurance?

If I could show you a way that your widow could receive $5 million in cash and your employees could own the business for a cost of 2% to 2.5% per year, would you do it?

Of course.

Have you ever asked them?

No. (He may not get the answer he expects.)

Is there much competition in your business for companies trying to steal your staff?

Yes, other companies are always trying to raid my staff.

And the rest is history.

What just occurred is called the Decision Tree.

The owner has rationalized a number of ways that he could deal with the succession of his business. My Broad Concept questions were not intended to trap him, but instead to help him understand the

impact of each alternative solution.

Perhaps his wife could run the business if he predeceased her. If so, the questions would address what happens if she predeceases him. Or what ultimately happens upon her demise. She may be able to run the business better than he could. Or what if he says he wants his children to run the business? These are all questions that will need to be addressed.

Perhaps two of the best questions to a business owner are from Hal Zlotnik, who wrote the insurance industry classic on the Broad Concept. I once read where he asked his business owner client this: I would like you to assume two things.

The first is that you died last night and that you’ve named me as your executor and trustee.

At 2 p.m. this afternoon, your widow is coming to meet with me. What do you think she will want to know? Where does she get her income? Will it be the same? Is there any life insurance? Who should she talk to for advice?

What do you want me to tell her?

Then at 10 a.m. tomorrow morning your general manager is coming to see me. What do you think he will want to know? Does he have a job? Who does he answer to? Who deals with the bank? Are there arrangements for payroll? Are we open for business on the day of the funeral?

These are questions that have an immediate impact as compared to questions about what happens when you die sometime in the future. This is the day after that nobody thinks about. Powerful.

The Broad Concept was developed years ago by Joe Dickstein, Don Pooley, David Greenstone, and Hal Zlotnik — all now deceased.

For another reference, Don Pooley’s presentation at the 1984 Million Dollar Roundtable (MDRT) is still available to MDRT members to access. It’s entitled Soft Facts and Software: I/R Code: 3900 Cassette: 84310; it’s as relevant today as it was in 1984.

The Broad Concept has enhanced the ability of thousands of advisors to be more effective in working with prospective clients. I know it has for me.

GARY CLARK, CLU, TEP, is president of Clark Insurance Advisory in Edmonton and is a founding member of CALU. He can be reached at gary@clarkadvisory.ca. To receive a PDF of this article, email dgageforum@gmail.com FEBRUARY 2021 FORUM 21

PRACTICE MANAGEMENT

Motivation Moves W

elcome to 2021. The year may have changed but the uncertainty in our working environment remains. More emphasis is being placed on employee wellness and mental health because of the direct impact that the workplace environment can have on a person’s health.

With the ongoing pandemic, some may wonder if workplace health and motivation is as significant a concern now that many people are working apart. The truth is, it has never been more important to focus on employee wellness and maintaining an effective, cohesive team — yet it has never been more challenging to achieve such a thing.

How can we possibly improve our culture and team cohesion when we are apart or are pulled in too many directions due to the demands put upon us in COVID times? I am a team coach focused on building team effectiveness and productivity. I am a Certified Facilitator & Authorized Partner with Everything DiSC® & Five Behaviors®. I understand that many teams (not all) are feeling like they are in survival mode. In this state, it’s difficult to embrace opportunities to improve your culture, but there are a few rather easy things that you can implement so that your team can have an amazing year.

Let’s start with the challenges. Despite your best intentions during the pandemic, it can be very difficult to manage and 22 FORUM FEBRUARY 2021

How can you improve your team motivation, culture, and cohesion virtually?

1. Get feedback from your team members.

Here are some questions to ask your team members to get a basic sense of how they are doing and how team communication could improve. You can send these questions out via email and request they respond by email, or you can send them out and follow up with a phone/video meeting to get more detailed responses. With their permission, it would be worthwhile to share the teams’ responses so that each person understands their coworkers’ preferences and challenges. This is also important information to know for when the pandemic is deemed over.

PHOTO: ISTOCKPHOTO

How can you keep your team inspired and focused during a pandemic?

Kim Poulin walks us through a plan of attack

support your employees the way you would like. Here are some challenges we have witnessed amongst advisors: • I worry about my staff, especially those who live alone.

• I wonder if they are getting enough accomplished.

• I don’t want them to become virtually fatigued.

• I am concerned about the mental health of one or more of my employees.

• I don’t want to lose business momentum.

• I’m struggling because I can’t talk to them as much as before.

Here are some challenges employees tell us they are having: • I’m not entirely sure what my employer wants day to day.

• It’s harder for me to work virtually.

• I’m stressed about my children being home and balancing their e-learning.

• I don’t feel as motivated as before.

• I don’t have a proper space to concentrate.

• I don’t think I’m working as productively with my team members.

• I’m not sure how to balance my job and checking in with team members/my employer.

Personally Focused 1. What do you need to feel good while working from home?

2. If given the choice, what’s your ideal balance between working on site and working from home? a. I get so much more done at home b. I prefer to be on site c. I prefer a 50/50 mix d. Other 3. What’s your biggest challenge working on a virtual team? a. Not enough time to interact with the team b. I feel like I’m always on the clock and can’t shut it off c. Communication can be a hassle and is limited d. Other

Team Focused 1. What changes occurred during COVID that have improved efficiency and will continue in the new norm?

2. For you, is effective, rewarding teamwork easier or more challenging on a virtual team compared to an in-person team?

3. What aspects of teamwork are easier or better when working virtually?

4. What aspects of teamwork are more challenging or less effective when working virtually?

2. Gain a deeper understanding of your team members’ motivations.

Along with knowing each employee’s talents, career aspirations, professional development needs, and communication style (which we recommend), you also need to know what motivates them.

People are motivated by different things. Two ways to determine one’s motivations include simply asking them questions about motivation, and secondly, by using assessment tools such as Everything DiSC® The Five Behaviours®.

Many people are motivated by extrinsic items like money or time off, but let’s focus on intrinsic motivation, also known as psychic income, which everyone has. These are things that your employee takes satisfaction in. The list is inexhaustive, but examples include prestige; working in a stable, predictable environment; solving problems; catching errors or flaws in design; achieving efficient results; being able to work closely with colleagues; giving and receiving praise; initiating projects; and inspiring others, to name a few.

As a side note, knowing the opposite of motivators is just as important. Let’s call these stressors. Examples of stressors include having little independence or private time, being forced to mingle with strangers, following inefficient procedures, dealing with a chaotic environment, being in a dull or unsocial environment, and working without clear guidelines.

With personal assessment tools, you can develop a deep understanding of your team members’ intrinsic motivators, which can have a dramatic impact on how you work with your employees and how your employees work together. Job satisfaction is key at the best of times and leads to overall wellness.

Let’s say Sarah and Tim work on your team. Sarah is friendly, outgoing, and thrives on building relationships and being around people. She is motivated by working closely with her colleagues — an intrinsic motivation that has likely been disrupted. As Sarah’s leader, you may want to touch base with her daily and have her focus on interacting with clients whenever possible.

Tim is motivated by giving and receiving praise, which typically

would happen in a public setting at the office. He is always encouraging the team to work harder to reach the end goal. As the team’s leader, consider implementing a “team success” update at the start of each virtual team meeting that he and the other team members can look forward to. Discuss how certain successes (no matter how small) have propelled the business forward, and encourage ideas to keep that momentum going.

3. Provide regular and consistent communication.

Hold team meetings and one-on-one meetings, especially if a team member is more likely to express themselves speaking to you alone.

Team members may have specific preferences when they can do a virtual meeting. Find out by asking. Be flexible in the timing if necessary.

Encourage those who may not be as tech savvy to log in 10 minutes before a meeting to get set up properly so meetings can start when planned and they don’t feel disruptive.

Limit team meetings to two hours. Our team finds that after two hours of screen time, we need to take a break. Offer a fiveminute coffee/bathroom break every hour. A best practice now is to have two shorter team meetings each week. If you have more than one employee, encourage team members to collaborate on video meetings at other times without you when possible.

4. If you need to hire, you can.

Some teams that have fully embraced a virtual model say it has positively impacted their business. So much so that they have been able to make hires virtually, and have needed to because their business has been growing with new clients and others requiring more services. There has been upward momentum in hiring since the fall of 2020. I am currently assisting six advisor teams to make hires. We will do three to four video interviews, and most teams will find a safe way to meet in person near the end of the hiring process, whether having a physically distanced walk in a park, or having the whole team meet in a parking lot.

In the interviewing process, ask a few questions to uncover what motivates them and have them do some sort of an assessment. Here are some examples of questions you can ask.

1. Describe the work environment or culture in which you are the most productive and happy.

2. What, in your experience, motivates your best, most successful job performance? Can you give us an example of this motivation in action in the workplace?

3. How do you ensure that your personal level of motivation is high on a daily basis?

If you have an employee who is motivated to inspire others, consider them to mentor your new hire. Doing a few icebreaker games during your virtual team meetings will help everyone to get to know each other. And again, doing an assessment such as Everything DiSC will fast-track the understanding of each other’s behaviours, communication styles, and motivators and stressors.

When you know what motivates your employees it doesn’t matter if you are apart. You can utilize each person’s energy for the betterment of the business, and the employees will be happier for it. You simply need to take the time to investigate.

KIM POULIN is a business coach with The Personal Coach, providing coaching for financial advisors and their teams. She can be reached at kim@thepersonalcoach.ca.

FEBRUARY 2021 FORUM 23

INSURANCE

Curveballs A paid-out critical illness policy at age 73 can be life changing.

It was for Richard Parkinson

24 FORUM FEBRUARY 2021

PHOTO: ISTOCKPHOTO

W Critical

hen it comes to critical illness insurance (CI), the biggest concern for advisors and clients alike is whether a claim will be paid. For example, in 2018, a woman was denied a claim for $300,000 because the illness she claimed, aplastic anemia, wasn’t on her policy, which only covered three illnesses.

Last year, another case was a 67-year-old male, who had a $500,000 CI policy that he cancelled effective April 1, 2017.

In May 2017 he was diagnosed with life-threatening cancer, so he initiated a claim, which was promptly denied as the policy was no longer in force. He took the matter to court where he lost his case because the contract clearly stated that a potential claim begins from the date of diagnosis, and since his policy had already been cancelled prior to that date, his claim was also denied by the court. The message from these two stories is: • Read the contract to fully understand what is included and what is not!

• Remember what illnesses are claimable, and that the definitions age 75 and term 100 back in 2003, but today, for a 40-year-old are based on the contract for the policy the client buys, (e.g., for male non-smoker who wants $50,000 of coverage, the monthly my 2003 policy it covered 10 illnesses, and the definitions were premiums are $66.82 for a level to 75 versus $75.77 for permaunique as it predated the 2005 definitions consolidation). nent to age 100. For me, an $8.95 monthly difference is worth it, And I have a message from a third story — my own personal especially given a 40-year-old male has a life expectancy of 81.6 experience, fresh from a pandemic year! years.

When I started my career in life insurance in 2003 with Freedom 55, I was encouraged to buy a critical illness policy from • I am glad I did not choose the return of premium (ROP) Great West Life. Ultimately, I purchased a $50,000 policy for $114 option, where you pay higher premiums for the guarantee of getting your money back if you don’t end up filing a claim. Most CI a month (I was 57 at the time). If I had not been in the insurance policies do not pay more than the benefit, and at age 83, the total business, it’s unlikely I would have even considered it. As I reached annual premium paid is $51,465.84. So if surrendered the client my early 70s, and also realizing I had purchased the level to 75 only gets the $50,000. So, for older, over-age-50 clients at start, do (because I was a newbie and didn’t know any better), and given I was in good health and not on any medications, I considered canthe math. I suggest people invest the ROP difference into a TFSA. celling it a few times, but fortunately did not.

That way, if they have a claim, they get both the benefit and the TFSA money. From analysis, I have found most clients on seeing Fast forward to 2020. On April 10, 2020, at age 73, I received a the numbers choose to invest the ROP premium in a TFSA. Below positive annual fecal immunochemical test (FIT), and would need is a table showing the numbers for a 40-year-old male. Should he to have a colonoscopy. By August 13, I had a colonoscopy that claim at age 73, he gets both the $50,000 CI coverage and the detected a mass in my colon. Two days later, I learned it was can$24,441.80 contributed in his TFSA. cerous, and I was referred to a surgeon to have it removed.

Clearly, I’m much more of a CI raving fan than before. Since I had a colorectal resection surgery on September 2. Fifteen mentioning my experience to prospects, I have placed more CI with inches of my colon was removed using laparoscopic surgery. clients. But more importantly, I’ve helped to protect clients from My medical team believes they got it all, and there is no remainfinancial hardship during a critical illness. ing cancer in my body. Recovery was more uncomfortable rather than painful, but after about three weeks I was more or less back to normal.

RICHARD PARKINSON, CPCA, is an independent insurance broker based in Vancouver. To receive a PDF of this article, email dgageforum@gmail.com.

On September 16, I received the pathology report and the physician’s statement that allowed me to submit my claim to Canada Life that evening. Two days later, I was pleased to Input Data receive a call from the claims department Client Age Start 40 saying that my claim was approved for payment. The examiner noted that because Client Age at Year of Claim 73 I had submitted everything they needed to Starting Year 2021 make a decision, and that the claim details met the illness definition, they were able to Cl Premium (excluding ROP) $841.92 make such a quick decision.

ROP Premium - annual $354.96 Some takeaways from my experience: • Knowing I had CI coverage greatly Total Annual Premium $1,196.88 mitigated the impact of hearing about my Invest Return 4.00% cancer diagnosis. Knowing I would receive some cash for my hassle and discomfort Marginal Tax Rate (0 if TFSA) 0.00% definitely made dealing with the surgery Benefit Amount $50,000 recovery more palatable.

• When you sell critical illness policies, advise your clients that you want to be involved in the claims process. The value of knowing the policy contract definitions, and ensuring your client gets all of the paperwork needed, results in a speedy resolution of the claim.

• As I mentioned earlier, I chose the level to age 75 rather than the permanent to age 100. I almost lived to regret that decision since at age 73, the policy was close to expiring. Fortunately, I did keep it. I don’t recall the difference between level to

Breakeven Return Rate for Investment to = ROP

6.36%

Results Summary Total Cl Premium Paid

$27,783.36

Total ROP Premium Paid

$11,713.68

Total Premium Paid

$39,497.04 ROP vs. Investing ROP Premium

ROP Return

$39,497.04

Total Net Investment Return

$24,441.80

Difference

$15,055.24 FEBRUARY 2021 FORUM 25

TAX UPFRONT

BY DOUG CARROLL

Wait or Not?

The case for taking Canada Pension Plan at age 70

W

hile playing charades over the holidays, my youngest son stumbled with “a bird in the hand is worth two in the bush.” Eventually we guessed it, and I explained to him that it means accepting a sure thing now rather than holding out for something potentially bigger later.

Coincidentally, that adage also featured prominently in an item on my holiday reading list. It’s a research paper about delaying Canada Pension Plan (CPP) retirement benefits, released in late 2020 by the National Institute on Ageing and the FP Canada Foundation.

My long-held opinion has been to take CPP at age 65, unless there are compelling reasons to start earlier. After reading this paper, I’m now leaning toward 70 as the default position.

The majority of Canadians — seven out of 10 — take their CPP retirement pension at either 60 or 65. Less than 5% take it after age 65, and only 1% wait until 70. The study’s author, Bonnie-Jeanne MacDonald, attributes this pattern of early uptake to a combination of lack of advice, bad advice, and “bad-good” advice.

The bad advice includes the emotional pull of the bird-in-the-hand: If you die early (so the argument goes), you’ll leave money on the table, so take CPP as soon as you can.

However, the only guarantee is that your payments start sooner, not that you’ll receive more. And ironically, the early uptake may in fact increase the likelihood that you will receive less, as we’ll see further down.

The “bad-good” advice is the mainstream practice of using a breakeven age. It compares two starting ages, say 60 and 65, focusing attention on whether you will reach the age when the cumulative receipts are the same. This plays to our behavioural tendency to favour the near-term (from first age to second age to breakeven age), thereby undervaluing the lifetime income security that CPP offers. On top of that, academic research shows we tend to underestimate 26 FORUM FEBRUARY 2021

our life expectancy, making it even more likely to choose the earlier start.

According to Canada’s chief actuary, life expectancy at age 60 is 85.9 for men and 88.5 for women. In my own experience, I’ve never seen a suggested breakeven/crossover age much over 80. This has long been my discomfort with this approach, as you are betting on being in the “dies-before” half of the cohort population. You lose (statistically) simply by being average, and it gets worse the longer you live.

MEASURING THE DOLLAR DIFFERENCE Early uptake would not be a concern if it in fact leads to a better financial outcome. To test this, MacDonald departs from the breakeven approach, favouring a calculation of the current dollar value of the expected loss, or “lifetime loss.”

For someone entitled to the maximum CPP pension who lives close to age 100 (a 25% probability from age 60 according to the dataset used), the current dollar loss can exceed a quarter of a million dollars.

For someone with average life expectancy entitled to the median CPP income who takes it at age 60 rather than delaying to age 70, the lifetime loss in current dollars is more than $100,000.

The model factors in the drawdown of RRSP/RRIF savings until the CPP begins.

Including this component, it finds that most people will still be much better off by bridging this way than by taking CPP early and

stretching their RRSP/RRIF money over the expected retirement years.

Notably, among the scenarios canvassed in the paper, for someone entitled to the maximum CPP pension who lives close to age 100 (a 25% probability from age 60 according to the dataset used), the current dollar loss can exceed a quarter of a million dollars.

To be clear, lifetime loss is not intended to be applied without consideration of individual circumstances. There are many situations where it would make sense to begin early, such as when there is a known life-limiting health condition, or when someone is trying to preserve income-tested benefits or shield against the Old Age Security clawback.

For most people, it’s a challenge just to identify all the contributing factors in making such a decision, let alone evaluate the tradeoffs among them. It’s both technically complicated and emotionally charged, which together can be overwhelming.

In addition to being a dependable information source, financial advisors can guide their clients by applying some of the lessons of behavioural finance: • Loss aversion holds that we feel the pain of loss twice as much as the joy of gain, which is what lifetime loss illustrates in concrete terms.

• It also frames the discussion on the more-likely scenario of longevity, as opposed to early death.

• Lastly, by anchoring the client’s thinking on age 70 as the default option, their ultimate decision is more likely to end up near that age, to their own benefit.

Ultimately, the decision should be informed by individual particulars and reliable evidence. In the latter respect, I recommend this paper as a helpful resource for all financial advisors.

DOUG CARROLL, JD, LLM (Tax), CFP, TEP, is a tax & estate specialist with Aviso Wealth.

He can be reached at doug@douglascarroll.com.

PASSIONATE ABOUT THE FUTURE OF YOUR PROFESSION?

JOIN THE ADVOCACY NETWORK! Meet with elected officials and build your local network Receive bulletins on political and regulatory developments that may impact your business Exclusive invitations to participate in Advocis Legislature Days and receptions

Learn more: advocis.ca/AdvocacyNetwork

READY TO GO PRO? SELF STUDY NOW AVAILABLE advocis.ca/PFA

Professional Financial Advisor “This is an excellent program for all advisors - not only new entrants to the industry. Besides covering technical concepts, it includes information on interacting with clients that is very practical and useful.”

– Stephen Macdonald, PFA, CHS

Advocis®, The Institute for Advanced Financial Education (The Institute™), CLU®, CHS™, CH.F.C.®, PFA™ and APA® are trademarks of The Financial Advisors Association of Canada (TFAAC). The PFA designation is conferred

by The Institute for Advanced Financial Education.

ESTATE DILEMMAS

BY KEVIN WARK

Estate Ahead Looking forward through past estates

T

he beginning of any new year presents an opportunity to reflect on key events that have affected our lives over the past year, and in turn how these events might influence both personal and business decisions in the future.

In keeping with this theme, I have reviewed several of my articles that were prepared for Advocis publications in 2020. As it turns out, a number of issues discussed in those articles continue to be relevant and have evolved with more recent events.

Of course, COVID-19 — and how it was impacting our personal, business, and financial health as well as our clients’ — was the big news in 2020. One of my first articles of the year observed that the pandemic was motivating many Canadians to create or update their wills and other estate documents. However, the need to isolate and physically distance was creating significant issues due to statutory requirements for witnessing these documents.

Fortunately, most provinces provided some relief by passing temporary “emergency orders” that permitted the virtual witnessing of estate documents. These emergency orders continue to be in effect, and in some provinces, have now been made permanent. We are seeing further innovations in will execution, such as recent legislation in British Columbia that will permit the use of electronic signatures.

In the same article I noted the need for simplifying the existing process for probating wills, particularly in Ontario. Someone must have been listening, as Ontario has now approved electronic filing of probate applications (with certain exceptions). As well, Ontario removed probate fees on estates with a value of less than $50,000.

Manitoba has gone one step further and eliminated probate fees on all estates. These are all very positive developments and hopefully are the precursors to more change that will truly move the process of estate planning into the 21st century.

However, a not-so-positive development 28 FORUM FEBRUARY 2021

for estate planning in Ontario emerged from the decision in Calmusky v. Calmusky, reviewed in my article “The Sanctity of Insurance Designations.” To summarize, the Court in the Calmusky case held that the “presumption of resulting trust” applied to a RRIF beneficiary designation in favour of the deceased’s adult son. This resulted in the RRIF assets being clawed back into the deceased father’s estate, subjecting those assets to probate and probate taxes. As well, entitlement to the RRIF proceeds shifted from the son as designated beneficiary to the beneficiaries under the deceased’s will. This case follows a line of similarly decided cases in British Columbia, Alberta, and Manitoba, where the presumption of resulting trust was also extended to beneficiary designations made under life insurance policies.

The Calmusky decision mobilized joint action from Advocis and the Conference for Advanced Life Underwriting (CALU) that resulted in a submission to the Ontario government recommending legislative changes to override the court decision. Other organizations, such as the Canadian Life and Health Insurance Association (CLHIA) and the Ontario Bar Association, have made similar representations. Recent discussions with government officials in Ontario have provided some hope that this issue will be addressed through legislative changes. Of course, similar advocacy efforts will need to be undertaken in other provinces where the courts have found that the presumption of resulting trust applies to statutory designations in favour of adult family beneficiaries.

The pandemic has also taken a toll on small business owners and the many employees who have been put on temporary leave, or even worse, have lost their jobs. In another article I discussed several post-pandemic tax and retirement planning strategies. At the time it appeared we were moving to recovery from the pandemic.

Unfortunately, more recent events demon-

strate this prediction was too optimistic, as we have moved into an even more serious second wave. However, the discussion of income splitting opportunities, the advantages of estate freezes and refreezes, and the need to review your clients’ insurance and retirement planning continues to be extremely relevant and important. The current low-rate interest environment, combined with the recent expansion of the tax on split income (TOSI) rules to spouses and adult children, make “prescribed rate loans” one of the most effective and reliable ways to split income with family members.

I will conclude by commenting on my most recent article, “True Insurance Value.”

I provided a summary of the recent Tax Court of Canada decision relating to corporate owned life insurance on the life of Ted Rogers — who founded Rogers Communications. The focus of the case was whether the taxpayer corporation properly determined its credit to the capital dividend account upon the receipt of approximately $100 million in life insurance proceeds. The case turned in part on the implications of tax changes enacted after Mr. Rogers’ death, which eliminated a planning opportunity that was employed in this taxpayer’s situation to increase the credit to its capital dividend account. The article concluded by stating that the Rogers tax case exemplifies the benefits of corporate owned life insurance, which not only supported the financial needs of family business enterprises on the death of the key shareholder, but also provided family members with tax-free access to the life insurance proceeds via the payment of capital dividends. This message will clearly resonate with business owners in today’s uncertain environment.

The events of 2020, combined with new developments in 2021, will continue to drive the need for clients to have access to trusted advisors who provide sage financial, retirement, and tax advice. I want to take this opportunity to wish you all the best as you continue to assist your clients in navigating through the challenges of the new year.

KEVIN WARK is managing partner at Integrated Estate Solutions and a CALU tax advisor.

He is the author of the bestselling consumer book The Essential Canadian Guide to Estate Planning (2nd Edition) available on Amazon.ca.

CORPORATE INSURANCE

BY GLENN STEPHENS

Family Divide P

Transferring insurance policies between family members

revious FORUM articles have addressed the tax consequences of transferring insurance policies between corporations and shareholders. As those articles indicated, the applicable rules can best be described as a confusing and inconsistent muddle of legislation and Canada Revenue Agency (CRA) interpretations. By contrast, the rules involving the transfer of life insurance policies between individuals are generally clear and are subject to established legislation that is reasonably well understood.

Nonetheless, there are circumstances where unexpected results can arise. Let’s look at the applicable rules and identify potential traps.

INTERGENERATIONAL TRANSFERS The general rules under the Income Tax Act provide that, where ownership of a policy is transferred to a non-arm’s length person, the transferor will be deemed to have received proceeds equal to the greatest of three amounts: the policy’s cash surrender value (CSV), its adjusted cost basis (ACB), and the fair market value of consideration given by the transferee. The amount (if any) by which the deemed proceeds exceeds the ACB will be taxable to the transferor. The deemed proceeds will also represent the ACB to the transferee.

A tax-deferred “rollover” is available where the policy is transferred to the policyholder’s child for no consideration, and where a child of the policyholder or a child of the transferee is the insured life. The following are some key points to consider: • The definition of “child” for these purposes is broad, and includes a grandchild, great grandchild, and a person under the age of 19 who is wholly dependent and under the custody of the taxpayer.

• A rollover is available where a grandparent owns a policy on the life of a grandchild, and subsequently transfers to the policy to his or her child (the parent of the

insured grandchild). A further rollover is available on a subsequent transfer of the policy from the parent to his or her insured child.

• The child must be the only insured life under the policy. However, the CRA has stated that a rollover is available if, for example, the child is insured under a joint last-to-die policy and the other insured is predeceased.

• If a policy is gifted to the child pursuant to the will of the parent or grandparent, the CRA’s view is that no rollover is available. However, a rollover is permitted where the child becomes the policyholder as a surviving joint tenant, or as a successor owner, after the parent’s death.

• No rollover is available if the transferor (e.g., a parent or grandparent) is the insured life.

• No rollover is available if the policy is transferred to a trust, even if the transferor’s child(ren) or grandchild(ren) are the only trust beneficiaries.

TRANSFERS BETWEEN SPOUSES In most cases, as with other property, the Act provides for tax deferral where an insurance policy is transferred from one spouse to another. The rule also applies to transfers to a common-law partner, including a same-sex partner. Specifically, a rollover is available where a policy is transferred by a Canadian resident policyholder to another Canadian resident who is: • The policyholder’s spouse or common-law partner; • The policyholder’s former spouse or common-law partner in a settlement of rights arising from the relationship; or • A spouse or common-law partner who receives the policy as a consequence of the policyholder’s death.

The following are some key features of these rules: • Unlike the intergenerational transfers described above, a rollover is only available

where both the transferor and transferee are Canadian residents.

• As with intergenerational transfers, tax deferral is available where a spouse becomes a policyholder as a surviving joint tenant or successor owner. Unlike the intergenerational transfers, however, tax deferral is also available where the transfer is made pursuant to the deceased’s will or under the intestacy rules.

• There is no requirement that the policy be on the life of any particular person.

• The rollover on the settlement of marital rights applies to a transfer during the policyholder’s lifetime but not on their death.

• There is no rollover on the transfer of a policy to a spousal trust. This is contrary to the rules that normally apply when property is transferred to a spousal trust, and can create onerous and unexpected tax consequences.

Unlike intergenerational transfers, the transferor can elect out of the rollover.

Where the policy’s CSV exceeds its ACB, it would result in the realization of taxable income. This election will be rarely used, but could be of benefit where, for example, the transferor’s income is below the taxable threshold. This would have the benefit of giving the transferee a higher ACB in the policy, which could mitigate the tax consequences of a future policy disposition.

TRANSFERS TO AND FROM A TRUST As already noted, there is no rollover available on the transfer of a policy to a family or spousal trust. However, similar to the rules that apply to other property, the CRA agrees that a distribution of a policy to a capital beneficiary from a trust does result in a rollover.

GLENN STEPHENS, LLP, TEP, FEA, is the vice-president, planning services at PPI Advisory and can be reached at gstephens@ppi.ca.

FEBRUARY 2021 FORUM 29

LEADERSHIP & GROWTH

BY DONNA STARR

Training Ground Tips for a successful virtual onboarding experience

I

n our new normal, we are faced with having to onboard staff from a distance. For most of us this is a new experience, and without the right tools and practices it can leave a new hire feeling isolated, unsupported, and frustrated. When this happens, it has been my experience that the unsupported new hire will either leave, or worse, they will attempt to do the job lacking proficiency and competence.

To ensure that this is not a new person’s experience, we have adapted the “learning path” approach, based on Steve Rosenbaum’s book Up to Speed. In his book he speaks to the importance of having a learning path, and not just a path that shows you the formal training but a path that encompasses all aspects of learning, including on the job, and the critical role a learning path plays in someone’s development. He reinforces three basic principles that are rooted in the learning path methodology.

LEARNING IS A PROCESS, NOT AN EVENT. Think of this in terms of a sport. Could you learn how to play baseball and play well all in one lesson? This is the same for a new hire coming into your practice.

How does your onboarding program stack up? Do you expect a new hire to attend a three-day workshop and be able to come back and perform? What support do you offer to the new person once they are on the job?

After formal training, a new person would have the basics and a general understanding of what to do, but they are a long way from being fully proficient! Their journey to full proficiency has just begun.

How do you currently map out a new hire’s learning experience? What is included in this map? How do you articulate what the performance looks like so that your hire knows when they have achieved proficiency? To support this, consider defining proficiency for each role and what learning 30 FORUM FEBRUARY 2021

process is required to set them up for success to achieve it.

A learning process is a sequence of learning activities that lead to a desired level of performance. It is knowing exactly what proficiency looks like for that role. Ask yourself, do you know what proficiency looks like for every role in your agency or are you just going based on your gut? If you are not clear on what true performance looks like it is probable that your new person and their supervisor/coach is not either.

KNOWING AND DOING ARE NOT THE SAME THING. Rosenbaum refers to the old saying “knowledge is power,” and goes on to further elaborate in saying: “The real power is being able to use that knowledge!” For example, knowing how to facilitate a discovery discussion is very different than doing it (and doing it effectively). The challenge we are up against is taking what they learned in the formal learning environment and putting it into action. The focus needs to shift from the learning objectives in the classroom to what proficiency looks like on the job. What are the behaviours that a fully proficient, high performer demonstrates?

Performance needs to be defined in terms of quality, output, and speed.

We need to shift away from knowledge testing as a form of evaluation and toward things like on-the-job observation. Getting 100% on a test shows that they know the information, it does not mean they can do the task on the job. This principle becomes even more critical in our new normal.

TRAINING SHOULD BE

BY DESIGN AND NOT

BY ACCIDENT. Formal learning is only about 10% to 20% of all learning. Data shows that the most impactful learning occurs informally and on the job. Unfortunately, much of this learning is unstructured and filled with trial and error. In these situations, the new per-

son will often never reach full proficiency due to inconsistent practices, unclear expectations, and the wrong staff supporting their development. Rosenbaum refers to this informal learning as the “mystery period.” This is the learning that happens after the formal learning is done.

What happens once the new person has completed their formal training? Are they supported by their supervisor or coach with unstructured and unknown learning experiences? Does their experience and skill level rely on the quality of the person beside them? Has the person coaching them developed bad habits or undesirable shortcuts? In these situations, it not only negatively impacts the length of time it takes for someone to hit proficiency, but the agency also risks errors and omissions situations, or worse, the new hire that you invested time and money into may leave or need to be terminated; employee morale may be impacted; while agency branding with both clients and potential candidates can also be affected.

When the informal learning or “mystery period” happens by design rather than by accident, a structure and process ensures this learning is defined and effective. The supervisor, mentor, and new hire are clear on what proficiency looks like, how the new person will get to proficiency, and the roles and responsibilities of all parties involved in the onboarding journey. Taking the time to structure the “mystery period” means defining practice, coaching, observation, and evaluation coupled with frequent and ongoing feedback.

DONNA STARR, FCIP, CTMP, is senior manager, distribution talent acquisition and business development, at The Co-operators in Guelph, Ont. GAMA International Canada, a conference of Advocis, provides professional development and networking opportunities for leaders in the financial services industry. For more information, visit www.gamacanada.com.

GUEST COLUMN

BY JACKIE PORTER

Engaging Women Clients Why most women aren’t happy with their advisor

PHOTO: ISTOCKPHOTO

T

here is a major inequality affecting women’s wealth. Because of the pandemic, jobs in female-dominated industries are disappearing at a rate that will impact the financial security of women for many years to come. The good news: Women in this predicament are ripe for our advice. Women value advice, and I’ve found they are also more willing to pay for professional advice than men.

Now, the bad news. Even before the pandemic, more than half of women report not having a financial plan and worry about their financial circumstances, according to a Financial Independence Survey from FP Canada. That number rises to 60% of women who are between the ages of 45 and 54. Not having a sense of direction leads them to avoid making decisions about their financial futures. What married women in particular may not recognize is that at some point, they will need to be prepared to manage their finances on their own. At the same time, because many take care of most of the unpaid work in the household, including caring for aging parents, they are facing an uphill battle saving for retirement.

Consider this moment a chance for us to rethink the role we want to play in our clients’ lives. Most people did not learn about money in school. If women are not feeling confident about their finances, then the responsibility is on advisors to demystify money for them and help them build their financial literacy to improve their financial outcomes.

In a pandemic world, there are more options to virtually meet female prospects and continue to grow your business. Let’s review four strategies.

1. TAKE TO SOCIAL MEDIA. Now is the time to build an online presence in your practice and get leads with

Like me, I’m sure you have female clients who have previously met with advisors who weren’t interested in getting to know their challenges. The advisors just wanted to offer their solution without listening to the problem. Meanwhile, the client did not understand what the advisor was saying but was too afraid to ask questions. No one wins when a client leaves a meeting feeling this way.

3. HAVE REAL- WORLD MONEY CONVERSATIONS. Ask them what they care about and let them lead the conversation. Studies show women are marrying later and having children later. They are also coming into relationships with their own assets. You can add value by facilitating conversations with their partner and by organizing family meetings. Sometimes, meeting with an advisor is more effective than meeting with a couples therapist.

4. HELP YOUR CLIENTS TO LEAN INTO FINANCIAL LITERACY.

more social networking. More women are on social media than men. Are you connecting with them on such platforms as LinkedIn, Facebook, Instagram, or Twitter?

Do you clearly communicate your value online to women who are potential clients?

Will you be left behind if you are not online? Consider the fate of bricks-andmortar stores that have recently closed during the pandemic and don’t have an online presence.

2. EMPATHY IS YOUR SUPERPOWER. Did you know 73% of women are not happy with their advisor, according to research from the Boston Consulting Group? Women want to work with advisors who are relatable. They need to feel like they can talk to you about their relationship with money and overall goals without feeling judged. They are not interested in speaking with an advisor who talks down to them and makes little effort to demystify investing, insurance, or financial planning strategies.

Consider the record level of debt Canadians were carrying before the pandemic. The need for basic financial literacy has never been greater.

There is so much to learn about money, so develop their financial confidence by encouraging them to learn more about a specific area of finances. Create a recommended list of books to help them build a library. Consider offering or sponsoring a financial literacy course.

JACKIE PORTER, CFP, is an advisor at Carte Wealth Management in Mississauga, Ont. She also co-authored Single by Choice or Chance: The Smart Woman’s Guide to Living Longer Better to help single women prepare better for their financial future.

HOW TO REACH US On Twitter: @advocis @deannegage On Facebook: facebook.com/advocis On LinkedIn: linkedin.com/company/advocis FEBRUARY 2021 FORUM 31

AdvocisNews ASSOCIATION UPDATES AND EVENTS

CHAPTER NEWS ADVOCIS VANCOUVER ISLAND

ADVOCIS VISL — THRIVING WOMEN IN 2021

T

he Vancouver Island chapter hosted a Women’s Day event virtually on Thursday January 14. They were joined by a powerful lineup of three women guest speakers at the top of their professions — Lianna Mah, Pamela Sylvan, and Sybil Verch — to engage and lead the audience in an exchange of experiences and personal development.

The first 50 registrants received a swag box from various sponsors filled with bath bombs, lotion, chocolates, champagne, and more! The first 50 participants are also in a draw to win one of 10 copies of The Female Edge, which was written by our featured speaker Sybil Verch. More than 150 registrants were in attendance.

ADVOCIS EDMONTON

CHRISTMAS EVENT GOES ON VIRTUALLY

A

dvocis Edmonton held their 8th Annual Christmas Event to benefit Christmas Bureau / Adopt A Teen on December 10, 2020. Event chair Amanda McCloy didn’t want to give up on this event — even if it meant changing gears and trying the online approach!

The plan was to change the event to late afternoon, host it virtually, and invite participants to enjoy charcuterie boxes and a glass of wine while listening to guest speaker Mark Connolly of CBC Edmonton. Amanda also planned and executed a silent auction, which started a few days before the event and was completed one day after. The chapter would like to thank all who donated and helped distribute the items. Total donations for this first attempt at an online Christmas Event was $7,728, bringing our eight-year fundraising total to $102,833.

ADVOCIS KINGSTON

CELEBRATING #MEMBERDECEMBER

T

he Kingston chapter dubbed December as “#Member December,” featuring something new every day to recognize, assist, or congratulate its members. A key highlight of this initiative was the hosting of a large “Happy Hour” virtual gathering that was kicked off by a national presentation of Ottawa’s event. It featured the entertainment of stand-up comedian Todd Van Allen (TVA) — an internationally known talent who grew up only 20 minutes from Kingston! The show was full of laughs and well received by members. Advocis Kingston president Sean Cassidy sent a quick note to TVA to express thanks on behalf of the chapter: “I wanted to reach out and mention that I had a lot of positive feedback from the attendees of the Advocis social event. We really liked your interactive approach, which you managed very well through the difficult digital medium. You provided us all with many much-needed laughs and gave us a hint of what the old ‘normal’ used to be like. Thank you very much for a great time!”

Member and Sponsor Recognition The second highlight of the virtual Kingston event in December was member and sponsor recognition. The chapter compiled a PowerPoint presentation to highlight all our new PFAs, our GAMA award winner, membership milestones, 2019 J.G. Taylor recipient, new board members, and a recap of all 2020 program volunteers. Because much of 2020 was virtual, the chapter included pictures from events past in memory of what was and what will come again!

Amanda McCloy (left), chair of the Christmas luncheon and Darlene Kowalchuk (right), campaign director, Christmas Bureau of Edmonton

32 FORUM FEBRUARY 2021

What’s New at Advocis As the new year begins, excitement for the possibilities of 2021 is kicking off at Advocis as well!

A few highlights include:

• Three new courses in our series on Risk Management are now available for online enrolment — and may be coming to your chapter soon as a hosted event! Learn more about Building a Protected Practice, Selecting the Right E&O Insurance, and the Challenge of Documenting Nothing for an opportunity to earn CE credits and qualify for a 5% discount on E&O insurance through Advocis Broker Services.

• The launch of DigiCat by our Tech Task Force. Check out best-in-class options for all your digital needs as an advisor, including CRM, calendarization, and financial planning software.

Learn more by visiting Advocis.ca/ttf, where you can also view the latest on what the Tech Task Force is looking forward to throughout the year ahead.

• Begin your path toward the PFA™ designation on your own terms and at your own pace with the PFA SelfStudy Program, now available alongside the existing Semester Program.

Make 2021 your year for pursuing the credentials and designations that will make you more effective than ever for the benefit of your clients.

• Interested in personal and professional development, reading, and taking part in a community of likeminded advisors across Canada?

Join the Advocis Book Club, a new benefit exclusively for members.

Our first book, The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg, is already being actively discussed in our forums. Join us.

• The fresh pot has now been brewed!

Advocis Coffee Talks continues throughout 2021, with brand new espresso-sized webinars exclusive to members with CE accreditation.

IN MEMORIAM Alexander Rutherford 1938–2020 dvocis was saddened to learn of the passing of Alexander Rutherford CFP, CLU, CHFC, TEP, on December 30, 2020.

Alexander joined Advocis in 1982 and was a member of the Durham Region chapter for 38 years. He was the proud owner of Rutherford Financial Services. We send our condolences to his family and friends.

A

Steven Lowe 1956–2020 dvocis was saddened to learn of the passing of Steven (Steve) Lowe on December 25, 2020. Steve joined Advocis in 1990, and was a member of the Durham Region chapter for 30 years, where he also served as a board member.

Steve was a long-time financial advisor with London Life, proud Kinsmen member, and supporter of the Canadian Cystic Fibrosis Foundation. We send our condolences to his family and friends.

A

FINAL WORD

The Future Is Here

W

e are finally into 2021!

Many of our parents and grandparents suffered through the twists and turns of the 20th century — the Great Depression, two World Wars, the Korean War, and beyond — but this pandemic was, for many of us, our first experience of this magnitude. With the emergence of a vaccine being distributed across the country as I write this, we will hopefully never see such circumstances again.

Despite these circumstances, our profession weathered the storm with a dedication that allowed us to explore all the opportunities it offered us to assist Canadians in a difficult time.

After getting over the initial shock of the March lockdown, many advisors took the opportunity to ramp up contact with clients. With an understandably renewed focus on their financial security, these clients were eager to talk, which resulted in new business. In fact, I’ve spoken to many advisors who had some of the best revenue months of their careers in 2020.

Product manufacturers also quickly responded to the pandemic with new technology. This allowed advisors to process new transactions quickly and efficiently. My hope is this will continue to be the new way of doing business, and I would like to thank the product manufacturers for making the underwriting process easier for clients and for all their assistance in responding to inquiries from both Advocis and its membership.

As technology plays a larger role in how advisors interact with clients, however, it will also force us to reassess our value.

If your value to your clients in the past has been the selection of funds, stocks, or bonds, you may already be behind the times.

Technology can do it quicker, better, and cheaper than even the most skilled and experienced advisor ever could.

In our research as part of the “Advocis 2024 – The Advisor of the Future” project, we spoke with The Legacy Companies out of Boston. Their view is that all clients are on an “advice journey,” meaning that the role of the advisor is shifting from a sales orientation to an advisory role with a much more holistic focus. This focus centres around four areas: empathy, understanding, planning, and advice.

The first of these, empathy, is about the ability of the advisor to have a deep caring and respect for clients and for how they envision the future. The second, understanding, refers to the ability of the advisor to have an awareness of and appreciation

34 FORUM FEBRUARY 2021

for the circumstances that impact the client. Planning refers to the work itself — the quantitative and qualitative analysis, assessment, modelling, and forecasting that comprises what we do. Finally, advice is about providing actionable counsel that leads to appropriate client product selection.

What’s notable about these four areas of focus is the order they are presented in — planning and advice are pushed to the back seat behind empathy and understanding. For the advisor of the future, our work will be about more than what you know about your clients, it will be about how you form the fundamental and persistent building blocks of everything you do for them.

This slight shift in orientation is crucial because understanding your client’s perspective can make all the difference. In his new book Life-Centered Financial Planning, Mitch Anthony states that clients may value your advice differently than you do. Rather than being focused on product advice, clients care far more about advice related to financial planning, and value overall life planning advice most of all.

Wealth holders want advice that supports their pursuit of a meaningful vision for their future rather than mere information on a product that may support it. Advisors need to have a fiduciary-first mindset and be skilled in helping wealth holders articulate their vision of the future. Equipped with the ability to do that, advisors can then draw out goals in support of that vision. Technology is a wondrous thing, but it will never be able to translate the subtle complexity of how people imagine and picture where they want life to take them. Nor can it build the level of trust between advisor and client required to make those conversations happen.

As we move into this decade, take some time to reassess your process — does it fit into the advisor-of-the-future model? The last 10 months may have shown some strengths and weakness in your practice. Will you do some things differently? It remains an exciting time to be in the financial advisory industry.

Thank you for your support of Advocis — please view our end-of-year message to members at advocis.ca/thank-you/ if you have not yet seen it. We look forward to a great year in 2021 and hope to see you soon.

ABE TOEWS, CFP, CLU, CH.F.C, ICD.D, is chair of Advocis.

He can be reached at abe@beyondwealth.ca.

PHOTO: ADAM REILAND

BY ABE TOEWS

NEW YEAR, NEW

YOU

Join the member-exclusive Advocis Book Club and connect with fellow advisors from across Canada through a wide variety of titles related to lifelong learning and personal growth.

pbc.guru/advocis

WE’RE BREWING A FRESH POT. Ready to kickstart the new year with another cup?

Stay tuned in January as COFFEE TALKS returns with more exciting topics, presenters and complimentary CE credit opportunities for members throughout 2021. advocis.ca/coffee-talks

COFFEE TALKS

Strike the perfect balance.

INTRODUCING

Fidelity All-in-One ETFs and Mutual Funds This all-new, multi-asset solution is available as both stand-alone ETFs and mutual funds. Our strategic asset-allocation acumen keeps costs low while you and your clients benefit from the consistent rebalancing that keeps their portfolios pointed in the right direction. It’s a one-ticket solution that fits with investors oriented towards growth and diversification.

Ask your Fidelity representative today.

fidelity.ca/AllinOneETFs

STAY AHEAD

Commissions, trailing commissions, management fees, brokerage fees and expenses may be associated with investments in mutual funds and ETFs. Please read the mutual fund’s or ETF’s prospectus, which contains detailed investment information, before investing. Mutual funds and ETFs are not guaranteed. Their values change frequently, and investors may experience a gain or a loss. Past performance may not be repeated.

The ETFs and mutual funds pay indirect management fees. Please refer to the mutual fund’s or ETF’s prospectus for further information on these indirect management fees. Actual indirect management fees will be reflected in the management expense ratio (in addition to applicable taxes, fixed administration fees and expenses, as applicable) of each ETF and mutual fund, posted semi-annually. © 2021 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC. 456356-v202115