39 minute read
Critical Curveballs
Critical
Curveballs
A paid-out critical illness policy at age 73 can be life changing. It was for Richard Parkinson
When 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he was diagnosed with life-threatening cancer, so he initiated a claim, which was promptly denied as the policy was no longer in force.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 geta month (I was 57 at the time). If I had not been in the insurance ting your money back if you don ’t end up filing a claim. Most CI business, it’ s unlikely I would have even considered it. As I reached policies do not pay more than the benefit, and at age 83, the total my early 70s, and also realizing I had purchased the level to 75 annual premium paid is $51,465.84. So if surrendered the client (because I was a newbie and didn ’t know any better), and given I only gets the $50,000. So, for older, over-age-50 clients at start, do was in good health and not on any medications, I considered can- the 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
Fast forward to 2020. On April 10, 2020, at age 73, I received a TFSA money. From analysis, I have found most clients on seeing positive annual fecal immunochemical test (FIT), and would need the numbers choose to invest the ROP premium in a TFSA. Below to have a colonoscopy. By August 13, I had a colonoscopy that is a table showing the numbers for a 40-year-old male. Should he detected a mass in my colon. Two days later, I learned it was can- claim at age 73, he gets both the $50,000 CI coverage and the cerous, and I was referred to a surgeon to have it removed. $24,441.80 contributed in his TFSA.
I had a colorectal resection surgery on September 2. Fifteen Clearly, I’ m much more of a CI raving fan than before. Since inches of my colon was removed using laparoscopic surgery. mentioning my experience to prospects, I have placed more CI with My medical team believes they got it all, and there is no remain- clients. But more importantly, I’ ve helped to protect clients from ing cancer in my body. Recovery was more uncomfortable rather financial hardship during a critical illness. 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
On September 16, I received the pathology report and the Vancouver. To receive a PDF of this article, email dgageforum@gmail.com. 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 saying that my claim was approved for Client Age Start 40 payment. The examiner noted that because Client Age at Year of Claim 73 I had submitted everything they needed to make a decision, and that the claim details Starting Year 2021 met the illness definition, they were able to Cl Premium (excluding ROP) $841.92 make such a quick decision.
Some takeaways from my experience: ROP Premium - annual $354.96 • Knowing I had CI coverage greatly Total Annual Premium $1,196.88 mitigated the impact of hearing about my cancer diagnosis. Knowing I would receive Invest Return 4.00% some cash for my hassle and discomfort Marginal Tax Rate (0 if TFSA) 0.00% definitely made dealing with the surgery recovery more palatable. Benefit Amount $50,000 • 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
Total Cl Premium Paid
Total ROP Premium Paid
Total Premium Paid
Results Summary
6.36%
$27,783.36
$11,713.68
$39,497.04
ROP vs. Investing ROP Premium
ROP Return
Total Net Investment Return $39,497.04
$24,441.80
Wait or Not?
The case for taking Canada Pension Plan at age 70
While 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 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 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.
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Estate Ahead
Looking forward through past estates
The 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 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 demonstrate 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.
Family Divide
Previous 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.
Training Ground
Tips for a successful virtual onboarding experience
In 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 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 person 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.
Engaging Women Clients
Why most women aren ’t happy with their advisor
There 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.
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.
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. HELPYOUR CLIENTS TO LEAN INTO FINANCIAL LITERACY.
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.
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CHAPTER NEWS
ADVOCIS VANCOUVER ISLAND ADVOCIS VISL — THRIVING WOMEN IN 2021
The 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
Advocis 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
The 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!
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
Advocis 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.
Steven Lowe
1956–2020
Advocis 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.
The Future Is Here
BY ABE TOEWS
We 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 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.
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