FORUM Magazine - May 2020 by Advocis

FORUM MAY 2020 • $5.50

The Magazine of Influence for Financial Advisors

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New VIRTUAL ORDER

Are Second-Career Advisors Crisis Management Experts?

Staying Connected to Clients and Your Team

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Trading Bricks and Mortar for Avatars

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Advising Fearful Clients

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Attracting New Clients During a Pandemic ››

Integrating Disability Benefits Publication Mail Agreement # 40069004

There’s a moment… It happens when you look a business owner in the eye and give your advice. It’s a moment of support and of confidence. A moment of trust. Trust is at the heart of what you do, and it’s what helps business owners achieve their goals, even when change is inevitable. • A 2% minimum interest rate guarantee backs your advice with a plan Clients can depend on. • An ACB that can hit zero early means you can give Clients a solution that helps optimize strategies for business planning. • Guaranteed YRT options provide the cash flow flexibility Clients want. • Streamlined investment account options make it easy for Clients to manage the investments within their policy. In that moment, you can look your Client in the eyes — and know your advice will deliver.

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To learn more visit Sunlife.ca/ULPro Sun Life Assurance Company of Canada is the insurer of these products and is a member of the Sun Life group of companies. © Sun Life Assurance Company of Canada, 2020.

FORUM VOLUME 50, 2

MAY 2020

ISSN 1493-826X

FEATURES

Brave New World

Proactive Approach

Virtual meetings with clients and team members aren’t going away anytime soon. April-Lynn Levitt and Kim Poulin share best communications practices for our new normal

Clients may not be finicky about volatile markets but Robyn Thompson explains why they still need to hear from you

DEPARTMENTS

COLUMNS

31 TAX UPFRONT

EDITOR’S JOURNAL How to pivot in a pandemic

OPENERS Advising clients facing job loss; COVID-19 and mental health; marketing during a pandemic

37 ADVOCIS NEWS Association updates and events

How RRIF minimum withdrawals have changed for 2020 BY JAMIE GOLOMBEK

32 ESTATE DILEMMAS System reform is needed to bring estate planning into the 21st century BY KEVIN WARK

39 THE FINAL WORD Professionalism and crisis BY GREG POLLOCK

33 CORPORATE INSURANCE

COVER ILLUSTRATION: ISTOCKPHOTO

What happens when life insurance is paid without a proper business deal? BY GLENN STEPHENS

Next issue: Profile of Advocis’s incoming chair

36 LEADERSHIP & GROWTH Are you really listening? BY JONATHAN SCHJOTT

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

Changing Face of an Advisory Firm

Second Act

Scott Plaskett explains why he revised his traditional bricks-and-mortar space to offer a unique virtual office

The average advisor enters the business at age 40. Tamar Satov talks to five second-career advisors about why they made the change and how they adapt to tough times.

Benefits Integration

Richard Parkinson explains why integrating long-term disability insurance with workplace benefits isn’t smooth MAY 2020 FORUM 3

EDITOR’S JOURNAL

BY DEANNE GAGE

How to Pivot in a Pandemic

4 FORUM MAY 2020

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., ICD.D VICE CHAIR Rob Eby, CFP PAST CHAIR Al Jones, CFP, CLU, ICD.D, ACCUD SECRETARY Catherine Wood, CFP, CLU, CHS TREASURER Eric Lidemark, CFP, CLU, CH.F.C., CHS CHAIR, CLC John McCallum, CFP, CHS CHAIR, THE INSTITUTE Stephen MacEachern, CFP, CLU, CHS, CH.F.C. DIRECTOR AT LARGE Wendy Playfair, CLU, CFP, CHS

astically participate in. Despite being the trend du jour, some may not understand how to use the technology or may just be uncomfortable being on a focal point on a screen. Not every call needs to be a video call. A plain old conference call can be just as effective. We all experience life curveballs, but we rarely see a situation like the pandemic that affects us all simultaneously although differently. Crises represent a chance for you to shine because that’s when clients realize your true value. Think about all the comprehensive financial plans you produced to ensure clients had their estate planning in order, their assets were properly allocated, a proper tax plan was in place, and they had a contingency plan in case of job loss or disability. Clients who followed your advice are very appreciative. Clients who procrastinated on important matters are now likely taking steps to rectify this. And prospects who believed they could manage their finances on their own may be reconsidering. Last month, a Nationalwide Financial survey in the U.S. found that a quarter of respondents sought out a financial advisor for the first time, and that 80% haven’t been as comfortable managing their own investments since COVID-19. Wishing you continued health and safety during this unprecedented time.

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

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

hat a difference a couple of months make. One minute we’re working in offices, visiting family members and friends, and dining in restaurants. The next we’re in our new normal of virtual businesses, video communications, and home-cooked or take-out meals. That’s the thing about a new normal. We rarely see it coming, and if we do, we fail to understand what it all means until we’re in the situation. As I write this column, it’s nearly week eight of quarantine. On the surface, my life hasn’t changed much. As an essential worker, my husband continues to work outside of the home. I’ve been working at home for the past decade, so already understood the importance of things like having my own dedicated workspace, a closed door, and a comfortable and ergonomic office chair. But I’m used to spending a lot of time home alone, and now my school-aged kids stay home with me. Their new reality consists of homeschooling, endless snacks, outdoor games, chores, and, to be honest, more screen time than I’d like. Pandemic parenting is truly a work in progress. How about you? Many clients value face-to-face connection when dealing with their professional circle of experts. But now Zoom, email, or a phone call must suffice. Some will quickly adapt to video calls, marvelling at the technology and wondering why you didn’t always do business this way. Others will long for the days of in-person meetings, especially if the COVID-19 pandemic goes on much longer than we anticipate, which is more than probable. I saw an interesting Twitter poll from the U.K.’s Boring Money. It asked if client video meetings would continue once we get back to “normal.” The poll produced divided results: A third of advisors believed video calls are the new normal, while 22% believed clients would prefer to meet in person. The rest of the respondents weren’t sure. Before launching with video calls, check to see if it’s something clients will enthusi-

FORUM

OPENERS Fodder For the Water Cooler COVID-19 HAS AFFECTED CANADIANS’ MENTAL HEALTH

EMERGENCY FUNDS, BUDGET MANAGEMENT KEY TO CLIENTS FACING JOB LOSS

ILLUSTRATION: ISTOCKPHOTO

dvisors whose clients are either still working or awaiting a return to part- or full-time work after the COVID-19 pandemic are anxious about their financial status. Regardless of the job situation, Shannon Lee Simmons, a financial planner and founder of the New School of Finance in Toronto, says clients should now be contemplating cutting costs. Even paid employees working from home who may not be spending the usual $1,000 to $1,500 a month on daycare costs could transfer that money to an emergency fund should COVID-19 last longer than expected. For those without an emergency account, Simmons suggests clients with income consider pausing monthly contributions to their RRSPs and TFSAs for a short time and putting that money into an emergency fund to give them extra cash flow if they need it down the road. Those who have already lost their incomes should stop those automatic payments immediately to avoid going into debt. Once the economy starts up again, they can reinvest the money if they didn’t need it, she says. The biggest concern for many clients right now, explains Simmons, is going further into debt. She points to the mortgage deferral program offered by Canadian banks, reminding her clients that this is a loan, not a gift. The loan is rolled into a client’s mortgage, and clients eventually pay compound interest on it. But Simmons says the deferral might be the right move for some. “Yes, it’s debt, but it’s likely that the interest rate is secured to your home and therefore at

your mortgage rate, which is likely lower than any other debt you’re going to go into,” she says. “In that case it might make sense to use the mortgage deferral program.” Minimizing costs is also high on the list of suggestions to Alim Dhanji’s clients. Dhanji, a senior financial planner with Assante Financial Management in Vancouver, calls his budgeting technique a “financial hike” that he takes investors on with a “water bottle” that fills up with income and then drains with expenses, taxes, debt, and discretionary spending. “In times like this we want to minimize our costs as much as we can,” he says. “If you overbuy you might have a situation with your cash flow.” Every time he meets with his clients he tells them they need two to three months’ of income in their planning. Even if clients go on disability, there’s a 90-day waiting period and they need funds to cover costs over that time. Applying for a line of credit may be a good idea when times are good because trying to get one without a job is difficult. One thing for sure, says Dhanji, is that when this is over, people will realize the importance of some kind of emergency fund. “I think this is going to change the way we think going forward, especially for those who don’t have the buffer, because this could happen again.” — Susan Yellin

OVID-19 has taken an unparalleled toll on people around the globe, whether in terms of lives, jobs, or the economy, all of which have had an effect on the mental health of a large chunk of Canadian society. A survey released by Morneau Shepell last month found a statistically significant drop in mental health compared to benchmarks before COVID-19, falling to a “very concerning” 63 from the benchmark 75. The survey noted the top concern impacting mental health is financial (55%), followed by the fear of getting ill or having a loved one pass away (42%), and uncertainty around how the virus will impact family (33%). “These findings confirm that COVID-19 is not just an infectious disease issue — we are looking at a mental health crisis,” says Paula Allen, senior vice-president of research, analytics, and innovation at Morneau Shepell. “This survey is of working Canadians, which makes this pandemic as relevant for businesses as it is for public health.” While self-isolation has been encouraged to help halt the spread of the disease, it can have a tremendous effect on extroverts who typically thrive on being both physically and socially active, says Lawrence Blake, a certified psychological health and safety advisor, and program manager of Mental Health Works at the Canadian Mental Health Association (CMHA) Ontario. CMHA is recommending that people remain “social” during this time, whether it’s through Facebook, emails, phone calls, or taking part in activities on YouTube or any one of a number of videoconferencing software programs like Zoom. Many insurers have group plan policies that include programs like internet-based cognitive behavioural therapy (iCBT). This

Continued on page 7 MAY 2020 FORUM 5

OPENERS

NEW!

BRANDING & SOCIAL MEDIA BY ERIN BURY

Adjusting Your Marketing for Unprecedented Times

Adjust your 2020 plan In mid-March, when COVID-19 became a more sobering reality for Canadians, the tenor changed almost overnight. Immediately, my social media feeds turned into almost 100% COVID-related content, and yet there were still the scheduled tweets from brands that felt inappropriate for the moment. While you absolutely shouldn’t stop marketing — after all, as business owners it’s essential that you continue to market in order to survive and thrive — it’s important to keep context in mind. The same old marketing messages won’t do in the face of COVID. Marketing plans need to be thrown out the window, content calendars adjusted, emails rewritten, and campaigns postponed. The first step is to do an audit of your current marketing efforts and your planned initiatives, and to amend or delay anything that may not fit with the current content (for example a campaign targeting restaurant owners wouldn’t land well right now).

Acknowledge what’s happening Part of why some brands’ marketing initiatives have fallen flat during COVID is they just seem oblivious to what’s going on in the world. Sending out an email about preparing for tax time is fine, but it’s odd if you don’t adjust any of the copy to acknowledge the current situation and adjusted tax deadlines. Strategic marketers are changing their messages to not only acknowledge COVID, but to cater their offerings to our new reality. As advisors, you likely communicate with your clients via email and phone the most, so don’t just send out the same old monthly newsletter or make the same “it’s tax time” reminder calls. Be real with your clients — acknowledge how this has affected the markets, share with them your own adjustments to remote work and balancing family and Zoom calls, and then inform them as you usually would, keeping in mind their financial priorities have shifted, as have a lot of their deadlines.

6 FORUM MAY 2020

Add value, not noise In mid-March, the emails started pouring in from brands telling us how they were dealing with COVID-19 and offering their words of encouragement. The emails and communications that have stuck are the ones that are going beyond platitudes to add value — and as advisors, you’re well-positioned to do that. The government benefits offered during COVID-19 have been confusing, complex to navigate, and are constantly changing. You’re in the best position to offer your clients ongoing updates on what these programs mean for them and how to apply for them. Whether it’s a free webinar on navigating the government benefits, a series of blog posts on what to do with your investments when the market tanks, or even a charitable donation to a COVID-focused charity like The Home Front, think of how you can help during this time.

Lead with compassion The companies and leaders who will be remembered for handling this well will be the ones who are compassionate, empathetic, and helpful. That goes for your team as much as your clients. There are horror stories about mass layoffs over Zoom, bosses that require webcams to be on all day in order to check in on staff, and companies raising prices on indemand products. How you treat your team does reflect on your marketing, so showing you’re a thoughtful leader through this pandemic will make your team members even bigger advocates for you, and help build your brand reputation. It’s also important to think about how this is affecting your clients — many are likely small business owners, people who’ve been laid off, or are those struggling with their mental health. Check in on your clients — call them to see how they’re doing, and just be a friendly voice that’s there for them during this tough time. They’ll remember it when they get a call from a competitor asking them to move their assets over. ERIN BURY is the CEO at willful.co, an estate planning startup. She has more than a decade of experience building brands.

ILLUSTRATION: ISTOCKPHOTO

he word unprecedented has often been used in relation to COVID-19, and it’s appropriate. After all, COVID19 has changed the way we work, live, and do business in ways we’ve never seen before. It has also changed the way that companies market to and communicate with their audience, causing many to think about how to be thoughtful, yet still carry on business. For any advisors struggling with how to shift their marketing activities during the pandemic, here are some tips to keep in mind.

OPENERS

Continued from page 5

type of therapy deals with the relationship between people’s thoughts and emotions and their behaviours. With CBT, people become aware of how negative thoughts affect how they act, and they then use these lessons learned to change their emotional, behavioural, and physical responses to their thoughts. Blake says insurers should be encouraged to let plan members know what kinds of mental health programs are available to them. Sun Life, for example, recently sent out a note to plan members saying it will now cover virtual services for appointments to such specialists as naturopaths, dietitians, psychologists, psychotherapists, and chiropractors. Canada Life has put together a series of online blogs and videos called Workplace Strategies for Mental Health. CMHA also runs a free CBT program, BounceBack, available to every Ontarian (bouncebackontario.ca). Blake suggests financial advisors tell clients not to make decisions in haste “because the feeling of anxiety or the feeling of stress can be worse than reality,” he explains. “That’s not to say that people won’t experience loss or hardship — that’s becoming apparent. But we should keep in mind that this too shall pass, that it’s not going to be a permanent state, and that the sun will rise tomorrow and the day after that. When all of this is over and we can resume some sense of normalcy again in our lives we will find hope and purpose and a connection with others.” — S.Y.

DID YOU KNOW? Women who feel confident about being able to afford the lifestyle they want through retirement: 55% say their portfolio will carry them through 43% say the same of their defined workplace pension or employer matching program 42% believe they are in good general health and do not anticipate significant health-related expenses in retirement 27% say they are earning well and have a personal retirement fund that is on target 17% say they have investment properties that generate income for retirement SOURCE: RBC INSURANCE, FEBRUARY 2020

When things get “back to normal” what are you MOST looking forward to doing? Please select up to two:

What clients are most concerned about with COVID-19?

• Market volatility • The virus itself • Drop in markets • Staying connected • Their portfolios/ retirement • The future SOURCE: INVESTMENT INDUSTRY ASSOCIATION OF CANADA, MARCH 31, 2020

Hugging friends/family

45%

Reconnecting with people Going to a restaurant/café/bar

34% 31%

16% Going back to work/workplace 16% Going on vacation 11% Going shopping 9% Going to the gym/fitness class

(All Respondents, n=4,240)

7% Watching live sports 6% Going to a hockey game/concert,etc.

*ANGUS REID INSTITUTE, APRIL 13, 2020

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.

AN N UA L

J.G. TAYLOR AWARD RECIPIENTS presented by

Patrick Murphy CFP , CLU ®

J.G. TAYLOR AWARD RECIPIENT

Patrick Murphy, CFP, CLU, Life & Qualifying member of

the Knights of Columbus, the United Way, the Movember

MDRT, past President of Advocis Kingston, and is a founding

Foundation, Secura Wish, and others. On many weekends,

partner of Secura Financial Group.

Pat dons his finest wig and neon garb to front the local retro rock band 80’s Enuff, who have raised over half a

A consummate people-person, Pat’s positive attitude, high

million dollars for individuals and organizations in need.

energy, and infectious laugh never fails to put the people around him at ease. Pat’s understanding and empathy

Equally impressive are the “small gestures” no one hears

always help motivate his clients to achieve their financial

about. Lending a helping hand, the winter coats that he

goals and dreams.

donates, a conversation with a young person regarding their future, and speaking at schools to provide students

When Pat isn’t in the office meeting with clients, he can

with a perspective on working life and giving back to their

be found spending time with his wife, Chris, and their two

community. Pat is best described through these words; “Pat

children Jensen and Callan. Never one to be sitting still,

never questions whether or not to get involved. If he thinks

you can often find Pat around Kingston and area by giving

he can help – he does. It isn’t even a decision that he makes

back to his community through organizations including

– but more of a natural reflex that is ingrained within”.

With more than 5,000 CLU® and CHS designation holders in good standing. The institute for advanced financial education is the leading designation body in canada for financial services practitioners in the specialty areas of advance estate and wealth transfer, and living benefits. The institute provides a platform of standards and advanced knowledge through designation programs and accreditation services. Institute destinations speak powerfully of a practice that is built on knowledge and a belief in the continuous refinement of that knowledge.

Award recipients have demonstrated excellence among their peers. they have made an impact on the profession and the public they serve; exemplified the Institute’s code of professional conduct; positively affected their communities; participated in the industry, with either the Institute or Advocis; and/or within other financial services professions.

Chris Hudson CFP , CLU , CHS ®

J.G. TAYLOR AWARD RECIPIENT

Chris began his career as an advisor with London Life

Chris has been a proud member of Advocis since Jan 1998

in Oshawa Ontario in 1997. Chris moved into a Manager

and has served on local chapter boards in Peterborough and

role with Freedom 55 Financial in 2001 working with new

Durham Region for many years and served as President for

advisors, coaching and mentoring them to success. In 2006

3 years in Durham Region. He is currently GAMA rep and

he moved into a different role and was responsible for

Co-Membership Chair in the Durham Region Chapter. Chris

working with established advisors coaching and helping

also is an avid supporter of the Under 5 program.

them to grow their businesses, incorporating their practices and growing their organizations. Chris was also responsible

Chris has also worked on the CLC Membership Committee

for attracting and hiring new talent to Freedom 55 Financial

for many years and in 2018 became Membership Chair on

and creating succession and partnering opportunities for

the CLC. He is also the CLC liaison to GAMA and works

established advisors.

closely with GAMA with the goal of growing membership at GAMA and Advocis.

In Jan 2020 Chris returned to full time financial advisor practice after almost 19 years in Field Management to work

Chris lives in Bowmanville, Ontario with his spouse Lisa and

with his daughter Brittany who joined Freedom 55 Financial

they have 2 daughters, Brittany and Melissa. Chris and Lisa

in 2017.

are anxiously awaiting the birth of their first Grandchild in May 2020.

The Institute for Advanced Financial Education (The Institute), CLU® are trademarks of The Financial Advisors Association of Canada (TFAAC). The Institute is a wholly owned Subsidiary of Advocis® Copyright © 2019 TFAA. All rights reserved. Unauthorized reproduction of any images of content without permission is prohibited.

COVER STORY

Brave

New World

10 FORUM MAY 2020

Virtual meetings with clients and team members arenâ&#x20AC;&#x2122;t going away anytime soon. April-Lynn Levitt and Kim Poulin share best communications practices for our new normal

ue to the COVID-19 pandemic, many advisors and their teams have had to adapt quickly to virtual meetings and communications, in line with social distancing. Conversations with clients may be challenging due to the level of fear and uncertainty. The Personal Coach has always been a virtual organization. Although we do meet in person several times a year with our advisor clients and as a team, we do not have a bricks-and-mortar office. We are geographically spread out, providing customized one-on-one business coaching to financial advisors and their teams across Canada. We wanted to share the best practices we see for communicating and connecting with clients and their teams as the world evolves through quarantine procedures, a possible slowdown, and recovery. We have three best practices for turbulent times, regardless of whether you are delivering your message in person, over the telephone, or on a video call. Clients, advisors, and team members alike are charged with emotions ranging from fear to sadness to possibility, raising the stakes for every interaction you have with your audience. A general guideline for times like these is that you cannot communicate enough.

MINDSET

ILLUSTRATION: ISTOCKPHOTO

Be aware of the mindset you bring into each interaction you have. In her excellent book Mindset, author Carol Dweck talks about the difference between a growth mindset and a fixed mindset. People with a growth mindset would tend to see difficult times as an opportunity for growth and serving others. They generally have a higher level of resilience and are excellent at helping others see the possibilities of the situation, even if there is much negativity. People with a fixed mindset focus on factors they cannot control and believe they have little influence over their situation. This isn’t to say that advisors should ignore or gloss over what may be actual problems, but focusing on how to solve those problems is a tremendous value to clients and team members. You can cultivate a growth mindset by setting aside a few minutes before each meeting or call to do some deep breathing and set an intention for the desired outcome of the meeting. You will be the one to set the tone for the conversation. Spending some time on inspirational reading, meditation, journaling, and other recreational activities can also help cultivate a more positive mindset overall.

LEADERSHIP Remember that your clients and team members are looking to you to provide leadership. You can do this by projecting a high level of confidence based on the experience you — or others — have had getting through tough times in the past. One of the best ways you can do this is

to reinforce your “why.” Remind clients of your business beliefs around insurance, financial planning, or investments. Why did you set their plan up this way in the first place? What have you learned about what the most successful clients do to build and protect their wealth? What is your perspective on what is currently happening? What beliefs drive your thinking, and have you shared them with your clients and your team? Another way to show leadership is to remind clients and your team of your vision. One of the advisors we work with has a vision to “provide an exceptional experience to all of our clients.” This drives every decision they make, from sending out emails, replying to client inquiries in a timely manner, and empowering every person on the team to go above and beyond to help clients out. The team has had a higher purpose throughout the disruption of maintaining their high level of service. As a leader, it is essential to remember the significance of your service to clients, especially in difficult times. Another advisor who works with physicians has a strong vision that by helping her clients with their finances, she is improving the healthcare system of Canada. If doctors are not worried about their money, they can focus on what they do best. What is your vision?

CONSULTATIVE APPROACH Use a consultative approach to deepen relationships and create greater buy-in even more than ever. You can follow a consultative process by:

1. Focusing on your audience We do this by asking deeper, open-ended questions, and truly listening to the answers. Questions like, “What is your level of confidence in your current investment strategy or financial plan right now?” “What would you like to get out of this meeting today?” “What concerns do you have today?” Then really listen to the answers. Too often, we are so focused on what we want our message to be that we do not hear what our audience is saying. Try not to formulate answers before you hear a person out. Repeat back what you heard them saying. Show sincere empathy for their situation, and acknowledge their feelings even though it may be uncomfortable. You can accomplish this by using statements like, “Thank you for sharing.” “I understand how this is a concern for you right now.” Try not to jump right to providing a solution prematurely before you have heard and confirmed the real concerns. Avoid using jargon and try to put things in terms your audience will understand. This is also a great place to use client stories that relate to the situation. 2. Persuading through involvement Now, more than ever, it is vital to make your meetings as interactive as possible. This can be accomplished by getting input throughout your process. Using visual concepts, PowerPoint presentations, and creating different illustraMAY 2020 FORUM 11

COVER STORY

frequency of communications, is to set up your next meeting, even if it is six months down the road.

tions live with the client are all ways to do this. Utilizing an agenda as a clear guide for the meeting can also help. Include your clients or team members in the development of the agenda. Ask, “What would you like to make sure we cover today?”

5. Asking value-seeking questions A great way to end the meeting on a positive note, and a step that is often overlooked, is to ask for feedback. “What did you find most valuable about this meeting today?” “What would you like to see from us going forward?” “What was your key learning or takeaway from today?” Then, as above, be quiet and listen! This can be a great way to learn where your message is hitting or missing your audience. How can you improve for next time? Whether you choose to focus on mindset, leadership, or a consultative approach — or maybe all three — the importance of virtual communication should not be underestimated or discounted as anything less than a super-skill.

3. Earning the right to advance your thoughts Check in with your audience, whether this is a client, prospect, or team member. Use queries such as: “Do you have any questions?” “Have I made myself clear?” “Does this make sense?” 4. Clearing next actions Wrap up your meeting with a clear summary of action items and next steps. You can do this verbally as a summary of the meeting, and also afterwards by sending out a summary, or if compliance allows, sending a recording of the meeting if using technology. Another best practice, especially if you are increasing the

APRIL-LYNN LEVITT, B.Comm, CFP, and KIM POULIN, BA, FLMI, CLU, CH.F.C., are coaches at The Personal Coach. To request a PDF of this article, email dgage@adovcis.ca.

›› Give praise and recognition when little or big achievements occur.

TIPS FOR YOUR CLIENTS

›› Slow down. You need to manage the cadence of your speech when using a phone or video. Pause frequently and check in for understanding even more than usual. ›› Try video over phone. While the phone is OK, using video will help you see your audience’s reaction, body language, and emotions.

›› Know your technology. Test it out, have others give feedback on how you look and sound, use the features such as screen sharing and recording.

›› Eliminate distractions as much as you can. Have a separate environment for conducting meetings or calls free of pets, kids, and background noise.

12 FORUM MAY 2020

FOR YOUR TEAM

›› Delight and surprise team members by sending a meal from a local restaurant or café. Alternatively, if there are young children at home, send a gift that could occupy their time.

›› Celebrate birthdays by sending a gift they are sure to enjoy — whether it be now or in the future. For example, sending a spa gift certificate not only acknowledges that you care about their well-being, but that you know that things will get better soon. Good times will return. ›› Share your expectations — working during the day and turning off in the evenings; or getting the work done whenever it is convenient to them given their home environment/challenges. ›› Request that team members be readily available for all work-related activities, however with things like childcare, flexibility may be required on the part of the advisor. Ideally, one may want the core business hours of 10 a.m. to 3 p.m. covered.

›› Have team members share their proposed work schedule. Encourage

regular breaks for lunch, fresh air, or informal chats.

›› If work for your team members has slowed down or shifted, brainstorm what would be a great online course for them to consider — something to advance their life or their work skills, or get continuing education credits. ›› Agree upon the anticipated amount and format of daily communication.

›› Give each team member a specific focus or tasks, recognizing that these may be different from before. ›› Have your assistant join you in meetings (even if this was not part of your process in the past); they can take notes, ensure the technology works fine, and see first-hand how you work with clients. ›› Encourage creativity. ›› Set up regular one-on-one check-ins with team members. ›› Consider permitting some remote workdays per month once we are back to normal. These days may enhance employee productivity and satisfaction, and reduce commute trips. — A.L. and K.P.

Your clients work hard to get ahead. Fidelity can help them weather uncertain times Ask your Fidelity representative.

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STAY AHEAD

306569-v2020331

Proactive Approach Clients may not be finicky about volatile markets but Robyn Thompson explains why they still need to hear from you

s advisors, we know the impact of COVID-19 provided the trigger for the stock market volatility that began in February. We know that markets downgraded earnings expectations at lightning speed, as they are so good at doing, forcing price-earnings ratios back down to Earth. Aggressive portfolios, overweighted to equities, and those without hedging mechanisms in place, sank to a bad place right along with the big market indexes. More defensive portfolios, especially actively managed 14 FORUM MAY 2020

balanced ones with a steady hand at the helm, not so much. Still, the clients always call. It’s at times like these when we advisors earn our keep. Here’s my quartet of key principles for helping my clients through financial panics and crises. They’ve helped in the past, and they’re helping now. Communicate. This should be No. 1 in every advisor’s arsenal. We’re all busy trying to bail out the Titanic as our inboxes fill up, our phones buzz constantly, and our staff is self-isolating at home. Clients don’t care. They want us to talk to them. And they want it now. So oblige. It’s our job. Return calls, emails, text messages within the hour — not tomorrow or the next day. If you can’t return a phone call, respond to the client with an email or a text message that you’ll get back to them soon. Or have a staff member do it within the hour, even if working remotely. Your clients need to know you’re on the case. Be proactive. As soon as the market volatility began, we called all clients by phone before they called us. And we followed up with e-blasts and emails advising clients that our firm follows all government-mandated health regulations, and that all scheduled in-person meetings will be held by phone or through online streaming services like Skype or Zoom. We are open for business. Advise. As advisors, we know that periods of volatility are never a good time for wholesale portfolio resets (especially if you’ve built client portfolios according to their true risk-tolerance levels). Clients can’t help but be influenced by the daily diet of rumour,

ILLUSTRATION: ISTOCKPHOTO

COVER STORY

hyperbole, and misinformation dished out by the 24/7 media feed. Our job is to counterbalance the self-destructive behaviour that results from that. I like to remind clients that the market is an emotional place. There’s fear. There’s greed. There’s high drama. You can grow too attached to an investment. Or come to loathe it for no good reason. Or you can be a lemming, and just do what everyone else does, happily running over a cliff. It’s always best to get down to specifics rather than spouting airy generalities about “staying the course” and “toughing it out” (although these are solid principles). I ask a client who is raring to sell something, anything, why? What is it about Asset X that’s changed? Have a stock’s fundamentals deteriorated badly — revenue, cash flow, earnings? Has the company declared bankruptcy? What’s changed since yesterday when they thought their investment was brilliant? If the asset has reached their pre-determined sell target level, it’s already gone. Why would they pick a market crash as the ideal time to sell another perfectly good asset? If they have no good reason other than “the market is falling,” I probe the client’s stated risk-tolerance level and their ability to withstand market volatility. Maybe it’s time to make a change. Reassure and reinforce. During a market crisis, I’ve found that clients are often simply looking for some reassurance and expertise. I go back to first principles with them. The best way to keep that urge to trade emotionally in check is to have a rock-solid investment plan in place. Many (perhaps most) investors overestimate their ability to tolerate risk and market volatility. So I reinforce the fact that we’ve already agreed on their goals and their risk-tolerance level, and we’ve allocated assets according to

a realistic assessment of their investment temperament — before we executed the plan. I reassure clients that their investment plan takes into account the market’s many moods and its volatility. Their portfolios are built to be more “defensive” or more “aggressive” to suit their needs, with built-in risk-mitigation strategies derived from proper asset diversification. And that means clients shouldn’t have to worry about the market’s ups and downs — the portfolio should perform comfortably within the parameters we’ve set, with no need to meddle and “try to make it better.” In actively managed portfolio mandates, I reinforce the fact that managers have flexibility to switch from a more aggressive stance to a defensive one within the mandate, and likely will already have done so at the first sign of market fragility. Shortterm losses are inevitable in equity portfolios, but — and this is key — not to the degree of broader market indexes and not exceeding clients’ stated risk-tolerance levels. Manage expectations. One of my communication strategies is to demonstrate, graphically if possible, the extent to which a client’s portfolio has performed better than the benchmark. For example, the S&P/TSX Composite dropped 37% from its high in February to its low in March over about four weeks. A market crash if ever there was one. But if you can show that your clients’ portfolios slipped only, say, 4%, 5%, even 10% in the period by comparison, you’ll have gone a long way to winning — and keeping — your clients’ hearts and minds. ROBYN K. THOMPSON, CFP, CIM, FCSI, is president of Castlemark Wealth Management Inc. in Toronto.

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By obtaining the CHSÂ® designation, you have demonstrated a significant commitment to your career and your clients. ALBERTA Benjamin David Campbell, CHS Annadette M. Clarke-Moore, CHS Lynsey E. Dalen, CHS Sieanna Valen Dawn Day, CHS Jozef Dulina, CHS Stephanie Dwyer, CFP, CHS Timothy J. Heinrichs, CHS Amy J. Howard, CHS Scott Michael Kwasnecha, CHS Nina Wing Kam Lau-Choy, CHS Kyle Thomas Lenz, CHS Caroline A. Logan, CHS Liam K. Moon, CHS Kate Norris, CHS Bonnie Ozem, CHS Neeraj D. Pardeshi, CFP, CLU, CHS Gurpreet K. Ralh, CHS Carrie Ann Sandboe, CHS Joseph P. Wagner, CFP, CHS Rachel Wolters, CHS Sharlene Yabut, CHS

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COVER STORY

Changing Face of an Advisory Firm Scott Plaskett explains why he expanded his traditional bricks-and-mortar space to offer a unique virtual office

18 FORUM MAY 2020

PHOTO: ISTOCKPHOTO

ndependent financial advisors live relatively isolated professional lives between meetings with clients. My wife, Cathy, and I were no different. We built our financial planning business back in the 1990s, and having lived on an island by ourselves for decades, we understood the desire to be part of something bigger. Now the physical distance with our head office or branch office made it difficult to really develop personal relationships with colleagues. Our business model allowed us to build out our branch member firms across Canada. Finding a way to build “community” into the lives of independent financial planners was integral to our business development plan. Enter VirBELA, a progressive community building solution that was supporting the fastest growing real estate brokerage in the world. Perhaps it could bring something similar to the financial planning industry. Although VirBELA felt gimmicky at first, the social and emotional benefits were quickly apparent during my first interaction with another “in-world” user. Soon we envisioned bringing our head office staff and branch members together in this virtual world to not only allow them to be more connected with their colleagues, but also to allow our company the ability to scale more efficiently, going forward. This was in the last quarter of 2019, and our plan was to reveal the virtual office to our head office staff and branch member offices across Canada late in the second quarter of 2020. Then, seemingly overnight, the world began to change … quickly. In the blink of an eye, businesses around the world were forced to adapt to a new way of working. Instead of the traditional office environment, for safety’s sake, many employees started working from home; face-to-face meetings were a thing of the past. Travel bans came into effect and events of all sizes were cancelled. Research has linked social isolation to a flurry of increased physical ailments and higher risk of mental health challenges. We needed to show leadership to help our staff, partners, branch offices, and clients successfully navigate these emotionally challenging times. By embracing technology, we successfully replicated the “feel” of working together by creating CANiWorld — our virtual office powered by VirBELA. We expedited the launch of CANiWorld as the hub of our new business continuity plan. Hours after announcing to our Toronto head office staff they were to work from home, everyone was logged in to their new virtual office, with their new well-dressed avatars, and our first “team huddle” ensued around the receptionist’s desk — virtually. Moving to a virtual firm is much more than being able to offer a Zoom meeting. Going virtual is part of a comprehensive strategy that requires embracing technologies that will enhance and automate your ability to systematize the predictable so you can personalize the unpredictable. I invite you to spend a day with me and my team to see how using the right tools can make working from home more efficient, productive, and meaningful than you think. 8:30 a.m. By this time, all of the head office staff who reside in and around the Greater Toronto Area, have logged in to their VirBELA account and have entered their office in CANiWorld. We can assume that everyone is on their first (or second) cup of coffee by this point, as they begin to congregate in the virtual reception.

They have all been checking their emails in their Google G Suite account and reviewing their appointments for the week (both personal and business) on their synchronized Google Calendar. We all have personal obligations to coordinate with business obligations, so being able to show both calendar time blocks on one calendar helps to identify potential conflicts early on. Since accessing this information only requires a web browser and cloudbased security settings, employees aren’t “tethered” to a work device. Grabbing a coffee and logging into your email is second nature for most people these days, and this is ground zero for remote work as well. However, for some companies, it was the only thing that was in place, so when their employees arrived home, they were handcuffed from being able to get things done virtually beyond that point. 8:45 a.m. The normal “how was your weekend” discussions in the virtual reception area begin to turn to a natural “team huddle.” Teams begin to break out into private groups in private lounges to plan out their projects for the week. In our virtual office (CANiWorld) we have individual offices, work spaces, lounges, resource rooms, and boardrooms to accommodate the current needs of our team. Virtual spaces first came on the technology scene with the popular game Second Life, but CANiWorld is solely focused on supporting the needs of the business. Everyone creates their own avatar and dresses appropriately for their day. Head office staff have their own office they can park themselves in so they are easy to find when needed. In each office there are “web boards,” which are live screens capable of showing public internet websites, internal reports, spreadsheets, and presentations of your choosing, and can also show a user’s screen using screen-share technology. Meetings are no longer just discussions, but interactive presentations as well. Avatars are capable of showing emotions, clapping, cheering, looking confused, shaking hands, and even dancing. All in an effort to not only allow for expression but to bring an element of “fun” into the workplace. We haven’t had a meeting yet where someone hasn’t bust out a good dance move. Offices can be renovated on the fly — turning a desk and two chairs into a meeting table or even breakout tables for team discussions is as easy as clicking a mouse. Growing companies can scale up their offices as needed, and large organizations can even create their own “campus” with multiple office buildings for different team regions. We tend to brand our office using appropriate company logos and images to make it more representative of our corporate culture. After the brief huddle, everyone goes off to start working but stays connected in the virtual office. 9:30 a.m. My first client meeting begins by logging into a prearranged GoToMeeting or Google Meet session that was booked by my assistant on my calendar in our customer relationship system called the Genie for Financial Planners. All attendees are included in the event that is integrated with Google Calendar, where automated email invites are sent out for all attendees to accept, decline, or modify. A brief virtual “hello” starts the meeting, after which we quickly move to a screen-share session to review the items on the agenda. In attendance at the start of the online meeting is the clients’ portfolio manager to provide some further market and portfolio MAY 2020 FORUM 19

COVER STORY insights and to answer any questions clients may have that pertain directly to their portfolio. Once done, the portfolio manager signs off and we continue with our review. Showing the clients’ updated financial planning model using Razor Plan, a cloud-based financial planning service, allows me to clearly illustrate to clients their financial planning progress. We discuss the findings and identify next steps. Clients provide further updates on family and business, and we end the call summarizing all of the next actions that are to occur. 10:30 a.m. A Google Chat message pops up from a colleague in the office who has a quick question. An immediate response is provided to ensure everyone can move forward with their work. We prefer to communicate via Google Chat instead of email to ensure nothing gets buried and stalled. Who needs more emails in a day? Chat messages are quicker and more efficient. But, for more complex questions, staff can “visit” me in my office so we can have a private discussion and review files together on the web boards if we need to. 10:45 a.m. A new branch owner in the company walks by my office in CANiWorld to visit one of the financial planner resource rooms to watch a replay of the previous week’s training session. The resource rooms include a couple of screens where the member can access replays of training videos and slide decks that let him learn about the syndicate’s systems and how to use them. Our financial planning syndicate members can benefit from CANiWorld through the ability to collaborate with staff and obtain information without having to travel to do so. Noon Time for lunch, so I mark myself “away” in CANiWorld to let people know I’ll be back. One of the dangers of working from home is that employees and managers often feel pressured to be available at all times, never leaving “the office.” Taking regular breaks, and scheduling a beginning and end to the business day is important for everyone’s productivity and health. 1 p.m. Pre-meeting preparation and post-meeting notes and follow-up tasks are all input into the Genie for Financial Planners, a platform customized for Canadian financial planners and built on the robust Salesforce.com service cloud. Having a centralized hub for all staff and office locations by managing a complete suite of business applications, automated marketing campaigns, sales and implementation processes from any device is critical. We touch so many aspects of a client’s life, making it impossible to manage the relationships without the proper use of technology.

our Virtual Coffee to begin. This is being hosted at the head office for one of the firm’s portfolio management firms so they can provide an update to the entire company. Financial planners often work in smaller markets, oftentimes from their home offices. The inefficiencies associated with travel to keep up on what is happening with supplier firms can be a huge ordeal. Being able to show up to a presentation virtually allows for camaraderie amongst colleagues as we mingle in advance of the presentation, and allows us to further relationships with those who supply critical services to our clients. 3:30 p.m. A quick review of my inbox reveals a handful of initial 30-minute chat appointments have been booked for the following week through our automated scheduler (ScheduleOnce) which integrates directly into my calendar in the Genie. This service allows prospective clients to see available times to schedule, at their convenience, a phone call or online meeting with me to find out more about our services. During the work-from-home protocol, making it easy for prospective clients to find out more about who we are and what we do is critical to nurturing leads and building rapport. Making it easy for someone to coordinate schedules increases the likelihood that they will initiate discussions with you. 4 p.m. A notification in my Google Chat directs my attention to my marketing manager’s report, which contains questions surrounding some draft social media messages she is looking for approval on. I open up the report on my phone and begin to review it and edit the posts. Upon further review, I feel a brief strategy discussion is needed so I look her location up in CANiWorld, click GoTo, and I am teleported to her office. We chat to clarify the strategy and she is now able to move the project forward. Easy collaboration with your staff and peers is key to efficiently moving projects forward. CANiWorld and G Suite integrate so well together to allow for collaboration and clear communication, whether it be voice or visual. Establishing a proper work flow etiquette is key to getting things done. 4:45 p.m. Cathy (who is my business partner) and I receive an autogenerated email from the bookkeeping system Quickbooks Online with the most recent month’s financial reports. A quick glance reveals some items to discuss, so I click “Create Event” from the email to schedule a meeting for us for the next day. The system notifies all attendees and attaches the reports to review to the meeting details. I then continue to work on cleaning up tasks from the day. 6 p.m. Time to leave the office for the day. I log out of CANiWorld, close my email, and walk downstairs to the kitchen.

2 p.m. The head office team in CANiWorld sit at the virtual boardroom table for their weekly staff meeting to review the status of current projects being worked on and discuss next steps. There are five web boards in the boardroom, all showing a different project to be discussed.

A work-from-home protocol is not a hindrance … it’s an opportunity. As we move through this new reality we are in, our perspective needs to remain positive. Don’t ask “How are we going to get through this?” ask yourself, “How are we going to change to get through this?” The changes you incorporate into your life today will be the building blocks for your success in tomorrow’s new normal — whatever that may be.

3 p.m. Outside the main boardroom, financial planners from across the country begin to arrive and mingle in the lounge waiting for

SCOTT PLASKETT, CFP, FEA, is president of IRONSHIELD Financial Planning & The CANi Financial Planning Syndicate.

20 FORUM MAY 2020

PRACTICE MANAGEMENT

Jackie Porter

Second Act The average advisor enters the business at age 40. Tamar Satov talks to five secondcareer advisors about why they made the change and how they adapt to tough times.

ean Ryder is in the middle of a job interview — which he is acing, by the way — when an unexpected thought pops into his head. Despite having spent the previous eight years in similar well-paying sales and marketing roles at large pharmaceutical companies, this is not the life he wants anymore. “I can’t do this. I don’t want to do this,” he thinks to himself, before departing for his newly purchased home, so he can explain all this to his wife. “I always wanted to be my own boss. I didn’t want to deal with all the politics in a corporate job. It’s too tiring and not for me,” he says. Fast-forward 13 years, and Ryder is in fact his own boss at Loreto Ryder & Associates Private Wealth Management, part

MAY 2020 FORUM 21

PRACTICE MANAGEMENT of IG Private Wealth Management in Toronto. “I’m so happy that I made the change,” says the 45-year-old certified financial planner. “This is definitely my calling.” Ryder is far from the only successful professional who pivoted to become a financial advisor mid-career. According to research compiled by Advocis, the average advisor enters the business at age 40, many of them doing so after climbing the ranks in other industries. Looking at the experiences of second-career advisors can be helpful not only as an example for anyone who may have recently made a similar transition, but also because they are experts at dealing with change. And change is afoot for even the most seasoned advisors, thanks to rapidly transforming market and economic conditions. Given that reality, below are the stories of five second-career advisors who made good, and the lessons they learned shifting to financial advisory services from fields as diverse as telecommunications, teaching, and the military.

JACKIE PORTER CFP, Former Telco Sales Rep

anding her first full-time job out of university at Bell Canada in 1993, Jackie Porter got a quick lesson in change and resiliency, as deregulation in the telecommunications industry put an end to “Ma” Bell’s monopoly. Eager to please, she quickly transitioned from direct marketing to sales manager, and gained the respect of her supervisors. But five years later, she opted for a buyout package. “People there talked about ‘golden handcuffs’ and staying until retirement, but I realized I didn’t want to work for a big company,” she says. When Porter met with a financial planner to discuss how to make the best use of her windfall, she spotted a career opportunity. “The planner was a woman — a unicorn back in the 1990s — and I saw there were a lot of people who look like me, who were women, who I could help to become wealthy,” she recalls. The 49-year-old advisor, who was named Female Trailblazer of the Year at the 2019 Wealth Professional awards, now runs her own business with five staff at Mississauga-based Carte Wealth Management. JACKIE’S TOP TIPS Be prepared for disruption. As Porter discovered from her telco industry experience, you can’t rely on the status quo when planning for the future. Disruption is the new normal, she says, whether it comes from a global pandemic, new technologies, or climate change. To help them thrive in the new reality, advisors must prepare clients — and themselves — to be financially resilient. “In the world we live in, how secure can you feel for the future? Recognize when the sun is shining, that’s when to save for a rainy day,” she suggests. Demonstrate your value. Since the proliferation of robo advisors is also creating disruption and a paradigm shift in the financial services industry, it’s critical for professionals to show how they add value. “Some may have thought they could build a business 22 FORUM MAY 2020

Gary Weston

just by providing a good rate of return to clients, but now that service can be outsourced and commoditized,” says Porter. Instead, advisors must think about the unique ways they can offer holistic advice, which will help them tap what she thinks of as an underserved market: women. “Many women don’t want the ‘masculine’ approach of ‘look how much return we got for you.’ They want more of a big-picture approach,” she says. “The advisors who do that well over the next decade will be successful.” Listen. One way to add value is to take the time to really listen to your clients, as well as review their documents, and then see how those two stories align. For example, Porter met with clients who told her they had $2,000 in savings left over each month. But when she examined their budget, she saw they were carrying debt on a credit card. “I called them on it and asked why they haven’t deployed that money toward the credit card debt,” she says, adding that she tries to use humour as much as possible. “I want them to know that I know — that I’ve looked at their circumstances. Then they trust me, and I don’t have to ‘sell’ them.”

GARY WESTON CD, CLU, CHFC, Former Military Personnel

fter almost 20 years, and a half-dozen postings, in the Canadian Armed Forces, Gary Weston retired from the military at the age of 37 with a pension and a bright future. That was back in 1987 — right around Black Monday and the largest stock market crash since the Great Depression. Nonetheless, Weston, who always had a head for numbers and

business, pursued a career as a financial advisor in his hometown of Winnipeg. After a brief stint with Investors Group he joined Canada Life, and in 1996 formed the Gary D.S. Weston Financial Group. Today, he’s a semi-retired financial and investment fund advisor with Investia Financial Services Inc., part of Crescent Financial Group. GARY’S TOP TIPS Be reassuring in a crisis. Given his military background and the timing of his entry into financial services, Weston has some apt advice for advisors who may be hearing from clients in a panic over stock market volatility: “Be the calming voice that your clients look to to get out of this mess. If they ride out the storm, they’ll get their money back.” In fact, he recalls clients running into his offices the day after Black Monday because they saw the crash as a perfect buying opportunity — an important lesson for any new advisor. Never stop learning. A former board member of Advocis Winnipeg and past president of the Winnipeg Chapter of Life Underwriters Association, Weston is a big believer in continual education for advisors. “Go to financial forums, Advocis general meetings, CE seminars, meet industry icons and ask them questions, and read everything you can get your hands on,” he suggests. “You won’t get ahead if you don’t learn.” Stand up to bullies. Weston always puts his clients — rather than sales numbers—first, as that’s what grows an advisory business. “If you look after your clients they will like the service and will refer their friends,” he explains. But he doesn’t ascribe to the-client-is-always-right philosophy. “I fired two or three clients — something I learned from an older agent — because of the way they were treating me,” he says. “I have no time for that. Don’t be afraid to speak out. It’s your livelihood.”

ANDREA ANDERSEN CFP, Former High School Teacher

lthough she loved teaching, Andrea Andersen decided to make a career change at age 36 to find an occupation with less rigid hours. “I kind of went into teaching for the family life it would give me, but I found out it didn’t give me much flexibility,” says Andersen, whose son was six at the time and at a different school with no after care. She turned to financial advising, which was a good match for her skill set and gave her the flexibility she was craving. Thirteen years later, Andersen is principal, Western Canada leader, and financial advisor at Edward Jones in Calgary. “My branch has three assistants, so someone is always in the branch to serve our clients if I have to be away.” ANDREA’S TOP TIPS Educate your clients. If you take the time to explain the basics about risk tolerance, time horizons, and how markets work, your clients won’t panic when they experience their first real bear market in a decade. “I’ve spent a lot of time over the past 10 years helping clients understand risk tolerance and long-term investing,” says Andersen, who had some investors get in touch after the market drop in March to ask about buying opportuni-

Andrea Andersen

ties. If possible, try to communicate in a way that best suits your clients; for example, visual learners may better understand through charts or pictures, while mathematical or logical learners may prefer to see raw data or calculations. Be empathetic. Clients are at their most vulnerable when they sit in front of you, and they want to feel like someone cares about them. When one of Andersen’s clients was diagnosed with cancer, for instance, her biggest concern was that her twin sons, who have special needs, would be looked after. “I can’t solve cancer, but I can take that worry off her mind that her sons’ financial future is going to be OK so she can focus on getting healthy,” says Andersen. “We set everything up with a guardian and executor.” Leverage available supports. This can include any dedicated administrative or other support staff at your firm, printed or online resources of data and information, or professional mentors. “Tap into all that group knowledge to help guide you on the decision making for clients,” she suggests.

KAMAL BASRA

CFP, FMA, FCSI, Former Canada Revenue Agency (CRA) Manager

amal Basra’s circuitous route to becoming an advisor started as a University of British Columbia hospital laboratory research assistant, then six years as a stayat-home parent to her two kids, followed by part-time work in the credit division of Sears where she handled people’s bill enquiries. Next was a tax return data entry role at CRA (then called Revenue Canada), where she was promoted to a supervisory position. MAY 2020 FORUM 23

PRACTICE MANAGEMENT But it wasn’t until an annual visit with her financial advisor in 1996 that fate really intervened. His assistant had just left and he offered Basra the job. “The whole thing was pure luck, but within about a month I realized how much of difference he was making in people’s lives and how his clients loved him,” she recalls. “He really cared for his clients, and I thought ‘this is something I could do.’ ” Many courses and two firms later, she enrolled in the rookie advisor program at TD Waterhouse at age 41 and started giving free investment seminars to women to build her business. In 2008, she met another woman advisor, Tracy Theemes, who had been on a similar path, and together they created Sophia Financial Group of Raymond James Ltd. in Vancouver, where they successfully serve the needs of a mostly female clientele. KAMAL’S TOP TIPS Seek out mentors. During her four years working for her own financial advisor as an assistant, Basra didn’t see him as a salesperson — she saw him as someone who took care of his clients. That mentorship laid the foundation for her entire approach to success. “Our industry measures us on how much you bring in assets each month, but that’s not how to build a business,” she says. “I meet with clients first, and make sure they understand the financial planning process, which is much better than bringing in clients quickly only to lose them through the back door.”

Sean Ryder

Success comes down to a few key things, and there’s no shortcut or easy way around it, says Ryder: “Keep in constant touch with your clients — especially in these tough times. Keep prospecting and trying to better yourself.” Find your niche. When she was in the TD Waterhouse rookie program, Basra had to develop a business plan that outlined how she would prospect for clients. She decided on educational seminars for women, speaking to them about basic concepts and leaving lots of Q&A time at the end. “They had been sold to too many times, and never had a chance to ask their questions,” she says. “They wanted to know, how is buying this mutual fund going to help me retire? Or help my kids? In an increasingly complex world with a lack of human contact, advice will always be valued. If I was just going out there peddling stocks, I wouldn’t do as well.”

Kamal Basra

24 FORUM MAY 2020

Draw on experience. All of Basra’s varied work history contributed to her success as an advisor, from her ability to analyze data as a researcher, to effectively communicating with customers and staff at Sears and CRA, and walking clients through their investment statements when she was an associate. But she draws on her personal experiences, as well. For example, she can relate to women who’ve had male advisors ignore them, because the same thing has happened to her. And because she is a widow

— her husband died six years ago — she can empathize with clients who are in similar situations. “When women get divorced or become widows, that’s often when they’ll change advisors,” she notes. “Having been through that myself just adds to the credibility for them. I understand.”

SEAN RYDER CFP, CLU, Former Pharmaceutical Marketer

fter Ryder had his “I can’t do this anymore” moment, he considered pursuing financial planning — a topic he found interesting — and researched the industry. He attended a seminar at Investors Group and was sold. But then he had to sell his wife on the idea of being paid 100% on commission. She gave him the green light, especially since he had a sizeable severance from a previous layoff, and he got to work in late 2007, just before the financial crisis. “That was my trial by fire,” he says. By 2010, he became a division director, and today he has $236 million in assets under management and the seventh largest IG practice in Canada. SEAN’S TOP TIPS Maintain networks. Ryder found that he landed many clients from staying in touch with those he worked with in the pharmaceutical industry. Colleagues knew he had previously received a severance package, so when they were later laid off as well, they immediately thought of him to provide advice. “They figured, ‘You’ve been through this, and now you’re a financial planner, so

Donating Bonds:

who better to guide me?’ It was a good source of warm leads.” Work hard. At the beginning, it can be a real grind building an advisory business, but Ryder always noticed how the top performers worked hardest. When he was division director, for example, he frequently turned down offers from his colleagues to go out after work and just kept going. “People who treat this as a job instead of a career will not do well. It’s a long-term play,” says Ryder. “It is extremely difficult to make a lot of money early in your career, but it is a great business [financially] once you have built it up.” Don’t look for a magic bullet. Success comes down to a few key things, and there’s no shortcut or easy way around it, says Ryder: “Keep in constant touch with your clients — especially in these tough times. Keep prospecting and trying to better yourself. Have a good work ethic. Use referrals, put on seminars, and host client appreciation events.” Finally, he recommends making the most of the resources at your disposal. “I’ve got this massive company behind me,” he says. “If there’s anything I don’t know, they know, and I’m not afraid to ask.” TAMAR SATOV is a Toronto-based editor and writer.

Would you like to receive a PDF of this article or others in this issue? Please email the editor at dgage@advocis.ca.

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An Efficient Solution in a Challenging Market Environment By Sherri Grosz, Gift Planning Consultant

onating bonds is a great option to explore when stock markets drop, and interest rates are declining. Individuals and corporations that donate publicly traded securities in-kind avoid paying the capital gains tax on those securities. Publicly traded securities are stocks, bonds, mutual funds and ETFs (Exchange Traded Funds) listed on a designated stock exchange. With the recent decline in the stock markets, donors and advisors might presume there is no longer an advantage to donating publicly traded securities.

While that might be accurate for stocks, mutual funds and ETFs, bonds can also have capital gains. When interest rates drop the market value of bonds usually increases, which could result in significant unrealized capital gains on bonds your clients hold in their investment portfolios. Donating bonds in-kind results in the same tax efficiency as donating stocks, mutual funds or ETFs.

Abundance Canada has significant experience processing gifts of securities. In 2019, we processed $55.33 million in total donations, of which $30.45 million were in-kind donations of stocks, bonds and mutual funds. If you have questions, contact an Abundance Canada gift planning consultant in your area at 1.800.772.3257 or email generosity@abundance.ca.

CLU DESIGNATES

John A. Tory

AWARD 2019 THE INSTITUTE CONGRATULATES 2019 JOHN A. TORY AWARD WINNER

CRAIG ALAN HANDLEY CLU®, CHS FOR ATTAINING THE TOP MARK IN CANADA. ALBERTA Robert G. Bradburn, CFP, CLU Susan J. Brown, CFP, CLU, CIM Michel F. de Ocampo, CLU, CHS Nicole A. Dziuba, CFP, CLU Christopher J. Geldert, CLU Craig Alan Handley, CLU, CHS Teighan R. Malloy, CFP, CLU Bradley S. Roy, CFP, CLU, CHS Suzanne A. Smith-Demers, CFP, CLU, CHS Ron Sutherland, CFP, CLU, CHS Audrey Thorhauer, CFP, CLU BRITISH COLUMBIA William Howard Ambrock, CLU Dylan Roderick Brown, CLU, CHS Claire Carbert, CFP, CLU Brandon Chapman, CFP, CLU Ching Yun Chen, CFP, CLU, CHS Raman Chopra, CFP, CLU Hsin-Yuan Denny Chou, CFP, CLU Christine Conway, CFP, CLU, CHS Meagan A. Daniell, CFP, CLU Shawn J. Fetter, CLU Thomas Gilman, CFP, CLU Shilan Huang, CFP, CLU Robert M. Humeniuk, CFP, CLU Adam Jung, CLU Eric Kao, CFP, CLU Sahra Khoshnavazi, CLU Beata Krajcovic, CFP, CLU John Ly, CFP, CLU Trever Morris, CLU Jeremy Reinbolt, CLU Kam K. Siemens, CFP, CLU

Brian So, CLU, CHS Tzu-Yao Tai, CFP, CLU Jamie Templeman, CFP, CLU Nadine F. Thornton, CFP, CLU MANITOBA Reg Braun, CFP, CLU Bruce G. Eyford, CFP, CLU Marty Minshull, CFP, CLU Riley A. Snell, CFP, CLU Olumide O. Soile, CLU, CHS, QAFP, MBA Michael A. Walker, CLU, CHS NEWFOUNDLAND Greg W. O’Brien, CFP, CLU NOVA SCOTIA Heather Himmelman, CFP, CLU Robert O’Donnell, CFP, CLU David J. Quinton, CLU, CHS Christina Wyatt, CLU ONTARIO Sandra Lynn Alder, CFP, CLU, CHS Alexander Anastasopulos, CLU, CHS Dana Arous, CLU Silvia Azevedo Pereira, CLU Ziad Azzi, CFP, CLU, RRC, EPC Kyle D. Badham, CFP, CLU Daniel Balofsky, CLU Joseph A. Bardaro, CLU Tejinderpal Bedi, CLU Richard P. Bell, CLU Dwight Omar Bennett, CLU Jeremy Marc Bertrand, CFP, CLU Grete Boyd, CLU, CHS Latoya Brown, CLU John Bulhoes, CLU Zining Cai, CLU, CHS Ryan Cameron, CLU David Catania, CFP, CLU Yinghui Chang, CLU, CHS Roshan Charles, CLU, CHS Tay Chayathivong, CLU Hairong Chen, CFP, CLU Zhong Chen, CLU, CHS

Allan Colavecchia, CLU Jian Tian Cui, CLU, FMA Brandon Currie, CLU Zijing Dai, CLU Susan DaSilva-Romeo, CLU, CHS Pieter Johan Demeester, CFP, CLU Rajnish Dhawan, CLU Matthew Donohoe, CFP, CLU Rajvir Kaur Dosanjh, CLU Juan (Coco) Du, CLU, CHS Juan (Joanne) Du, CLU, CHS Ahmed El-Shaboury, CFP, CLU, CIM Jie Fan, CLU, CHS Yan Fang, CLU, CHS Daniel Peter Felicetti, CLU Mark J. Foster, CFP, CLU Jie Gao, CLU, CHS Elvis P. Garcia, CLU Colin G. Gies, CLU, CHS Avinash Amar Gopichand, CLU Fang Gu, CLU, CHS Derek Holt, CLU Chong Huang, CLU, CHS Muhammad Arshad Hussain, CLU Robert A. Hutton, CLU, CHS Obehi R. Imhanlahimi, CLU, CHS Ying Lai Jiang, CFP, CLU Qin Jiang, CLU, CHS Yaowen Jiang, CLU Shu Jin, CLU Melanie Jane Johannink, CLU, CHS Mohamed Kababji, CFP, CLU Matthew Karam, CFP, CLU Tim A. Kelly, CLU Haranjan Lalli, CLU Michael R. Lapointe, CFP, CLU Jeannette Lee, CFP, CLU Linda Li, CLU Tao (Ellen) Li, CFP, CLU, TEP XiaoWen Lin, CLU Guixia Lin, CLU Nathan Linwood, CLU Yudan Liu, CLU Yanjun Liu, CLU Hui Liu, CLU, CHS Jovyna Mico Manuyag, CLU, CHS Angela E. Marinelli, CLU Ana Martinho, CLU, CHS Russell R. Mationg, CLU Cody Vern Matthews, CLU

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

Jamie A. Meldrum, CFP, CLU Leslie J Mroz, CLU Jaclyn Nemethy, CLU, CHS Nga Thi Minh Nguyen, CLU Rauf Ozdincer, CLU, CFA Conor David Pang, CLU Amrita Paul, CLU Angela Paulo, CLU, CHS Dave J. Pecharich, CLU Yi Peng, CLU Sanjay S. Persaud, CFP, CLU, CHS C. Albert (Al) Pizzi, CLU Emil Popescu, CLU, CHS Richard P. Prior, CFP, CLU, CHS Ernesto Raurell, CLU Ian Reay, CFP, CLU, CIM, FCSI Alexandre Rochtchine, CLU Beata Rodzoch, CLU, CHS Edvard Ryder, CLU Sadaf Saleem, CFP, CLU, CHS Kusum Sen, CLU, CHS Qiaoyang Shangguan, CLU Andrew H. Sheppard, CLU, CHS Mitchell Shields, CFP, CLU Heera Singh, CFP, CLU

Jacqueline Leah Smollan, CLU, CFP Bingyan Song, CLU, CHS Yuzhen Song, CLU, CHS Laura Southall, CFP, CLU Melanie P. Stapleton, CLU Stephen Ste. Croix, CLU Adam Tantawi, CFP, CLU Trevor Theobald, CLU, CHS Mithura Thirumalmarukan, CLU Wei Yan Tian, CLU, CHS Sean Tidd, CFP, CLU Hoi-Ying (Eva) Tsang, CLU, CHS Krishna M. Tula, CLU Rebecca Turcotte, CLU Terry Van Dreumel, CFP, CLU Gurpreet Singh Vasdev, CLU, CHS Rakesh K. Verma, CLU, CHS Perry Villanueva, CLU Maria Vucenovic, CLU Mona Wahab, CLU Yuanji Wang, CLU, CHS Enci Wang, CLU Ye Wang, CLU, CHS Yiqi Wang, CLU

Philip N. Wolverton, CFP, CLU, FMA, FCSI Zheng Yu, CLU Grace Xi Hui Zang, CLU, CHS Vicky Daqun Zeng, CLU, CHS Tianxu Zhang, CLU QUEBEC Martin Dionne, CLU Qiong Hui Luo, CFP, CLU, CGA SASKATCHEWAN Paul V. Bourgeault, CFP, CLU Michael R. Dick, CFP, CLU Jarrett J. Goettler, CFP, CLU Kelsie M. Lenton, CFP, CLU, CHS Marty Metz, CLU Jonathon W. Michel, CLU Tammy Richmond, CFP, CLU Tanis M. Robertson, CFP, CLU Darren W. m. Ulmer, CFP, CLU, CHS

CFP® Certification

Leslie W. Dunstall

AWARD 2019

MANITOBA Bruce G. Eyford, CFP, CLU Marty Minshull, CFP, CLU

AWARD 2019

THE INSTITUTE SPECIALLY RECOGNIZES THE 2019 DUNSTALL PRIZE WINNERS FOR ATTAINING TOP MARKS IN THEIR RESPECTIVE PROVINCES:

ONTARIO Rebecca Turcotte, CLU

BRITISH COLUMBIA Brian Kam Hin So, CLU, CHS

SASKATCHEWAN Michael R. Dick, CFP, CLU

THE ADVOCIS CFP® CERTIFICATION PROGRAM AWARD IS A NATIONAL AWARD GIVEN TO THE STUDENT WHO EARNS THE HIGHEST AVERAGE MARK WHILE SUCCESSFULLY COMPLETING THE ADVOCIS CFP® CERTIFICATION PROGRAM.

NOVA SCOTIA Heather Himmelman, CFP, CLU

Carissa Thorne, CFP

INSURANCE

Benefits Integration

here’s a well-known rule about disability insurance: The insurance companies do not want an insured to be better off financially while on claim than when working. Otherwise, there isn’t a lot of incentive to return to work. For most group benefit plans with long-term disability (LTD), they often have a statement in the contract that the maximum income from all sources, while on disability, cannot be more than 85% of either gross or net predisability income if the LTD benefit is either taxable or non-taxable, respectively. Also, Canada Pension Plan, Workers’ Compensation, or auto insurance disability

generally has a direct offset, except with some professional plans. For individually owned policies, this rule does not apply, at least in terms of an initial application. Instead, the insurance company specifies the maximum monthly benefit amount, based on the amount of reported earnings — assuming the policy premium is paid for by the insured, and therefore the benefit is non-taxable. The table below from Manulife is an example of financial requirements and income to declare as annual income when doing an illustration. Then the illustration software deter-

ACCEPTABLE PROOF OF INCOME Employment Status

Photocopy of pages 1, 2, & 3 of most recent Personal T1 General Return

Salaried Employee

Lines 101/104

N/A

Commissioned Employee

Lines 102/104, less line 229

N/A

Unincorporated Business Owner

Lines 135–143

N/A

Incorporated Business Owner

Lines 101/104

*Yes

SOURCE: MANULIFE

28 FORUM MAY 2020

mines the maximum monthly disability benefit based on declared income. The following table shows Manulife’s limits that are similar to other company individual plans. You will notice that the maximum benefit these individual plans offer is less than the 85% for group plans. In other words, while the group plan providers are happy with 85% all sources maximum, individual providers are not. This is where the integration of benefits scenario I have been recently dealing with arises. Here’s a common thread with the cases I am going to describe. The clients are pro-

Photocopy of Corporate Financial Statements including: Income & * Expense Statement * Balance Sheet * Notes to Financial Statement

PHOTO: ISTOCKPHOTO

Richard Parkinson explains why integrating long-term disability insurance with workplace benefits isn’t smooth

TABLE SHOWING MAXIMUM BENEFIT AVAILABLE FOR A GIVEN ANNUAL INCOME Pre-tax annual income

Percentage of pretax income

Maximum monthly benefit

$30,000

$1,850

74.00%

$40,000

$2,375

71.25%

$50,000

$2,850

68.40%

$60,000

$3,300

66.00%

$70,000

$3,750

64.29%

$80,000

$4,250

63.75%

$90,000

$4,700

62.67%

$100,000

$5,100

61.20%

$110,000

$5,500

60.00%

$120,000

$5,860

58.60%

$130,000

$6,260

57.78%

$140,000

$6,660

57.09%

$150,000

$6,920

55.36%

$160,000

$7,320

54.90%

$170,000

$7,620

53.79%

$180,000

$7,950

53.00%

$190,000

$8,200

51.79%

$200,000

$8,500

51.00%

fessional, younger than 40, category 4A, and covered by a generous group benefit plan (i.e., the no-evidence maximum (NEM) is higher than what their income qualifies them for). Group plans use two typical methods to calculate the monthly benefit an employee qualifies for, flat rate of graded formula. • Flat rate: This is straightforward. The popular choice is 66.66% of income to the amount specified by the NEM, or the amount after they have applied for optional group coverage. • Graded Formula: Designed for higher salaried employees and paying the LTD premium to compensate somewhat for the possibility of the “all sources maximum” causing one or both disability plans (i.e., group and individual) from having the benefit reduced. In the below example, for a person earning $130,000 annually and a flat rate of 66.66%, they would qualify for a $7,222 monthly benefit, and their premium would be based on this benefit. However, if they were receiving benefits from other sources, e.g., a company group benefits plan, which collectively exceeds the 85% rule, then their benefit would be reduced. Notice with the graded formula, the benefit is showing as $6,267 monthly, which means a lower premium for the group LTD. Now onto the case example, for a professional information technology worker, age 35, category 4A, earning $130,000 per year. I built an Excel spreadsheet to help with the calculations with the output shown below:

GRADED FORMULA CALCULATOR & DISABILITY TOP UP WHEN GROUP PLAN IS FIRST PAYOR VS. INDIVIDUAL POLICY Graded Formula

Flat rate $130,000.00

Client Annual Income:

$130,000.00

Client Monthly Income:

$10,833.33

66.66%

Rate brands

Rate brands $

Income Amount

% per amount

Benefit

Benefit Maximum (Approx.):

$7,221.50

1st

$3,500.00

70%

$2,450.00

$3,000.00

55%

$1,650.00

Group plan No Evidence Maximum (NEM):

$12,000.00

Over $6,500

$6,500.00

$4,333.33

50%

$2,166.67

What is your group plan coverage?:

$7,221.50

Flat Rate Percentage:

Max. group plan coverage based on income [non taxable benefit] {F=Flat / G=Graded}:

Graded

Maximum individual plan monthly benefit (based on income): In the event the calculated benefit exceeds the NEM of $12,000, the maximum this plan will pay is the NEM, unless you have opted to apply for additional optional coverage. If your potential benefit is greater than the NEM, then you are underinsured and should consider applying for additional coverage from your group plan, or consider an individual policy.

Annual Income $130,000.00

Gross Monthly Income $10,833.33

$6,266.67

$10,833.33

Maximum Monthly based on Income Flat or Graded formula group plan * $6,250.00

Maximum Monthly based on Income typical individual plan $6,266.67

$6,266.67

Difference Individual minus group plan

$6,250.00

$16.67

If your group plan is first payor, then $16.67 is all the individual plan will pay. Note if some or all of the group plan benefit is taxable, the individual plans with more room.

*With any group plan, if your income exceeds what the NEM qualifies you for, the NEM prevails, unless you have applied for additional coverage, which is typically medically and always financially underwritten.

MAY 2020 FORUM 29

INSURANCE This client’s group plan uses the graded formula, which shows that should he become disabled, the group plan would pay a $6,266.67 monthly tax-free benefit. He was hoping for more, plus he is considering changing employers within a year, or perhaps becoming self- employed, so, he would like to have an individual policy in place before he makes a change. The bad news is that the major disability providers with professional plans (e.g., Canada Life, Manulife, RBC, etc.) have a calculator built in for you to enter the existing group coverage, and when you do, as in this example with Manulife, it says the maximum you can apply for is $16.67, which is below their minimum of $500 monthly benefit, and all that they would pay on claim. Faced with this, and after speaking with a few wholesalers with these companies, there seem to be two possible solutions. Plan A: Apply for a minimum amount, e.g., $1,000, and add an appropriate additional / future insurance amount 1 (maximum shown) to top up the plan should the client leave the group. You can see that it would take five years to add the maximum amount to the base coverage, and the rate paid would be based on attained age. If this individual plan is still second payor to the group plan, then he may receive next to nothing as a benefit, as long as the group plan is paying, but it hasn’t cost a lot for this backup plan. After two years, if the group plan cuts him off, then this plan would pay the maximum initially chosen, plus one additional insurance increase if applied for while disabled. Plan B: Apply for a maximum amount the insurance company will approve based on income, e.g., $6,250, with the group offset option and add an appropriate additional

insurance amount (maximum shown) to top up the plan should the client leave the group. Choosing this option would make sense if the client was planning to change employers in the next year or less, realizing that if he becomes disabled while still with his current employer, it will pay a fraction of the monthly benefit he has been paying for. Plan C: Apply for a median amount, e.g., $3,000, with the group offset option and add an appropriate additional insurance amount (maximum shown) to top up the plan should the client leave the group. The rationale for this option is to hedge the bet. So, for example, provide enough initial coverage to allow getting to the ideal coverage amount quicker once the individual plan is first payor, yet a monthly premium that isn’t so onerous if he decides to stay with his current employer for longer than expected. Interestingly, I have had three clients choose one each of these plans, which highlights the need to have some available, workable options. I have found my local wholesalers of the companies mentioned very knowledgeable and helpful when faced with a client scenario that is outside the simple norm.

Client age:

Annual Income

Rate category

$130,000

Plan

Initial coverage amount

Max. addltional Insurance

Monthly premium

Max. amount of increase per year

$1,000

$10,000

$34.94

$6,250

$12,750

$3,000

$15,000

30 FORUM MAY 2020

When discussing disability insurance with clients, I’ve learned that it pays to read the sample contracts to make sure you understand how any particular option works. Don’t assume the way one company has implemented an option is the same for the others. Also, I make it a habit to review the claim form for the company I am planning to apply to with the client. Manulife’s form is 12 pages long, and goes into more detail than the application, so if a claim question is relevant, I add a note, or send a copy of the claim form completed as an adjunct to the application. For example, Manulife’s claim form asks for details of the work environment and strength and mobility (e.g., “lifting or carrying more than 25 pounds?”) that are not asked in the application. I wouldn’t want to see a claim denied because the claim form asks a question the application didn’t ask in the first place. I have worked with advisors over the years who say they avoid discussing disability insurance with their clients because they find it too time consuming to bone up on, too complicated, or are worried about the hassle if a claim is denied. All of these things are true, but it does our clients a disservice if we don’t at least discuss it with them. If nothing else, align yourself with someone who is comfortable with quoting and applying for disability insurance, and refer your client to them. RICHARD PARKINSON, CPCA, is an independent insurance broker based in Vancouver. To receive a PDF of this article, email dgage@advocis.ca. note1: Manulife calls the option this article takes advantage of “Additional Insurance.” Canada Life calls it “Future Insurability Option,” and RBC Insurance calls it “Future Income Option.” The purpose of this option is to allow a client on the policy anniversary, to increase their coverage by a contracted amount, without having to provide medical evidence, however financial evidence to justify the increase is typically required.

to age

Max. amount of increase per year

to age

$2,000

$1,000

$144.23

$2,550

$1,275

$80.59

$3,000

$1,500

TAX UPFRONT

BY JAMIE GOLOMBEK

Some Relief for Retirees How RRIF minimum withdrawals have changed for 2020

n March, as part of the response to the COVID-19 pandemic, the government passed legislation that lowered the minimum amount that must be withdrawn from a Registered Retirement Income Fund (RRIF) in 2020 by 25%, “in recognition of volatile market conditions and their impact on many seniors’ retirement savings.” This is welcome relief for retirees who may have suffered a decline in the value of their RRIFs since January 1, 2020. Here’s how the new minimum works and how the withholding tax will apply.

carrier must withhold 10% if the excess payment is up to $5,000, 20% if the excess payment is between $5,000 and $15,000, and 30% if the excess payment is more than $15,000. Note that these rates are only estimates of taxes owing, and since no tax is withheld at source on the minimum amount, RRIF annuitants may end up owing additional taxes when they file their personal tax returns, depending on their marginal tax rates, deductions, and credits. For purposes of determining the tax to be withheld from excess (above the minimum amount) RRIF withdrawals made in 2020, the government has stated that the regular minimum amounts are to be used.

LOWERED RRIF MINIMUM

PHOTO: ISTOCKPHOTO

The required minimum amount is based on a percentage factor (the “RRIF factor”) multiplied by the fair market value (FMV) of the RRIF assets on January 1 each year. For example, if the RRIF had a FMV of $100,000 and the annuitant was 71 at the beginning of the year (i.e., January 1), they would be required to withdraw $5,280 (5.28% X $100,000) in the year. The RRIF factor increases each year until age 95, when the percentage is capped at 20%. The new legislation decreases the required minimum withdrawals from RRIFs by 25% for 2020. The lower minimum withdrawal factors also apply to Life Income Funds (LIFs) and other locked-in RRIFs. Annuitants who have already withdrawn more than the lower minimum amount in 2020 will not be permitted to re-contribute the excess to their RRIF. These changes apply only for 2020, so the regular RRIF withdrawal factors will apply again starting in 2021. Example Calvin turned 71 in 2019 and converted his RRSP to a RRIF in December 2019. On January 1, 2020, the FMV of Calvin’s RRIF was $100,000. Using the regular minimum amount rates, he would have been required to withdraw at least $5,280 in 2020. Using

the lower minimum amount rates for 2020, Calvin will now only be required to withdraw $3,960 and can effectively leave $1,320 more in a tax-sheltered environment. Calvin is still free to withdraw more than $3,960, but he’s not required to do so. Calvin previously instructed his RRIF carrier to distribute the minimum amount to him through equal payments on the 15th of each month in 2020. For each of January, February, March, and April, Calvin has received $440 ($5,280 / 12), for a total of $1,760. If he decides to withdraw only the lower minimum amount of $3,960 in 2020, he could instruct his carrier to reduce his monthly payments to $275 ([$3,960 – $1,760] / 8) for the remaining eight months of 2020, starting in May 2020. Calvin can also choose to receive higher payments from his RRIF, perhaps to cover his expenses. If he does withdraw an amount in excess of the lower minimum amount, he may not recontribute the excess to his RRIF.

Example On January 1, 2020, Hobbes was 71 and had a RRIF worth $100,000. Absent the lower RRIF minimum amount for 2020, Hobbes would have been required to withdraw at least $5,280 from his RRIF in 2020. Under the lower minimum amount rules he will only need to withdraw $3,960 in 2020. What if Hobbes decides to withdraw one lump sum payment of $8,000 in 2020? The amount of tax that would be withheld on the withdrawal is $272 ([$8,000 – $5,280] X 10%) since the government is allowing the regular minimum amount to be used for purposes of calculating the withholding tax on excess payments. JAMIE GOLOMBEK, CPA, CA, CFP, CLU, TEP, is the managing director, tax and estate planning with CIBC Private Wealth Management in Toronto. HOW TO REACH US ON TWITTER: @advocis @deannegage

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The general rule is that when the annuitant receives annual payments from a RRIF in excess of the “minimum amount,” the RRIF

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MAY 2020 FORUM 31

ESTATE DILEMMAS

BY KEVIN WARK

Estate Deficiencies System reform is needed to bring estate planning into the 21st century

32 FORUM MAY 2020

mation. As is currently the case in B.C. and Quebec, the resource centre could also maintain a national register for wills and powers of attorney that can be searched upon the incapacity or death of a person to determine whether a power of attorney or will has been executed and its location. The resource centre might also be staffed with qualified specialists who would be available to provided limited types of estate planning advice on a fee for service basis.

THE PROBATE PROCESS suggestions on how Ontario and other provinces could make the system more “consumer friendly” while still covering off valid concerns relating to the testator having the capacity to make a will, minimizing the potential for undue influence, and avoiding fraudulent wills.

NATIONAL HARMONIZATION Like other areas of the law that benefit from a national approach (for example, provincial insurance legislation), the common law provinces should work together to develop a new legislative model for wills and powers of attorney. Having a national model would not only standardize the requirements for the preparation of these documents, but also ensure they are consistently interpreted in situations where the testator moves to another province, or where any of the executors/beneficiaries reside in different provinces.

NATIONAL RESOURCE CENTRE Concurrent with the national harmonization of legislation relating to wills and powers of attorney, a national resource centre should be developed. The resource centre would maintain up-to-date reference material relating to wills and powers of attorney including checklists, commonly asked questions, and other relevant infor-

My experience with the probate system relates primarily to Ontario, where quite frankly, probate is a messy process, taking up to six months in some locations. What is a bit confounding is the solution appears to be relatively easy. There’s no magic bullet to completing the probate application. A consumer user interface, similar to online tax preparation services linking with Canada Revenue Agency, would not only simplify the process but likely shorten the probate approval process by several months. For those provinces that charge probate fees based on the value of estate assets, this calculation could also be integrated into the overall system design. Currently, probate is paid by certified cheque or bank draft. Payment by Visa and Mastercard would also be appreciated! No doubt many good ideas exist on how to improve the system, and getting to the right solutions will take the input of multiple stakeholders. But given the massive transfer of wealth that will take place over the next 20 years, this appears to be a much needed and timely investment of resources. It will not only facilitate more people preparing their estate plans, but will also make it easier for attorneys and executors to properly do their jobs. KEVIN WARK, LLB, CLU, TEP, is the author of The Essential Canadian Guide to Estate Planning (2nd Ed.) and The Essential Canadian Guide to Income Splitting.

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number of people who have attended one of my presentations on the intricacies of estate planning have left those meetings with their heads spinning. This feeling of lightheadedness is certainly no fault of the attendees. The reality is that the current legal and tax system that governs estate planning is too cumbersome and complex for most people to navigate. The statistics seem to bear this out, as it is reported that more than 50% of adult Canadians do not have a valid will in place. The COVID-19 pandemic has made these deficiencies abundantly clear, as many people, motivated by dire circumstances to create or update their wills, have been frustrated by rules that appear to date back to the signing of the Magna Carta in 1215. One of the most significant barriers in most provinces is the statutory requirement for witnessing a will. These rules state that the testator must make or acknowledge his or her signature in the presence of two witnesses who are present with each other and with the testator at the same time. As well, a beneficiary (or the spouse of a beneficiary) should not be a witness or their bequest will be void. These rules make it difficult to legally execute a will in the face of the new legal norm of social distancing. Fortunately, Ontario (and hopefully other provinces will follow) has responded to this particular issue by passing an emergency order permitting “virtual witnessing” for wills and powers of attorney, provided that at least one witness is a licensee pursuant to the Law Society Act. This order will be in place for the duration of the declaration of emergency in Ontario. However, the end of the pandemic should not be an excuse to return to the norm. Instead, government-level responses to the pandemic also present the opportunity to reform the system in light of new technologies combined with consumer needs and preferences. Below are some

CORPORATE INSURANCE

BY GLENN STEPHENS

No Shareholders’ Agreement What happens when life insurance is paid without a proper business deal?

ife insurance advisors who work in the business market are all familiar with the advantages of having a properly funded shareholders’ agreement. In theory, the agreement is drafted in a way that, among other things, allows for a tax-efficient buyout on a shareholder’s death. At the same time, insurance is arranged with the appropriate ownership and beneficiary designations so that if a shareholder dies the proceeds can be readily applied toward the purchase as stipulated in the agreement. As illustrated by the case of Brown v. Laurie Estate, however, the theory does not always hold up in practise. Brad Brown and Lachlan Laurie were friends who started a jewellery store business in London, Ontario, in 2014. As part of the business arrangement, each of them personally acquired an insurance policy on the life of the other shareholder and named himself as beneficiary of any proceeds payable on the other’s death. Premiums were paid by the corporation, although apparently these were treated as a credit toward each shareholder’s compensation, and were therefore taxable to them. Beyond that, the corporation was not involved in the arrangement. Within a very short time after the issuance of the policies, Lachlan was diagnosed with terminal cancer. He died in November 2015, and insurance proceeds of $250,000 were paid to Brad as beneficiary of the policy on Lachlan’s life. A dispute arose between Brad and Lachlan’s widow, Donna, as to how the proceeds were to be dealt with. Donna took the position that Brad was obliged to use the proceeds to purchase Lachlan’s shares of the corporation, while Brad argued that there was no agreement in place and that he was entitled to retain the proceeds. This and other issues were argued before

a judge of the Ontario Superior Court in 2018. Having no formal shareholders’ agreement to put into evidence, Donna relied on certain other evidence, including the insurance advisor’s notation on the insurance application that the purpose of the insurance was “buy sell.” There was also a handwritten note on the agent’s file reporting a discussion with Brad and Lachlan about a “buy sell.” For Brad’s part, he was not only able to rely on the absence of a written agreement, but on an email that Lachlan had written him in May 2015, after he had become ill. In this email, Lachlan essentially suggested that Brad use $50,000 of the proceeds to help sustain the business, and then requested that he divide the remaining $200,000 between the two families. Brad argued that this email was a clear indication that Lachlan believed that no buy-sell agreement existed. The judge ruled in Brad’s favour in June 2018. He found that no agreement existed, and that notes made by the insurance advisor only implied that preliminary discussions regarding a buy-sell agreement had taken place. He placed significant weight on the above email that Lachlan had written to Brad a few months before Lachlan’s death. The court seemed satisfied that the two shareholders had a business relationship and mutual pecuniary interests, and that these factors were sufficient to justify the insurance arrangement even in the absence of a buy-sell agreement that would apply on death. In short, there was insufficient evidence to overturn Brad’s rights as the beneficiary of the policy. The Ontario Court of Appeal fully agreed with the lower court, and dismissed Donna’s appeal in a judgment dated March 2019. At first blush this may appear to be an

unfair and unreasonable windfall to Brad, especially when the evidence indicated that the value of Lachlan’s shares was substantially less than the proceeds Brad received. Nonetheless, it is hard to escape the conclusion that the court decisions were legally correct given the lack of evidence that an agreement existed. A few lessons may be taken from this case: 1. Clients should document their intentions. It seems reasonably clear that no

buy-sell agreement existed between the two shareholders, but there also wasn’t a document clearly indicating the parties’ intentions regarding how to deal with the proceeds. A clearer statement might have allowed the parties to avoid litigation. 2. Consider corporate ownership of insurance. While these policies were per-

sonal, suggestions in the judgments hinted that the insurance was at least partly intended to assist the business in the event of a shareholder’s death. In that case, the preferred route would have been to have the corporation be the owner and beneficiary of the policies. This might not have been enough to avoid a dispute between the parties, but it would have put the funds under the control of both Brad and Donna/Lachlan’s estate, as the two shareholders of the corporation, and would have made a settlement of the case more likely. 3. Consider a “temporary” shareholders’ agreement. There are many circumstances

where insurance is placed on the lives of shareholders where no shareholders’ agreement yet exists. In these circumstances, it is recommended that the parties execute what is essentially a temporary agreement that would deal with the buyout of a deceased shareholder, and with the use of the insurance proceeds, if the death occurs before the more comprehensive agreement can be completed. In the Brown case, such an agreement could have provided for a buyout of Lachlan’s shares at fair market value, and for any surplus proceeds to remain with Brad (or with the corporation, if that is what the agreement provided). This would likely have been enough to keep the parties out of court. GLENN STEPHENS, LLP, TEP, FEA, is the vice-president, planning services at PPI Advisory and can be reached at gstephens@ppi.ca. MAY 2020 FORUM 33

L O N G - S TA N D I N G C L U D E S I G N AT I O N H O L D E R S

The Institute for Advanced Financial Education honours longstanding CLU® holders – those who have held their designation for 25 years or more—demonstrating a longtime commitment to excellence in financial advice. We are honouring CLU designation holders who are celebrating 25, 30, 40, 50, 60 & 65 year increment milestones in 2020. 25-YEAR CLU DESIGNATION HOLDERS

Robert E. Jackson, Saundra L. Roll, CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., CHS W. Ralph Rose, CFP, CLU, CH.F.C. Brad W. Jardine, CFP, CLU, CH.F.C. Gordon J. Ross, CFP, CLU, CH.F.C., CHS Peter E. Aarssen, CFP, CLU, CH.F.C. Calvin Q. Joe, CFP, CLU, CH.F.C., RHUMr. Jan T Russel, CFP, CLU, CH.F.C. Lamar Boisvert, CFP, CLU, CH.F.C., CHSColin F. A. Jones, CLU, CH.F.C. Thomas B. Russell, CFP, CLU, CH.F.C. Anthony K. Bosch, Mr. Ben Brinder Joshan, Gordon E. Rymal, CFP, CLU, CH.F.C., CHS CFP, CLU, CH.F.C., CHS CFP, CLU, CH.F.C. Mr. Jeffrey Ian Schreiter, Alan R. Broadbent, John A. Karn, CFP, CLU, CH.F.C., CHS CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., CHS Mr. David Kohler, CFP, CLU, CH.F.C. Arnold J. Shell, CFP, CLU, CH.F.C. David A. Bruch, CFP, CLU, CH.F.C. Leanne M. Kotchonoski, Earl R. Shipmaker, CLU Michael Camacho, CFP, CLU, CH.F.C., CHS Mr. Charanjeet S. Sidhu, CFP, CLU, CH.F.C., CHS Barry G. Laberge, CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., CHS Bruce Caplan, CFP, CLU, CH.F.C. Mr. Roland Laframboise, Dan M. Sims, CFP, CLU, CH.F.C. Charles Caruana, CFP, CLU, CH.F.C., CHS CFP, CLU, CH.F.C. Kevin A. Smith, CFP, CLU, CH.F.C. David P. Cechini, CFP, CLU, CH.F.C. Janette L. Lim, CLU, CH.F.C., CFP Peter O. Snowling, CLU, CH.F.C. Sigmund V. Ceponis, Michael M. K. Lui, CFP, CLU, CH.F.C., CHS John E. Stregger, CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., RHU Mr. Sanjeev Malik, CFP, CLU, CH.F.C. David A. Swartz, CFP, CLU, CH.F.C., EPC Kelly J. Coulter, CFP, CLU, CH.F.C. Jacquelynne E. McFarlane, Mr. Ronald C. Sylvester, Heather M. Courneya, CFP, CLU, CH.F.C., CEA CLU, CH.F.C., EPC, CHS CFP, CLU, CH.F.C., RHU Patrick D. McGuire, CFP, CLU, CH.F.C. Daniel D. Tolmie, CLU John H. Crawford, CFP, CLU, CH.F.C. James E. McKeown, John S. Tompkins, CLU, CH.F.C. Duncan V. Davies, CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., CHS Clifford I. Toplis, CFP, CLU, CH.F.C., RHU Michael J. Denault, CFP, CLU, CH.F.C. Mark D. McMillan, CFP, CLU, CH.F.C. Barry F. Twerdun, CFP, CLU, CH.F.C. Jean R. Duguay, CFP, CLU, CH.F.C., CHS Mr. Kenneth McNaughton, Glen W. M. Ungar, CFP, CLU, CH.F.C. Peter G. Elkin, CLU, CH.F.C., CFP CFP, CLU, CH.F.C., CHS John V. R. Wark, CFP, CLU, CH.F.C. Mr. Brian Elle, CFP, CLU, CH.F.C. Ms. Izumi Miki McGruer, Geordie W. Watson, CLU David J. Field, CFP, CLU, CH.F.C., CHS CFP, CLU, CH.F.C., CHS Glenn T. Welch, CFP, CLU, CH.F.C., CHS Donald G. Flack, CFP, CLU, CH.F.C. Daryl M. Milleker, CFP, CLU, CH.F.C. Brian W. Wilkinson, CFP, CLU, CH.F.C., CIM Mark A. Foris, CFP, CLU, CH.F.C., CHS Wayne C. Mills, CLU, CH.F.C. Emeli R. Yacoub, CFP, CLU Danielle J. Genier, CFP, CLU Scott F. Moody, CFP, CLU, CH.F.C. Brian A. Zaba, CFP, CLU, CH.F.C. Scott T. Gilfoyle, CFP, CLU, CH.F.C. Mrs. Linda S Moulin, CLU, CH.F.C. Mr. Garry M. Zlotnik, CFP, CLU, CH.F.C. With more than 5,000 CLU® and CHS designation holders in good standing. The institute for advanced financial education is the leading designation body in canada for Robert B. Gillrie, CFP, CLU, CH.F.C. Robin W. Muir, CFP, CLU, CH.F.C., CSA financial services practitioners in the specialty areas of advance estate and wealth transfer, and living benefits. The institute provides a platform of standards and advanced Steve S. Halajian, CFP, CLU,programs CH.F.C.,and CHS Nobrega, CFP, CLU, knowledge through designation accreditation David services.P.Institute destinations speak CH.F.C. powerfully of a practice that is built on knowledge and a belief in the continuous refinement CFP, of thatCLU, knowledge. Jennifer Hamilton, CH.F.C. Lordy M. Numekevor, CLU, RHU Mr. Peter A Hammer, CFP, CLU, CH.F.C. Gerald R. O. O’Brien, 30-YEAR Donna J. Harrison, CFP, CLU, CH.F.C. CFP, CLU, CHS, CH.F.C. CLU DESIGNATION HOLDERS Lyle G. Harvey, CFP, CLU, CH.F.C., CHS Mark O’Farrell, CLU, CH.F.C., TEP, CEA Michael T Hazell, CLU Lloyd M. Osmond, CFP, CLU, CH.F.C. Nizar H. Abdulla, CLU, CH.F.C. Richard L. Holdham, Claudio Paolini, CFP, CLU, CH.F.C. Timothy G. Affolter, CFP, CLU, CH.F.C. CFP, CLU, CH.F.C., CHS Murray J. Parks, CFP, CLU, CH.F.C. Keith H. Ballantyne, CFP, CLU, CH.F.C. Frederick F. Hurdman, CFP, CLU, CH.F.C. Gordon E. Pilkington, CFP, CLU, CH.F.C. Colin T. Brown, CFP, CLU, CH.F.C. Catherine H Hurlburt, John W. Ponto, CFP, CLU, CH.F.C. Peter J. Buckley, CFP, CLU, CH.F.C., RHU CFP, CLU, CHS, R.F.P Robin J. Rankine, CFP, CLU, CH.F.C. David L. Bumstead, CFP, CLU, CH.F.C., CHS

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

Holding a CLU designation is proof of commitment to higher standards. Even under the most difficult economic circumstances, longstanding CLU designation holders have continued to help Canadians build and preserve their wealth.

Jacqueline A. Burger, CFP, CLU, CH.F.C. Alan J. Connors, CLU, CH.F.C. George R. F. Cook, CFP, CLU, CH.F.C. Michael J. P. Cowhig, CFP, CLU, CH.F.C. T. Alec Crossgrove, CFP, CLU, CH.F.C., CHS Jay D. Daley, CFP, CLU, CH.F.C. William E. Deacon, CLU, CH.F.C., CHS Mr. Raymond Di Rinaldo, CFP, CLU, CH.F.C. Gerald R X DSouza, CFP, CLU, CH.F.C. Mr. Luc Dupuis, CFP, CLU, CH.F.C. Mr. T. Paul Dyck, CFP, CLU, CH.F.C., CHS Kathie G. Dyck, CLU Marek A Foff, CFP, CLU, CH.F.C. David A. Gray, CFP, CLU, CH.F.C. Rick L. Green, CFP, CLU, CH.F.C. Felix M. Guerrero, CFP, CLU, CH.F.C. Paul G. Haslam, CFP, CLU, CH.F.C. Peter D. Jobe, CFP, CLU, CH.F.C. Brent T. Johnson, CLU Harris M. Jones, CFP, CLU, CH.F.C. Mr. Gordon L Keon, CFP, CLU, CH.F.C. Garry P. Kopeck, CFP, CLU, CH.F.C. Gordon P. Kroeker, CFP, CLU, CH.F.C. John D Landry, CFP, CLU, CH.F.C. Ms. Joan Lane, CFP, CLU, CH.F.C. Rejean M. Laverdiere, CLU Ramsey (Ian) MacKinnon, CFP, CLU, CH.F.C. Donald L. MacLeod, CFP, CLU Ned W. Mazur, CFP, CLU, CH.F.C. J. Douglas Mccreary, CLU, CH.F.C. Robert M. McEachern, CFP, CLU, CH.F.C. Douglas G. Medley, CFP, CLU, CH.F.C. Alden R. O’Brien, CLU, CH.F.C. Mr. Stephen J ONeill, CFP, CLU, CH.F.C. Kenneth E. Prentice, CFP, CLU, CH.F.C. Dale M. Rafuse, CFP, CLU, CH.F.C. Donald A. Rawding, R.F.P., CFP, CLU, CH.F.C., RFP Ronald G Reid, CFP, CLU, CH.F.C. Joseph J. Ruddell, CLU, CH.F.C. Dale M. Sandles, CFP, CLU, CH.F.C. Joseph R. Secord, CFP, CLU, CH.F.C. Mr. Timothy M. Shmigelsky, CFP, CLU, CH.F.C. Denis E. Smith, CLU, CH.F.C. Anthony P. Vossenberg, CLU, CH.F.C., CHS Paul J. Walker, CFP, CLU, CH.F.C. Andrew D. Wilkin, CFP, CLU, CHS, CH.F.C. James M. E. Wilson, CFP, CLU, CH.F.C. Debbie Wolfe, CFP, CLU, CH.F.C.

Mr. Daniel Wong, CFP, CLU, CH.F.C. Mr. William Yeung, CFP, CLU, CH.F.C.

50-YEAR CLU DESIGNATION HOLDERS

40-YEAR CLU DESIGNATION HOLDERS

Hugh A. Arrison, CFP, CLU, CH.F.C. Keith R. Coles, CFP, CLU, CH.F.C., TEP Cecil L. Paull, CFP, CLU, CH.F.C. William A. Teeter, CLU, CH.F.C.

Mr. Sam Albanese, CFP, CLU, CH.F.C., FLMI Gordon D. Anderson, CFP, CLU, CH.F.C. James M. Anderson, CLU Paul R. Bourbonniere, CFP, CLU, CH.F.C., CHS Russell M. Chapman, CLU, CH.F.C. Mr. Donald B Couse, CFP, CLU, CH.F.C. Claude Y. De Cosse, CLU Dale A. Ens, CFP, CLU, CH.F.C., CHS Robert L. Fowler, CLU Jerome L. Gedir, CLU David J. Gowmon, CLU Dwight W. Hickson, CLU Mr. Charles Keith Inches, CLU, CH.F.C. Winston R. Johnson, CLU David A. Johnston, CLU Lawrence B. Joseph, CLU, CH.F.C. Chris D. Leroux, CFP, CLU, CH.F.C. Donald G. Lumb, CFP, CLU, CH.F.C. Gordon Mayede, CFP, CLU Robert M. McLaughlin, CFP, CLU, CH.F.C. Daniel T. McNeil, CFP, CLU, CH.F.C. James A. Millar, CLU, CH.F.C. Murray D. Morton, CFP, CLU, CH.F.C. Vincent L. Murchie, CFP, CLU, CH.F.C. Robert W. Owens, CFP, CLU, CH.F.C. Joseph M. Pal, CFP, CLU, CH.F.C. Richard E. Reynolds, CFP, CLU, CH.F.C. David G. Sherwin, CLU Andrew G. Simpson, CFP, CLU, CH.F.C. Michael W. Slota, CFP, CLU, CH.F.C. Donald L. Smith, CLU, FEA, TEP Randy Kent Soon, CFP, CLU, CH.F.C. Kerry E. Southorn, CLU, CH.F.C., CHS W. Michael Thomas, CFP, CLU, CH.F.C., CHS John E. Wahl, CFP, CLU, CH.F.C. Michael D. Wrenshall, CLU Barry C. Wright, CFP, CLU, CH.F.C.

60-YEAR CLU DESIGNATION HOLDERS Cyril Newman, CLU

65-YEAR CLU DESIGNATION HOLDERS John A. Bowden, CFP, CLU, CH.F.C. Joseph Dickstein, CLU William P. Hair, CLU Mr. Harry Stein, CLU

For more information on the CLU designation, please visit www.iafe.ca/clu

The Institute for Advanced Financial Education™ (The Institute™), CLU® and CH.F.C.® are trademarks of The Financial Advisors Association of Canada (TFAAC). The Institute is a wholly owned subsidiary of Advocis®. Copyright © 2018 TFAAC. All rights reserved. Unauthorized reproduction of any images or content without permission is prohibited. Financial Planning Standards Council is the marks licensing authority for the CFP® marks in Canada, through agreement with Financial Planning Standards Board Ltd. CAIB® is a registered trademark of the Insurance Broker Association of Canada. F.Pl. is a registered trademark of the Institut québécois de planification financière. FEA® is a registered trademark of the Family Enterprise Xchange.

LEADERSHIP & GROWTH

BY JONATHAN SCHJOTT

I’m All Ears Are You Really Listening?

hen was the last time you really listened to someone? Listened without thinking about what you wanted to say next, without glancing at your phone, finishing the other person’s sentence, or jumping in to offer your opinion? When did you last listen so intently in a coaching session that your advisor finished with “Wow! You totally get it!” The ability to listen to has been replaced by conversational grandstanding — with each party believing that what they have to say is of paramount importance. Have you ever caught yourself doing this? Waiting politely for the other person’s lips to stop moving so you can talk. Maybe you nod quickly to move the other person along. Or sneak glances at your phone, lightly tap the table, or take a peek over your shoulder to see if there is someone else you could be talking to. Or, you lose track of what the other person is saying because you are formulating your own commentary or response. And yet, listening is far more important than speaking. It is only by listening that we can truly connect with others. It’s fundamental to any successful partnership. None of us are good listeners all the time. It’s human nature to get distracted by what’s going on in your own head. Listening takes effort. Listening is a skill that you can develop and improve.

BAD LISTENING BEHAVIOURS If you’re like most people, you get aggravated when people don’t listen to you. So, what does it mean to be a good listener? Since most people have experience with what makes them feel ignored or misunderstood, here are some of the most often cited bad listening behaviours: • Interrupting • Responding vaguely or illogically • Looking at a phone or around the room • Fidgeting 36 FORUM MAY 2020

If you do these things, stop. This alone won’t make you a good listener, but it’s a start. Next, if you can stop interrupting and listen for a few moments, notice what you are listening for. Are you: • Listening for opportunities to jump into the conversation? • Listening for a chance to tell your perspective or viewpoint? • Listening to your own thoughts? • Listening to how you can benefit? What many people tend to notice is that we only really listen a small percentage of the time. As leaders, it is our job to listen to truly understand the perspective of our advisors. Without developing this skill, it’s likely we’ll miss opportunities to help our people grow.

HOW TO DEVELOP GOOD LISTENING SKILLS The best listeners focus their attention. To listen well is to figure out what’s on someone’s mind and to demonstrate that you care enough to know. Listening requires curiosity. In Michael Bungay Stainer’s book, The Coaching Habit, he encourages coaches to ask better questions, actually listen to the answer, and to stay curious just a little while longer. This may sound simple, but in practise, it can be extremely difficult. The majority of us have no idea what kind of vibe we give off when we’re listening — or not listening. Start by being aware of what your body is doing. Facing the speaker, looking into their eyes, nodding your head, and, where appropriate, taking notes are good places to start. And make sure to smile. Lots of us fall victim to a blank poker face during conversation. What you want to have is a curious expression with what I call a “25% smile.” It’s just a little smile to remind your advisor that you’re listening, you’re curious, and interested in hearing more. And don’t reserve this expression just for important conversations. Hone your

skills by practising at home over dinner, while making conversation with strangers on the bus, or at your kid’s baseball game. Eventually, this will become a habit. You’ll notice an immediate impact in those who are speaking with you. They will open up more and you will both get far more from the conversation. Next comes asking the right questions. Anyone can be interesting if you ask the right questions. If you find someone dull, it may be on you! In How to Win Friends and Influence People, Dale Carnegie wrote: “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get people interested in you.” You already know about you! You don’t know about the other person. Once you’ve asked the right questions, ask more questions. A trap we all fall into is assuming we know what the person is saying and understand them. We normally don’t. Finally, listen patiently and ask the right follow-up questions. With a deeper understanding of what’s on their mind, you’ll become more effective at helping them find solutions. Not only will this help you become a better coach, it will also serve to strengthen the professional relationship you have with your advisor. Listening takes effort. And though it requires you to let people speak, it doesn’t mean you remain forever silent. In fact, the depth and quality of your response is the measure of a good listener. And this will only happen if we slow down and take the time to listen. Stay curious. JONATHAN SCHJOTT, CLU, CFP, CHS, is regional vice-president, insurance brokerage at RBC Insurance. 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. HOW TO REACH US On Twitter: @advocis @deannegage On Facebook: facebook.com/advocis On LinkedIn: linkedin.com/company/advocis

AdvocisNews ASSOCIATION UPDATES AND EVENTS

CHAPTER NEWS Sold-Out Crowd Attends International Women’s Day Event

n March 4, the Advocis Toronto chapter hosted its 2nd annual International Women’s Day event. Held at the Sheraton Centre Hotel in Toronto’s financial core, attendees enjoyed a morning of education, networking, and surprises. Guest speakers included Shannon Lee Simmons, founder and owner of the New School of Finance. The event also featured a panel of women who shared their stories of success, including Sara La Gamba, CFP, CLU, CHS, TEP, associate advisor at Sheffar Potter Muchan Inc.; Catherine Wood, CFP, CLU, MISt., ICD.D, chief strategy officer at Coast Capital Savings; and Veena Daddar, BSc. Hons, CFP, CLU, CH.F.C, CHS, principal at Pyramid Wealth Management Inc. Jaclyn Nemethy, BSc, CHS, CLU, sales director at iA Financial Group (Industrial Alliance), acted as panel moderator.

Advocis Toronto chapter board members: From left to right: Robert Fleischacker CLU, CFP – past president; Cindy Marques CFP – membership chair; Jannet Gibson – administrator; Cathy Harman CFP, CLU, CHS – president; Jaclyn Nemethy CFP, CLU, CHS – programs chair; Kathryn Bennett LL.B,TEP – best practices chair; Graham Bergsma – GAMA representative; and Adrian Altamirano CFP, CIM, FCSI – communications chair.

Cathy Harman, president, Advocis Toronto, addresses the crowd at International Women’s Day 2020 with opening remarks.

Shannon Lee Simmons, CFP, CIM, founder and owner of the New School of Finance, stresses the importance of listening to the client’s tone and emotion when meeting with them.

Panellists Sara La Gamba; Veena Daddar; Catherine Wood; and Jaclyn Nemethy, moderator, discuss the different stages of their career and challenges that they as women faced in their careers, and how they handle it.

Cindy Marques, membership chair, Advocis Toronto, discusses the PFA program and Why Become an Advocis Member?

Advocis National staff attending International Women’s Day 2020: left to right: Christine Arezzi, associate director, education; Jasna Miovska, associate director, ABS; Amanee Nassereddine, chapter relations coordinator.

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AdvocisNews A Message from Abe Toews, Advocis chair

s I mentioned in my message to the membership in April, it is in times like these that we can show real value to our clients. The uncertainty may prompt them to make short-term decisions with long-term consequences. We can listen and help talk them through their concerns, providing guidance on what may be appropriate actions and — more importantly — non-actions. While governments and central banks around the world take financial and economic steps, and the local health authorities are putting protocols in place for our safety, our clients need someone to help them figure out how this will affect them personally. That someone is you — their financial advisor. During a time of crisis there are always opportunities. All of you are doing business differently today than you did as little as six weeks ago. You and your staff are working remotely; using a lot more technology and spending more time talking with your clients. As we look forward to going back to a more “normal” way of doing business, how will this experience change the way you provide service to your clients? Should it? I would encourage you to take some time during the next few weeks to review your business practices. We know that revenues may be more challenging for some time, so this may be a good time to retool your practice. While you work at providing meaningful service and advice for your current clients, this can also be a great time to reach out to those who may not have an advisor. While you are speaking with your clients, ask if their friends or family have similar concerns. Invite them to call you with no obligation. Again, we will get through this together, and your clients will appreciate you all the more for it. Remember, clients need advice now more than ever — that is what sets you apart from all the others. Thank you. Please stay safe.

IN MEMORIAM Richard Newton, 1944–2019

dvocis was saddened to learn of the passing of Richard (Rich) Newton, CFP, on December 25, 2019. Rich joined Advocis in 1968 and remained a proud member for 52 years. He served the Greater Niagara chapter board executive as a volunteer from 1999 onwards, primarily in the role of treasurer. We send our condolences to his family and friends.

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he Advocis Vancouver chapter hosted its first online seminar in the wake of COVID-19: Lead or Be Left Behind with Robert Gignac. The engaging presentation offered concrete examples of what clients and prospects are struggling with today and how Advocis members can take a leadership role. Advocis chapters across the network will be offering virtual opportunities for CE, fellowship, and professional development. For upcoming dates and information visit: https://www.advocis.ca/chapters/EventCalendar.aspx

NOTICE OF ANNUAL GENERAL MEETING OF MEMBERS The Annual General Meeting (“AGM”) of Members of The Financial Advisors Association of Canada carrying on business as Advocis (“the Association”) will be held exclusively online this year due to the restrictions in place for the COVID-19 pandemic. Online voting for the 2020 AGM will be available from no later than June 1, 2020. Items for approval by the membership include: • Minutes of 2019 Annual General Meeting • Appointment of the Auditor for the next fiscal period • Election of Directors • Receive the audited financial statements for the financial year ended December 31, 2019 and the Auditor’s Report • Any other business THE AGM of Members of The Institute will also be held exclusively online due to the restrictions in place for the COVID-19 pandemic. Online voting for the 2020 AGM will be available from no later than June 1, 2020. Items for approval by the members of The Institute include: • Minutes of 2019 Annual General Meeting • Appointment of the Auditor for the next fiscal period • Receive the audited financial statements for the financial year ended December 31, 2019 and the Auditor’s Report • Any other business

FINAL WORD

Professionalism and Crisis BY GREG POLLOCK

ad COVID-19 not begun to eclipse every aspect of our lives, this column would have no doubt been solely in celebration and recognition of Advocis’s Professional Financial Advisor (PFA) Designation, and the launch of our inaugural class working toward it. This launch went forward on April 1 because Advocis made that commitment — and through a remarkable execution of transitioning our entire national staff to working from home, we have kept it. Advisors are an equally resilient bunch, and I’m pleased to say that our first official cohort is already successfully balancing their PFA studies with family, working in isolation, and — as always — meeting the needs of clients. At the same time, pretending that these events are not casting a shadow of uncertainty over what the long economic recovery from COVID-19 may look like would be doing a disservice to the truthfulness and professionalism that Canadians need from us more than ever. Indeed, as government and financial professionals continue to respond to and cope with the crisis, it is becoming clear that the professionalism that our new designation represents is at the heart of how we can help individuals, families, and businesses stay secure and healthy. COVID-19 has created an opportunity for advisors to act in a role closer to genuine national service than they have ever had before, and Advocis has been here to help members answer that call. For starters, we launched the COVID-19 Member Resource Centre (MRC), a continuously evolving online resource to provide members with a one-stop shop for the latest updates and resources to help them understand and work with their clients on all things related to COVID-19. The MRC features articles of interest, links to modules from our educational offerings on a free or reduced-cost basis, and information on the rapidly shifting regulatory landscape. It has also become a central hub for relevant updates from Advocis itself, including details on our efforts to work with government so members can best plan for the continuity of their business, and spend as much time focused on their clients, as possible. As we mentioned in one of our

earliest communications to members: We are here to take care of you so you can take care of them. And to expand the help that members can offer even further, we have also now launched Advocis Connect. This free online program matches our financial advisors with small business owners across Canada, offering them a complimentary session with members to work through high-level financial concerns and directing them toward government relief programs that can help. As of this writing, literally hundreds of members have stepped up to volunteer for this program, and we are already making connections that we believe will have an impact on business owners as they navigate what could be the most challenging period of their livelihoods. Of course, Advocis also realizes the impact that COVID-19 is having on the day-to-day operation of your business as well. That is why we are doing everything we can to alleviate pressure on members, including an extension of our deadlines for membership renewal, expanding the time frame for PFA enrolment, and other provisions that will likely be in place by the time you are reading this. Like you, we are taking this unprecedented situation and adapting to it daily. We remain optimistic because we trust each other to stay focused, to work as a team, and to be patient as members of our medical and scientific communities around the world collaborate to develop the treatments, equipment, and testing capacities that will enable us to overcome this pandemic. From speaking to advisors, I believe that we have already learned a great deal about what it means to take care of each other, our families, and our communities. I am confident that all of our members will come away from this experience with greater compassion and understanding — qualities that can only benefit their practise as financial advisors in the future. In that future, we will be here to support you — as we always have been. GREG POLLOCK, CFP, is the president and CEO of Advocis.

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