Working with a professional financial advisor: Worth more than 1%?

Like many investors considering working with a financial advisor, you have probably asked: “What will I get for the fee I’m paying?” The simple answer: a professional dedicated to helping you stay focused on your financial plan to help achieve your financial goals.

Please click here to read more about the significant value you'll receive from working with a professional financial advisor.

Understanding the Costs of Mutual Fund Investing

There are many different investment options available to help you reach your financial goals. Regardless of which investment you choose, it is important to understand the costs involved and how they can affect your investment. Click here to learn more about the investment costs related to a very popular type of investment: mutual funds.

What is a mutual fund?

A mutual fund is an arrangement under which shares or units are sold to raise capital.

Investors purchase units if the mutual fund is a trust or purchase shares if the fund is a corporation. When you invest in a mutual fund, your money is pooled with the money of other investors and invested on your behalf by the fund manager. Mutual fund trusts and corporations are also known as flow-through entities.

For tax purposes, a flow-through entity treats the taxable income earned inside the entity as if you held the investments directly, instead of through the fund. The income that is distributed, or flowed out to you, keeps its identity. For example, dividend income remains dividend income, and capital gains remain capital gains when they are flowed out (or distributed) to investors.

For more information, please contact me.

Source: Canada Revenue Agency

Tax-Free Savings Account (TFSA)

The Tax-Free Savings Account (TFSA) allows Canadians, age 18 and over, to set money aside tax-free throughout their lifetime. Each calendar year, you can contribute up to the TFSA dollar limit for the year, plus any unused TFSA contribution room from the previous year, and the amount you withdrew the year before.

The annual TFSA dollar limit for 2017 is $5,500.*

All income earned and withdrawals from a TFSA are generally tax-free. Plus, having a TFSA does not impact federal benefits and credits. It's a great way to save for short and long-term goals.

To learn all the facts, please contact me.

* For more information, please visit Canada Revenue Agency's TFSA website.

Registered Retirement Savings Plan (RRSP)

An RRSP is a retirement savings plan that you establish, that is registered with the Canada Revenue Agency, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax.

Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan.

To learn all the facts, please contact us.

Registered Education Savings Plans (RESPs)

A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter).

Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.

There are two different types of RESP available: family plans and specified plans.

For more information, please contact me.

Source: Canada Revenue Agency

Registered Retirement Income Fund (RRIF)

A RRIF is a fund you establish with a carrier and that is registered with the Canada Revenue Agency. You transfer property to the carrier from an RRSP, RPP, or from another RRIF, and the carrier makes payments to you. Establishing a RRIF can be done at anytime, but must be done no later than the year the annuitant turns 71. Once a RRIF is established, there can be no more contributions made to the plan nor can the plan be terminated except through death.

You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs.

For more information, please contact us.

Source: Canada Revenue Agency

Premier Investment Program

The Premier Investment Program is a fee-based account that offers a range of investment services and the ability to hold a wide variety of investment products including mutual funds and individual stocks and bonds. Virtually every investment offered at Manulife Securities can be held in a Premier plan.
In addition to transparency, objectivity and accountability ­– the hallmarks of a fee-based account – the Manulife Securities Premier Investment Program can benefit my clients in a number of ways:

  • You pay for advice, not trades – transactions are incidental and are not the differentiating factor in assessing the value I offer
  • Advisor compensation is completely transparent and agreed upon, and because the costs associated with trades or other services are reduced or eliminated, you can fully understand what you’re paying for your investments

The fee-based solution provides the medium for developing a strong, customized portfolio at a cost that is generally less than the cost associated with traditional mutual funds.

  • Fees can be paid outside of your portfolio; this means your portfolio return need not be reduced to pay fees and assets can grow faster
  • When a fee is paid for investment advisory services on a portfolio outside of an RRSP, the fee is generally tax deductible
  • Because compensation can be based on portfolio value, fees will rise or decline based on the performance of the portfolio; this assures you that my primary interest is the growth of your portfolio

To learn more, please click here or contact me.