Ontario is finally regulating the terms financial planner & financial adviser

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The recent 2019 Ontario Budget finally introduced a proposal that is long overdue – formally regulating the terms financial planner and financial adviser. While specific details about proficiency standards are yet to come, most of us in the financial advice and investment industry are eager to have a valid framework in place as soon as possible.

There is a difference between a financial adviser and a financial planner. A financial adviser typically helps clients manage their investments, while a financial planner helps clients identify and meet major goals, such as retiring comfortably or paying for a child’s education. While appropriate licensing is required for someone to advise in the purchase or sale of a mutual fund, a stock, or an insurance policy, anyone can offer general financial advice without any evidence of qualification. As a result, many investors can fall prey to a regular stream of frauds and incompetent advisers.

For the past few years, our industry has been focused on a few key issues, such as the fees investors pay. While regulators have concerns with respect to their transparency, many players in the industry seem to be focused on whether or not they are too high in terms of their fees. Both of these perspectives are important, but miss the point.

In my view, the big issue is whether or not the advice is qualified, competent, and valuable. How one pays for it, and what one pays for it, are secondary.

It’s critical that investors are able to tell financial advisers apart, first to help protect themselves from fraudsters, and second, to help guide them to properly qualified practitioners. You don’t have to spend too long on Google or reading newspapers to find stories about investors being scammed out of their money. But regulating the use of financial adviser and financial planner titles is a simple and effective first line of defence against criminals. It’s like locking your doors and closing your windows.

Today, Canadians are facing a retirement-income crisis. Here’s what is driving the severity and urgency of the problem:

  • The fastest growing segment of the population is baby boomers. By 2024, one in five Canadians will be over 65.
  • Fewer than 23 per cent of tax filers made an RRSP contribution in 2016, according to the most recent data from Statistics Canada. The result is that there is nearly $1-trillion in unused RRSP contribution room available.
  • While TFSAs are popular, they are used as much for short-term savings as for long term, with 47 cents in withdrawals for every $1 contributed.

According to MNP, a leading consulting firm for accounting, tax and business, 46 per cent of Canadians are within $200 of financial insolvency.

The fact is more Canadians are reaching retirement age faster than we realize. And they are getting there with less money put aside in order to live longer than they expect to. There is a sense here of burning the candle at both ends.

While many things can impact your economic reality, it is clear that financial illiteracy is widespread. Most Canadians are really passengers in their own financial lives and are headed for disaster. When they do decide to grab the wheel, most of them need help, advice, and assistance to get back on track. When they seek the help of a professional, they deserve to get qualified, experienced advice. Indeed, a great adviser can make an enormous difference.

But lousy ones can derail us in disastrous ways. An important aspect of my work is something I refer to as “forensic financial planning.” It involves finding and correcting the damage that bad advice has done. Think of dentists who must fix problems other dentists have created. But then not everyone can be a dentist. My industry is different since, until now, anyone could hang a shingle.

What kind of mistakes happen? Here are four big ones:

  1. The incorrect use of leverage.
  2. Over-allocating to securities that are high-risk.
  3. Buying mutual funds that are too expensive and proprietary.
  4. The excessive use of whole life insurance.

And this is only the tip of the iceberg. Often the salesperson is well meaning, but not particularly competent. Let’s hope that this new initiative from the Ontario government makes it easier for clients/consumers to find qualified professionals.

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I want to become a general insurance agent. What are the qualifications and how do I apply? Here’s how.

Swap These Financial Stocks to Reduce Risk

Victoria Hetherington

Rising household debt, falling house prices, slowing credit applications – it’s a wonder anyone is still buying shares in Canada’s Big Six banks. Indeed, from financing weed suppliers to exposing itself to a potentially volatile American market, big Bay Street bankers may be too rich by half for the low-risk appetites of domestic investors looking to them for stability.

Take Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), with its exposure to the U.S. economy, for instance. Scotiabank does substantial business south of the border, and as such may have left itself vulnerable to the potential of a widespread market downturn in the U.S. Even with this leg up, though, it still managed to underperform the Canadian banking industry as well as the TSX index for the past year.

More shares have been bought than sold by Bank of Nova Scotia insiders in the past three months, though not in vastly significant volumes. The usual boxes are ticked by its value, indicating P/E of 10.6 times earnings and P/B of 1.4 times book, while a stable dividend yield of 4.88% is augmented by a good-for-a-bank-stock 6.6% expected annual growth in earnings.

Again, overexposure to the United States market is an issue with Bank of Montreal(TSX:BMO)(NYSE:BMO). Specifically, this comes from BMO Harris Bank, a large personal and commercial bank; BMO Private Bank, which offers wealth management across the U.S.; plus BMO Capital Markets, an investment and corporate banking arm of the parent banker.

With year-on-year returns of 8.1%, BMO outperformed the industry and the market, and as such seems a safe bet on the face of it. Its one-year past earnings growth of 24.6% shows rapid recent improvement given its five-year average growth rate of 6.1%. Meanwhile, a P/E of 11.3 times earnings and P/B of 1.5 times book show near-market valuation, and a dividend yield of 3.9% is matched with a 3.6% expected annual growth in earnings.

Try the “insulated” alternatives

An example of domestic alternative on the TSX index would be Laurentian Bank of Canada (TSX:LB). Although its one-year past earnings dropped by 4.2%, a five-year average past earnings growth of 14.3% shows overall positivity, while a P/E of 9 times earnings and P/B of 0.8 times book illustrate Laurentian Bank of Canada’s characteristic good value. A dividend yield of 6.3% coupled with a 9.2% expected annual growth in earnings gives the Big Six a run for their money.

Alternatively, Manulife Finanical (TSX:MFC)(NYSE:MFC) offers a way to stick with financials but ditch the banks. This ever-popular insurance stock was up 2.33% in the last five days at the time of writing and is very attractive in term of value at the moment, with a P/E of 10.3 times earnings and P/B of 1.1 times book.

Manulife Financial’s 3.5% year-on-year returns managed to beat the Canadian insurance industry, but just missed out on walloping the TSX index’s 4.2%. In terms of the company’s track record, its one-year past earnings growth of 138.1% eclipsed the market and its industry, though its five-year average is sadly negative. Its balance sheet is solid, however, with its level of debt reduced over the past five years from 60.2% to the current 41% today.

The bottom line

Sidestepping banks may be a shrewd move at the moment, with other forms of financials offering a more insulated route to a broader space. While more regionalized banks like Laurentian Bank of Canada are one option, stocks like Manulife Financial, with its dividend yield of 4.17% and 11.3% expected annual growth in earnings offer a similar but less risky play on the TSX index’s financial sector.

The Top 10 Tips For Spring Cleaning Your Finances

Excerpted article was written, by

Wade Stayzer is Meridian’s Vice President, Sales & Service

Taking time this spring to get your house and finances in order will benefit you and your family in the long run. Following are 10 tips for spring cleaning your finances.

1. Take Stock. Now’s the time to take a long hard look at your where your money resides, and what it’s doing for you. Ask yourselves the following questions and make sure you’re able to find the answers: What do I have? Where are my investments? What investments are making money for me and my family, and what ones are not? How are my funds dispersed? At the end of the day, you want to make sure that you’re getting the most “bang” for your buck so make sure to find out all of the details regarding your money so that you can determine if there needs to be any changes made.

2. Review Your Budget. Do you have a budget and if so, do you stick to it every week? If the answer is “no,” you’re not alone. If the answer is “yes,” it’s always good to prioritize the time required to find out where your money is going to every month. How family dollars are being spent is a key part of getting your finances in order.

3. Credit Where Credit is Due. Do you know what’s on your credit report? Did you know that one incorrect or negative item can make a considerable difference in how much money a bank could lend you, or whether you get a preferred rate on a loan or credit card? Order your credit report and get down to business — is everything correct? Are there mistakes? Are outstanding items still appearing, e.g. bankruptcy, etc.? Find out what’s said about you financially and make sure that there are no costly mistakes listed.

4. Commit to Saving More. It may seem difficult to do but taking stock of the amount of money being saved per year then committing to saving just a little bit more will make the world of difference to your finances of the future. Double check the amount of money in your emergency fund and/or savings account and commit to increasing it by a small percentage per year. An incidental amount that won’t be missed in the short term can make a considerable difference towards your long-term retirement funds.

5. Automate. If you haven’t already, get online and automate your monthly payments, wherever possible. Doing so will saves you the worry about paying your bills on time and will allows you to keep track of your debits and credits easily.

6. Pay it Down. Make a plan to reduce or eliminate your debt altogether for the coming year. This will need to be done by taking a long hard look at how money is spent and coming up with a plan for how you can effectively pay off money owed while still saving. Though it may seem counter-intuitive at first, it is possible, and will ultimately result in your having more disposable income to reinvest.

7. Better Safe Than Sorry. Do you have a place for your important documents? Outside of your home, are there backup documents elsewhere, such as in a safety deposit box or digital backups in a Cloud-based account? If not, it’s important to do so right away as we can never be sure of when a situation may occur where important information is, unfortunately, lost or destroyed. Having a back up plan doesn’t have to be complicated. Options for doing so include giving copies of important information to a trusted friend or family member to store in another location, or providing copies to your lawyer.

8. It Will Be Done. They say that there is nothing certain in life but death and taxes, and this is found to be no more true than when a loved on dies. As part of your financial spring cleaning, make sure to get your will in order so that there are no surprises or disputes in the event of an untimely death. Details regarding your kids’ guardianship, allocations of funds and related items should be clearly outlined in this important document.

9. Review Your Contracts. Take this time to review your supplier and vendor contracts such as your phone/TV and internet service providers. Take this time to review your contracts and ask your suppliers for a better rate or package.

10. Insure and Ensure Your Future. Do you understand all of the details of your insurance policy? How much are you paying, and what will you or your loved ones receive, in the event that insurance funds are required? Take this time of the year to review all policies, including Life Insurance, Home and Auto Insurance to confirm that you have the best policy and rates that suit your particular family situation.

Source: The Huffington Post

Two-thirds of Canadians enter 2019 worried about the economy

NEWS PROVIDED BY

Financial Planning Standards Council 

TORONTOJan. 21, 2019 /CNW/ – Two-thirds of Canadians enter 2019 worried about their financial fortunes, according to a recent economic poll. The Kitchen Table Forecast, a Leger poll of 1,515 Canadians, was conducted for non-profit organizations Financial Planning Standards Council (FPSC) and Credit Canada.

The survey sought to add consumer context to reports on slowing economic growth by asking Canadians about a series of “kitchen table” issues – the sort of daily financial concerns that confront people on a daily basis, such as bill payments and debt, cost of living, job security and bankruptcy. It comes on the heels of a global report by The Organisation for Economic Co-operation and Development (OECD) that suggests Canada is showing signs of a sharp decline in growth in 2019.

“Canadians are feeling stressed about their finances and are often at a loss to improve their situation,” said author, personal finance educator and FPSC’s Consumer Advocate, Kelley Keehn. “This hopelessness can cause people to do nothing, and possibly make their condition worse. Uncertainty about an ever-changing job market and economy only intensifies the average person’s confidence and ability to handle the ebb and flow that life inevitably presents.”

The “R word” – Four-in-10 Canadians feel economy will get worse in 2019
The report didn’t ask about the dreaded “R-word” (recession) specifically; however, four-in-10 Canadians (42%) feel that the economy will get worse in 2019 – while 36 per cent believe it will stay the same. Across the country, people aged 55-plus are significantly more likely than those under 55 to feel the economy will get worse in 2019 (47% vs. 39%). Meanwhile, Quebecers (at 46%) are more confident than the rest of Canadians (34%) that the economy will stay the same in 2019.

“It’s no surprise people over 55 are more pessimistic (or realistic) when it comes to our economy. This isn’t their first rodeo and they know the red flags,” says Credit Canada CEO, Laurie Campbell. “Insolvency rates were up by more than five per cent last fall, we’ve seen five interest rate hikes since mid-2017, and the cost of living continues to rise. If debt levels don’t come down and people don’t start to get serious about paying off their debt, it’s only a matter of time before we’re in major trouble. You can only bury your head in the sand for so long.”

Looking ahead – Daily financial concerns 
Respondents were also asked the question “Looking ahead into 2019, what are you most worried about?”  Overall, two-in-three Canadians (67%) say they have worries when forecasting their prospects for the year. While gender does not play a role, those under 55 are considerably more likely to be worried (76% vs. 52% for those over 55). Respondents with children under 18 are also more likely to have concerns (79% vs. 62% for those without children).

Here are the “kitchen table” issues that are keeping Canadians up at night:

  • 34 per cent are concerned that the increased cost of living will put them further in debt
  • One-in-four (23%) are concerned they won’t be able keep up with monthly payments
  • Also, one-in-four (23%) are concerned with their debt growing
  • 13 per cent are concerned about losing their job
  • 10 per cent are concerned about other bread-winners in their home losing their jobs
  • 14 per cent are concerned about an unaffordable increase in mortgage interest rates
  • Five per cent are concerned about going bankrupt

Alternatively, one-in-four Canadians (26%) were “not worried about anything” going into 2019.

How to recession-proof your life – tips from FPSC’s Consumer Advocate, Kelley Keehn

  1. Get your emergency fund established and funded.  Experts estimate three-to-six months of household income that’s safe and secure.
  2. Do a family net worth statement.  Know your situation and know where you may be leaving money on the table, like with an employer-funded pension plan or employer RRSP matching plan.
  3. Consider your insurance needs during times of high debt in the case of death, disability or job loss.
  4. Don’t panic – seek out expert assistance from a CFP® professional who can create a plan that protects your downside without adding to your already stretched bottom line.
  5. Take a hard look at ways to cut expenses or increase your income to increase your bottom line and help fund your emergency account.

How to recession proof your life – tips from Credit Canada CEO, Laurie Campbell

  1. Build (and stick to) a monthly budget to ensure you know exactly how much money is coming in, how much is going out, and how much is left over for financial goals. See where you can cut costs – for example, find cheaper cell phone and internet plans, gym memberships and better insurance rates.
  2. Contribute regularly to an emergency savings fund. Make regular contributions – even small amounts, such as $20, is a very positive step. Consider setting up automated savings through your bank.
  3. Pay down debt. Start with paying off the credit cards with the highest interest rates first, also known as the “avalanche” method for paying down debt. Credit Canada’s free Debt Calculator can help determine the best debt repayment strategy for each individual.
  4. Always remember that Credit Canada offers free, confidential, one-on-one counselling sessions with certified credit counsellors.

The full results of the Kitchen Table Forecast can be found on the FPSC and Credit Canada websites.

About Credit Canada 
Credit Canada is a not-for-profit credit counselling agency that provides free and confidential debt and credit counselling, personal debt consolidation and resolutions, as well as preventative counselling, educational seminars, and free tips and tools in the areas of budgeting, money management, and financial goal-setting. Credit Canada is Canada’sfirst and longest-standing credit counselling agency and a leader in financial wellness, helping Canadians successfully manage their debt since 1966. Please visit www.creditcanada.com for more information.

About Financial Planning Standards Council
A professional standards-setting and certification body working in the public interest, FPSC’s purpose is to drive value and instill confidence in financial planning. FPSC ensures those it certifies―Certified Financial Planner® professionals and FPSC Level 1® Certificants in Financial Planning―meet appropriate standards of competence and professionalism through rigorous requirements of education, examination, experience and ethics. There are approximately 18,500 financial planners in Canada who have met, and continue to meet, FPSC’s standards. More information is available at FPSC.ca and FinancialPlanningForCanadians.ca. Effective April 1, 2019, FPSC will become FP Canada™: a national professional body dedicated to advancing professional financial planning. Learn more at FPCanada.ca.

About the Kitchen Table Forecast
The survey of 1,515 Canadians was completed between January 4 and January 7, 2019, for Credit Canada and FPSC using Leger’s online panel. The margin of error for this study was +/-2.5%, 19 times out of 20.

Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90%.

Websites

https://www.creditcanada.com/ 
http://www.financialplanningforcanadians.ca/   
http://www.kelleykeehn.com/

CFP® and Certified Financial Planner® are certification trademarks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planning Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB. All other ® are registered trademarks of FPSC, unless indicated. © 2018 Financial Planning Standards Council. All rights reserved.

SOURCE Financial Planning Standards Council

3 money tasks you need to do right now

By Liz Weston

THE ASSOCIATED PRESS

Most financial to-do lists focus on what you need to get done by Dec. 31, but there’s also a brief window early in the new year to save yourself some significant cash. Here are three tasks to consider doing now:

1. AVOID TAX PENALTIES

If you live in a high-tax area, have a bunch of children or otherwise take a lot of deductions, you may face an unpleasant surprise on April 15. It won’t just be a big tax bill. You may also face penalties for not having withheld enough taxes in 2018.

Some people  “are going to be in really sad shape,” says Cari Weston (no relation), director of tax practices and ethics for the American Institute of CPAs .

Taxe experts say many people are still unaware of how many tax rules have changed. Personal exemptions no longer exist, for example, which can be a problem for people with many dependents. People also can only deduct up to $10,000 of state, local and property taxes combined, when there used to be no limit.

Free income tax calculators can help you estimate your tax bill, or you can turn to a tax pro.You may face a penalty essentially interest on the amount you should have paid, but didn’t  if you’ll owe more than $1,000 on April 15 , Weston says. But there may still be time to avoid it.

Most people can dodge the penalty if their withholding in 2018 at least equaled the total tax they owed the year before (that’s the amount shown on line 63 of your 1040 form for 2017). People with adjusted gross incomes over $150,000 must have withheld at least 110 per cent of the previous year’s tax.

Those who withheld too little can still avoid the penalty by making an estimated tax payment by Jan. 15. Instructions are on the IRS’ payment page .

2. CONSIDER FRONT-LOADING YOUR MEDICAL EXPENSES

Scheduling routine health appointments and screenings early in the year helps make sure they get done. You could catch problems before they get bigger and more expensive.

Front-loading your costs can also help if you have big medical expenses later in the year. Most health insurance comes with out-of-pocket maximums, which is the most you’re expected to pay in a year counting copayments, deductibles and coinsurance amounts but not counting premiums. The average out-of-pocket maximum for employer-provided health plans was $3,872 for a single person in 2018, according to the Henry J. Kaiser Family Foundation. Once you hit your plan’s limit, your insurance typically starts picking up the entire bill for medical care for the rest of the year.

If you have a flexible spending account for medical care through your employer, draining it early in the year can be a good plan. Although payments for FSAs are deducted from your paycheque throughout the year, you don’t have to contribute the money before you can spend it, says Sander Domaszewicz , principal at consulting firm Mercer. You can submit claims and be reimbursed for the full amount you’re scheduled to contribute for the year (up to $2,700 in 2019 ) at any time. If you lose your job or quit, you don’t have to pay back the difference between what you’ve contributed and what you’ve spent.

3. SET UP (OR ADJUST) YOUR SAVINGS BUCKETS

“Savings buckets” are savings accounts for a specific purpose, such as vacations, property taxes, life insurance premiums, car repairs and so on. You figure out roughly how much money you’ll need and when, then set up automatic transfers so the money is there when you need it. Having the cash on hand means you don’t have to charge it (and pay high credit card interest rates) or take out expensive loans.

Some people who do this have a single savings account at a traditional bank, using a spreadsheet to keep track of how much has been accumulated for each purpose. But online banks make it easier and more intuitive. These banks typically allow you to set up multiple sub-accounts, with labels you choose, and don’t charge monthly fees or require minimum balances.

If you’re already saving for non-monthly expenses, see if you need to tweak the amounts. Property taxes typically go up every year, for example, but you may have to save less for car repairs if you recently bought a newer vehicle.

A few minutes spent on these chores now could save you money, time and stress throughout 2019.

Sun Life Financial announces appointment of Helena Pagano

Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) is pleased to announce the appointment of Helena Pagano as Executive Vice-President, Chief Human Resources and Communications Officer, effective June 11, 2018.

Reporting to Dean Connor, President and Chief Executive Officer, Helena is responsible for leading Sun Life’s enterprise-wide human resources and communications strategies, programs and governance. It is a critically important role as we drive for a disproportionate share of top talent, wrapped in a diverse, inclusive and engaging culture.

Helena Pagano (CNW Group/Sun Life Financial Inc.)

“Since joining Sun Life, Helena has had a big impact, enhancing our approach to global wellness, data and analytics, and our employee agile program,” said Dean Connor, President and CEO, Sun Life Financial. “She demonstrates the leadership and forward-thinking that will continue to support our Client For Life strategy and purpose of helping Clients achieve financial security and live healthier lives.”

Helena brings deep global human resources expertise, with more than 20 years in financial services supporting retail and institutional businesses. Prior to joining Sun Life, she held several senior roles in financial services. She joins an Executive Team committed to creating a diverse and inclusive workforce, which includes strong female representation in leadership roles. Helena succeeds Carrie Blair who announced her retirement from Sun Life earlier this year.

Helena is a Board Member of the Artists’ Health Alliance and is a member of the United Way’s Major Individual Giving Cabinet.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life Financial has operations in a number of markets worldwide, including Canadathe United States, the United KingdomIrelandHong Kongthe PhilippinesJapanIndonesiaIndiaChinaAustraliaSingaporeVietnamMalaysia and Bermuda. As of March 31, 2018, Sun Life Financial had total assets under management of $979 billion. For more information please visit www.sunlife.com.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.

Note to editors: All figures in Canadian dollars

Media Relations Contact:
Irene Poon
Manager, Media & PR
Corporate Communications
T. 647-256-2596
irene.poon@sunlife.com

Investor Relations Contact:
Greg Dilworth
Vice-President
Investor Relations
T. 416-979-6230
investor.relations@sunlife.com

SOURCE Sun Life Financial Inc.

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