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4 Financial Tips for Active Young Families

4 Financial Tips for Active Young Families

From the desk of Erin Gendron…

With the start of a new fall season and the end of care free summer days, the ‘responsible, let’s get organized’ side of me kicks into high gear. Fall has always had a ‘fresh start’ feel about it for me – similar in a sense to New Year’s Eve; a time to reflect on what’s going well and what new opportunities lie ahead.

A constant source of review in our household is how we’re managing our money. How to plan, be smart and make the most of every dollar while juggling the multi-faceted financial priorities of an active household can be a daunting task.

As an Associate Investment Advisor by day and a wife and mom-to-two by night, the following are 4 of our essential tips that will help start you and your family down the path to money mindfulness.

1. Build your budget

Not unlike so many things in life, we need to know where we’re starting from in order to know where to go next.  For this reason, I’m going to come right out and say it – the first unavoidable step is to prepare a budget.

A simple income vs. expenses (fixed & variable) = surplus or deficit as well as a basic idea of your family’s net worth (net worth = assets – liabilities).

This is the hardest, most time consuming part – and sometimes what stops us from even getting started.  Let me assure you that it’s not so bad and well worth your time.  Make use of great apps available, I use mint.com or get started with an Excel template. If all else fails, break out your trusty pen and paper; whatever you need to do.

2. Positive cash flow is key

Next up!  Track your spending and understand where your money is going every month – in the financial world, this is called your cash flow.

Is your cash flow positive or negative every month?Which direction are you trending?

There are many apps available, for example mint.com that link all of your bank accounts & credit cards to make the process easier.

3. Remember the bigger picture

The third step to rounding out a simple financial plan is to think about what your bigger, long term goals are – primarily, retirement and kids education.  Other things to consider might include buying a recreation property or starting a business.

My husband and I had our kids in our mid-late 30’s – a reality for many Canadian families. This means raising kids, helping them pay for an education plus saving for our retirement become competing priorities over the next 20 years.

A big mistake is putting off retirement planning, simply because it’s the furthest away and the least “in your face” – waiting for a time when you can “afford it”.

The power of tax free compounding, dollar cost averaging, and good savings habits will have a bigger payoff the sooner you start.

Give some thought to what these goals look like and what time frame is involved.  Allocate money in your family budget to these goals. Small steps you take now will have big impact later.

4. Insurance: What no one truly enjoys talking about it.

A last consideration that can’t be overlooked; insurance and wills.

Having put some hard work and thought into your family’s financial plan, it’s worth going the extra step to ensure it’s all protected.

Specifically when you have dependants, insurance and wills are non-negotiable as we don’t have the saving level to ‘self-fund’ in the event of a ‘worst case scenario.’  Some questions for you and your partner to consider…

  • Have we discussed and agreed on who would look after our child(ren) should something happen to both of us?  How would this person cover the additional expenses?
  • If we were suddenly without one person’s income, would our family be able to maintain their standard of living?  Most employees have life insurance which includes one or two times their salary but this is rarely enough.
  • Do we have a plan in place financially to carry on in the event of disability or critical illness?

The ability to earn an income is your biggest asset – especially during a time when kids are small, debts are high and savings are low. If this is taken away, even for a small amount of time, the financial impact to your family could be severe.

Although not a simple task, once the above items are analyzed thoughtfully, a real life plan can be put together.  This will leave you with a feeling of confidence and peace of mind to meaningfully move forward with clear goals and purpose.

Remember to review your plan periodically.  A financial plan is meant to evolve over time, to adapt with your families changing needs, wants and priorities as you grow.

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iA Financial Group Completes the Acquisition of HollisWealth from Scotiabank

QUEBEC CITY, Aug. 8, 2017 /CNW Telbec/ – Industrial Alliance Insurance and Financial Services Inc. (“Industrial Alliance” or “iA Financial Group”) (TSX: IAG) and The Bank of Nova Scotia (“Scotiabank”) (TSX: BNS) (NYSE: BNS) today announced that Industrial Alliance has completed the acquisition of HollisWealth from Scotiabank effective after close of business on Friday, August 4, 2017. The agreement was first announced on December 5, 2016.

HollisWealth provides diversified investment and wealth management services to individuals, families and corporations from 300 locations across Canada. With the addition of HollisWealth, iA Financial Group becomes one of the largest non-bank wealth management firms in Canada with assets under administration of close to $80 billion.

About iA Financial Group
Founded in 1892, iA Financial Group offers life and health insurance products, mutual and segregated funds, savings and retirement plans, securities, auto and home insurance, mortgages and car loans and other financial products and services for both individuals and groups. It is one of the four largest life and health insurance companies in Canada and one of the largest publicly-traded companies in the country. iA Financial Group stock is listed on the Toronto Stock Exchange under the ticker symbol IAG.

About Scotiabank
Scotiabank is Canada’s international bank and a leading financial services provider in North America, Latin America, the Caribbean and Central America, and Asia-Pacific. We are dedicated to helping our 23 million customers become better off through a broad range of advice, products and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. With a team of more than 88,000 employees and assets of over $921 billion (as at April 30, 2017), Scotiabank trades on the Toronto (TSX: BNS) and New York Exchanges (NYSE: BNS). For more information, please visit www.scotiabank.com and follow us on Twitter @ScotiabankViews.

SOURCE Industrial Alliance Insurance and Financial Services Inc.

For further information: Industrial Alliance: Investor Relations, Grace Pollock, Phone: 418-780-5945, grace.pollock@ia.ca; Public Relations, Pierre Picard, Phone: 418-684-5000, ext. 101660, pierre.picard@ia.ca; Scotiabank: Investor Relations, Adam Borgatti, 416-866-5042, adam.borgatti@scotiabank.com; Media Relations, Rick Roth, 416-933-1795, rick.roth@scotiabank.com

RELATED LINKS
http://www.inalco.com
http://www.scotiabank.com

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Updates on IA Securities Acquiring HollisWealth

In a previous communication, we confirmed the ownership of HollisWealth will change from Scotia Capital to IA Securities (owned by Industrial Alliance) in the 3rd quarter of 2017.

We anticipate this as a positive transition as we will continue to benefit from the depth and backing of a large, secure financial institution.

We want to assure you that you will be updated on any pertinent developments and changes in the coming months and that we have a plan in place to communicate these in an efficient manner.

What to expect over the coming months:

  • You will receive an IA Securities mailer in your June monthly statement that will outline the change
  • You will receive a Welcome letter in July with your new account information

In mid-July, we’ll send instructions on how to update your online access and e-statement preferences to the new platform.

There will be no material change to our personnel. We remain your fully independent advisory team, and will not become employees of IA Securities.

A QUICK SNAPSHOT

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Basic Ontario Budget Summary

Below is a brief summary of the Ontario budget from April 27, 2017.  You can download a full review from Scotiabank here.

  • Children’s Prescription Medication: All children and youth aged 24 and under, regardless of family income, get free prescription medication
  • Electricity: Lower household electricity bills on average by 25% beginning this summer (even greater reduction for on-reserve First Nations and low income)
  • OSAP: Starting this fall, Ontario will roll out the new OSAP
  • Affordable Childcare: Removed Ontario childcare waitlist fees (creating new licensed spaces and renewed investment in childcare)
  • Elimination of Drive Clean Emissions Test Fee: As of April 1, 2017 government eliminated $30 fee for Drive Clean emissions test
  • Lowering Public Transit Costs for Seniors: Available July 1, 2017 government proposing a new Ontario Seniors Public Transit Tax Credit for all Ontarians aged 65 or older
  • Rent Control: The government is proposing to expand rent control to all private rental units, including those occupied on or after November 1, 1991.
  • Ontario Lifelong Learning Skills Plan: Investment in adult education, New OSAP support for mature students, updating Key Employment Ontario programs that support unemployed workers who require retraining or new skills
  • Personal Ontario Caregiver Tax Credit (OCTC): Replacing the separate caregiver and infirm dependant tax credits with a new Ontario Caregiver Tax Credit beginning in the 2017 tax year.
  • Personal Ontario Medical Expense for Fertility Treatments: Following the measures in the 2017 Federal Budget, the Ontario Budget proposes to adopt the Federal changes to allow Ontarians to claim tax relief at both Federal and Ontario levels.
  • Personal Tax Planning Strategies for Private Corporations: The Ontario Budget proposes to work with the Federal Government to examine tax planning strategies involving private corporations relating to: income-splitting with family members, holding passive investment portfolios inside a private corporation, converting business income to capital gains
  • Burden Reduction Initiatives: The budget proposes 150 changes to existing statues that will save businesses costs due to reporting requirements
  • Tobacco Tax: The Budget proposes to increase tobacco tax rates by $10 per carton of 200 cigarettes over 3 years
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Canadian Banks: We Love ‘Em & We Hate ‘Em

From the desk of Erin Gendron

You probably haven’t been able to avoid seeing the negative media attention (and resulting share volatility) the Big 5 Banks have been receiving over the past month. We’ve certainly taken note. The attention on the banks is due to alleged high pressure sales tactics used by under qualified advisors. These stories may or may not remind you (or a family member or friend) of dealings with the banks…but I used to work there, so I have a pretty good perspective to share.

Many aspects of these media stories rang true for me having spent the last 8 years of my career working for 2 of the largest Canadian banks.

Of course, the media does like to create a sensational story. Amidst all this noise, the banks have great employees and managers that do truly care about customers.

The parts that did ring true centered around the misalignment of the banks employee’s interests/priorities and the banks client’s interest/ priorities. These were the primary drivers that led me to leave, and ultimately join Vandermeer Wealth Management!

Where we truly differ;

“Clients really do need advice from people they can trust. If banks can’t guarantee that trust, maybe regulators must step in. In the meantime maybe customers must look elsewhere for advice they really can trust.”

By way of licensing, Brent is licensed as a discretionary Portfolio Manager, which gives him the highest level of fiduciary duty to our clients.

Being a fiduciary involves due care, loyalty and good faith. Simply put, it means legally (not just ethically) putting yourself in your client’s shoes and sacrificing your interest for the client’s interest. Bank branches and any broker not licensed as a PM do not have this same level of licensing and responsibility.

We differ in our ability to offer independent investment solutions –
we don’t have a product shelf that we “recommend as the best options for clients”. We literally go out to the universe of solutions, complete a thorough due diligence process and choose the best one. Of course, a thorough monitoring process starts right after purchase and changes are made as needed with no pressure to retain “in house” products.

We invest the time and attention that every one of our clients deserves every day. On top of that, we care. Every day, in my previous bank life, it became a frustrating conflict of interest between taking care of existing clients and the constant pressure to look for new clients or find new ways to sell more products and ‘solutions’ to existing clients. The significant financial incentives that geared actions towards the latter became an every day struggle.

All this being said, if you have friends and family being served by someone who may be less qualified, or not have their best interest in mind, we would love the opportunity to meet them, and explain how our industry works and how we could serve them better.

Didn’t catch the recent news:

Despite the ads begging for your trust, banks are not your mom: Don Pittis

‘I feel duped’: Why bank employees with impressive but misleading titles could cost you big time

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Offering Professional In-House Tax Preparation Services

We are pleased to offer you the services of our in-house Tax Specialist. Robert Westgarth is an accountant and tax consultant, and has years of experience with tax preparation. We will continue to facilitate the tax preparation services of Steve Ernst (Converge Financial) via our office if you’re one of the many clients who have used him over the years too.

Interested in using our tax preparation services?  Please let us know here.

Even if you don’t want to use our tax preparation services, please know that you can contact us at any time with tax questions or to request duplicate slips (but please, do so as early as possible!)

Here is some information to get you started:

  • Download our 2016 Personal Income Tax Checklist here »
  • March 1, 2017 – Last day for 2016 RRSP contributions.
  • April 10, 2017 – Last day to drop off taxes for guaranteed
    completion by the deadline
  • April 30, 2017 – Deadline to file your 2016 personal income taxes.

 

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Industrial Alliance (iA) Acquires HollisWealth from Scotiabank

The rumours in last week’s article in the Globe and Mail have been confirmed with today’s announcement that Scotiabank will sell their ownership in HollisWealth to Industrial Alliance (iA) effective in the third quarter of 2017.

STABILITY

We view this change positively as this acquisition will make HollisWealth a member of one of the largest independent advisory network in Canada. Industrial Alliance is a major player in Canada as they manage $126 billion in assets with over four million clients. They use National Bank as the custodian of client accounts, which brings the same level of stability we’ve been accustomed to. Industrial Alliance is a publicly traded company, listed on the Toronto Stock Exchange under the symbol IAG and will become one of the largest non-bank wealth management firms in Canada.

INDEPENDENCE

We want to assure you that it is business as usual. There is no material change to our personnel, processing and systems. Of equal importance is that over the years, we have fiercely guarded our independence in order to offer the best possible solutions to meet your wealth management needs. Your advisory team, Vandermeer Wealth Management, is an independent firm and we are not employees of Scotiabank nor will we become employees of Industrial Alliance.

DUE DILIGENCE

While there may be some aspects of this transition that will require further clarity, rest assured that in the weeks and months ahead, we will monitor this transition on a continuous basis. We will undertake the necessary due diligence of this new association with Industrial Alliance to ensure we are aligned with the right partner to best serve your needs.

We wanted to make sure we communicated this news to you in a timely fashion and we will continue to keep you updated of any pertinent developments. As always, please feel free to contact us with any questions you may have.

Thank you for your continued loyalty and the trust you have placed in our team to manage your wealth. We truly appreciate it and we hope that you and your family have an enjoyable holiday season.

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Stay the Course

Following the US election results, we would like to share some research on the impact this may have on markets and the economy.

We also want to remind you about our investment philosophy and what that means in terms of portfolio management strategy during times like this:

As high-conviction, long-term investors, we do not change our process or philosophy in response to elections or other short-term events; we believe investors would be well-served not to do so either. In our view, the approach we take holds true no matter which party is in office:

  • Work with us to build a diversified portfolio designed to meet your long-term needs, and stick to your plan over time.
  • Update the plan when your needs change, and don’t abandon it due to market volatility — after all, volatility often presents the opportunity for investors to buy quality stocks at cheaper prices.
  • Discuss any fears or concerns with us.

 

While we don’t change our approach due to politics, we will certainly continue to keep a close eye on Washington over the coming months and will assess any ramifications of the incoming administration’s policy goals for the US economy, global markets in general and certain market sectors in particular. This may result in moving our tactical weighting to the US up or down in our model portfolios.

Thank you for partnering with us. We sincerely appreciate it.

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Brexit Vote: This is Not a “Today” Event

As you likely know, the UK people voted to exit the European Union yesterday.  This has and will continue to create political uncertainty as other member countries like the Netherlands, Spain, Italy, etc consider their own “leave” decisions. It’s important to note that it will take at least two years for an exit to actually occur and so there is still plenty of time for this to be sorted out in a reasonable fashion.  The decision has also created economic uncertainty and we are seeing that in the markets today…markets that were likely caught off guard by the result. Markets had priced in a “stay” decision and are now reacting to the uncertainty and potential domino effect across the EU – something referred to as “contagion-risk”. Broad markets are selling off around 3-4% with the hardest hit markets in Europe. A flight to safety is in effect with US dollars, bonds and gold reaching higher prices.

We’d like to offer some comments regarding your portfolio and what our strategy has been and will be going forward:

First, we all need to maintain proper perspective. Headlines will be scary but we can’t focus on those. We need to focus on the quality of the businesses and sectors we own and, in fact, be looking for the right opportunity to buy these assets at now lower prices.  We also need to focus on maintaining balance in our portfolios and ensuring we have proper diversification across the asset classes we own. Remember, proper asset allocation is the key to driving long-term returns.

Second, we had positioned the portfolio a few months ago for uncertainty by shifting to “low-volatility” ETF’s in the Canadian, US and International models. This trade continues to be exceptional with these positions experiencing less than half of the downside move in the markets.  We also added to our sector positions in agriculture, water, infrastructure and healthcare. These positions offer us high-quality businesses that pay good dividends (cash flow is very important) and this gives us the confidence to hold them through uncertain times like this.

We don’t believe that net earnings from quality businesses will be impacted very much from these political decisions. Yes, some will have adverse effects from higher tariffs, etc. but the majority will seek opportunity in global markets and will adapt. Strong demand remains for businesses that produce items that are in need and their experienced management teams will navigate uncertainty with confidence. Therefore, while we see the price multiple contracting today, we think their earnings will stay strong and we’ll be able to pick-up high quality businesses at better valuations.  Further, we don’t see this event as a “Lehman-like” collapse that occurred in ’08. The contagion risk is present but we don’t believe the magnitude will be the same.

Over the coming days and weeks we will continue to manage the asset allocation of the portfolios and we’ll be looking for ways to add value and grow your wealth as opportunities present themselves.There will be no action today as we don’t believe events like this warrant a knee-jerk reaction but rest assured we’ll be ready to take advantage of price dislocations that are inevitable when other people panic.

We thank you for your continued loyalty and for the honour of managing your wealth. Feel free to get in touch with us at any time if you have any questions or concerns.

Sincerely,

Brent Vandermeer

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Brent Vandermeer Awarded the ETF Champion of the Year

Last week, over 400 attendees from across the wealth management industry in Canada came together to celebrate the outstanding value that financial professionals provide to their clients. The 20 award categories recognize excellence across the industry, from community service to best practice.

The Canadian ETF Association (CETFA) presented the first CETFA ETF Champion of the Year award to Brent Vandermeer, CIM®, FCSI® of Vandermeer Wealth Management – HollisWealth, at the 2016 Canadian Wealth Professional Awards.

This award recognizes the achievement of an individual, group or firm whose efforts have gone beyond the requirements of their position to advance the ETF industry in Canada. Consideration is given to how each nominee is promoting, innovating with, demonstrating the tax efficiency, and communicating the value of ETFs to their clients, networks or industry.

Read the CETFA Press Release »

Read the HollisWealth Press Release »

 

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