Written by: Terry Willis, CFP, Vice President
May 17, 2012

I read an article the other day about the wife and family of Ruslan Salei, the Belarus hockey player who, along with 43 others, died in the Lokomotiv plane crash in September of last year. Ruslan was only 37. The article spoke of how the family, and specifically his wife Bethann, have been coping since that horrific day. Obviously, it has been a challenge for her. A single mom now, raising three young children would be hard for anyone. Before his death, he and Bethann had made a deal: she would take care of the children; he would take care of her. Now it was all on her shoulders.

Luckily they had found time to ask the question, ”what could happen?” Bethann and Ruslan had been together for 14 years, married for six, and were raising a family with a home in California and another in Belarus. Ruslan had accumulated plenty after collecting NHL pay cheques for 14 seasons (just over $22 million) and this year in the KHL was another year of guaranteed money. So when answering the ‘what could happen?” question they found themselves at an attorney’s office in July 2011, putting the finishing touches on their wills, planning the estate and setting up trusts for the kids. This is what good financial planners do— they ask their clients the difficult questions, not necessarily the same questions everyone is concerned about at the moment. A good financial planner would not primarily focus on how to invest $22 million, but takes the client’s entire financial situation into consideration.

Written by: Robert Broad, Vice-President & Investment Counsellor, CIM, CFA

This is the second in a three-part series.

As noted in the first part to this three-part series, we would like to continue the conversation on some of the “innovations” in the investment industry that have not made it into the hands of our clients. While we are not against these ideas all of the time, or for all people, our belief seems to be that simple and understandable is better.

Principal Protected Notes (PPNs): These products, which have some similarities to index-linked GICs, were huge through the first half of the last decade. The goal was to participate in the growth of some sort of portfolio, while preserving the capital value in the event of market declines. The manager or sponsor set aside enough money with a third party financial institution to guarantee the return of principal at maturity. The balance was then invested to generate a return. Typically investors had to commit their money for anywhere from five to ten years in order to take advantage of the capital guarantee.

Many of these PPNs got more and more confusing as time went on. They started out being based on simple indexes. But then returns were linked to individual stocks, managed portfolios, commodities, and all sorts of obscure combinations. And the exposure to the underlying portfolio also became more confusing with many funds using leverage and unusual “portfolio insurance” strategies. A large number of these instruments did not make it through the crisis. While most delivered on the principal guarantee, many had to shut down the managed portfolios (and potential for upside) when markets declined beyond a pre-determined breakeven point. There are still some investors waiting for the guarantee period to run out in order to get their original investment back.

Written by: Robert Broad, Vice-President & Investment Counsellor, CIM, CFA

This is the first in a three-part series.

Our approach is to find solutions that work and stick with them. Generally, we wouldn’t buy into an approach unless we thought it was going to work for the long term. Markets won’t always cooperate, but sound investment approaches should provide value over time. This can be misconstrued as a lack of activity, but people are often unaware of the work going on behind the scenes.

Occasionally, our clients wonder if there are more exciting things they should be doing with their investments. We are always on the lookout for new ideas and approaches that might benefit our clients. The reality is that there aren’t all that many worthwhile new ideas! Investing is pretty basic: blend together stocks, bonds and cash to participate in the long-term growth of the globaleconomy. If we can find more opportunities for diversification and
enhance returns, we’ll take full advantage. But, in the retail or high net worth space it is seldom that easy. Sometimes investing is about what you don’t buy, rather than what you do.

Written by: Marcy Ages, Senior Consultant & Certified Professional Consultant on Aging, B.A, CIM, CFP, CPCA, CLU

You’ve spent months working with your financial planner to put together a plan that covers all of your financial planning needs. You’ve reviewed your investments, your insurance coverage, your estate planning and whether or not you can retire when you want to, on your terms. But you never mentioned to your planner that both you and your spouse have parents who are elderly and are starting to show signs of ill health. You have not included a crucial item in your plan for a successful retirement.

Written by: Kathryn Jankowski, Vice -President, Financial Divorce Specialist, B.A, CFP, FDS, FMA, FCSI

The mention of the Financial Divorce Specialist (“FDS”) designation conjures up various ideas and definitions. What does the designation have to do with the role of the financial planner?

Let’s start with what it is not. An FDS does not replace a lawyer, or negotiate the financial issues around a divorce with a soon-to-be-ex which are, all too often, assumed the responsibility of the FDS. So, what then, does a Financial Divorce Specialist do?

If we were to break it down there are up to three issues to be negotiated when divorcing: children custody, children access and division of the financial pie. When negotiating the financial piece the solution is not as simple as dividing half of every asset. What needs to be divided is net family property. Consequently, assets are allowed to be swapped. For example, RRSP assets can be floated over to the “ex’s” side of the balance sheet in favour of keeping more equity in the family home, especially if it’s an asset you intend to keep. Where an FDS’ expertise is important is how your financial future plans pan out once you give away your existing retirement funds. Have you done a financial budget? Can you afford to keep the house? Are you able to save for the children’s education? What do you need to reconsider with respect to re-writing your Wills and Powers of Attorney? What are your financial goals going forward, on your own?

Written by: Karen Hall, Vice President, Financial Education & Employer Services, B.Sc., R.F.P, CFP

When employees know what it means to them.

Let’s consider Jade, perhaps a typical employee in your company. What does that year end pension or Group RRSP investment statement mean to her? If she sees an account balance of $115,000, is it just a number? Or, does she have the knowledge and tools to convert that number into an income stream, and relate it to her future retirement income needs? With that knowledge, Jade’s statement suddenly has meaning.

Where does Jade go to get the tools needed to understand her statement? She’s looking to you, her company, to provide them. If you, the plan sponsor provides this information, great. However, the issue facing most organizations is the information that is supposed to build awareness and understanding is not being accessed by the employees. Or, alternatively, too much information is provided all at once, which may overwhelm employees.

Written by: Robert Broad, Vice-President & Investment Counsellor, CIM, CFA

These days, more and more investors, including our clients, are asking whether their portfolios should include Exchange Traded Funds (ETFs). With lots of positive press lately investors are interested in the possibility of a lower cost, more readily understood portfolio approach. We thought it would be useful to share our opinion on these products.

Written by: Warren J Baldwin, Regional Vice President, CFP, R.F.P., CIM

Savings has been described as consumption deflected. Of course, savings is what you don’t spend on consumption of either services or products. Canadians used to be terrific savers, however within the last few decades our savings levels have plummeted while levels of debt have now almost never been higher.

Written by: Nicholas J. Miazek, Consultant & Manager Financial Planning, CFP

Joe called one day, a day no more unusual than many of the others before it; markets were swinging, headlines were screaming of calamity, impending doom. The media seemed to be competing for who could come up with a worse case scenario. Joe was not sure his asset mix was appropriate at this time; he felt that something, possibly something big, was coming over the horizon. He wanted to get out of the markets, not for long, but just until he felt the markets were going to be less risky, a month or maybe three. He was worried his retirement may be at risk, the income stream he draws from his portfolio in jeopardy.