A Day in the Life

You often hear that you are fortunate if you enjoy your profession or job and waking up every day and getting there is something you look forward to. Growing up I dreamed about being a professional hockey player but what actually happened isn’t half bad.

Last week I had a day that reminded me about why I do what I do. It isn’t very often that I need this reminder but they are meaningful when they happen.

I knew the day was going to be a busy one so I wanted to get to my desk early. It’s not uncommon for me to be at the office by 7:30a.m. but that morning the argument with the alarm clock lasted a little longer. After arriving, I started in on the “morning news” blast I send out each morning to my investment clients. With the markets’ recent surge it hasn’t been as difficult to find uplifting economic/market stories (this is the intention of this communication with clients. Media these days I feel tends to rely too much on shock and negativity).

My first meeting that morning was with a new corporate client. She is an American resident/Canadian citizen so I brought along with me our newest consultant Brent Soucie who has cross-border tax experience. We had a great meeting with her discussing her financial goals, concerns and retirement expectations. I really enjoy meeting new people and discovering their contribution to society – how they do it, why they do it, are they passionate about it and ultimately, how can I help them?

From there, Brent and I met up with a couple of other colleagues at a Toronto Board of Trade luncheon to hear a panel speak on “Canada’s Pension Conundrum.” Most of you have had some kind of pension plan to deal with sometime throughout your career and with the recent trend of moving from Defined Benefit pension plans (“DB”) to Defined Contribution plans (“DC”), employees, governments and consulting firms are all concerned. The employers’ responsibility with this benefit is complicated. An employer wanting to provide the best benefit possible for the years of loyal, dedicated service to employees should be a given, but not if there is a risk the company may go bankrupt one day due to poor market conditions or mismanagement (i.e. GM, Ford, Air Canada). The panel included Mark Fuller, President/CEO of the Ontario Pension Board and two consultants from AON Hewitt. Their belief was that the DB pension model is needed in Canada and is sustainable with proper management efficiencies. True, shifting the risk to the employee by having a DC plan instead of a DB plan in the long run helps to protect the employer from a future financial liability (pension payment obligations) but without the DB plan the employee is left to their own resources on how to financially prepare for retirement. The questions become “why is it so hard to accept responsibility and manage your own affairs?” and “since when did your employer need to as part of your compensation package guarantee you a ‘defined’ amount of retirement income?” Hey, if it was included in the employee’s original employment letter I don’t think the company would have the right to take it away and most employers don’t when switching to DC plans, but this sense of entitlement is wrong.

After shaking my head and expressing my conflicting views with my colleagues to that of the panel it was back to the office to meet up with new clients, who ironically enough were entering into the retirement stage of their lives, him with a DB plan (that is currently underfunded). Presenting their retirement plan to them revealed a few gaps and red flags in estate planning and portfolio management. Overall they were in pretty good shape and if I had never entered their lives, retirement still would have been fine from a financial perspective. However, now everyone is comfortable with the fact that money is going to be made, spent, saved and monitored with their financial goals incorporated into a financial plan. In addition, the clients are also aware of how much the financial planning, investing and taxes are going to cost and where the fees are coming from and going to.

Hustling from this meeting to a T.E. Wealth event with the Burlington Chamber of Commerce was trying but we arrived safe and just a little late – traffic on the QEW wasn’t as bad as it normally is (HOV lane helped). Matt Ardrey, another T.E. Wealth Consultant in Toronto, is a member of the Burlington Chamber of Commerce and he was hosting (T.E. Wealth was sponsoring) a networking event that evening. Shook a few hands, asked a few people “how could I help you grow your business” and had my picture taken with the mayor. I am not much of an extrovert and I don’t thrive in these group situations but I survived. I was glad to be there and support Matt.

Last meeting of the day was at a client’s house in Burlington. Their kids were already in their pj’s and the wine glasses were half full when I arrived – he too had had a long day. These clients were in a position now to start investing again (she was back to work after having their third child) and the insurance gap that we discovered a few years ago still hadn’t been filled and they wanted to discuss and move forward on it. We reviewed the Q4 portfolio statement and everyone was glad to see double digit returns again. From a tax standpoint, RRSP contributions this year would be good because of a larger than normal 2013 bonus and then using the refund for a mortgage prepayment or RESP contribution (never anything wrong with paying down non-deductible debt or for that matter, RESP contributions have an immediate 20% rate of return from the government grant). Given that the mortgage rate is 1.9% everyone was leaning towards the RESP plan for the 3 kids. She is a teacher and we got on the topic of pensions. The Ontario Teachers Pension Plan (OTPP) is asking current members to vote on changes to their current plan in order to be sustainable and relevant in the future, such as decreasing the inflation factor or increasing the contribution rate of current members, and increasing the retirement age factor from 85 to 90 (age + years of service). So this got me going on what I had heard today at lunch and I told them what the panel was saying and how I thought that two benefit consultants and the President/CEO of the Ontario Pension Board speaking about the relevance of DB pensions was a conflict, given that each of them were paid either directly or indirectly from a DB plan’s existence.

Getting home for the tail end of the Leaf game (another loss) and having some microwave-heated dinner the kids kindly saved for me gave me an opportunity to reflect on the impact I was having on people’s lives and what I learned today. It made me feel good. People and their families were trusting me to guide and advise them on what is best for them, without prejudice or conflict. To be able to do this with a company like T.E. Wealth and support colleagues like we do is kind of like playing on your own hockey team… and winning.

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