Canada is slowly emerging from the first COVID wave, but there’s still a long way to go and many questions to be answered. Almost all of them resonate at the personal level for executives across Canada.
How will my company survive COVID over the long term?
Can I count on a bonus of any sort this year?
What will schooling look like this fall for my kids?
These are just some of the questions that are keeping executives up at night. I know several, for instance, who decided to switch their kids from public to private schools for this coming school year given that the latter, on the whole, are better equipped to handle the challenges of physical distancing.
However, private schools come with substantial fees. And if this switch is sudden – as many such decisions may well be – you have to wonder how flexible the financial plans of those executives and their families are to accommodate these added expenses amid many uncertainties.
The fact is, executives have always led very busy lives. Add in a pandemic and things get busier on an almost exponential scale. Managing budgets under massive pressures and leading endless team meetings on Zoom – all while trying to educate or entertain young kids at home and check in on aging parents elsewhere – can be incredibly taxing. Distractions build along with the stresses, and mistakes inevitably happen.
Executive Financial Counsel (EFC) can help alleviate those stresses as the COVID crunch plays out. Talking about the value of having a customized and responsive financial plan is one of the most important – and frequent – conversations my colleagues and I are having these days.
In short, we speak with them about how EFC fosters peace of mind in very unsteady times.
What is EFC?
At the core of EFC, you find financial education. And by that I mean addressing all six pillars of wealth management: financial planning, cash management, investment planning, insurance and risk management, tax planning and preparation, retirement planning and estate planning.
Having access to independent financial education lets people examine their own financial situations and identify areas that need attention. This kind of support helps them ask some really important questions, such as, “What are the consequences for my family if I die without a will?” Enhanced financial literacy that stems through financial education also helps build a plan based on specific needs, and not on the incentivized needs of planners keen to sell products.
EFC takes financial education to a higher level. It includes virtually all facets of financial education and adds a dedicated expert working closely with executives and their families. Working together, they articulate the executive’s financial goals, create a plan to achieve those goals, and then execute all the relevant parts of that customized plan moving forward. Ongoing reviews check the status, with any necessary course corrections made along the way.
Key facets of effective EFC services should include:
- In-depth understanding of company benefits and compensation to ensure that no opportunities are left on the table
- Advice on taking a strategic approach to exercising stock options
- Ensuring both tax optimization and that returns are properly prepared and filed
- Preparing and updating retirement and estate plans
At the company level, EFC is beneficial because it mitigates regulatory and reputational risks while strengthening corporate governance. It supports employee retention and attraction strategies, thus bolstering a firm’s human capital.
At the individual level, it provides proactive risk management that evolves with the executive’s needs and the demands they face. Delivered as part of a compensation package, EFC helps executives achieve their personal financial plans while fitting into their busy schedules.
Putting focus where it belongs
Our EFC clients are a diverse group. For example, I’m working this summer with a large utility company in Ontario. The safety of their people is a top priority for senior management. And this commitment extends to offering EFC services to their executives, and financial education for many of their non-management colleagues. It’s a similar story with a Montreal-based transportation company and a global energy firm in Alberta.
The value of offering EFC in these and other scenarios can be a game changer. No longer concerned about the details and direction of their personal financial plans, busy executives can increasingly focus on leading change and creating value throughout their respective organizations. Productivity rises and fewer mistakes happen.
Executives value and appreciate this kind of support from their employers, and that appreciation builds trust. This will be increasingly important as the economy slowly re-builds and the competition for top talent really heats up.
In other words, offering EFC services now can pay big dividends in many ways down the line for executives and their firms.
How can I help?
As we move through the pandemic together, I’ll be writing more about the game-changing value of EFC and financial education in my new role as head of these services in our firm. Please reach out to me if you’ve got questions.
Connie Cooper, VP Executive Financial Counselling & Education Services
T.E. Wealth, Toronto
This article was published in T.E. Wealth’s Strategies newsletter, September 2020 edition. Read the full edition here.
These articles are for general informational purposes only. Please obtain professional advice before taking any action based on this information. No endorsement or approval of any third parties or their advice, information, products or services should be implied by any references to third parties contained in any article. Trademarks cited in these articles are the respective properties of their owners.