Financial advisors and their clients have had to adapt to a changed world during the past month. From finding ways to work productively from home, to recalibrating portfolios to take advantage of the current stock market volatility, April brought forth many new challenges.
Here are 10 articles that resonated with Globe Advisor readers in an unprecedented April.
Watching the economic impact of the COVID-19 pandemic take a bite out of investment portfolios is tough for any investor, but more so for baby boomers expecting to rely on those funds for retirement. Baby boomers are the first generation to leave the work force with relatively high exposure to equities as low interest rates make typical retiree investments such as bonds, guaranteed investment certificates and savings accounts less attractive.
The annual tax-filing ritual is always an important financial exercise for Canadians – and it’s essential during this year’s COVID-19 pandemic. That’s because it’s the quickest way to take advantage of enhanced tax credits and to receive a much-needed tax refund. There were substantial changes to this year’s tax forms that advisors need to be mindful of when helping clients work through these documents. Evelyn Jacks of the Knowledge Bureau shares some key items to consider.
The massive push to get Canadians to work from home has put an already growing trend into hyper-drive. One small consolation for workers who are socially isolated – and an added benefit for those who have enjoyed their new reality – is the home-office related tax breaks. The extent of the workplace migration to home offices is unprecedented, and tax professionals are working with the Canada Revenue Agency for clarity.
Yield-seeking investors may want to hunt for bargains among real estate investments hit hard during the recent stock market collapse. Given falling interest rates, the robust dividend yields that some real estate investment trusts and stocks offer have become more attractive. Further, some of these firms have strong fundamentals to weather the current storm. Three fund managers share their top real estate picks.
Advisors have been busy amid the COVID-19 pandemic addressing investors’ growing list of concerns, including one that often ends up on the back-burner during normal times: life insurance. But while broaching the subject with clients can be tricky for advisors as they run the risk of appearing opportunistic, discussing life insurance has more merit than ever before.
The rule of thumb to set aside three to six months’ worth of living expenses in case of an emergency appears to be spot on. That’s because millions of Canadians face a cash crunch due to the loss of income from widespread business closures brought on by the COVID-19 pandemic. For advisors, it’s an opportunity to remind clients why having some cash set aside is a good idea.
Before COVID-19 , some of Canada’s largest independent investment dealers had been recruiting advisors actively and aggressively. Although the onset of the pandemic has had little impact on the level of this activity, how firms are recruiting advisors – and, in some cases, whom they’re targeting – has been affected significantly.
It may be time for long-term investors to start nibbling at beaten-up cyclical, dividend-paying stocks to bet on an economic recovery – even though its timing is uncertain. Stock markets have rallied recently amid signs that the outbreak is stabilizing in the hardest-hit countries, but they could retest the March lows. Three dividend fund managers shared their top cyclical stock picks.
Retirees and those approaching retirement, who make up a large, growing proportion of Canada’s population, rely on income-generation strategies to help sustain them financially. But while the need for income has never been greater, the low interest-rate environment has made yield hard to find. Closed-end funds are a potential solution to this problem, writes Adam McCabe of Aberdeen Standard Investments Inc.
While plenty has been written recently about how advisors can collaborate with their teams and with clients remotely, there’s far more to online client communications than e-mails and videoconferencing. There are various products and tools available to advisors to maintain communication, inform clients, demonstrate value and stay top of mind, writes Jason Pereira of Woodgate Financial Inc.