With Canada’s provinces continuing to re-open their economies during the past month, financial advisors and investors are taking a closer look at the implications of the continuing COVID-19 pandemic and planning their next steps.
From the impact of travel restrictions on snowbirds to preparing for anticipated tax hikes on wealthy Canadians, these are the 10 articles that garnered the most interest in July.
Given the uncertainty of how a prolonged COVID-19 pandemic will affect Canadians’ travel plans for the foreseeable future, snowbirds across the country are concerned about the implications of holding or selling their vacation properties in the United States. As many didn’t anticipate the need to change their winter migration patterns, some are turning to their advisors to help them figure out what to do.
Advisors are warning their clients – especially those who have higher levels of net worth – to start planning for higher taxes as all levels of government seek to repay their already historic, and still rising, pandemic-related debt. Some are already bringing up the expectation for a higher tax burden during client meetings and beginning to tweak their clients’ financial plans to prepare for that reality.
Parents are often more than willing to help their adult children financially – whether it’s getting ahead with education, buying a first home, or with financial hardships such as a job loss or business failure. But the economic fallout from COVID-19 has many parents pulling funds out of their savings particularly to help children who have lost work and need income, or have recently graduated and can’t find a job.
Although small- and mid-cap stocks got hit harder than blue chips during the pandemic-induced stock-market crash, their returns should trump the giants in the economic rebound. Some of these stocks have started bouncing back from their March lows. Given that the recovery may be bumpy if there’s a second wave of COVID-19, it’s worth looking at names that pay a dividend. We asked three fund managers for their top picks.
The COVID-19 crisis is inspiring more advisors to consider going it alone. The interest comes as advisors discover that managing client relationships from home works well and are questioning their current ties to traditional firms. As a result, wealth management technology firms, which are providing tools that are empowering advisors to run their own shops, are reporting a surge in inbound calls in recent weeks from prospective clients looking for information on how they can support independent advisors.
So much has happened already in 2020 that the U.S. presidential election campaign – a multi-year phenomenon that typically receives a lot of media attention and has significant implications for the stock market – has been put on the back burner. That could begin to change very quickly. Brooke Thackray of Horizons ETFs (Canada) Inc. looks at whether the presidential election cycle still a valid gauge for the stock market.
While the traditional portfolio asset mix of 60 per cent in stocks and 40 per cent in lower-risk bonds has served advisors and investors well for many years, some in the investment industry are now questioning its future. Alternative investments can potentially make up for shortfalls in this balanced portfolio for some investors, but others may want to consider other options.
With the shift to providing financial advice that’s more centred on financial planning than on portfolio management, the financial services industry has failed to realize one of the big differences between the two approaches. While portfolio management is a scalable business, financial planning is not. Comprehensive financial planning is focused on providing clients with ongoing advice on various important topics. But time limits the services advisors can provide.
Emerging markets may have enjoyed a strong start to the year, but they were sent tumbling in mid-March along with all world markets. The swoon sent the MSCI Emerging Markets Index, the broadest measure of emerging economies, down 32 per cent. Since then, emerging markets have rebounded nicely and look to be in a good position as recovery takes hold. The engine has been Chinese stocks, which make up 41 per cent of the index.
Pre-signed forms have long been among the leading enforcement proceedings by the Mutual Fund Dealers Association of Canada (MFDA) against dealers and their advisors. Yet, these violations have also been amid the most controversial as industry players have struggled to stay on side of rules that some allege are enforced too rigorously.