As restrictions begin to ease and life slowly returns to some semblance of normal, financial advisors and their clients are starting to focus on post-pandemic realities.
From taking advantage of investment opportunities to taking stock of how current events are affecting retirees’ short-term lifestyle plans to the impact of the market meltdown on the investment industry, these are among the topics that resonated with Globe Advisor readers in June.
Here are 10 articles that garnered the most interest.
Most retirees have been capable of weathering the current financial storm without making significant adjustments to their portfolios. It’s how the pandemic will affect their travel and lifestyle plans over the next year or two that has left many wondering what to do instead. One suggestion advisors can make for clients who have money earmarked for travel is to put those assets toward renovations that make their homes more enjoyable and socially inviting before winter hits.
Some in the investment industry expect an increase in client complaints against advisors as investors scrutinize their portfolios following the recent stock market downturn. Yet, others believe incidents could be tempered by stricter rules put in place since global financial crisis of 2008-09. At the same time, there are strategies advisors can use to try to avoid complaints, or worse, face legal action from clients.
Exchange-traded funds (ETFs) that offer juicy distribution yields have proliferated amid paltry interest rates over the past decade. Namely, Canadian-listed covered-call ETFs have grown to 66 offerings totalling $8-billion in assets under management. Although earning extra cash on top of dividends by using an options strategy may be tempting, investors need to mindful of the risks in owning these equity or commodity ETFs – and that they aren’t always the best choice for everyone.
Advisors in Ontario who have been working from home during the COVID-19 pandemic received a little help from the provincial government, which changed the rules around a cumbersome barrier that had slowed down the client onboarding process. In effect, Bill 190 explicitly allows clients to designate beneficiaries for a range of registered accounts – including registered retirement savings plans, registered retirement income funds, locked-in retirement accounts, life income funds and tax-free savings accounts – with e-signatures.
Dividends are rarely top of mind when investing in technology stocks. After all, companies in the high-growth tech sector often just reinvest their earnings back into their businesses. Still, there are some mature companies that offer decent dividend yields or others that can grow their payouts over time. They can also help investors ride out bumps in this typically volatile sectors. Three portfolio managers shared their top picks among tech stocks with payouts.
Workers and business owners who have lost income due to the coronavirus shutdowns as well as retirees who are either relying on the markets to fund their lifestyle or need cash to support their struggling adult children may be facing a cash crunch due to the economic fallout from COVID-19. In turn, many advisors are working with clients on strategies such as tapping into savings to taking out loans. Withdrawing money from investment portfolios at this time, given the market volatility, is often considered the last resort.
For advisors, extra steps such as sanitizing surfaces around their work space frequently, keeping their distance from others, wearing a face mask and gloves into every meeting – and providing clients with the same – may soon be par for the course. As parts of the country reopen in stages, a growing number of advisors are revisiting the idea of heading back into the office, but what that looks like is bound to differ tremendously from anything we’ve seen before.
With the economic uncertainty many Canadians now face, we’re dealing with the uncomfortable reality that millions of households could see their life goals crumble. Even worse, they could face bankruptcy. It begs the question: Knowing that so many Canadians were in fact not financially well, why hadn’t there been a more concerted effort to address it? What have we missed? And what lessons can we learn and apply as we move toward a post-COVID-19 world?
Real estate investment trusts (REITs), once the go-to companies for investors seeking safety and high dividend payments, have been hit hard by the COVID-19 fallout. The S&P/TSX Capped REIT Index is down by about 25 per cent year to date, more than double the approximately 11 per cent decline of the S&P/TSX Composite Index. Some REITs have cut dividends while others, particularly in the office and retail space, aren’t sure which of their tenants will be able to pay their rents. But there are some opportunities amid the REIT rubble – including specialty companies that cater to growth in the digital economy.
One persistent struggle for advisors has been to find ways to demonstrate the value that they bring to the table. In fact, research shows that investors undervalue the qualities advisors perceive to be their biggest strengths. Understanding the reasons for this disconnect can help advisors connect the dots for clients and ultimately help them prove their value.