There’s an old proverb that says March “comes in like a lion and goes out like a lamb.” Although that reference is associated with changing weather conditions, March, 2020 will forever be known as the exception to that rule – and it had nothing to do with winter’s end and spring’s arrival.
What started out as a normal month quickly morphed into one unlike any other the investment industry – or the world, for that matter – had ever seen. The articles published on Globe Advisor reflect that. From stories focused on the registered retirement savings plan (RRSP) contribution deadline to those addressing advisors’ changing role during the market mayhem, here are 10 articles that resonated with our readers in March.
Getting a tax refund from an RRSP contribution has become a rite of spring for many winter-weary Canadians. But some financial advisors say much of the lifelong tax-saving power of RRSPs is lost if the refunds aren’t reinvested. For example, Jordan Damiani, senior wealth advisor at Meridian Credit Union in St. Catharines, Ont., says: “It’s not money you should use for a vacation or buying a big-screen TV.”
The Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP) are two advantages of investing in a RRSP, as they allow Canadians to pull funds – interest- and tax-free – to buy a home or get educated, then pay it back over the long term. But there are some downsides to the these programs, including the potential of missing out on tax-sheltered growth in an RRSP, some advisors say.
Almost one-quarter of retired Canadians have tried to re-enter the labour market, according to a 2019 CIBC survey. Although half of survey participants cited financial concerns as a reason, 59 per cent said they returned to work for intellectual stimulation. That includes former advisors such as John Klaas and Susan Latremoille, who have found new callings and challenges in this stage of their lives.
Although women control a greater proportion of total wealth than ever, anecdotal and statistical evidence suggests that advisors still aren’t giving female investors the attention they deserve. If advisors continue down this path, they do so at their peril – especially because women can be great allies in helping advisors grow their business.
Advisors go through a ‘know-your-clients’ exercise when they first meet them and then annually to gauge their risk profiles. But is that enough? Do advisors need to dig further into clients’ psyches to gain a greater understanding of their tolerance for risk? Personal finance educator and former advisor Kelley Keehn spoke with Larry Berman, co-founder, CEO and portfolio manager at ETF Capital Management in Toronto recently to discuss these issues.
As Canadians struggle to address personal financial constraints amid the coronavirus pandemic, advisors are scrambling to figure out how best to serve affected clients, which has resulted in volatile markets, shuttered businesses and employee layoffs. The situation has Canadians reeling and searching for ways to reduce the financial impact of COVID-19.
Recession clouds are lurking, but there can be a silver lining. Global stock markets have been roiled by coronavirus fears and plunging oil prices. Still, certain dividend-paying stocks can help ease the pain. When the S&P/TSX Composite Index dropped by 35 per cent in 2008, some of these equities outperformed the market or eked out a gain. Others outpaced the market in the ensuing years. At the very least, investors can get paid while waiting for a recovery. We asked three fund managers for their top recession-resistant stock picks.
The coronavirus outbreak has had a serious impact in terms of both the human toll on the health of thousands of people worldwide and the economic effects of quarantines and business closures. However, there are a small number of companies whose businesses stand to benefit from the outbreak. In many cases, the stock prices of these companies have jumped as investors speculate on just how big the benefits could be. But some companies may be able to realize sustainable boosts to their businesses and more long-running gains to their stock prices.
David O’Leary of Kind Wealth wanted to do something constructive as the COVID-19 pandemic began to disrupt people’s lives. So, as businesses closed their doors and layoffs spread across the country, he launched the Coronavirus Relief Effort to offer free personal finance consultations for anyone struggling with the economic impact of the pandemic. Soon after, about 20 advisors stepped forward, able and willing to dedicate at least half a day a week to this initiative.
With markets whipsawing in recent weeks, some advisors are considering the best approach to contact clients and keep them on track with their financial plans. Some are being proactive, reaching out to everyone either individually with a phone call or through mass-communication, such as an e-mail or newsletter. Others are standing down and letting clients come to them if they need to talk. It’s a delicate balance between keeping clients informed and not fuelling fear.