Globe Advisor readers were interested in the impact of a potential wealth tax, how advisors can help with tax audits, investment bargains in tax-loss selling season and how older workers can manage their excess income, among other topics, in November.ridvan_celik/iStockPhoto / Getty Images
With many Canadians now back in various forms of a lockdown and the end of the year fast approaching, financial advisors and investors are focusing on the various aspects – and value – of comprehensive financial planning.
Specifically, advisors and their clients were particularly focused on matters related to taxes and income. On the tax side, readers were interested in the impact of a potential wealth tax, how advisors can help with tax audits, and the investment bargains that can be found during COVID-19 tax-loss selling season. When it comes to income, they turned their attention to how older workers can manage their excess income and higher-yielding Canadian dividend stocks for income-seeking investors.
Here are the 10 articles published on Globe Advisor that received the most attention in November:
What a wealth tax could mean for financial planning
Canada’s federal government is considering a wealth tax to reduce inequality and to pay for the relief measures that were implemented in response to the COVID-19 pandemic. Those measures have led to a record deficit and a ballooning national debt. If the new tax were to come to pass, it would present significant planning challenges for financial professionals.
How older workers can manage their excess income
Whether it’s the love of a job or a need to stay connected socially, Canadians working in their late 60s and early 70s are running into the issue of balancing money earned on the job with income from other sources such as the Canada Pension Plan, Old Age Security, as well as pensions and registered and non-registered investments. Specifically, they’re facing the challenge of looking for ways to reduce the taxes they pay on the income from these various sources.
Six ETFs to play a post-pandemic economic recovery
Betting on an economic recovery may be difficult for investors, given the rising number of COVID-19 cases in North America and new lockdowns in Europe. However, with a safe coronavirus vaccine on the way and China’s economy gaining strength, there’s room for optimism. We asked Daniel Straus at National Bank Financial Inc., David Kletz of Forstrong Global Asset Management Inc. and Alex Bryan of Morningstar Inc. for their top exchange-traded fund picks to play a post-pandemic recovery.
Investors see greater need, value in professional advice
New research suggests that appreciation for advisors is on the rise as investors seek out financial advice – and some emotional support – amid the massive market uncertainty stemming from the COVID-19 pandemic. A combination of recent reports shows that investors are not only leaning more on advisors for advice, but believe the fees they pay are worth it. In turn, advisors are being encouraged to take advantage of the situation by developing and deepening long-term, trusted client relationships that prove their value – especially when compared to robo-advisors and other do-it-yourself investing options.
With tax audits increasing, how can advisors help?
Being audited by the Canada Revenue Agency (CRA) is never a fun ordeal, but advisors can play an important role in helping their clients get through the process as stress-free as possible. In fact, that role could become more prominent for advisors as a recent C.D. Howe Institute paper says the CRA could come under pressure to raise additional revenue through aggressive tax audits to help pay for the lower tax revenue and relief measures resulting from the COVID-19 crisis.
Why the investment industry needs continuing education reform
Continuing education (CE) in Canada’s financial services industry is in a disorganized state and in dire need of reform. There is no common standard for CE requirements among regulatory organizations and credentialing bodies, causing CE obligations to stack on top of each other rather than integrate. For advisors, this means more time and more money on satisfying industry obligations. The intended benefits of CE are being outweighed by their unintended burdens. That’s the message from John Waldron, founder of Learnedly, a modern training platform for Canadian financial professionals that powers Globe Advisor’s new CE Centre.
Six higher-yielding Canadian dividend stocks for income-seeking investors
Faced with interest rates that will be low for several years, yield-hungry investors may want to seek opportunities among Canadian dividend stocks. Although higher-yielding dividend stocks are not without risk, there are firms with stable cash flows that will allow them to maintain and raise payouts – and their stocks still trade below pre-pandemic highs. We asked Stephen Groff of Cambridge Global Asset Management, Steve DiGregorio of Canoe Financial LP and Michael Simpson of NCM Asset Management Ltd. for their top picks.
Bargains to be found in COVID-19 tax-loss selling season
Hunting for bargains in the stock market during the tax-loss selling season can be rewarding, but every year has its quirks and opportunities. Deals arise from selling pressure on stocks or ETFs as investors dump losers at year-end to offset capital-gains taxes, but this year’s COVID-19 pandemic and vaccine optimism can play havoc with usual strategies. “There are bargains this year, but one needs to tread more carefully to avoid value traps or potentially financially troubled companies,” says Stephen Takacsy at Lester Asset Management Inc.
Limited opportunities to invest in Canada’s fast-growing digital health sector
The COVID-19 pandemic has accelerated several trends, one of which is the transformation in the way Canadians interact with their doctors and other medical professionals. As more people work from home and try to avoid public places, fewer are taking the time to visit their doctors in person. “COVID-19 has broken down a lot of telehealth barriers,” says Cameron Burke at PwC Canada. “What people were predicting would happen over the next three to five years happened in a matter of six months.”
What role should energy have in Canadians’ portfolios?
Oil and natural gas stocks – staples in Canadian investment portfolios for decades – have become permanent red blotches on quarterly statements for many long-term investors. The culprit has been a combination of high production costs in the oil sands, lack of pipeline capacity to get the product to global markets, oversupply from lower-cost U.S. shale producers and dwindling demand as the world turns to more environmentally compatible energy sources.