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Many advisors don't engage clients early enough in their succession plans.designer491/iStockPhoto / Getty Images

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While advisors may have circled a date for their retirement, many neglect to share that information with clients until the last minute, a recent Maru Group online survey conducted on behalf of Meridian Credit Union Ltd. found.

According to survey data, 29 per cent of Ontario investors are concerned about their advisor’s retirement and what the transition to a new advisor looks like.

Globe Advisor spoke with Robert Coruzzi, associate vice-president of wealth distribution at Meridian Credit Union in Toronto, about the survey findings.

What surprised you the most?

That [almost] half of advisors still don’t have a succession plan in place. Another thing of interest was the characteristics clients deemed necessary for a successful transition to a new advisor. The top characteristics were integrity, patience, understanding of the client’s goals, and [caring] about a client’s financial future. These things aren’t based on performance or education. These are relationship-based skills. It’s really about how advisors can connect and understand their clients. So, when a retiring advisor is looking for a successor, it’s important to match with someone who excels in these skills so their clients can feel confident in the transition.

Do advisors tend to underestimate how long it takes to execute a succession plan?

They do. I’ve seen some do a simple meet and greet and that’s it. But they need to engage clients in those conversations early and often, starting at least a year to 18 months before they retire. Clients are going to have questions and concerns about that transition period. You want to make sure they feel part of the process. You don’t want to leave it up to the client to determine when that transition should happen because they’ll ultimately find a new advisor.

What if a client isn’t happy with their new advisor?

They will find a new relationship elsewhere if there’s no ongoing communication from the firm, the new advisor or the outgoing advisor. Sometimes, it’s just not a personality fit or the values just don’t align. So, we spend time examining the personality of our advisors and how they may match up with clients.

Deanne Gage, Globe Advisor reporter

This interview has been edited and condensed.

Must-reads from Globe Advisor this week

Advisors face difficult discussions about fees for bare trust filing services

After the Canada Revenue Agency (CRA) exempted T3 trust tax return filings for bare trusts, financial professionals are navigating difficult discussions about the fees many clients paid for the preparation services. Depending on the circumstances, an individual client affected by bare trust reporting requirements may have paid anywhere from $250 to four figures for T3 filing services suddenly not deemed necessary for the 2023 taxation year. “The CRA change came very late,” says Brianne Gardner, financial advisor and co-founder of Velocity Investment Partners at Raymond James Ltd. in Vancouver, noting the majority of bare trust filings were already completed. “Our clients are not happy with the fees.” Deanne Gage reports on how advisors are dealing with the fallout.

Why this money manager is buying Intact and selling Choice Properties REIT

Money manager Kevin Burkett isn’t waiting to see if the economy has a soft or hard landing, or how many interest rate cuts could come this year. Instead, his four-person investment team at Burkett Asset Management Ltd. looks to buy high-quality companies that are out of favour or misunderstood by investors. “Our firm is small and independent, which we think gives us an advantage because we can be more nimble in making investment decisions,” says Mr. Burkett, partner and portfolio manager at the Victoria-based firm, which oversees about $340-million in assets. Brenda Bouw asks what he’s been buying and selling.

What to know as RRSP reporting measure takes effect

With tax season in full swing, experts are interested in what the CRA is doing with new information about registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs). Starting with the 2023 taxation year, the agency has brought RRSPs and RRIFs in line with TFSAs with a new requirement that financial institutions report the year-end fair market value of the property contained in these plans. “We can imagine that they would be using this information much in the way that they did with the TFSA balances and that it’s a way of flagging individuals or cases for which they would be looking into having follow-up questions,” says Nicole Ewing, director of tax and estate planning at TD Wealth in Ottawa. Alison MacAlpine reports.

What three tax experts expect Ottawa to include in next week’s federal budget

As the federal Liberals announce policies ahead of the April 16 budget, financial services professionals are watching for a few key areas on budget day that could affect financial planning for their clients. When it comes to seniors, some tax experts are looking for an increase to the CPP survivor and death benefits and a reduction in annual RRIF withdrawals. “This change would allow seniors to continue to have more of their assets invested in tax-deferred vehicles instead of being forced to draw down certain amounts,” says Wilmot George, head of tax, retirement and estate planning at CI Global Asset Management. Brenda Bouw reports on these and other measures.

Also see:

How to invest in gold as it shines again

Your CPP questions answered: How do zero-income years affect your retirement pension?

The rise of AI is showing why financial advisors remain indispensable

Childhood hardship put this advisor on a path to financial independence

Make sure clients don’t miss out on medical expense claims

What you and your clients need to know

Costs for CRA’s bare trusts rules neared $1-billion, survey of accounting firms suggests

Accountants and their clients may have spent almost $1-billion trying to comply with controversial new reporting rules for bare trusts before the CRA announced a last-minute decision not to enforce them for the 2023 taxation year, a survey of Canadian accounting firms suggests. Joseph Devaney, a director at the financial education platform Video Tax News, asked accounting firms in an online survey to reveal how much they had spent and charged in fees to help Canadians abide by the new rules before they were scrapped. He gathered responses from 118 small and medium accounting businesses across the country. Erica Alini reports.

Ottawa expands first-timer buyers’ maximum mortgage amortizations to 30 years for newly built homes

Ottawa says it will allow first-time homebuyers to take out 30-year mortgages for newly built homes, marking a change in its mortgage policy as the Trudeau government faces political pressure to ease the country’s housing crunch. The government also said Thursday it would allow first-time homebuyers to withdraw up to $60,000 from their RRSPs without tax penalties to buy or build a home. The previous limit was $35,000. Rachelle Younglai has more.

Terminated RBC chief financial officer stands to lose millions in pay

Royal Bank of Canada’s (RBC) decision to terminate Nadine Ahn will cost the bank’s now-former chief financial officer millions of dollars. RBC said Friday that it terminated Ms. Ahn effective immediately after an internal investigation “found evidence that, in contravention of the RBC Code of Conduct, Ms. Ahn was in an undisclosed close personal relationship with another employee, which led to preferential treatment of the employee including promotion and compensation increases.” RBC did not say Ms. Ahn was terminated “with cause.” David Milstead reports.

Postsecondary students should take advantage of tax benefits

Tim Cestnick’s son had a bunch of friends from university over on the weekend. He asked the group if they had filed their tax returns yet. Not one hand went up. So, he embarrassed his son and spent a few minutes talking about tax tips for students. Here are some of his key ideas, including FHSA contributions, and claims for tuition, student loans and travel expenses.

– Globe Advisor Staff

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