This is Globe Advisor’s weekly newsletter for professional financial advisors, published every Friday. If someone has forwarded this newsletter to you via e-mail, or you’re reading this on the web, you can register for Globe Advisor, then sign up for this newsletter and others on our newsletter sign-up page.
More women (60 per cent) than men (44 per cent) are worried about the financial challenges they’ll experience when a spouse passes away, according to a recent survey from online will platform Willful and Angus Reid Institute.
Of those women, a quarter (25 per cent) said they were “very worried” about being left with financial woes.
Globe Advisor spoke with Willful co-founder and chief executive officer Erin Bury to gain more perspective on the survey’s results.
In your mind, what is the big takeaway from the survey?
Traditionally, women have taken a backseat in financial matters. Obviously, that has changed as women entered the workforce and taken a more active role in contributing to and managing finances. But in a lot of cases, it’s still the male partner who takes on the financial role.
The lesson is you can’t just rely on your partner to hold all the knowledge around finances. You also can’t leave it up to your partner to decide whether to get an estate plan. I hear this often from customers: “I have my will finished but my spouse is dragging his feet.” People need to take action because, without these documents, you’re going to be the one who is left behind cleaning up the mess, trying to track down everything.
Have you had many situations in which someone gets a will because their spouse passed away without one?
It’s the third most popular reason that people come to create a will after having a child and buying a home. Losing a loved one makes you think about your own mortality in your own planning and people see what happens when you don’t have a will in place and proper planning.
And of course, it’s not just drafting a will but ensuring it’s updated as life events change.
Divorce is increasingly a common reason why women are coming back to update their will. But typically, you’ll be updating your will four to five times over your lifetime. You may want to change executors because you’ve had a falling out with someone or someone named in the will has passed away and you want to replace them. Maybe you’ve moved provinces and so you want to create a will in the province where you now reside.
What other trends did your survey uncover?
I was chatting with a couple this week who are part of the sandwich generation. They’re creating estate plans and appointing guardians for their children but they are also caring for aging parents.
A big trend as we go through this intergenerational wealth transfer will be knowing [whether] our parents also have solid estate plans in place. The kids will likely be the executors, so we have a vested interest in making sure our parents are also organized. So, it’s not just about bringing our spouses on board.
This interview has been edited and condensed.
- Deanne Gage, Globe Advisor reporter
Must-reads from Globe Advisor this week
Why Canadian spin on single-stock ETFs offers a more risk-adjusted approach
Single-stock exchange-traded funds (ETFs) have been lauded for their innovation and criticized for the high risks they entail when first launched in the U.S. last summer. But a new suite of Toronto-listed ETFs puts a new, less risky spin on the strategy, garnering increasing interest from Canadian advisors. Purpose Investments Inc. launched a suite of single-stock ETFs for a handful of large-cap U.S. companies, including Tesla Inc. TSLA-Q, that take advantage of recent regulatory changes allowing for modest use of leverage inside an ETF. Joel Schlesinger looks at the pros and cons of using these products and how the Canadian ones differ.
Is it a good idea to take out your CPP early and invest it?
Canadians are urged to delay receiving their Canada Pension Plan (CPP) or Quebec Pension Plan benefits until age 70 to receive a larger monthly income in their retirement years. Yet, research shows less than 1 per cent do. Many choose to take the funds sooner either because they need the money, worry they won’t live very long, or want to invest it – strategies advisors say could be best in certain circumstances. Brenda Bouw speaks to experts about the benefits and drawbacks of taking the CPP early.
Is it a good idea for parents to gift money for the Tax-Free First Home Savings Account?
The Tax-Free First Home Savings Account (FHSA) is expected to take effect in the coming months and advisors are fielding a flurry of questions from parents about how to take advantage of the plan to get their adult children into the housing market. While parents can’t contribute directly to a child’s FHSA, they can gift the kids the money. If the child doesn’t buy a home, the money in an FHSA can be transferred to a registered retirement savings plan within 15 years of the plan being opened or by the time they’re age 71, whichever comes first. Brenda Bouw reports on the strategies that clients can consider.
How to play the music royalty boom as streaming services fuel growth
Canadian pop star Justin Bieber recently sold his song-catalogue rights to a British investment firm for US$200-million, joining a parade of big-name artists who have done deals with major investors. A music royalties land-grab is underway with more players – from private equity firms to investment funds and entertainment giants – taking part in a catalogue-acquisition frenzy. But individual investors also have opportunities to get royalties from music. Paid streaming services, such as Spotify, and social media platforms like TikTok, YouTube and Instagram are fueling its strong consumption growth. Shirley Won looks at the industry and where the investment opportunities lie.
How this money manager of women-led active ETFs is playing the ‘earnings recessionary environment’
How advisors can create more meaningful relationships with female clients
How advisors can bust their clients’ money myths
Expiry of Vanguard ETF patent could spark run of copycats
Skeptical investors worry whether advances in AI will make money
What you and your clients need to know
Bay Street is fighting over high-interest ETFs, sparking a federal review, sources say
The federal banking watchdog has launched a formal review of cash ETFs, one of Canada’s most popular retail investments, amid a Bay Street spat that stems from surging demand for these products. The Office of the Superintendent of Financial Institutions, which regulates banks, launched its review in the fall and is studying any liquidity concerns posed by these ETFs, according to three financial industry sources. Clare O’Hara and Tim Kiladze report on the review and what it means for investors.
17 High performing female-led Canadian funds
With International Women’s Day just behind us, one can’t help but notice the stark lack of female-led portfolio management in the industry. Case in point, Morningstar Inc.’s U.K. office conducted a short study last year and found that there were actually more registered portfolio managers named “Dave” than there were female managers in the country. Quite a sobering stat. With that in mind, Ian Tam of Morningstar Canada looks for good-performing female-led funds and ETFs.
Naming an estate or charity as the beneficiary of an RRSP or RRIF
It’s possible to name an estate as the beneficiary of a registered retirement savings plan or registered retirement income fund. If this is done, there will generally be tax owing on the final tax return on the value of the plan assets. It is possible for an executor to make a joint election with a spouse, or a qualifying dependent child, to make a tax-deferred transfer of a plan’s assets to a spouse’s or child’s plan. However, if a province levies probate fees, the value of the plan assets will be subject to these fees if the estate is named as beneficiary. Tim Cestnick looks at the pros and cons of doing this.
– Globe Advisor Staff