How to Select an iA Private Wealth Investment Advisor

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By iA Private Wealth, May 10, 2020

Choosing an Investment Advisor is one of most important long-term financial decisions you will make – perhaps even the most important. We recommend that you take a systematic, deliberate approach using this four-step process:

Step 1: Self-assessment

The first step is to identify your needs and goals and assess your financial position. It’s important to be as thorough as possible and to document this process in as much detail as possible.

Step 2: Choose your level of involvement

iA Private Wealth offers two ways of receiving investment advice:

Option 1: Advisory account

An advisory account allows you to maintain control over investment decisions while receiving guidance from an Investment Advisor.

Learn more about advisory accounts

Your advisor will share investment recommendations that take into account your current financial situation, goals, investment knowledge, risk tolerance, and time horizon. You will have the opportunity to assess and approve – or revise – your advisor’s recommendations before taking action.

Responsibilities

This type of account allows for close collaboration with your advisor for investment selection. To make the most of this relationship, a clear understanding of mutual obligations is vital.

Your responsibilities

  • Clearly communicate your investment objectives, risk tolerance and time horizon
  • Validate investment decisions
  • Stay informed on the progress of your investments
  • Inform your Investment Advisor of any change in your personal or financial circumstances

Your Investment Advisor’s responsibilities

  • Know your investor profile
  • Maintain regular contact
  • Demonstrate a proper degree of prudence
  • Present investment recommendations that are suitable for your profile

Option 2: Managed account

Also known as a discretionary account, a managed account is right for you if you prefer to delegate all investment decisions. With a managed account, your investments are overseen by a Portfolio Manager, which is a special type of advisor with regulatory approval to exercise complete discretion when building and maintaining your investment portfolio.

Learn more about managed accounts

After providing your Portfolio Manager with a clear picture of your current financial situation, goals, investment knowledge, risk tolerance, and time horizon, you’ll agree to an investment policy statement (IPS) that’s built around your profile. Based on the guidelines in the IPS, your Portfolio Manager will make all investment decisions on an ongoing basis. If your financial situation changes, the IPS will be updated and your Portfolio Manager will make future investment decisions in line with the revised IPS.

Please note that there is a $250,000 minimum initial investment to qualify for our managed account offering.

Step 3: Interviews

After settling on a manageable list of candidates, contact them by phone or Zoom to get a sense of their background and experience. Some key questions to ask at this stage include:

  • How many years have you worked as an advisor?
  • What is your training?
  • What is your approach to planning and portfolio construction?
  • Which regulatory and professional organizations are you registered with?
  • How are you paid?

Step 4: Follow-up meeting

Following your initial interviews, you should be able to reduce your list to a few names. Request a 30-minute follow-up meeting with each advisor to learn additional details about what they have to offer and if they’re the right fit for your goals and needs.

After these meetings, it will be clear which advisor is best suited to becoming your long-term partner for financial success.

This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.

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The Building Blocks of Financial Literacy

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By iA Private Wealth, November 10, 2021

November is Financial Literacy Month. It’s a great initiative, but in reality, every month is a good time to learn about personal finances. As you gain more knowledge, you’ll become a better saver, spender, consumer and investor.

Being financially literate touches almost every aspect of life. This article will consider some of the basics, giving you a foundation in case you wish to learn more about topics that are most relevant to you.

It can pay to shop

The world of financial products is more complex than ever, given the growth of online platforms. With so many financial institutions and so many products to consider, it can be overwhelming.

Before making a decision, shop around and weigh your options. Let’s say you want to open a bank account. Conduct an online search and learn what services each bank provides and what features each account type offers. Do you require a physical branch nearby, or will you do most of your banking virtually? Based on your circumstances, determine which account best meets your needs.

Similarly, credit cards come in all shapes and sizes, so shopping around can help you find the card with the features, rewards, fees and interest rates that work for you. Shopping around for the right mortgage is also crucial because purchasing a home is a major long-term financial commitment. Since mortgage rates and conditions vary by institution, careful shopping can make a big difference over the long run.

Know your rights and responsibilities

To satisfy regulatory requirements, financial institutions use clear, plain language in their contracts and other documents. For instance, banks provide easily understood information about their credit products, while investment managers publish materials like a Simplified Prospectus and Fund Facts document that highlight a product’s key features and risks. You should read these materials before signing any agreement, as understanding all terms and conditions will ensure you know what you’re getting into.

If your financial institution experiences insolvency, there are safeguards to help protect your money. For example, the Canadian Investor Protection Fund (CIPF) provides clients with limited protection for assets held by investment dealers that are CIPF members. Similarly, the Canada Deposit Insurance Corporation (CDIC) provides limited protection for eligible deposits held at CDIC members, such as banks, credit unions and trust companies.

Watch for scams

Protecting assets is the responsibility of every individual. Fraud and cybercrime are on the rise, targeting those who are vulnerable or careless. Scammers may call, email or text you, posing as a someone from a recognizable company or government agency. They often use aggressive tactics and threats that pressure you to provide banking or credit card information. If you question the identity of someone claiming to represent a legitimate organization, get their name/contact details and call the organization to confirm.

The Financial Consumer Agency of Canada (FCAC) ensures that federally regulated financial organizations comply with the appropriate measures to protect consumers. The FCAC also provides information to help you understand consumer rights and responsibilities, as well as how you can spot and avoid scams.

Understanding investment products

Everyone wants to build wealth for the future, but there are many investment products to choose from – and some are highly complex. Your advisor can help you choose products that best match your investment objectives, time horizon and risk tolerance.

If you don’t have an advisor, do your research as there are many options. Some people try investing on their own, but usually lack the necessary time and expertise. Others may use “robo advisors” that offer lower fees but typically provide limited services. For most investors, it makes sense to work with a professionally accredited advisor – one who offers personalized advice that can help them stay on track to meet their long-term financial objectives.

An iA Private Wealth Investment Advisor can help you navigate the financial marketplace as you work to achieve your wealth goals. Speak with one today.

5 Tips for Managing Your Expenses

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By iA Private Wealth, November 01, 2021

Are you looking for ways to keep expenses under control so you can improve your financial situation? That’s an important step toward achieving your objectives, since reducing debt and growing your savings will help you build wealth for the future. Managing finances has become more complex than ever, so the challenge for many people is taking the first step. Here are five actions to help you get started.

  1. Create a wealth plan. You want to reach certain goals and a comprehensive plan can help you get there. A professionally developed wealth plan will account for your unique circumstances, objectives, time horizon and risk tolerance. It can help you save and invest wisely, manage debt obligations and take advantage of tax-efficient vehicles to keep more money in your pocket. Also, it can adapt to changing circumstances so your plan can remain relevant at any life stage. A wealth plan keeps you on track to achieve your goals, helping you gain confidence and peace of mind. But creating a wealth plan requires a significant amount of training and skill, so it’s best to seek the help of a qualified advisor.
  2. Maintain a budget. A key aspect of wealth planning is setting a budget. Basically, a budget tracks your sources of income and your expenses over a given time period (typically monthly). Once you know how much money comes in and goes out, you can assess your financial health and make adjustments to strengthen your finances. For instance, if expenditures are higher than anticipated, look at your different expenses and determine which ones are essential (e.g., food, rent or mortgage payments) and which are “wants” (e.g., restaurant meals, new gaming system). Maintaining a regular budget will provide an ongoing snapshot of how well you’re managing money and where improvements might be possible.
  3. Consolidate your debt. Carrying debt is often unavoidable, as many people have mortgages, credit card balances, etc. An advisor can review your various debt obligations, working with you and your financial institution(s) to see if it’s advantageous to consolidate debt into one relatively lower-rate loan or line of credit. Doing so could help you pay off debts with high interest rates that may be unnecessarily eroding your wealth. Consolidating debt can streamline your finances since you only need to track one monthly payment instead of several. You might also consider contacting your financial institution(s) and negotiating a lower interest rate – it doesn’t hurt to ask or explore other institutions that may charge a lower rate.
  4. Commit to saving. Reducing your debt is important, but the flipside is increasing your savings. One common trick is to “pay yourself first” by taking a certain amount (e.g., 10%) of your monthly income and automatically depositing it into an interest-bearing account or investment plan. It’s tempting to spend money that’s readily available, so devoting some income to a regular saving or investment routine will keep you disciplined – chances are, you won’t even miss the money being saved. Another important part of saving is putting away money for emergencies (e.g., employment loss, major repairs/renovations, serious illness, etc.). Life is filled with unexpected situations that may require immediate access to cash, so an emergency fund (general rule of thumb is a minimum three months of household expenses) becomes essential.
  5. Make use of technology. Advances in technology can greatly improve your finances. To compare institutions and products to see which ones offer the best rates/prices or the features you need, simply conduct an online search. There are also financial-related apps that may enhance your banking experience, help you save or invest, find an appropriate mortgage or insurance policy, keep your finances secure from cybercrime, create a budget to help you track your income and expenses, and much more. Search online for financial apps that interest you, and then read reviews and conduct other research to determine which apps are most suitable for you. Your advisor may also have insights into how financial technology can work well for your circumstances.

An iA Private Wealth Investment Advisor can help you get and stay on track so you can reach your unique wealth goals. Speak with one today.

Marketing Your Small Business

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By iA Private Wealth, October 04, 2021

Having a strong brand identity is one of the best ways you can differentiate your business from the competition. Whether it’s new or established, every business can benefit from effective marketing to enhance brand awareness and generate strong leads.

Marketing a small business takes commitment and persistence, but it doesn’t need to be onerous and you won’t need an outsized budget. Also, today’s online technological capabilities can make brand marketing very accessible and highly effective.

Here are five basic tips to help you build a solid plan to market your small business:

  1. Define your audience. Most small businesses are not geared to everyone, so identify your target audience. It’s useful to create sample profiles (known as “personas”) of the types of clients you want to attract. A persona will capture details like age group, job type, income, location, objectives, challenges, how someone likes to be engaged by a business, etc. Once that’s done, you can better understand your typical client (e.g., what they need, why they need it) and customize your marketing efforts so you can resonate with your niche audience.
  2. Define your value proposition. You might know your products or services are better than the competition, but your potential clients may not. That’s why it helps to create a value proposition highlighting how you can meet your clients’ needs and why they should choose you (e.g., maybe you’re faster and less expensive, or offer superior personalized service). Think about your business in relation to others in your field, and clearly articulate specific points of differentiation and reasons why you provide better value.
  3. Leverage referrals.It’s powerful when your clients are “brand ambassadors” and spread the word about why they like your business. Referrals are a lifeline for business growth as many people would rather interact with a business their family or friends recommend than seek out a company blindly. Satisfied clients typically won’t mind referring you when one of their contacts needs your products or services. Some may leave positive online reviews about your business or be receptive to being quoted in your marketing materials – just be sure to explain how you intend to use their testimonial and let them see the quote first, in case they want to make revisions.
  4. Leverage social media. Business owners often turn to digital marketing to promote their business and brand. They maintain a professional-looking website that makes it easy to learn who they are, what they offer and how to conduct business with them. They also utilize social media to deliver their message and connect with clients and prospects, perhaps offering tips or information related to their business, and then linking to their website so people can find out more. You may also consider advertising on social media channels to raise awareness and engagement. Whatever social media strategies you choose, track their effectiveness in driving interest and growth, and focus on the ones best suited for your business.
  5. Use automation tools. As your online presence gains more visibility, you’ll want to engage further and turn prospects into clients. For example, automation tools can collect email addresses and other valuable details from people who visit your website. Then you can send promotions or offers that may spark greater interest in your business. Just be sure that all of your email marketing activities fully comply with CASL – Canada’s anti-spam legislation, as the penalties for non-compliance are quite stiff. You can also use automation tools to segment email campaigns (e.g., an email may target a certain region or people who display interest in a specific service or product). Online analytics tools will track traffic on your website and tell you what content is most popular and pertinent. Knowing what attracts clients and prospects helps you refine your marketing strategy so it better aligns with people’s interests and needs.

There’s more to marketing your small business and brand, but these five tips provide a solid foundation to build upon. If you want more help, reach out to professionals who can support your marketing needs. Your contacts may recommend experts they’ve had a good experience with.

For more insight on how to grow your small business, speak with an iA Private Wealth Investment Advisor today.

Small Business Owners: Partner with a Trusted Advisor

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By iA Private Wealth, September 30, 2021

While operating a small business is challenging, it can also be highly rewarding and provide business owners with autonomy as they pursue their passion. That’s why they invest so much time, effort and money into running their businesses.

However, without a comprehensive wealth plan, your small business may not reach its potential – even if it’s generating significant revenue.

Benefit from professional advice

Fortunately, an Investment Advisor can help build and maintain a sound plan that considers the complexities of your business and how it fits into your overall financial circumstances. An advisor can help your business be more efficient and profitable by assessing all your income sources and expenses. Equipped with that information, an advisor may uncover strategies for earning more and spending less, paving the way for growth.

Professional advice can help you address day-to-day business finances. For instance, business owners need steady cash flow to meet operating costs, cover wages, ensure adequate inventory and pay product/service providers. An advisor can also offer guidance concerning tax obligations and help you manage your business finances in a tax-efficient manner.

Invest wisely

While it’s satisfying to generate healthy business income and profit, it’s equally important to invest for the future, including retirement. That’s another area where Investment Advisors deliver meaningful value. Advisors consider your professional and personal financial situation, including short- and long-term needs and goals, and then evaluate whether you’re on track. Your advisor will help you invest according to your financial objectives, risk tolerance and time horizon. A concrete wealth plan keeps you focused and disciplined, empowering you to invest regularly and stay invested – even when markets experience occasional periods of volatility.

Plan for the future

While Investment Advisors encourage saving and investing for retirement, another key aspect of wealth planning is creating a viable succession plan. Eventually you’ll need to transfer ownership of your business. With a strong succession plan – ideally as part of an estate plan that your advisor may help create – you can maintain business continuity while gaining the peace of mind that comes with establishing your future financial well-being. A good succession plan provides clarity to your heirs regarding how (and to whom) you intend to transfer your business.

Choosing an advisor

There are many benefits of working with an advisor, but it’s crucial to select one who’s right for you. During your search, find out if a candidate has experience with small business owners, since this background will be useful when addressing your financial needs.

The advisor-client partnership is built on trust and a long-term commitment to the process. To determine if your personalities mesh well, interview each candidate and request references, preferably from other business owners. Also inquire about an advisor’s employment history, such as where they’ve worked, years in the financial industry and field of practice. You’ll want to know about their professional and academic designations as well (e.g., CFA®, MBA, CFP®, CIM®).

Another important question pertains to compensation. Some Investment Advisors earn commission for each transaction – like a stock or mutual fund trade – while many are compensated based on a percentage of the assets under administration. There are other ways to be compensated, so find an advisor whose compensation model suits your service requirements.

It’s also useful to ask about their professional network. While Investment Advisors offer a range of capabilities, your circumstances as a small business owner may call for specific knowledge in other areas. For instance, your advisor may engage the services of external collaborators* such as accountants, lawyers and insurance professionals. Consider your Investment Advisor as the “quarterback” of the team, overseeing your comprehensive wealth plan and bringing in others when needed.

You can’t be an expert at everything. Just as you understand your business and industry, an Investment Advisor has deep knowledge of finances. By delegating complicated financial matters to your trusted advisory team, you can concentrate on running and growing your business.

An iA Private Wealth Investment Advisor can help your business succeed. Speak with one today.

Give Your Child the RESP Advantage

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By iA Private Wealth, September 22, 2021

As the school year begins, many parents devote more thought to saving for their child’s post-secondary education. Truth is, it’s always a good time to think about funding education as the cost of schooling continues to rise.

One of the best ways to save for post-secondary education is through a Registered Education Savings Plan (RESP).

How RESPs work

There are two types of RESP accounts: individual and family. As long as the person opening the account (the subscriber) and the beneficiary (student) reside in Canada, anyone can open an individual RESP account. The subscriber of a family RESP must be the beneficiary’s parents or grandparents, but an advantage of family RESPs is that the plan may be designated for one or more children in the family.

You can contribute any amount to an RESP in a given year, but keep in mind the current lifetime limit is $50,000 per RESP beneficiary. While RESP contributions are not tax deductible, any investment growth within the plan will compound on a tax-deferred basis until the beneficiary heads to college or university.

To encourage saving for education, the federal government matches up to 20% of contributions each year – until the beneficiary turns 17 – through its Canadian Education Savings Grant (CESG) program. The maximum annual grant is $500 and the CESG lifetime limit is $7,200. If you don’t take full advantage of the CESG in a given year, any unused grant room may be carried forward, to a maximum of $1,000 granted annually.

The earlier you contribute to an RESP, the more your child will benefit from compound, tax-sheltered growth. RESP contributions can be invested in a wide range of products, including mutual funds, ETFs, stocks and bonds. Your Investment Advisor can help you decide which investments are suitable for your particular circumstances.

5 common RESP questions

  1. How many RESPs can I open?
    You may open as may plans as you wish at different financial institutions, but the lifetime combined contribution limit of $50,000 per beneficiary remains.
  2. How does my child use RESP funds?
    Contributions may be withdrawn to pay for the child’s qualifying post-secondary education program. Withdrawals from CESG (and other) grants, or the interest earned, can be used to pay for tuition, books or transportation. These withdrawals are taxed in the hands of the beneficiary, who is typically in a lower income tax bracket.
  3. Can I transfer an RESP to another child?
    Yes. For example, if one child does not attend post-secondary school, you may change the RESP beneficiary or add another child to an existing family RESP.
  4. What happens to unused RESP funds?
    RESPs mature after 36 years and unused contributions are returned to the subscriber. Any income from the contributions may be transferred (up to $50,000) to the subscriber’s (or their spouse’s) RRSP, or taxed at the marginal rate plus a 20% surtax. Unused CESG-related funds must be repaid to the government.
  5. Can I withdraw RESP funds?
    Contributions can be withdrawn tax-free at any time by the subscriber, but certain restrictions may apply on future CESG payments.

An RESP is a great vehicle to help save for your child’s education in a tax-efficient manner. To learn more, speak to an iA Private Wealth Investment Advisor.