Kevin Gebert
Financial planner Kevin Gebert was surprised when a client recently dropped in to say, "Thank you for helping me buy my house."
"I was a bit taken aback," says Mr. Gebert. "I didn't think I'd done much – it's just part of my job. But it all came down to a conversation we had about using his RRSP for his down payment."
Early in their professional relationship, the client had mentioned his dream of buying a home. "We discussed using the Home Buyers' Plan and made the appropriate risk allocations within his RRSP portfolio."
The Home Buyers' Plan enables a qualifying first-time homebuyer to borrow up to $25,000 from his or her RRSP and repay the amount over up to 15 years. By contributing to an RRSP, income is sheltered from tax in the year it's earned, so that money that would otherwise be paid in tax instead goes toward savings – bringing home ownership within reach earlier.
In another case, a client decided to invest an additional $50 each month. "I suggested we have a broader discussion. We did a full-scale needs analysis, and she agreed it was better to put that $50 into a critical illness policy."
Just a few years later, she was diagnosed with breast cancer. "She is cancer-free today, but because of that conversation, she received a cheque for $50,000, tax free, that alleviated a lot of her stress and let her focus on her recovery," he reports.
Kevin Gebert is a certified financial planner based in Surrey, B.C. His book Financial Fotographs, which uses images to help families have valuable conversations about money, can be pre-ordered now at www.knowledgebureau.com.
Andrew Guilfoyle
It might seem counter-intuitive, says financial adviser Andrew Guilfoyle, but it is a mistake to assume that a family with a net worth of $5 million or even $10 million has realized financial security. For example, he says, "One family recently sold their business, and they couldn't sleep at night for worry about what they were going to do with their money."
The sense of responsibility and uncertainty about how to manage a nest egg that had taken most of a lifetime to accumulate was affecting their health, says Mr. Guilfoyle.
"They told us afterward that what was supposed to be a very happy time in their life was instead one of the most stressful periods they'd ever been through."
The reason, he explains, was that "they had had a certain income from their business for over 40 years. It was very difficult to adjust to that no longer being the case."
Through a series of long-term planning exercises and re-allocations, Mr. Guilfoyle and his team were able to help the couple reach a point where they were very comfortable with their financial affairs and could begin to enjoy their retirement.
For another high-net-worth family who recently sold a part of their company, Mr. Guilfoyle's team set up a life insurance plan that serves the purpose of a corporate tax-free savings account to leave a legacy for the third and fourth generations.
"The compounded rate of return is greater than they could get in today's fixed income rate environment, on a fully guaranteed basis. But as well, a detailed communication plan has also been implemented, and all three generations are completely aligned with it," he says.
The plan enables the family to achieve their shared significant charitable objectives as well as corporate objectives over the coming decade.
"Many of our clients feel similar to Warren Buffett: they want to leave their children enough to do anything, but not to do nothing. Wealth can be a blessing and a privilege or a curse," says Mr. Guilfoyle. "We're fortunate to be able to assist our clients in having their wealth work for them over multiple generations, to help them achieve their life dreams."
Andrew Guilfoyle holds the prestigious chartered accountant (CA) and chartered financial analyst (CFA) designations, and acts as a personal chief financial officer for wealthy Canadians.
Elaine Politsky
When Alan Hall, at age 97, met with financial adviser Elaine Politsky and told her he wanted to invest in Nortel stock, she advised him against it. "I told him I felt it was too high-risk. He said, 'But it's for the long-term portion of my portfolio,'" she says, laughing. "We should all have that kind of optimism."
Eventually she convinced Mr. Hall that he would be better off with some blue-chip, dividend-paying stocks that have since stood the test of time. Mr. Hall passed away at the age of 101, but Ms. Politsky continues to meet regularly with his wife, Ida, and recently helped her celebrate her 105 birthday at the St. Hilda's Retirement Home in Toronto, Ontario.
"She asked me if she had enough to transfer some money to her spending account for the year, and I was able to reassure her that – despite the fact that they had a modest nest egg when we began working together – she has enough to last until she is 120 and then some."
Ms. Politsky has been helping her clients face the challenge of planning for retirement for almost 30 years. "Many are looking for a reliable income strategy – it can be what defines what they will be able to afford during retirement," she says. "Ultimately, clients want to build a relationship with an adviser they trust and create an income stream that will last a lifetime."
Of her work with Alan and Ida Hall, Ms. Politsky says, "It has been an honour to have them as clients, to experience their love for each other and help them achieve their dreams in retirement."
Elaine Politsky is the founder of ESI Wealth Management in Markham, Ont. She blogs about retirement at www.GoldenGirlsFinance.com.