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What We've Been Up To Lately
Chelsey Chartren wows the crowds at The Wealth Professional Summit as a key speaker on the Millennial Panel. She discusses the merits of financial advice for Millennial clientele and the popularity of her new “Keeping It Simple” videos.
Container Gardening Workshop
June 25th
Avid gardeners.
Guests watched a hands on presentation on succulent/tropical container gardening, spicy “caliente” container gardening, edible flower and vegetable container gardening.
Then it was time to get dirty as everyone got a chance to plant their own take home herb garden.
Guests chose between Thai herb planter and a BBQ marinade planter. |
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Deadline for submission Aug 28th. |
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Not All Fees Are Created Equal
For the fortunate investors who have maximized their tax deferred and tax free accounts, the next logical place to invest is in a non-registered account. Although the investment income earned is taxable annually, there are still tax benefits that can be derived from these accounts.
Next time you receive your non-registered account statement, take a look at how you pay your management fees. In the case of mutual funds, are they in the form of a portion of the Management Expense Ratio (“MER”) or do you pay your advisor directly through a fee-based compensation model where you see your management fees deducted as a hard dollar amount? In this compensation model, the advisor is paid directly by the investor, whereas in the former example, the advisor is compensated out of the MER from the mutual fund company.
If you have the latter, then you have a distinct tax advantage over your MER charged counterparts.
The reason being is investment management fees that are paid directly by your account are tax deductible to Canadians. This means that for every dollar that you pay your advisor in management fees, you are able to deduct that amount from your total income (line 150) when you file your tax return. That is a direct reduction in your taxable income.
For example, take 2 investors that have $1,000,000 non-registered accounts. They both invest in mutual fund portfolios. Investor A has an MER of 2.30% and Investor B has a 2.30% total fee between their 1.00% management fee to the advisor and a 1.30% MER. Both investors are in the 43% marginal tax bracket.
Both investors would pay $23,000 in fees for the management of their portfolio. However, Investor B can reduce his fees by deducting the 1.00% management on this tax return ($10,000). This would result in a $4,300 savings, thus reducing his fees to $18,700. ($23,000 – (($10,000 * 0.43)).
By simply changing the way that you compensate your advisor, you can enjoy tax savings in your non-registered account. Talk to your TMFG advisor today to see if you are taking advantage of these tax savings.
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Chelsey’s Experience as a
Millennial with Insurance
This article goes out to all you Millennial’s who are in the work force and are so confident that you are sufficiently insured or that you don’t need any insurance at all. I’m not here to sell you anything, I’m just here to open your eyes a bit to potential risks that you could be taking on by not considering insurance.
The different areas of insurance for millennial’s I will be talking about is term life insurance and disability insurance. I’ll start by giving you a brief overview of what exactly these products are. Term life insurance provides your named beneficiary(s) with a tax-free lump sum benefit upon premature death to cover mortgage balances or any other outstanding debts, lost income, child education costs, etc. Disability on the other hand is a “living benefit” as it provides you with a tax-free monthly income while you are disabled and unable to work.
Take myself for example, my husband and I bought our first house last year and knew that we absolutely needed to purchase an individually owned term life insurance policy to cover our mortgage balance in the event that one of us were to pass away prematurely. We didn’t want the surviving partner to worry about affording a mortgage payment while dealing with an unexpected death. An important note here is we recommend that you check no to “mortgage insurance” when completing your mortgage application and go buy yourself an individually owned life insurance policy instead. Click here to see why. Some other reasons why you should consider life insurance is if you have a family, you want to take advantage of low premiums while you are young, you’re a business owner, or you want to cover your funeral expenses. For a deeper dive, take a look at this article.
Next on the list is disability insurance. Typically, millennials believe that they are sufficiently insured through their group plan with work. In most cases, this is false. It is important that you look through that huge booklet your work gave you and understand exactly what coverage you have. This will prevent you from being unprepared in the event that something happens to you and you are unable to work. Don’t you know that your ability to make money is your greatest asset?! Again, for a deeper dive, this article is a quick read.
If you think you might need one of these insurance products or just want a review of your current insurance coverage versus your needs, contact your advisor or myself. I am the dedicated Insurance Advisor at the office and would love to chat!
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Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see me for individual financial advice based on your personal circumstances. Insurance products and services are provided through Assante Estate and Insurance Services Inc.
Commissions, trailing commissions, management fees and expenses, may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the Fund Facts and consult your Assante Advisor before investing.
*Please note that a live recording may be conducted at our workshops. Consent will be obtained, should you be captured in the video.
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