Free Advice Can Cost You a Fortune



By iA Private Wealth, April 02, 2019

Financial advice can benefit everyone, no matter how simple or complex their situation. From building up emergency savings and funding a child’s education to preparing for retirement, guidance on how best to channel your resources to reach your short- and long-term goals is always handy. So, where do you turn for advice?

It’s not hard to find. Thanks to the internet, you have access to a world of information on a litany of financial topics at the click of a mouse. There’s also the media, both traditional and social, inundating you with articles, blog posts and tweets. Add to that your IRL (in real life) sources, which could include friends, family and maybe even your hairdresser, and it’s clear that anybody and everybody can have an opinion on what you should do with your money. Free financial advice is everywhere. But what about its quality?

The proverb, “a little knowledge is a dangerous thing” can ring especially true when it comes to money management. Research shows that investors can fail even after their financial literacy improves. While more financial education can boost confidence, it doesn’t necessarily increase ability. For example, a study on do-it-yourself investors discovered that they fared worse once switching to online trading platforms where they bought and sold investments more actively, more speculatively and less profitably1. They may have known how to trade, but not how to be successful doing it.

Another investor pitfall comes in the form of breezy narratives and so-called rules of thumb, like “buy and hold” or “own gold”. On their surface, simple stories offer certainty in an uncertain world. They seemingly bring sense to events that otherwise may be difficult to grasp. Despite their innate appeal, these simplified perspectives can prove dangerous to your financial health. Follow them blindly at your own risk. Whether inaccurate, oversimplified or too generic to apply to individual circumstances, this type of “advice” sets up money management as being deceptively easy.

In reality, financial decision-making is complex. What you do (or don’t do) as it relates to your finances can have a big impact on your present and future well-being. Good financial planning isn’t about churning out sound bites. It involves looking at your whole financial picture and how all the pieces connect, then developing coordinated strategies that fulfill your needs. It's also about having a trusted coach by your side to help you through the inevitable bad days when you’re liable to succumb to emotion and make poor decisions about your money.

Free advice tends to be worth what you pay for it. Ultimately, it can cost you dearly if it prevents you from meeting your financial needs and goals. On the other hand, investors who are professionally advised see greater long-term value as a result. According to the Investment Funds Institute of Canada, advised investors have on average almost four times more assets after 15 years than their non-advised counterparts2. Over time, working with an advisor can help you create substantially more wealth than if you tried to do it alone.

Contact an iA Private Wealth Investment Advisor near you to find out how you can get the right kind of advice.

2 Modest Investors: Easy Access and the Freedom to Choose are Keys to Successful Long-term Investing

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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Preserve Wealth and Reduce Taxes with a Family Trust


By iA Private Wealth, April 27, 2021

High-net-worth families want to protect their wealth, and one proven way to achieve that goal is through a family trust. And while high-net-worth families may reap the greatest benefits from trusts, other families – especially those who own a business – can make good use of family trusts as well.

A family trust is a legal entity that allows family members to protect assets, control the distribution of assets, transfer wealth among family members and split income in a tax-efficient manner. Before we look at these benefits in more detail, it’s important to understand the three key parties involved in family trusts: settlors, trustees and beneficiaries.

The settlor is typically a family member or close friend who establishes and funds the family trust on behalf of the trustees and beneficiaries. Trustees are the people who manage and administer the trust, and are often parents or a reliable business advisor. Beneficiaries are the people who will receive financial benefit from the trust, and can be children, grandchildren, siblings, nieces, nephews, etc.

Family trusts may set up as either testamentary (e.g., arising after the death of a trustee) or inter vivos (e.g., implemented while the trustee is alive).

Why create a family trust?

Now that we know who’s involved in a family trust, let’s look at four of the most common reasons for creating one:

  1. Protect assets. A family trust can protect the beneficiaries from claims for payment made by creditors. Assets held in the trust typically cannot be seized in the event of a lawsuit or bankruptcy.
  2. Control the distribution of assets. Trustees decide which beneficiary receives what – and when – based on the factors they have documented. Also, let’s say a child is disabled or not careful with money. The family trust can distribute assets in a way that ensures the child has enough money to help meet their lifetime needs.
  3. Transfer wealth among family members. An estate freeze is a strategy that allows a business owner to lock in the value of their business at its current valuation as part of the family trust. Any future growth of the business is considered a capital gain and the beneficiaries can use their lifetime capital gains exemption to help shelter these gains from income tax. Estate freezes are also used in other tax-mitigation strategies and for certain estate planning and business succession purposes.
  4. Split income in a tax-efficient manner. A family trust allows trustees to distribute earned income to family members who are in a lower income tax bracket, so the income (e.g., capital gains, dividends) is taxed at a lower rate. By sharing income, the overall family tax burden is reduced, leaving more wealth available.

Family trusts offer many benefits, but may also be costly and complicated. We can help you determine if establishing a family trust is suitable for your family’s unique financial situation. Find out more by contacting an iA Private Wealth Investment Advisor.

Why Everyone Needs an Estate Plan


By Josh Sheluk, April 19, 2021

Pop legend Prince passed away in 2016 at the young age of 57. Despite fame, fortune, a wardrobe filled with raspberry berets, and a lineup of royalty-generating music, the man made a critical mistake that too many Canadians seem intent on copying – he didn’t have a will.

An Angus Reid Institute poll finds that 51% of Canadians do not have a will, while only 35% have one that is up to date. If you want to mimic Prince’s fabulous personal style, that’s one thing; but following in his footsteps by dying without a will is not something we recommend.

An estate plan isn’t just for the wealthy, and it involves much more than a will. Consider a few real-life scenarios that may hit a bit closer to home than the story of an international pop star.

Scenario 1

A single father has two minor children. He has a well-paying job and has accumulated assets: an RRSP, a TFSA, and the family home. He also has a life insurance policy that would pay out upon his death. He would like to have the assets managed professionally for his children until their 25th birthdays.

The case may be obvious, but our father is in dire need of a proper estate plan. Upon his death, there are tax consequences for the RRSP, a formal trust needs to be set up by a lawyer, a trustee needs to be appointed, and assets need to be liquidated. The only proper way to do any of these things is with the help of a will.

Scenario 2

A married couple has two young children. They have some debt but do not have much in the way of savings. There is a modest life insurance policy through the wife’s employer, but with the absence of personal wealth and with money tight, they are not yet considering creating a will.

Personal wealth does not determine the need for an estate plan. Importantly, a proper estate plan covers the guardianship of minor children. Without explicit directions from the parents, the guardianship could end up in court. With family members who don’t get along, the only ones who win are the lawyers.

Scenario 3

Your friend’s mother passes away. Your friend’s half-sisters would like their mother to be buried next to their father, who passed away 50 years ago. Your friend, of course, would like her mother to be buried next to her father, who was the deceased’s current husband of 45 years.

A proper estate plan involves a final directive, which is direction to those left behind on what should happen with one’s remains. It’s often difficult to foresee what problems or contentions may arise upon your passing, which is why a properly structured and well-thought-out plan is crucial.

So, should you have an estate plan? The answer, in our experience, is almost certainly “Yes”. And that estate plan should almost certainly include a will, appointment of a power of attorney, and final directive. Not only should you have a plan, you should also revisit it regularly, as it’s likely you’ll change your mind as circumstances change over time.

If you’re having difficulty figuring out where to begin, talking to a professional would be worthwhile. A financial advisor or lawyer who focuses on wills and estates would be a good place to start.

Josh Sheluk, CFA, CFP®, CIM®, is a Portfolio Manager at White LeBlanc Wealth Planners, iA Private Wealth, in Burlington, Ontario.

Do You Need a Prenuptial Agreement?


By iA Private Wealth, April 16, 2021

If you’re getting married, it’s an exciting time. You’ve got many things to do before the big day – is a prenuptial agreement one of them? It’s usually not top of mind for couples entering marriage, but it’s worth considering.

A prenuptial agreement (also called a prenup or marriage agreement) is a written, legally binding document that a couple signs before they marry. In the event of divorce, a prenup determines the rights of entitlement (e.g., how assets are divided).

People often hesitate to sign a prenup. They feel it assumes the relationship is headed for divorce or treats marriage as a business arrangement. That’s not necessarily the case.

Think of it as a form of insurance. When you buy home insurance, you’re not assuming your house will burn down. When you buy disability insurance, you’re not assuming you’ll suffer a major accident. You just want peace of mind knowing that you’re protected if something bad happens.

Benefits of a prenup

A prenup encourages open communication before marriage regarding important life issues. You will disclose financial circumstances (good and bad), major goals, approach to childrearing, etc. You’ll learn what’s important to your partner and what needs and concerns he or she may have.

Here are eight more reasons to sign a marriage agreement:

  1. You want to protect your existing assets (e.g., a home, investments, insurance policies, jewelry or other possessions with monetary/sentimental value) and future inheritances.
  2. There’s a significant imbalance in the value of assets each person brings to the marriage.
  3. You own or have an ownership stake in a business (especially a family business).
  4. One partner (or both) is carrying a large amount of debt into the relationship.
  5. You want to uphold an existing estate plan so your assets are distributed according to your wishes when you die.
  6. One partner (or both) is already divorced and/or has children who may be receiving financial support.
  7. A prenup can make divorce less contentious, facilitate a smoother settlement (which may mean lower legal fees) and ensure a fair distribution of assets.
  8. Divorce is a common cause of financial hardship and bankruptcy, potentially jeopardizing long-term financial health and stability.

In Canada, the laws regarding prenuptial agreements vary by province, so be aware of the parameters and limitations that apply to your province of residence.

Postnuptial (postnup) and cohabitation agreements

Like a prenup, a postnup is legally binding and stipulates how a couple’s assets are distributed in the event of divorce. But as its name suggests, a postnup is signed after getting married. Courts often treat a postnup carefully to ensure validity of the reasons why the couple made this arrangement after they exchanged vows.

Cohabitation agreements differ slightly. Without a prenup, a divorcing couple typically splits their assets equitably. This default action doesn’t apply to common-law couples with no cohabitation agreement. For example, you’re not automatically entitled to 50% of the shared home, even if you’ve been making 50% of the mortgage payments and covering 50% of home maintenance costs.

Keep all receipts and other documentation regarding home-related expenses, and ensure your name appears on the title of the home. Alternatively, a cohabitation agreement can clearly (and legally) spell out how you deal with financial issues when together, and what happens to your assets should the relationship end.

If you’re engaged or thinking about moving in with your partner, an iA Private Wealth Investment Advisor can work with your legal counsel to create a marriage agreement that is fair and protects your assets.

How to Select an iA Private Wealth Investment Advisor


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.


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.

Four Tips to Keep Your Household Finances on the Right Track


By Erin Gendron, January 11, 2019

With a new year and the end of an often overindulgent holiday season, the “let’s get organized” side of me kicks into high gear. As with most people, it’s a time to reflect on what’s going well and what new opportunities lie ahead.

Top of mind for many is, unsurprisingly, household’s finances. According to a recent Forbes article, more than half surveyed wanted to save more in the coming year.

How to plan, be smart and make the most of every dollar while juggling multiple household financial priorities can be daunting. A financial planner by day and a wife and mom by night, I’ve put together four tips to help start you and your family down the path to money mindfulness in 2019.

Build your budget

You need to know where you’re starting from to know where to go next. For this reason, I’m going to come right out and say it: you need to prepare a budget.

Begin with a simple income vs. expenses (fixed and variable) = surplus or deficit, as well as a basic idea of your family’s net worth (net worth = assets – liabilities).

This is the hardest, most time-consuming part – and sometimes what stops us from even getting started. Let me assure you it’s well worth your time. Make use of great apps like or an Excel spreadsheet. If all else fails, break out your trusty pen and paper – whatever it takes.

Positive cash flow is key

Next, track your spending and understand where your money is going – in the financial world, this is called your cash flow. Is your cash flow positive or negative every month? Which direction is it trending?

An app like links all of your bank accounts and credit cards into one spot and makes this process relatively painless.

Remember the bigger picture

The third step is to think about what your bigger, long-term goals are – like retirement, child’s education, buying a recreation property or starting a business.

My husband and I had our kids in our mid-late 30s – a reality for many Canadian families. This means raising children, helping them pay for an education plus saving for retirement will become competing priorities over the next 20 years.

A big mistake is putting off retirement planning simply because it’s the furthest away. Don’t wait for a time when you can “afford it” – by that point it’ll be harder to make up for lost time. That’s because the power of tax free compounding, dollar cost averaging and good savings habits have a bigger payoff the sooner you start.

Small steps you take now will have a big impact later.

Insurance: What no one enjoys talking about it

A last consideration that can’t be overlooked: Insurance and Wills.

Having put some hard work and thought into your family’s financial plan, it’s worth going the extra step to ensure it’s all protected.

Specifically, when you have dependents, insurance and Wills are non-negotiable, as you don’t have the saving level to “self-fund” in the event of a worst-case scenario. Some questions for you and your partner to consider include:

  • Have we agreed on who will look after our children should something happen to both of us? How would this person cover the additional expenses?
  • If we were suddenly without one person’s income, would we be able to maintain our family’s standard of living? Most employees have life insurance that includes one or two times their salary but this is rarely enough.
  • Do we have a plan in place to carry on in the event of a disability or a critical illness?

The ability to earn an income is your biggest asset – especially when your children are small, debts are high and savings are low. Without this, even for a short time, the financial impact to your family could be severe.

Although it’s not a simple task, once you’ve thoughtfully taken the steps above, you can begin putting together a real life plan, one that gives you more confidence and peace of mind to move forward with clear goals and purpose.

And remember to review your plan periodically. It’s meant to evolve over time and to adapt to your family’s changing needs, wants and priorities.