October 2018 Charity and Estate Newsletter

As you may know, I’m a ridiculously loyal client when I find great service. I’ve had the same hairdresser for 20 years. When I started going, I wanted her to dye my hair grey, because I had just started teaching at Western University, and someone had mistaken me for a first-year student in the men’s room.  Now, Octavia likes to point out that the grey has taken hold naturally. And, in one of my bigger life crises, she’s nearing retirement, and I’m probably never going to get my hair cut again.  (Fortunately, big hair seems to be making a comeback, although I might need a combover by then anyways.)

Similarly, I’ve been going to the same mechanic, Williams Downtown Automotive, for 25 years –ever since I bought my first car while a student at Western. Ian, the owner, earned my loyalty by being straight-up honest.  He did a fine job getting my rather rusty Chevy on the road, and continues to do so with all the vehicles I have driven since.

There isn’t a chance in you-know-where that I’m going to have Octavia service my car, and under no circumstances would I ever want Ian to cut my hair. Nor would I want either of them to do brain surgery should the need arise.  Similarly, I’m not going to have Joe, one of London’s finest neurosurgeons, fix my car, or do my hair. He might be able to shave my head (it’s a related skill to brain surgery), but on the off chance I want a perm, he’s probably not the right guy.

As funny as this seems…

…there’s a serious message I want to send. These folks are all amazing at what they do. They all got there through training, hard work, and many hours perfecting their craft. The same is true in my industry, and it’s important that you understand how to find the right professional to work with you.

In this month’s newsletter, I want to talk to you about the area of expertise that we hold as CFPs – Certified Financial Planners.  It’s something I’m very passionate about – so much so, that I’ve even helped design questions for the CFP qualification exam a few years back.

What is the role of a CFP?

As a CFP, our area of professional expertise is much like your family doctor – we’re the nexus of your financial care. Our job is to know you and be your advocate as you work through the financial system.  Not every investment or insurance provider has a CFP certification.  To become a CFP, you need to have several years of industry experience, go through rigorous training and demonstrate your planning skills. To me, this is what makes the difference between a salesperson and a planner.

CFPs have areas of expertise. For example, I specialize in working with people who have been chronic savers and now find themselves with significant tax issues on their estate.  In particular, we’re exceptionally good at using charitable giving to minimize taxation.

Unlike most investment folk, I start with a deep dive into your personal value system, before we start making recommendations on investments or insurance. I recall working with one client a few years ago who was an ardent environmentalist, but her previous investment advisor, a stockbroker, had put 37% of her investments in the oil sands! Now she has less than 3% of her portfolio in fossil fuel companies of any kind. Because we specialize in aligning personal values with planning, we were able to help her fund her retirement in a way that resonated with her personal beliefs.

In another of my favourite examples, we recently helped a client give away more than $200,000 to charity at a net cost to their estate of nearly $0. It took a lot of planning and knowledge of tax and charitable law on top of investment expertise.

Investment regulators are starting to catch on.

In the last few months, some of the regulatory bodies in Canada have discussed clamping down on who can call themselves a financial planner. Believe it or not, there are virtually no regulations about the qualifications your investment advisor needs to use this title. Personally, I am looking forward to the day where my profession requires recognized and comprehensive credentials, so consumers can see a clear distinction between an investment salesperson and a true financial planner.


Image via CC2.0 license from Flickr by Becky Matsubara