Helping You Achieve Your Goals
Everyone has their own definition of wealth; everyone has their own perception of what it means to be wealthy and because of that, the approach that we take when working with clients is very personalized and customized. It is prudent that you do your homework when choosing a financial advisor to work with because the eight steps listed below can affect your family’s wealth either in a positive or if misguided, a negative way.
Eight Step Wealth Process
The concept of “retirement” means many different things depending on who you talk to. For some people, retirement is about working hard for a long time and then moving to a desirable location to enjoy their “golden years.” For others, including many of our clients, the traditional concept of retirement is the furthest thing from their minds. Planning for your retirement isn’t a one-time exercise you can do in one meeting. It will be an ongoing process, one that will involve a lot of thinking and modifying your plans as you age and your situation changes. It’s about dreaming and thinking creatively about your future.
The term “lifestyle” is equally personal and subjective. Most of our clients lead active and productive lives well into their 70s, 80s and even 90s. For them, retirement is more like a renaissance that involves starting new businesses and taking up encore careers. Many of our clients travel extensively during their renaissance years. Some take up art, writing and other creative endeavors. Others become actively involved in their communities and with philanthropic activities.
In this step we look at your non-financial assets, which consist of tangible items like art, collectibles, real estate, precious metals and other “hard” assets and intangible items like intellectual property, closely held business interests, rights and royalties; and, other high-value assets.
When it comes to wealth optimization, non-financial assets can offer attractive opportunities. They can also present some formidable challenges. This is mainly due to their unique characteristics which include:
- They are less liquid than financial assets
- They can be difficult to value
- They can be difficult and expensive to insure
- They can be difficult and expensive to buy and sell
- Intangible assets can be completely overlooked
In this step, we look at your current and future liabilities. Current liabilities include mortgages, leases, personal loans and other financial obligations that must be serviced (paid) now. Future liabilities include financial obligations and large expenditures that will take place in the future. These include college/university tuitions, retirement income and vacation homes.
There are three main ways to cover future liabilities. The first is to save enough money to pay for them when they come due. The second is to borrow the money when they come due. The third is to sell some assets to pay for the expenditures when they come due.
The concept of “debt” (in any form) has a bad connotation for some people. While we would never advocate taking on debt imprudently, there are some situations in which borrowing money is in the best interest of your family’s wealth. These are the types of conversations we will be having and types of decisions we will be helping you make.
Your portfolio is the combination of all of your financial assets. These include stocks, bonds, mutual funds and other publicly traded securities. In this step, it is imperative that we consider ALL of your financial assets, regardless of where they are held. This includes taxable and tax-deferred accounts such as non-registered and corporate investment accounts, stock option programs and individual registered retirement as well as Tax-Free savings plans (RRSP’S & TFSA’S).
When it comes to wealth optimization, tax planning can present some unique challenges. Among them are:
- Tax and estate planning issues tend to be complex.
- Tax laws can change frequently.
- Tax planning is unique in that it is directly affected by the decisions you make in the other seven steps. Virtually every decision you make has tax consequences.
- With the possible exception of accountants, Canada Revenue Agency (CRA) and politicians most people do not like to think about income taxes, much less talk about them.
- Even fewer like to think about estate taxes, which is understandable. Woody Allen summed up how many people feel when he said, “I am not afraid of death, I just don’t want to be there when it happens.”
Caveats aside, it is important to note that the quality of advice you receive in the areas of Tax and Estate Planning can have a significant impact on your family’s wealth. If the advice is exceptional, the impact can be very positive. If it is anything less than exceptional, the impact can be very costly.
Risk comes in many forms and from many sources. To further complicate life, risk changes constantly and new risks can emerge at any time. For all of these reasons, we encourage our clients to have a Risk Management Plan that is reviewed on a regular basis. Your plan should begin with a thorough assessment that seeks to identify all of the major risks and other threats that can affect your family’s wealth. This includes risks that currently exist, as well as those that might exist in the future. Your plan should include strategies for managing those risks in the most cost and tax-efficient way possible. Finally, your plan should include an annual review of all insurance policies you and your family have in place.
Unfortunately, the word “risk” ranks right up there with death, taxes and debt when it comes to things people like to talk about. However, ignoring risk or hoping that “bad things will never happen” are not viable risk management strategies; at least not if you want to optimize your wealth! The harsh reality is that Risk Management is an area where one misstep or oversight can significantly affect your family’s wealth in a negative way.
Virtually everything you own (assets) and everything you do (activities) has a level of risk associated with it. The same is true for every member of your family. Every person, regardless of how cautious they are, can get into trouble at any time. That includes getting sick, getting injured or making bad decisions. Suffice to say that the earlier one adopts a Risk Management mindset the better.
Estate Planning is the process of organizing and preparing for the disposition of someone’s assets upon their death in a way that achieves the following goals:
- Minimizes the administrative complexities and costs for their executor and heirs.
- Minimizes estate and other taxes that might have to be paid.
- Maximizes the preservation of their assets and ensures that they are transferred to the desired parties in the desired manner.
When it comes to estate planning it is critical to optimize your family’s wealth and ensure that family harmony is maintained during a difficult time relating to the loss of a loved one. When it comes to thinking about planning to achieve optimum wealth transfer to key beneficiaries, “Don’t assume anything!” This is especially important in the area of Estate Planning. There are countless examples of smart, successful people who died without having done the proper planning. Many passed away without wills or wills that were out of date. Others left significant and unnecessary burdens for their heirs because they failed to be proactive when it came to Estate Planning. In some cases, they received bad advice or their advisors overlooked certain things. The estate planning field is littered with stories like these. For these reasons, we encourage you to assist other family members with their estate plans. At the very least, you should have a heart to heart conversation and encourage them to have their estate plans reviewed very carefully. We are happy to facilitate these conversations, via hosted family meetings if and when appropriate.
To some, the word “legacy” conjures up visions of a university library or hospital wing that bears a family name like Morgan or Rockefeller. To others, the idea of leaving a legacy can be as simple (and meaningful) as documenting their family’s genealogy in a way that celebrates and honours their ancestors. To us, the word legacy is synonymous with GIFT. At its core, Legacy Planning seeks to answer four fundamental questions:
- WHAT are you going to give?
- WHO are you going to give it to?
- WHEN are you going to give it to them?
- HOW are you going to give it to them?
As you contemplate your legacy, be sure to include tangible and intangible gifts. Your tangible gifts are relatively easy to identify. They include the financial and non-financial assets. Most of your intangible gifts will be transferred to your heirs in accordance with your Estate Planning documents.
Your intangible gifts include things like your knowledge, your values and the time you spend with the people who care most about you and vice versa. In most cases, intangible gifts do not have a monetary value, yet they are more cherished than their tangible counterparts. In addition, they are typically “given” to their recipients while the donor is living. A wise person once said that the most valuable gift you can give to the people who care most about you is to simply take better care of yourself so you can spend more time with them.
Guiding Principles we use along the way
Peace of Mind
Combining our financial planning approach and our discretionary money management services, CrossPoint Financial has a proven wealth optimization method that provides you with knowing your finances are in the best possible hands. Our high net worth private clients have the confidence and comfort knowing their money is well invested and that they are on the right path to investment success.
Our unique, boutique-style team approach is designed specifically with our valued high-net-worth clients in mind. We purposely work with a select number of private clients to deliver the utmost in personal and professional service – believing that successful investing requires a very personal approach. Open, ongoing communication is vital to all that we do. From our initial meeting to our portfolio design and management we provide transparency and understanding in every step to show integrity and build trust.
As your wealth advisor, we will act as the motivating force to keep your finances on track. Day in and day out, our insight, clear guidance and care will provide you with confidence and knowledge that you are on the right path so that your life goals can be successfully realized. We actively work with our client’s lawyers, accountants and other professionals to coordinate the best possible financial solution for you.
Discretionary portfolio management involves our clients providing us with trading authorization to make investment decisions on their behalf. Our special licensing sets us apart in an industry that generally requires the majority of advisors to have client involvement prior to implementing changes to portfolios. By authorizing us to act on your behalf, we are able to react based on up-to-the-minute market research and analysis. This enables us to structure portfolios effectively without concern of them becoming stagnant.
We are continuously working to enhance our extensive knowledge base through educational seminars and industry related courses and certifications. As our client, you get to work with an professional team that boasts a wealth of knowledge and experience in an area often considered complex. Clients benefit from over 100 years of collective experience, with access to multiple Portfolio Managers and Licensed Assistants, CFP® professionals, RFP’s, CIM’s and many other designations.