When we think back to the history of investing, a lot has changed the landscape over the last 40 years. The advancement of communication and technology has completely transformed the process of investing. Investment options once reserved for the rich are now accessible to more people. More recently, a new entrant has made a big splash – the Robo-Advisor.
A question we are asked is, “how do these ‘robos’ change the investing landscape going forward? “
The strength of a robo-advisor is that it takes the emotion out of building a portfolio, but they are now finding that the robos are missing a key component – personalized advice. Yep, the idea that you are different than your neighbour in more ways than your investment risk tolerance still holds true.
To date the robo industry hasn’t been able to mimic the value good financial advice. Research has shown that clients benefit from advice. A recent study found a significant benefit to personalized advice:
There are many reasons for this remarkable difference in how advice can help build wealth. A few of the many reasons they found are:
The value of advice goes beyond what investment vehicle you are in. It is equally as important how you build your wealth efficiently and as uniquely as you are that we feel can make a significant difference.
We partner with our clients to discover the right financial options are best during each stage of life.
If you have any further questions, or would like more information, don’t hesitate to reach out.
De-Bunking Your Budgeting Barriers. If you don’t have a million dollars in your account right now, it is likely that you hate budgeting. It’s even more likely that you’re annoyed, even enraged, the moment the topic arises. It’s an interesting phenomenon, we all want to be financially successful, yet this first step is often the […]
The income sprinkling rules outlined in July 2017 held strong and the rules pertaining to passive investment income weren’t as harsh as predicted. Specifically, Budget 2018 has implemented two simple measures as it pertains to passive investment income:
Budget 2018 proposed to provide for an alternative reduction to the small business tax rate where a Canadian Controlled Private Corporation (CCPC) and its associated corporations have investment income in the year exceeding $50,000. The amount of the reduction is $5 for every $1 of investment income exceeding $50,000. In effect, the small business tax rate reduction disappears if passive income in a related business exceeds $150,000 in a fiscal year.
Currently, private corporations are entitled to claim a tax refund equal to $38.33 for every $100 of taxable dividend Where the corporation has a combination of regular business income (taxed at the regular business rate which does not include a refundable tax element) and investment income (taxed at the corporate investment rate which includes a refundable tax component), planning was commonly implemented to have the business income distributed by way of eligible dividend (taxed at a lower rate) while still being able to claim the tax refund.Budget 2018 proposes to modify the refundable tax regime to eliminate this planning and ensure that, in general, the private corporation is entitled to a dividend refund only when non-eligible dividends are paid.
There are ways to reduce the impact the business tax changes outlined within Budget 2018 through other financial strategies. These strategies may include Individual Pension Plans, Cash Value Insurance, as well as the strategic use of prescribed loans. We highly recommend contacting your financial advisor to determine which of these strategies will best suit your financial situation.
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If you have any questions on this taxes, or the different kind of impact it could have on you, please, do not hesitate to contact us!
Connect Wealth is an independent financial planning firm that offers holistic advice to clients based on their current goals and future aspirations. We use well-established workflows and cutting edge technology to maximize financial efficiencies while simplifying the process for clients. Learn how you can maximize your financial opportunities at connectwealthp.wpengine.com
There are numerous articles that focus on the many highlights (some are listed below) that will work to assist the many varied interests of middle and lower income households in BC. Less reported however is that in order to provide the tax relief outlined within the budget, the BC Government will undertake a record-breaking capital spend and increase overall taxes to the tune of $4.4 billion over three years.
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