Legislation, education, licensing and product changes affect plans for your wealth
It is an understatement to say that the changes and trends affecting the financial services landscape are voluminous. Cindy David, president of Cindy David Financial Group Ltd., and the Senior Estate Planning Advisor for Raymond James Financial Planning Ltd., notes that her industry is fundamentally changing.
She says, “Professionals in my line of work are increasingly moving away from dispensing general advice and instead offering specialty services. This requires extra education to obtain the appropriate designations and licenses, but it benefits clients because the advice they receive is more comprehensive and focused on their specific needs.”
David cites a few examples of the designations that she and her colleagues have earned that help drive business in 2019, including the Family Enterprise Advisor Designation, which gives advisors including accountants, lawyers, bankers, wealth advisors, and coaches a broadened perspective of the issues business families face, such as generational transition.
Another designation is that of Chartered Life Underwriter, which gives financial advisors a greater level of knowledge and specialized skill in complex wealth and estate-transfer markets.
Another trend in financial services is the increasing number of portfolio managers “as opposed to advisors who just have a securities licence,” explains David. The job of these professionals is to manage the portfolios of investors or institutions, and develop the right combination of securities to maximize investor return for a given level of risk. “Among the many benefits they provide compared to the services of someone with just a securities licence, is discretionary portfolio managers have the ability to make trades quickly as markets shift, without having to call every household first for permission” says David.
Yet another trend is advisory teams marketing themselves as a family office—which David notes has led to some misunderstanding. “A true family office works for families who are wealthy enough to retain this type of service for a fee; whereas, financial advisors are more often paid by commissions.”
Unsurprisingly, these and other specialty practices have resulted in an enormous amount of products to choose from. “There are over 22,000 distinct mutual funds alone,” says David.
Also contributing to new products in the market is the changing regulatory landscape; one example being 2016 legislation that overhauled the life insurance industry in Canada. “Today there are different uses for insurance that previously didn’t exist, such as corporate tax planning to avoid the Small Business Rate clawback on passive income,” explains David.
So, what do all these changes and trends mean for those who seek financial advice?
While the obvious answer is greater choice and a higher quality of service, David acknowledges that the sheer volume of services available can be daunting. “So a good way to zero in on the advisor that will do the best job for you is to ask what designations and licences the advisor has. What is the advisor’s training? How does he/she get paid? What type of experience does he or she have?”
David, whose company consults to national firms such as Raymond James Ltd., group employee benefits brokers and investment consultants, concludes, “Our industry continues to evolve in so many ways, and individuals and companies can benefit substantially from these changes—as long as they learn about the landscape and thoroughly vet prospective advisors.”
Disclaimer: Cindy David is the President of Cindy David Financial Group and Senior Estate Planning Advisor representing Raymond James Financial Planning Ltd. (RJFP). This article expresses the opinions of the author and not necessarily those of RJFP. It is for information purposes only. It is furnished on the basis and understanding that RJFP is to be under no liability whatsoever in respect thereof. It is provided as a general source of information and should not be construed as an offer or solicitation for the sale or purchase of any product. As with all planning strategies, you should seek the advice of a qualified tax advisor.
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