Integrated Financial Planning with a Wealth Advisor

"Financial plan" is a broad term that many of us think we understand... but do we? Listen to Luke MacLennan, CPA, CA, QAFP and President of Ward & Uptigrove Wealth Management talk about what really makes a strong financial plan. You'll learn about all of the pieces you need to consider, and how the end product made better thanks to the integrated approach at Ward & Uptigrove.

Make sure to like this episode and hit that follow button to be kept up to date on all our new episode releases. If this episode raised some questions for you, we would love to chat. Give us a call or send us an email any time - links are on our website here.

Transcript

00;00;07;15 - 00;00;26;03
Speaker 1
Hello and welcome to Integrating for Success a Ward and Uptigrove Podcast. My name is Amy Noonan and I will be your host. So integrating for success, it's not just our podcast name, but it's the value we strive for every day here at Warden Up to Grow. But what does that mean for you as a listener or as a client?

00;00;26;22 - 00;00;49;27
Speaker 1
To answer that question today, we have Luke McLennan with us. Luke is the president of Ward and Uptigrove Wealth Management, the financial planning arm of Ward and Uptigrove. Previously, Luke worked as an account at a national accounting firm earning his CPA designation and then served independent accountants, investment counsel or IAIC, as some of you may know, as the chief operating officer and the chief financial officer.

00;00;50;08 - 00;01;05;03
Speaker 1
So when it comes to looking at a financial plan holistically, Luke is a great person to speak with. As a wealth advisor, he delivers customized financial plans to clients like you and serves as their guide in ensuring they achieve their financial goals and dreams. Welcome to the podcast, Luke. Thanks for joining us.

00;01;05;28 - 00;01;07;17
Speaker 2
Thanks for having me, Amy. Happy to be here.

00;01;08;18 - 00;01;21;21
Speaker 1
So obviously I'm the marketing person here at Ward and Uptigrove. I'm familiar with our marketing materials and the term integrated wealth management is used throughout. What specifically does this term mean from your point of view?

00;01;22;29 - 00;01;44;21
Speaker 2
Yeah, it is a term we use a lot around here. We've named our podcast with the word integration, and the word integration is in big letters on the side of our building. So, yes, it is a it's a term or word rather that we we use quite a bit. And it's an important one. And it does it is a part of our firm that makes us really unique on the wealth management side of things.

00;01;44;28 - 00;02;09;27
Speaker 2
Integration is really about having a holistic approach to bringing together accounting and tax, financial planning and investment management. Now, there's a degree of overlap in each of these areas, not not one of these worked individually on its own, but there are parts of each of those services that is very unique and important in the overall delivering of services in managing one's wealth.

00;02;10;22 - 00;02;29;24
Speaker 2
So it's not an approach where we've got one person operating as a generalist in each of the areas. It's bringing together professionals with training to designations in each of the specific areas, to work as a team, to serve the needs of the clients. There's a formally designed system and infrastructure in place to ensure that different areas of expertize are working together.

00;02;30;08 - 00;02;53;03
Speaker 2
Is one comprehensive team and it's a procedures and approach ensures action is being taken to deliver the wealth management service. Whether that be a county tax. Financial planning is done so with the consideration of what's happening in those other areas. Nobody's working alone without knowing what's going on in the other areas, which is so important that with having integration.

00;02;54;00 - 00;03;14;14
Speaker 1
Right? No. And that makes total sense. You know, you don't want to be trying to explain to one professional what the other one said. And maybe this these are not terms you're super familiar with. And something gets sort of lost in translation. So what? Maybe you've already touched on it, but what are the main benefits to clients of having this integrated approach to wealth management?

00;03;15;19 - 00;03;38;20
Speaker 2
Yeah, certainly. Certainly something we can expand on it. But what, what that the advantage of that is and then just and what you said there about the talking it's and it's talking where you have this team approach where where it's established group, the relationships already exist between the accountant, the financial planner and the portfolio manager. So there is that, that way of working together that's already established.

00;03;38;20 - 00;04;00;23
Speaker 2
And then the pieces are in place for the infrastructure for for information moving along, you know, and it's that consistency that all action is being taken with consideration. The other areas which that which I just touched on in a second, it's that that old saying of everybody rowing the boat in the same direction. Everybody is working together and nobody's independently kind of doing something without the thought of what's going on elsewhere.

00;04;01;01 - 00;04;01;19
Speaker 1
Mm hmm.

00;04;02;18 - 00;04;21;08
Speaker 2
And it's not up to the client to ensure that this this communication is taking place. You've got the team in place, and you can just rely on. Okay, this is taking place in the background where I know the accountant is talking to the financial planner. And it may be information that's coming from the accountant to the financial planners and into getting to the portfolio manager who's been managing their investments.

00;04;21;16 - 00;04;40;19
Speaker 2
Right. So like just on an ongoing basis and then even with reporting, especially around tax time, you know, key information coming from the portfolio management firm that needs to get on to the tax returns infrastructure in place to make sure that information is being properly shared again so that the reliance is in on the accounts around the client.

00;04;41;14 - 00;04;49;26
Speaker 2
And the client can focus on what they're doing, whether it's their business or with their family. They just don't know how this added piece of making sure that they keep people are working together.

00;04;50;06 - 00;04;59;03
Speaker 1
Right. So it's like that that piece of mind that things are working the way they're supposed to do, that something's not really getting missed and it's all happening behind the scenes and you don't have to worry about it. I guess.

00;04;59;23 - 00;05;03;07
Speaker 2
Exactly. That whole thought of just making sure nothing falls through the cracks.

00;05;03;08 - 00;05;19;01
Speaker 1
Right. Totally. So with you being involved with the financial planning portion of the Integrated Wealth Management Servicing offering, perhaps you could provide an overview of what exactly a financial plan is. People use that word a lot, but I'm not sure. Myself included, we know what it means.

00;05;20;16 - 00;05;52;16
Speaker 2
Yes, it is. Financial plan is a broad term and it can be applied pretty loosely. But that's that's okay too. That it is because a financial plan it can be very different for different situations have different levels of focus and concentration in different areas and it's certainly isn't a cookie cutter, you know, one size fits all. It's not like, okay, here's my template that I've got for a financial plan and I'm going to work through and just do, you know, input information in here and information here.

00;05;52;24 - 00;06;15;21
Speaker 2
It really should go back to to focusing on what specific to the needs of that that individual. So the most important part of piece and should be part of any financial plan regardless of how whether it's a comprehensive plan or just focusing on an area, is that the first thing you got to do is define the financial goals and objectives of the person or the people that the plan is being completed for.

00;06;15;23 - 00;06;34;28
Speaker 2
To getting an understanding of that is okay, what are we trying to achieve over the long run or in the short term, which would lead to financial goals so that we can work around that and make sure that we're we're looking at the situation to get an understanding of that. And working towards that. The other thing that you need to do is get a good understanding of the current financial financial position of the person that's going through the financial planning process.

00;06;35;09 - 00;07;10;12
Speaker 2
And that mainly being your network. What do you own most? Assets, your own house, you have investments and what do you own? What are your debts? Do you have a mortgage? You have a line of credit student loans. Right now, loans within your business, all those different pieces. So getting that information is key as well. And additionally, there's a term that we call the financial lifecycle and it's where you go through and it's people reside in different areas on the financial lifecycle, somebody that's 30 years old with with a couple of young kids, very different position of somebody who's 60 years old.

00;07;10;26 - 00;07;19;14
Speaker 2
Kids may be grown up and what perspective that they're looking at. So if you like me, I'll just expand on the different areas of financial planning, you.

00;07;20;02 - 00;07;28;17
Speaker 1
Know, and I think it's great that you said there's different you know, it's not a cookie cutter situation. Everybody is so different. Yeah, I'd love to hear more. Absolutely.

00;07;28;17 - 00;07;46;06
Speaker 2
Yeah, for sure. So I'm going to kind of refer to my my 30 year olds and 60 year olds quite a bit, just so that we can kind of the two people that may be on different areas of the spectrum, but there's all sorts of spots that in between that different people can be. So but for the purpose of this, we're just going to concentrate on our 30 year olds and six year olds.

00;07;47;18 - 00;08;06;23
Speaker 2
So within a financial plan or financial planning, there can be areas of focus and all, you know, how much work you do in there or if any work you do in there really depends on where you're on the lifecycle. So I'll just name off the six areas of focus and then talk about those more, more specifically in a moment here.

00;08;06;23 - 00;08;35;27
Speaker 2
So the first area being protection planning, otherwise known as insurance, next section investment planning, tax planning, retirement planning, estate planning, cashflow planning. So if we were doing a comprehensive financial plan, we would cover each of those areas. But no different points in lifestyle. There might be a need to focus in specifically on those different areas. And as I talk about these individually, I will highlight how it can be different for people in different spots in the lifecycle.

00;08;36;03 - 00;09;07;03
Speaker 2
Mm hmm. So the first one I mentioned was protection planning. And that's just a fancy way of saying insurance. And primarily protection planning ensures that there's measures in place if something really bad happens, that's going to prevent you from earning income going forward. Right. And those bad things to be a death, that income, if it's especially for the major earner of the family, a death would be be devastating to the finances of a family act.

00;09;07;09 - 00;09;21;10
Speaker 2
Accidental or illness. So that example of if you get in a car accident and you're no longer able to do the work that you're previously doing and then needing additional care. Right. And then and then that could be where you might not ever be able to work again. So that's what we're talking about in that situation.

00;09;21;11 - 00;09;30;27
Speaker 1
Those are situations people really don't want to face or think about or plan for. You know, you never think it's going to be you. So you just agree. And so that it's not.

00;09;31;27 - 00;09;57;13
Speaker 2
Exactly, exactly. Yes. It's the insurance. Is that that unique item in an ideal situation, you never make it make a claim on the insurance. But if you if something did come up, you want to make sure you got that coverage in place. And then there's also that the third kind of branch of insurance and it's if if if you had an illness where you're just going to be off for several months and you can get treatment and then and then you go on you're with life.

00;09;57;13 - 00;10;19;09
Speaker 2
So like a non terminal cancer diagnosis, would you maybe opt for several months to get the proper treatment? You know, that would be another item that could prevent income from being there for a period so that the different types of insurance that you can get are life insurance. So that's the when you pass away there, there's a payout to the beneficiaries, typically the family members, disability insurance.

00;10;19;09 - 00;10;40;26
Speaker 2
So that's, you know, example I talked about before, you're in a car accident, not able to work ever again, getting a monthly income that that to supplement the loss of the income that you've had and then critical illness is that now said there is a cancer diagnosis and then with that you would all of a sudden you get a one time large, large payment for whatever the amount the coverage is.

00;10;40;26 - 00;11;16;28
Speaker 2
And that allows you to focus on getting them to care. You need and perhaps take the time off that that that you need to take off to to get the proper treatment. So planning for this is determining the need, the amount of coverage that's needed for for each of those types of insurance coverages. And going back to the life cycle, talking about my 30 year olds and six year olds, a 30 year old, but if got a couple of young kids that, you know, those insurance coverages are important, you've got a lot of earning years in front of you, whereas switching to the 60 year olds, you know, insurance, this type of insurance might not

00;11;16;28 - 00;11;29;13
Speaker 2
be needed. It could be that they've already got enough that if something like this happen, they find financially okay and therefore not needed. But this part of the planning is doing the analysis in that area to make sure that that the appropriate coverage is in place.

00;11;29;26 - 00;11;30;08
Speaker 1
Right.

00;11;31;03 - 00;11;56;23
Speaker 2
And ensuring that, you know, sometimes like, I'm not trying to picture as as an insurance sales process, but because you can certainly there's situations where you identify that maybe somebody has has gotten too friendly with an insurance agent and that maybe they may have had too much coverage. Or maybe there's a ways that you can face coverage because maybe you're going to those 30 year olds again, maybe for the next ten years, there's more coverage needed because your kids are really young.

00;11;56;23 - 00;12;07;24
Speaker 2
But if ten years from now your kids are ten years older, you've got that much more savings. Maybe there's a period where you don't need as much insurance at that point in time, so planning and creating strategies related to that.

00;12;08;04 - 00;12;16;14
Speaker 1
For sure, I think that's maybe what some people are afraid of over coverage paying too much and then you never need it. But anyway. Yeah, I'll let you get back to your.

00;12;17;02 - 00;12;38;01
Speaker 2
Yeah. So that's one down. We'll now move to two investment planning and that's really identifying what savings are for and when those savings will be needed. Again, my 30 year olds, there could be a good portion of their saving. That's for long term. They might be putting money away for for retirement, or that could be savings for a shorter period.

00;12;38;01 - 00;12;56;24
Speaker 2
We've seen interest rates starting to go up. So people are looking, you know, I got a mortgage renewal in a year. And I at that point in time, I want to put a big lump sum payment against my mortgage. So those are savings for those those different purposes are very different. So the investment is related to that to different retirement savings.

00;12;57;04 - 00;13;22;15
Speaker 2
You can you can live with the ups and downs. It may not always be comfortable, but you can live with the ups and downs. But if your mortgage payment is scheduled for a specific date, you don't want that money to the come crashing down shortly before that. Now you've got got less in there than you save. So, you know, it's understanding that making sure that it gets a different investment treatment and again, with an integrated approach, ensuring that's communicated up to the portfolio manager who can now apply that.

00;13;22;15 - 00;13;24;05
Speaker 2
And then the investment strategy they have for the client.

00;13;24;15 - 00;13;24;26
Speaker 1
Right.

00;13;25;19 - 00;13;40;23
Speaker 2
For those 60 year olds, you know, the investment planning is different. We're maybe going to in a few years starting to draw for those investments. We need them to create an income. So now what is that looking about that? So we have an investment plan with that. It's called having your cash wedge of what money you're going to need from your investment.

00;13;40;23 - 00;14;11;25
Speaker 2
So getting that understanding and all of this needs to be, as I said, communicated to the portfolio manager or manage the investment. So that they can do the appropriate investing work with that. Right. And then within that, that's the use of specific accounts, you know, RSP accounts, registered retirement savings plan accounts, tax free savings accounts. If people that are saving for the Education and Education Fund for their children, RRSP Accounts Registry Education Savings Plans and then for for families that may have somebody with a disability.

00;14;11;25 - 00;14;17;03
Speaker 2
There's the Registered Disability Disability Savings Plan Account that can be set up as well.

00;14;17;14 - 00;14;18;29
Speaker 1
Okay.

00;14;18;29 - 00;15;00;19
Speaker 2
And then tax planning moving on to the other one there. So tax planning is very different for for people with different sources of income. So somebody with just say employment income or T4 income, it's commonly called RSP accounts can be a way to limit taxes. It is one of the common ways that can do that. So RSP planning related to that for tax purposes, but also within your investing plan, there can be different things taking advantage of tax free savings accounts, maybe using a spousal RSP account makes sense from a planning perspective as well as the use of non-registered accounts where this money that that where the income on that investment is taxed making sure

00;15;00;19 - 00;15;35;13
Speaker 2
that those are held properly and as well looking at, you know, potentially spousal prescribed rates as a way of doing that right. For business owners, it can be even that much more complicated or not complicated, but sophisticated and often with those there there's there's it could be a company that's going to be utilized for investing a hold call it referred to and that the be specific strategy in that with tax planning for both in the working years so building money up into the savings company and then drawing it down in retirement, we kind of use it loosely.

00;15;35;13 - 00;16;05;19
Speaker 2
We use the term business owners use that can use a holding company to build their own retirement pension, which they'll continue to draw out of and their working years and then continue with tax planning of know retirement. It's minimizing taxes in your retirement years and eventually in estate settlement rrif accounts. You know, if you pass away and you don't have a beneficiary that the account can move to on a tax deferred basis, it can create a tax liability, a significant tax liability on death.

00;16;05;19 - 00;16;29;24
Speaker 2
Same thing with money that's inside corporations. So so planning with that is the tax planning piece. Right. And next area is retirement planning. So retirement planning is typically the key anchor of a financial plan for those where retirement is on the horizon. And it's really, again, tying to goals retirement plan is that identifying retirement goals big thing is time like when do you want to retire?

00;16;30;09 - 00;16;39;02
Speaker 2
You know, sometimes people say, oh, I'll never retire. And then I'll say, okay, okay, when do you want to be working? Because you want to, not because you have to. Then that becomes their retirement. Retirement. That's a.

00;16;39;02 - 00;16;42;21
Speaker 1
Great question. Yes.

00;16;42;21 - 00;16;56;06
Speaker 2
You know that things like, you know, what do you need to live off of? And people often with retirement say, hey, the goal could be I want to do a bunch of traveling, so let's have some money. And for traveling, you know, purchasing a winter property, now we can go away for four, four, four months in the winter.

00;16;56;15 - 00;17;15;08
Speaker 2
Is that going to be an item? And then people often too, with some house prices that we're seeing some people have wanting to gift their money to their children earlier in their retirement years being part of a retirement plan. So in the retirement process, the first step is saying, is there enough you know, do the calculations, is there enough?

00;17;15;18 - 00;17;31;13
Speaker 2
And if it is, yes, there's enough. You got lots here. We don't see a retirement shortfall. You know, the first thing. Second, revisit your goals. Do you want to retire early or do you want to spend more? You know, that was a thought of a winter home. You know, you never thought it was a possibility for you, but now we've discovered it.

00;17;31;14 - 00;17;40;14
Speaker 2
So revisiting that and then reshaping the plan. And then from that, once we got the plan that's in place as being, again, tax efficiency, both in your living years and on a state settlement.

00;17;40;22 - 00;17;59;28
Speaker 1
Right. And I think that that it's it's interesting with the tax planning, too, because we do have that specialized tax department at Wharton up to Grove. So there's a whole group of people working specifically in that area. It's not exactly, you know, on the portfolio manager or the planner or the accountant to figure it out. There's people specifically doing that.

00;18;00;05 - 00;18;00;16
Speaker 1
Yeah.

00;18;00;29 - 00;18;27;09
Speaker 2
Exactly. Yeah. Now, unfortunately, sometimes all you can do the retirement plans that, oh, boy, there isn't enough, you're going to run out of money. And so any goals, can you work a little bit longer? Do you want to spend a little bit less or are there other things that we can look at to handle the shortfall? Maybe it's getting value out of your house, whether it's selling and downsizing or renting those types of things, and just having an understanding of what does this mean so that, you know, it's not at age 78 you're going, Oh, shoot, I'm here, I am now.

00;18;27;09 - 00;18;31;05
Speaker 2
I've got to make decisions. You really started in your mind of what what the plan's going to look like.

00;18;31;21 - 00;18;32;06
Speaker 1
Mm hmm.

00;18;32;17 - 00;18;51;02
Speaker 2
So, like, for 30 year olds, often, that the retirement planning piece isn't there in that section of the lifecycle. So so much can change between now and when you're retiring. But, you know, the main thing is to ensure that there's a savings plan or at least a path to savings plan. However you know, plan is unique to people's individual goals.

00;18;51;03 - 00;19;12;17
Speaker 2
If somebody has a goal and say, my goal is to retire as early as possible, then yes, certainly retirement planning is a concentration in that that individual's financial plan, estate planning. So that's determining what happens with what's left and that's very lifecycle dependent as well. And you know, are 60 year olds that that's a little bit top of mind.

00;19;12;17 - 00;19;42;08
Speaker 2
And if they've gone through the retirement planning process and looked at that, they have a good understanding of what could be left if past the different ages. And okay, we passed away today. This is what we'd be. But if we passed away when we're, you know, you know, life expectancy around 85, what would be left. And so it's having a discussion of what their wishes, what do they want to have with this excess, and then making sure that their documents, specifically their will, reflects those wishes and making sure that's in place and up to date and really reflects those wishes.

00;19;43;14 - 00;20;11;10
Speaker 2
And then there are conversations about considering transitioning wealth before estate settlement can be done. It can be tax it tax advantages, but, you know, the transition of wealth to the next generation can you know, you need to do that planning to make sure that there's there's enough there for for the individuals that are gifting that I sometimes joke with my clients that are doing that and saying I want to give up some money for my children as they're building a house and might say, well, have we done the planning to make sure you have enough?

00;20;11;10 - 00;20;18;24
Speaker 2
Because, you know, otherwise you've got to make sure that they've got a good basement in there because you might need to move in there someday.

00;20;18;24 - 00;20;19;08
Speaker 1
Awesome.

00;20;19;19 - 00;20;50;01
Speaker 2
Yeah. And included with that is power of attorney documents. So that's if if you haven't passed away, but you aren't able to take care of items. And there's documents specifically for your your health care and then then financial decisions and then again, tax efficiencies. There's all sorts of complications about what the family at death, especially second debt, those rrif accounts that I mentioned before, and corporate accounts, if not proper planning, then, you know, there's there's a potential that over half of that could go away to tax if it's just left in those accounts.

00;20;50;01 - 00;21;05;02
Speaker 2
So, you know, looking at that, those items and for the corporate clients, you know, sometimes we look at situations, you've got this holding company and you've done a great job saving all this money into it, but you're not going to need it. You're not going to spend that in your lifetime, which is eventually going to be part of your estate transition.

00;21;05;08 - 00;21;29;07
Speaker 2
You know, there's items of looking at his a permanent life insurance option available for you. There's there's nuances about that. And looking at that situations and then flipping to our 30 year old, you know, 130 or so all time, I've got lots of life ahead of me, so I don't want to think about that. But we do say, okay, you know, if you got your own family out to talk about the insurance portion that's really started part of the estate plan, but you really should have a will in place.

00;21;29;07 - 00;21;50;25
Speaker 2
If not, you die in what you're called intestate and you know, if that's a situation, there are measures in place. It goes through the courts and money will eventually go. You know, if you have a spouse, sort of what you supposed to children but the spouses involved got it so there's these different mechanisms that make it go through, make it make sense.

00;21;50;25 - 00;22;10;25
Speaker 2
But if you don't have the will, it's going through a court system. It's going to be a lot longer process. It's going to be more and more painful. And if you do have any specific wishes, like, you know, those aren't going to get highlighted. If you've got a brother or sister that you've got a unique item that you want to leave to, you know, they won't get covered off.

00;22;10;26 - 00;22;35;06
Speaker 2
And Diana intestate and our last section, I know we've gone through a lot here, cash flow planning and it seems doesn't everything ultimately come down to cash comes back to cash. Cash is king. So when we're looking at 30 year old individuals, it's money that's coming in. Where is it going? And making sure that we got a plan in place to that.

00;22;35;06 - 00;22;53;22
Speaker 2
So, you know, what's going towards debts? Is it paying down mortgages? It's paying down line of credits or student loans that may be left over what's going to insurance? Because we have this this goal in place to make sure that we're properly insured and making sure them across there what's going to savings and then what's left to go to cover day to day expenses.

00;22;53;22 - 00;23;09;14
Speaker 2
And that sometimes can be the eye opener because, you know, you've got money going to debts, insurance and savings. And then, okay, this is what's left for your living expenses. And so that's this can be the eye opener of what it means to be living within your means of saying, okay, we've got these other goals that we've talked about in these areas.

00;23;09;21 - 00;23;32;07
Speaker 2
So this is what the means are that we can live with in for the 60 year olds the opposite way. Okay, where is cash flow going to come from when I'm in retirement? What's coming from government benefits like CBP and old age security? And where am I going to draw, draw drawdown from savings to ensure tax efficiency? And that includes making sure that you don't run into OAS clawback issues which which can comes into effect.

00;23;32;07 - 00;23;57;07
Speaker 2
So there can be tax planning related to that. So those are the areas. And so that and what's the next part of the plan is, is the action items, it's implementation, it's, you know, getting insurance policies in place. If we found that there's a shortfall or canceling some, if we find that there's an excess, setting up an appropriate investment account, setting up automatic contributions, those investment accounts, setting up automatic withdrawals from those investment accounts and updating your your will and power of attorney document.

00;23;57;19 - 00;24;18;10
Speaker 2
And then on an ongoing basis, you've got to revisit the plan. It's not this one thing. When we did our plan this year and ten years later and I did a plan ten years ago, I you got to ensure that the action items are being taken, pivoting and developing new strategies as things change. And believe it or not, things will not unfold exactly as detailed in the plan.

00;24;19;09 - 00;24;39;13
Speaker 2
So shocking that I align that a more experienced financial planner to me is that the joke about a financial plan is the only thing we can guarantee about. The numbers in the plan is that they're wrong and and that's not to say that, like, it's not worth doing, but it's just saying that that things change and that's why it why things need to be revisited.

00;24;39;13 - 00;25;01;03
Speaker 2
So if you allow me now to in wrapping this up, what is planning is to pay homage to my mother. My mother was a public school teacher many years ago and she's big on the proper use of the English language. So in my back of my mind as I'm doing this, because I know she's going to listen to this, so I've got to make sure that I'm using it right now.

00;25;01;04 - 00;25;18;28
Speaker 2
I'm sure I'll use the who when I should have use him and she'll let me know. But. But what I have to do is I joke to clients and say that, you know, financial planning is a verb, means an action item. It's something that's ongoing. It's not a noun. It's something that's a thing. So, you know, it's this action item that's ongoing.

00;25;18;28 - 00;25;38;00
Speaker 2
It's not the stack of paper or I guess more now appropriately, a PDF document that just sits there and doesn't do anything. It's an action item, and that's why it requires ongoing revisiting and working with. And I think that's where the it really the importance of having a relationship with a financial planner and it's not a one and done experience.

00;25;38;00 - 00;25;54;15
Speaker 2
It's the ongoing relationship to make sure that things those things continue, get that get done and updated as circumstances change. Right. So I've really just scratched the surface on all these items here. Each of them can probably be their own podcast that at a future date. But just to give an overview of what financial planning means.

00;25;54;15 - 00;26;18;22
Speaker 1
Yeah. And I think, you know, as I listen to you, it's it's honestly one uncomfortable situation. You have to consider after another. But without considering it, you're not going to be ready for, you know, however you want your life to look or or whatever may happen to you in the future. So I think, you know, having that financial plan, it sounds like you're figuring these things out because you have to and it's for the better.

00;26;18;22 - 00;26;28;17
Speaker 1
And it may be uncomfortable at the time, but it's going to leave you in a better situation later on. At least that's how my 30 something brain with no financial looks at it.

00;26;29;00 - 00;26;33;08
Speaker 2
Yeah, yeah. It's the kind of going from ignorance is bliss.

00;26;33;09 - 00;26;33;28
Speaker 1
Yes.

00;26;34;09 - 00;26;38;10
Speaker 2
Until you find things out where the financial plan is continued bliss.

00;26;38;22 - 00;27;00;22
Speaker 1
Yes, exactly. So so tying back to the Integrated Wealth Management, maybe you can touch on some examples of how, you know, items that are specific to an individual are integrated into the accounting and tax as well as the investment area or investment management area of the overall, you know, integrated wealth management offering for sure.

00;27;00;22 - 00;27;17;09
Speaker 2
Yeah. And then just a bit consistent with the kind of areas that I spoke with, I'll go through this a little bit quicker, but talk about the different areas specific to those those areas of focus that I just chatted about of how that can happen. So production planning or insurance accountant, you know, what income are we trying to replace?

00;27;17;09 - 00;27;50;22
Speaker 2
Some great source of finding out what the income is and that the source of work, different incomes for business owners. It's really having an understanding of what the impact would be at the catastrophic event. You know, what value could they get out of the business if they if the person that owns the business passes away? And what value would go away with that person passing away for the portfolio manager with knowing that insurance is place and that there's money that's protected, is it good to know that and knowing that if something bad were to happen, there's sources from other than what's in the investment portfolio that could be used to fund in that situation investment

00;27;50;22 - 00;28;12;01
Speaker 2
planning. You know, one example there like again multiple and all these areas but know RSP decisions just having access to the account to talk to them and saying okay this is their situation, what's their tax so do we make contributions this year? You know that they have their contribution from do we use it or other things that we say, okay, do we make contributions this year and take advantage of the tax deferral with the RSP?

00;28;12;01 - 00;28;30;09
Speaker 2
But we're not going to actually use the deductions against the income for future years. So just having a count knowing that and then again with the connection with being indirect, with the portfolio management firm, we can communicate those strategies of what's happening with the different accounts, the portfolio manager making sure it's communicated properly and then the onus isn't on the client to communicate that right.

00;28;30;22 - 00;29;03;26
Speaker 2
Tax planning the accountant no one knows the tax individual of individual families and businesses better than the accountant. So getting their input of where it's best to place money in for investing it isn't as tax efficient manner as possible is extremely about just as you alluded to earlier in this discussion is that having that tax department right there that I've got relationships with that I can talk to and I know they know their situation and I can you know, I'm not scared to ask what might be a stupid question to discuss, especially because I know I've hopefully proven that I do know a little bit about this and that I know what I'm talking about.

00;29;04;03 - 00;29;27;17
Speaker 2
So having that relationship been able to kind of have those deep guys on conversations about the tax planning aspects and then from the PM side of things, you know, being tied to those discussions so that they know the strategies and planning and they've had input on that and what they can do to help with that. And then they're not going to have any surprises of the tax planning aspect of what it is so that, you know, decisions that they're making with the portfolio, there is an information coming in later related tax that's going to surprise them.

00;29;27;17 - 00;29;46;21
Speaker 2
Retirement planning. You know, we're not the group. We work with a ton of business owners and getting a business owner for retirement as a really a unique item. So and part of the financial planning process is, you know, look, what's the value of the business? What what the value is it what that business will sell for and then what taxes are going to be on sale and then what remains?

00;29;46;21 - 00;30;07;19
Speaker 2
And then what what's the flow of cash for retirement planning? Is there money that remains in a holding company? How much of that goes to the personal side of things? Getting all that information so that we can tie it into plan counts the best source for that and then again for the portfolio manager. Knowing the timing of cash flows, when's the money coming and the portfolio when the money is going to go out of the portfolio for tax purposes and with the business.

00;30;07;19 - 00;30;29;03
Speaker 2
Okay. How does this work in the plan in terms of do they have enough and therefore we've got lots of risk in the in the business. Maybe we can take less risk in the in the portfolio and not need as high rate of return. So we don't have to take the risk of the volatility. Right estate planning, again, a variety of ways the accountant can participate just so valuable in that integration.

00;30;29;03 - 00;30;46;10
Speaker 2
But I touched on it briefly about the permanent life insurance for somebody that owns a business and has this money in a corporation that they don't need, and if they pass away with this, there's going to be a big tax event there. So it's understanding what that tax situation saying, okay, maybe a permanent life insurance policy makes sense in this situation.

00;30;46;20 - 00;31;09;16
Speaker 2
And and then going out and making sure the appropriate insurance amount and product is acquired. And that's situation for potential toxic cost optimization. And then for the portfolio manager, if it's decided that we're going to go and purchase a permanent life insurance policy that has, you know, maybe five years of significant contributions to that policy. Portfolio manager knows the thought that money is going to come out.

00;31;10;03 - 00;31;32;00
Speaker 2
And, you know, every April, the payment of the premiums, the insurance deposits are going to go to plan to invest for that. And then lastly, cash flow planning. It seems that every movement of cash triggers tax. You can't move, move cash around without triggering catch. So, you know, having the account involved so that, you know, you're not doing things within the portfolio, moving things around that that trigger tax.

00;31;32;00 - 00;31;53;09
Speaker 2
No we get the clearance from the accountant first and make sure that we're not doing anything that's going to be detrimental from a tax perspective. And then again, the portfolio manager can clearly communicate that information up and then execute the movements within the portfolio that makes sense from other of a tax perspective. Well, so let's just at a high level of this of what this integration means.

00;31;53;09 - 00;32;15;26
Speaker 2
And yes, without formal integration, well, you know, you could have a structure in place or figure something out so that your account just talking to your planner and your investment manager for non contact connected entities, we just feel that it's much more beneficial to the client with this being all done through an established procedures and process among individuals that have established and ongoing relationships.

00;32;16;07 - 00;32;22;19
Speaker 2
That's the real benefit of the integration approach, especially tied to financial planning and ultimately wealth management, right?

00;32;22;19 - 00;32;28;20
Speaker 1
I mean, it's pretty easy to, you know, walk up the stairs and knock on the tax accountant's door and say, I need some help here.

00;32;29;13 - 00;32;29;29
Speaker 2
Exactly.

00;32;30;08 - 00;32;30;17
Speaker 1
Yeah.

00;32;30;27 - 00;32;34;01
Speaker 2
That's a tool that we have at our disposal that we use a lot.

00;32;34;06 - 00;32;59;01
Speaker 1
Yeah, absolutely. No. And like you said, everything seems to trigger tax. So it makes a whole lot of sense that you know, having it and building just make your life so much easier. So. Wow. Okay, so I know my my mind is blown. That was fantastic. I think we're definitely be having you on soon again and we're going to go through some other things, maybe more.

00;32;59;01 - 00;33;17;18
Speaker 1
Well, I think that was quite in detail, but even more in detail. Yeah, because that was fantastic. So I really appreciate you coming on, Luc. And, you know, if anybody has any questions, you've been listening and you've gone, Oh, maybe I do need some insurance, or maybe I just I need to figure out what my financial plan is.

00;33;17;26 - 00;33;26;20
Speaker 1
You can always reach out to our wealth management team. Contact details will be in our show notes and we'd love to chat with you. So thanks again for coming on.

00;33;26;20 - 00;33;36;22
Speaker 2
Luc My my pleasure. Thanks, Amy.