What would we do without Dad?

Ivan Cons

June 2012

One of the most anticipated events of the year, at least in my house, is upon us.

On June 17, dads old and new, as well as granddads, are singled out for all the things they do throughout the year. Many Dads are unsung heroes diligently fulfilling their responsibilities, not looking for recognition or accolades, simply trying to maintain a secure and happy environment for their families.

All you dads out there, have you ever asked yourself what your family would do without you? Think of the myriad of things that would not get done. Who would take out the garbage, change the snow tires, fix the little broken things around the house? Help with homework, comfort tears of sadness, come up with the extra $20, put gas in the car, chauffeur the kids at all hours, get up to go to the rink at 5 am for hockey practice, eat the leftovers, drive the 26 hours to Florida, run to the depanneur at night to pick up milk, talk to the school principal, fix the computer, magically pay the bills, give up the umbrella, feed the goldfish, walk the dog in the snow and rain, unblock the toilet, watch a chick flick, teach the kids how to ride a bike and play catch, put things away when no one is looking and say the kids did it.

Take the last shower with no hot water, bake Pillsbury cookies, start the fire in the fireplace, brew the early morning coffee, pick up the newspaper, mow the lawn, char the meat on the barbeque ...

Dads and granddads: Take the day off. Sleep in and let someone else deal with all the things you do. Smile in appreciation when you receive those cards with the antique cars and fishing poles on them. Enjoy that new power tool and driver.

You’ve earned it.

Embrace change, but get help with it

Ivan Cons

March 2012

Moving to a seniors’ residence is a big decision. There are numerous factors to consider, such as leaving a place you have grown accustomed to for many years, parting with belongings that have surrounded you forever, and recognizing and accepting that the change is part of a positive step; a new beginning and a continual journey.

Last year, we lived that experience with a close family member who lost a loved one after 50-plus years of marriage. The decision to move to a residence was a fairly easy one. The question was how to go about selecting the right place and how to deal with the monumental task of packing up and selling a house after 40 years. Big decisions: What to keep and what to give away? We learned that there were many resources available to make this transition an easier one.

The first thing I recommend when shopping for a residence is to budget prior to making the move. Typically the proceeds from the sale of your house and other accumulated assets, plus your pensions need to be factored into your decision. Shop around for a residence. Give them a test run. Many residences will allow you to move in temporarily to try their facilities. Location, surroundings, size of the unit, activities, friends, security, and most importantly the menu will all determine which one is for you.

Once you have made your choice, the rest will fall into place.

I strongly recommend using an interior decorator to help you visualize the move. Most residences have a designer they work with who knows how to put the apartments together with your existing furniture. They come in and measure all your furniture to determine what will fit and how it is to be placed in your new surroundings. They will even hang all your pictures and photos. In addition, there are services that can pack and unpack your belongings so when you arrive in your new surroundings, it is as if you have lived there for a long time.

There are many highly reputable moving companies that specialize in moving seniors.

Finally, once moved in, take advantage of all the facilities the residence has to offer. Chances are you will make new friends and try new activities that you would not even have considered doing in the past.

Life is about change: adapting, evolving and enjoying.

Resolve to know what’s at risk

Ivan Cons

February 2012

Well here we are in 2012. February’s settled in and it seems many of us are back to our old routines.

Every year, we make promises to ourselves, but they quickly evaporate—life has a way of getting in the way. Finances seem to be an issue that many of us would like to tackle but simply don’t have the energy or patience to delve into. I’d like to offer some ideas and challenges to break through the hurdles and to help you take charge of your destiny.

Everyone who has access to a computer should set up online banking. Visit your local branch to get the necessary info. It is easy to do and so convenient. You will know to the penny how much is in your account instantly and at all times. Paying bills is a snap—no more lineups at the bank. The only thing the banks haven’t thought of is how to make our printers print out money. I’m sure this will be a reality one day.

Look over your investments. No adviser has a crystal ball. Everyone talks a good game but the reality is nothing is certain. Any non-guaranteed investment has market risk. Often seniors have investments they don’t understand or that have huge market risk but are packaged and sold as alternatives to GICs.

One huge financial resolution should be to understand the risk of the product you are investing in. People believe that if they place their assets with an adviser or financial institution, their worries are over. There are many excellent advisers in the marketplace, but no one has control over performance. It’s your money, so participate, follow it, ask questions and—if you do not understand—walk away.

For those who have accumulated savings, it is okay to spend once in a while. You certainly cannot take it with you. Imagine having all the savings in the world but your health prevents you from enjoying it.

Finally, don’t forget about others. Charity certainly begins in the home, but there are many around us who are less fortunate. Giving of time or money is one of the most rewarding things we can do.

These are truly the Times of our lives

Ivan Cons

October 2011

Just around 25 years ago, The Senior Times came into being, started by a young, energetic, independent woman named Barbara Moser with a vision and an infectious enthusiasm.

The early years at The Senior Times were characterized by a passionate desire to serve a growing segment of the marketplace that was largely ignored and dismissed. Clearly Barbara was on to something based on the proliferation of product and design exclusively dedicated to the aging baby boomer.

Manufacturers and businesses in general had increasingly come to realize that not catering to the baby boomer market could seriously undermine their viability. Barbara understood this years ago and was quite simply ahead of her time. The newspaper has evolved from a frenetic patchwork of ideas to a sustainable, anticipated, well-read and respected publication.

Ivan Cons, husband of sales manager Jacquie, in the first row, second from right, Times of Your Life, 1989 Photo: Ara Avedissian

There were many interesting adventures and plenty of interesting characters along the way. The Senior Times has been responsible for extending the journalistic lives of several well-known Montreal personalities, providing a voice and an outlet to those who were long since retired.

Neil McKenty springs to mind. I recall another wonderful retired journalist to whom Barbara gave an opportunity to write: Joe MacDougall was well into his 90s when he penned “I Remember When...”

Years ago, The Senior Times sponsored a festival called The Times of Your Life. Held at a downtown hotel, seniors were invited to come out for lectures, inspiring music and to have fun.

Barbara understood how to reach and encourage people to feel part of a community and to accept aging as something to be celebrated, not denigrated. The Senior Times celebrated multiple generations of families, often featuring interesting stories and pictures.

The Senior Times is an outlet where creativity is encouraged and ideas are debated. Barbara was always willing to listen to different opinions but ultimately her gut instincts were usually correct. The Senior Times reflected the determination of a dedicated group of people determined to change opinion, inform, and empower. The changes in technology over the last 20 years have been incredible—many were predicting the demise of print media.

It is clear that many publications are relics of their former selves. The Senior Times continues to be a viable, growing publication with an ever-increasing audience. Congratulations and let’s look forward to the next 25 years.

Be certain you’re insured for life

Ivan Cons

October, 2010

When was the last time you looked at your life insurance policy?

Many of us purchase life insurance in our younger years and often do not pay attention to the policies until such time as we receive a notice from the life insurance company advising us of a change or premium increase. I want to highlight important details that should be considered in managing insurance policies. Essentially there are two types of insurance contracts.

Term insurance usually has a guaranteed rate for 10 or 20 years and the premiums increase on the 10th or 20th anniversary as per a guaranteed schedule in the contract. These policies usually terminate between the ages of 70 and 85 and renewal costs in later years are very high. Rarely, the renewal rates are not predetermined and can be set by the insurer.

The second most common type of insurance policy is permanent insurance. Typically, the policy is designed to stay in force for a lifetime. The most popular varieties are whole life insurance, which usually has an accompanying dividend given by the insurance company; universal life insurance, which might or might not have an accumulation linked to external factors such as interest rates or mutual funds; and term to 100, which is a fully guaranteed product with or without guaranteed cash values. The rule of thumb is that the more guarantees available in an insurance contract, the less likely you will run into trouble in the future.

I can’t tell you how many times I have been approached by clients unhappy with their existing product because it did not perform according to their expectations, or more specifically, the expectations implied to them by their broker.

If you are purchasing or have a contract that is subject to variation in company or market performance, it is important to understand how this product will perform under varying circumstances. Insurance companies make their clients sign multiple forms that essentially absolve the company of any responsibility and put the onus on the client.

If you are not sure how your policy actually works, it is worthwhile to have it reviewed by someone who can give you an objective opinion. Policies that were undertaken many years ago have features that can allow retirees to augment their monthly income or provide emergency cash in a time of need.

One strategy I strongly recommend to seniors is to consider changing ownership and/or payer to a trusted family member. Unfortunately, and it is an all-too-common occurrence, an insured person might start to lose their memory or their health starts to decline. As a result, a premium does not get paid and the policy is subject to lapse 30 days thereafter. If the insured exhibits any change in health, the insurer will not reinstate, causing the insured to lose the benefit they had diligently kept for so many years.

This rings particularly true in Quebec, where children have left the province and might not have access to their parents’ affairs. If you do have a life policy, verify it with someone you trust. You might be pleasantly surprised at how valuable an asset it is.

Resist temptation when making investments

Ivan Cons

September, 2010

What a summer. After two rainy, disappointing summers, we have ourselves a real winner. Hopefully many of you were out there enjoying and doing the things you like.

Typically, summer is a less active time in the market, with trading volumes down and energies focused elsewhere. This summer has seen a very active market with discouraging results. Unemployment is still very high in the United States and is casting a long shadow on economic performance. In addition, housing prices are still under pressure and great uncertainty hangs in the air with no signs of direction.

We will eventually recover, but in the interim, one must be cautious about the investment choices made. Look no farther than the shares of Manulife, which have plummeted over the last six months with no end in sight.

Where is a good place to invest?

Interest rates are at all-time lows, bond yields are low and markets are fraught with risk. I think the key today is to resist temptation. What looks like an attractive investment today could be the next bubble to burst.

Many investors have fled to what they think is the security of corporate bonds, which have delivered solid returns. The problem is that the quality of these bonds may not be as solid as you are led to believe and many experts are calling for an implosion in this sector. Bonds can be a risky asset class and many investors are unaware until it is too late.

Another option frequently recommended are exchange-traded funds, or ETFs.

ETFs can be purchased like a stock and follow the price of a basket of assets. ETFs are widely available on different exchanges and track the price of commodities, equities and bonds. The expectation is that as the commodity price rises, the ETF will follow suit. Unfortunately, this is not what has transpired and investors are shocked when, for example, oil and gas prices rise but their ETFs continue to drop.

The reason for this is the way in which future commodity contracts are bought and sold within the ETF. Futures traders can take advantage of the way this investment is structured. The net result is huge losses for the small investor. There is an excellent article on commodity ETFs in the July 26 issue of Bloomberg Businessweek that explains this phenomenon in much greater detail.

Whatever asset class you elect to invest in, ask questions and read the financial statements. It is important to look at the big picture.

One area of investment that is often overlooked is life insurance. Life insurance carries no risk and has a guaranteed return. Many clients are supplementing their portfolios with an insurance policy to cover losses incurred in the market.

If you do the math, the return to your estate on an insurance policy will exceed the return offered in a fixed income portfolio under today’s rates. For example, a 65-year-old non-smoking male would pay an annual premium of $7,200 to guarantee a payout of $250,000. By contrast, a $7,200 annual investment over 20 years assuming a fixed four-per-cent rate of return would generate $214,000. If we add in taxation each year, the return would be significantly lower. The nice thing about a life insurance policy is that it is totally predictable in how it will perform.

In today’s market, take nothing for granted, especially if you are a passive investor.

Imagine a Father’s Day with no returns, exchanges

Ivan Cons

June, 2010

Fathers’ and Grandfathers’ Day is upon us.

It’s funny how Father’s Day follows Mother’s Day. I wonder how that was decided. Maybe one year we should have Father’s Day first, to switch things up. Better still, what about Children’s Day, which, as a kid, I was not too subtly reminded was every day. This year, I propose something completely dif- ferent. No more sweaters, shirts, socks and ties that might not see the light of day. Imagine how many fewer returns and exchanges there would be worldwide.

Imagine not having to fret between buying a large and an extra large when Dad thinks he looks great in medium. This year, take back Father’s Day.

Start a new hobby. Take a flying lesson or go hang gliding. If speed does not do it for you, go up in a hot air balloon. If you like thrills, ride a roller-coaster with your grandchildren. Take a fast car out on the track. Buy the Porsche or Corvette you always wanted. So what if the wind doesn’t blow your hair around any more? Just make sure you wear a hat.

If machines are not for you, train and run a marathon, take a yoga class, meditate, try out your material at a local comedy club. Take in a festival you have never done before like the Jazz or Just For Laughs. Take a walk up Mount Royal, explore Île St Hélène. Go dancing.

If exotic appeals to you, take the kids and grand-kids on a cruise. Imagine the joy in having everyone together. Take a European tour and, if on a budget, stay at Elder hostels. Go somewhere you have always dreamed about.

Walk with an extra spring in your step with your head up. Smile, be cheerful. Spoil your grandchil- dren, but most of all spoil yourself.

So to all fathers and grandfathers, enjoy the day. Go a little wild and for goodness sakes, when the restaurant bill comes, pass it to someone else.

Put Mom in charge of the economy

Ivan Cons

May, 2010

Spring has arrived and once again Mother’s Day is just around the corner. Many of us are fortunate to still have our mothers, while others are left with warm memories of days gone by.

Throughout our lives, mothers have been influential in instilling us with values and common sense. Much of who we are is influenced by our mothers.

Remember how your mother talked to you about the value of saving money and not spending foolishly, how she would sacrifice her needs to make sure you would not go without.

In many families, the father was the sole breadwinner, but the mother managed the finances and ran the household, stretching the weekly paycheque. Each week, she would head to the bank, waiting outside until the branch opened to make the deposit and take out the cash that was required for the week’s expenses. My, how banking has evolved.

In the old days, cash was king.

Lately we seem to have lost that mantra, with access to cheap money and easy financing. Perhaps if more mothers were in charge of our economy, there would be less financial ignorance.

Maybe it’s time we went back to living simpler lives. When my mother needed to reach me, she managed to get in touch. I didn’t have to post my life on Facebook or Twitter – my mother knew everything just by listening to my voice.

Who had a cellphone? If you had a rotary-dial phone in your house, you were lucky and heaven forbid if you left it off the hook.

“Mothers knew how to turn a dime into a quarter and a quarter into a dollar.”

Nowadays, people have busy, fractured lives, eating on the go, with no time to prepare a proper meal. My mother’s kitchen was the restaurant: You knew what you were getting. How many people know how to sew today? Hems to be done, clothing to be repaired: it was all done by guess who. Not too long ago mothers knew how to turn a dime into a quarter and a quarter into a dollar. Today it seems we know how to earn a dollar but spend the hundred we don’t have.

To all those mothers out there, I wish you a fantastic day surrounded by your loved ones. To those whose mothers are no longer here, I hope w cherished memories will warm your day.

Dream big. Blow through a million before midnight

Ivan Cons

April, 2010

Recently I was listening to how Boxer Mike Tyson and golfer John Daley managed to whittle away fortunes on exotic automobiles and gambling. What if we had the chance to spend a million dollars in Montreal?

How fast could you blow through it? How would you prioritize? I’m not talking conservative here – I’m talking real, hard-core spending. Let’s go back – perhaps 50 years – to when the city was rocking.

The first thing that I would do would be to head over to my local Steinberg’s to fill my pantry and freezer with the finest they offer, making sure to stock up on Ice Castle ice cream and soft drinks.

I would head down to Trans Island Motors and pick out the biggest and baddest Chrysler I could get my hands on. No tramway for me. In fact, I would buy two – an Imperial for my wife and a New Yorker for myself, chauffeur-driven, nonetheless.

Then I would be off for a game of golf in Hampstead. I would want to be close to the 18th hole, so I would buy a house or two in this up-and-coming community. Life would not be complete without a country house in one of the more exclusive Laurentian communities.

I always dreamed about travelling. Perhaps I would book a vacation via Trans Canada Airlines. What could be better than prime roast beef accompanied by champagne and fine silverware while well-dressed patrons smoked the finest Cuban cigars and sweet Caporal cigarettes offered by exotic stewardesses. I could jet-set to some far-flung island like Aruba or spend a week in London and Paris. Or better still, take a month-long cruise, experiencing Europe in extreme opulence.

Did I forget to mention that a whole new wardrobe would be in order, which of course would require an exclusive visit to the downtown Eaton’s store? That’s right, the Eaton’s with the apostrophe in the name.

I would have lunch on the ninth floor. Oh, how wonderful to shop at Eaton’s, with their wonderful salespeople who would greet you by name as if you were a long-lost friend. What a joy to ride in the elevators where the most beautifully chic operators would call out each floor and ask you to mind your step. Maybe I would really spoil myself and head over to Ogilvy’s with its wonderful bagpiper and terrific food.

Speaking of food, this city has no shortage of good restaurants. How about an evening at Desjardins for seafood, or steak at Moishe’s with all the trimmings? If I was in the mood for exotic fare, I would saunter over to Ruby Foo’s for the Poo Poo platter spare ribs and eggrolls that were out of this world. How about tasty chicken at The Chicken Coop? Or head over to Ben’s delicatessen on Burnside for smoked meat. To cap off an evening, nothing would beat Miss Montreal for coffee and dessert.

Having all this dough to spend, I would certainly want to flash some of it at the finest joints in the city. I would start at The Bellevue Casino and catch the showgirls and dancers. I would visit Chez Paree to catch the electrifying sights and sounds.

No evening would be complete without a stop at The Gayety, hobnobbing with Lilly St. Cyr and all of Montreal’s finest. At the end of the evening, I’d be stripped of my cash.

There is a lot to do in this town and the fun only goes as far as your money. But alas, we dream and reminisce about the good times. For most of us its family and friends that count the most.

Dream on, dream big and live life to the fullest.

Putting your money in the wrong hands

Ivan Cons

March, 2010

As many of you are aware, we are in the midst of an RSP campaign. We are bombarded with reminders to make our contribution and to review our retirement portfolios.

For many of you holding RIFs, the RSP season is a thing of the past. The focus becomes how to hold on to your money without encountering major losses. The sad reality is that over the last 10 years, the equity markets have delivered just that: losses.

On top of the losses, there are other disturbing trends. People entrust their money to financial advisers who ravage their accounts with no regard to accountability, and ruin their retirement. By the time they figure it out, most if not all of their money is gone, and usually there is no restitution.

Many people simply do not know how to deal with money. The prospect of someone looking after it for them is a big relief. In one instance, I have seen a client’s RSPs reduced from $120,000 to $13,500 in the course of seven years. The broker kept trading the client’s entire retirement fund in highly speculative penny stocks. How does this happen?

Easy. The client was trusting and the broker was unscrupulous, forging signatures to alter the client’s investment profile in accordance with the way he was investing their funds. The client, of course, was unaware of this transgression until several years later.

In addition, the broker no longer works for the firm, which denies any responsibility.

What is the client supposed to do? The most obvious answer is to launch a complaint and open a formal investigation with the AMF (Autorité des marchés financiers), the regulatory body in Quebec that has been in the spotlight recently, trying to show they have a handle on policing transgressions.

Unfortunately, these transgressions have been allowed to fester on their watch for many years. Keep in mind that opening a file with the AMF is a lengthy process and can become very costly if pursued legally. What ends up happening most of the time is people become resigned to their loss, which is tragic.

We need to demand more accountability and responsibility from the investment sector. Investment firms must take more responsibility for rogue advisers and misdeeds perpetrated against their clients.

There is a bond of trust established when monies are handed over to a firm. This trust must be upheld at any cost. More importantly, we must be vigilant when it comes to their accounts.

It is your responsibility to check your statements online – daily if possible and to verify all transactions on your account. Insist on copies of all paperwork completed by the adviser.

Never sign uncompleted documents, especially documents that are generally known in the industry as KYC forms or Know Your Client Forms. These documents express specifically the nature of your risk tolerance and can unequivocally support any transgressions of your investment intentions.

Any purchases or trades should be verified. If you are not happy or suspect any foul play, speak to the compliance officers in the firm.

If it all seems overwhelming, perhaps it is advisable to stick to such basics as fixed income investments like GICs.

Whatever you do, remember it is your money and if it sounds to be good to be true, it probably is.

Protecting yourself and your money from scammers

Ivan Cons

Every time I open my email it seems I have won money from a far-flung country or my co-operation is desperately needed to retrieve a long-lost fortune that only I am capable of delivering, if I send some huge amount to untangle the bureaucracy and liberate the funds. Sound familiar?

The sad part is that these offers play on our emotions and inherent goodness and we may become entangled in them and cheated out of our hard-earned money. How do you protect yourself?

No matter how enticing or genuine the offer may seem, make sure you delete the email and resist engaging with the sender because once you respond, you will encourage them. Remember, if it sounds too good to be true, it is.

You should also be wary of phony bank emails. Fraudsters have become more sophisticated and developed techniques that make their emails look like they are official requests from your financial institution.

Remember, banks will never solicit you online and more importantly will never ask you to verify personal information online.

Think about it. They already have your personal information.

The best thing to do is delete these emails. Financial institutions do not take kindly to people who fall for these scams and are under no obligation to reimburse you for fraud committed on your account under these circumstances. Never click on any links within these emails, as they may contain viruses or keylogging software that will record PIN numbers and passwords that the scammers can use to empty your bank account without your knowledge. It is your responsibility to protect yourself online. Make sure you have quality antivirus software running at all times and that it is up to date.

What about all those nuisance calls from credit card, cellphone, alarm or utility companies? These calls may be fraught with more danger than is apparent. It seems we are constantly being bombarded with offers and upgrades that are only clever ways to maintain our loyalty.

These calls are designed to get you to reveal information without your realizing it. Answering questions like: “Do you currently have an alarm?” can be more trouble than you realize. My personal favourite is when they ask me to confirm my address or credit card information. Last time I checked, they were calling me.

Don’t give out any personal information over the phone unless you know who you are talking to. When in doubt, disconnect. It may not be polite, but it could save you a lot of grief down the road.

Simple tips to protect yourself

• Never give credit information to strangers.

• Change your PIN numbers online frequently.

• Change your bank PIN numbers frequently. Go to the bank to do this.

• Shield the keypad when keying in your code. Eyes are everywhere, especially at stores. When you use the bank machine, look around to see who is behind you.

• Never leave your PIN numbers in your wallet or store them on a computer; commit these numbers to memory and absolutely do not write them on the back of your bank card.

• When setting PIN numbers do not use birthdays, sequential numbers (i.e. 1, 2, 3, 4), or one digit in repetition.

• Be careful about where you use your bank cards. If in doubt, pay cash or use credit.

Online brokerages offer low fees, independence

Ivan Cons

December, 2009

How much do you know about your spouse? Are you prepared should the unforeseen occur? Too often, upon the death of a partner or loved one, people are left scrambling. Much of this could be avoided with advanced planning.

Locating and centralizing your important papers is a priority. It should be easy to find bank accounts, investment accounts, wills, safety deposit boxes, real estate holdings, and life insurance.

Make sure that your wills are up to date and notarized. Many people neglect to do this. It is particularly important if you are in a second marriage and there are children involved. Your wishes may not be respected and the fallout among family members can be devastating.

Verify that the beneficiaries on your life insurance policies are correct. Generally the life insurance proceeds are paid directly to the named beneficiaries and bypass the estate completely. If minors are involved such as grandchildren, make sure you appoint trustees on the insurance contract and that you specify to what age.

Consider prearranging your funeral. This simple task ensures that things will be done according to your wishes. This avoids unnecessary acrimony among family members and siblings. Consider purchasing a small life insurance policy to cover final expenses such as funeral and burial costs. By doing so, you know the money will be available.

Appoint trusted executors who can look after your estate. Keep in mind the many tasks such as filing a terminal return, applying for death certificates, transferring RRIFs and RRSPs, pensions, real estate, and assets in general. You want to make sure that the value of your estate is maximized and not compromised by foolhardy decisions.

The best advice is to get good advice. Death is not a topic that most of us want to face; however, acknowledging its impact on your loved ones will go a long way toward easing the burden.

Online brokerages offer independence, low fees

Ivan Cons

I would like to talk about investing in the market and more specifically share some thoughts about using discount brokerage companies available primarily online.

Like most investors, I hold my portfolio with an established broker at a reputable firm. About two years ago I decided to open a self-managed trading account with one of the discount online brokerages owned by the bank.

We often hear that we need the advice of a professional, that we should leave it to the experts. In some respects this is true, but there is so much information available online regarding stocks that with some concentrated effort, we can become more educated and take more of our investment decisions into our own hands.

One of the advantages online brokerages offer are extremely low fees on transactions, generally between $6.99 and $9.99 per trade. They also offer different platforms for a monthly fee whereby you can have access to accelerated information. And there is full access to option trading and bonds. One of the most important criteria in trading online is to set up very strict parameters of when to buy and when to sell. Educate yourself and implement strategies that appeal to you. You are responsible for all decisions that you make. However, the experience can be very rewarding.

If you are looking at setting up an account shop between financial institutions, some will offer promotions such as free trades. Start with a small sum. Many people will practice or set up mock portfolios prior to making their first trade. Research the market well. If your strategy is to trade shares, study and pick companies that have some volatility and volume. Get to know a few of these companies intimately. Examine their trading patterns and make sure you understand all the key ratios. The more knowledge you possess the more likely you are to succeed. It is a wonderful way for retirees to self educate and understand the challenges of the market.

Do not forget to keep track of your gains and losses and report them annually in your tax return.

A great gift for the grandkids

Ivan Cons

October, 2009

If you would like to give a wonderful gift to your grandchildren, consider enrolling them in a Registered Education Savings Plan. The RESP is an easy vehicle to set up, with the simple condition that the child must have a social insurance number. An RESP is a unique savings account registered with the Canada Revenue Agency created specifically to help families save for their children’s post secondary education.

Some of the highlights of the plan are that all contributions grow tax-free until the child is enrolled in a post-secondary program approved by the guidelines of the plan. There is a lifetime limit contribution of $50,000 per child. When the money is withdrawn for educational purposes, it is taxed in the hands of the student, which under most circumstances leads to minimal or no tax. In addition, there is a CESG grant whereby the Canadian Government matches 20 per cent of the first $2,500 per year contributed to an RESP up to a maximum of $7,200 over the plan’s lifetime.

There are further CESG matching rates that allow the bonus to increase to 30 per cent on the first $500 of annual contributions for families who are receiving the Canadian child tax benefit.

When selecting an RESP provider, it is important to understand the differences between product and companies. Some products offer complete flexibility in investment choice and payments. Others promoted as non- profit education plans have more restrictive regimens that have financial penalties if you are unable to continue contributing. It is important to learn how to ask the right questions when selecting the vehicle of choice.

If the child named as beneficiary decides not to pursue a post-secondary education, as the plan owner you have options.

First, you can nominate a new beneficiary, provided the person you choose is under 21 and related. Second, you may transfer up to $50,000 of the earned income into an RRSP within your contribution limits. All grant money must go back to the government. Third, you can receive the earnings via an accumulated Income Payment. Finally, you can withdraw the money subject to various tax rates.

There are many choices. As with all other financial decisions, be informed and clearly understand the nature of the contract you are signing.

Remember, the greatest gift you can give a child is an education.

Protecting ourselves against unscrupulous financial advisers

Ivan Cons

Unfortunately, this summer we became aware of a seemingly impossible financial fraud committed against many Montrealers, including seniors, some of whom are incapacitated or isolated geographically from their children.

The financial regulators, in this case the Autorité des Marchés Financiers (AMF), seldom heard from in the past, emphasize that one of the problems with Earl Jones was that he was unlicensed – as if his having a license would have changed his behaviour or prevented people from becoming victims. If we go back five years, there are many examples of licensed brokers in insurance and mutual funds perpetrating similar fraud or promoting products that were not duly registered. One only has to refer to the AMF website (www.lautorite.qc.ca) or the headlines in our local newspapers.

How should we protect ourselves in a financial transaction?

• Make sure you have legitimate copies of paperwork handed to you by the broker upon completion of a transaction. The broker can provide you with his own in-house statement, but there should also be a statement from the company with whom you are dealing sent directly to you.

• Look for a track record. Look for companies that offer a genuine array of products and who you can access by phone and also with a private code online. Verify whether the company or product is registered and licensed in Quebec. Start your search for a track record by simply googling the person’s name. You can also look for past infractions on the AMF website.

•The moment you hear a story about a better return than is available at your financial institution or a teaser about a product that will save you taxes, investigate it thoroughly. Many advisors use the words tax or tax savings as a lead in to sell a product. Often these tax savings are negligible or are designed for a very small, wealthy segment of the market.

• Ask to see the tax opinion from the company on its letterhead. Have them remove it from their vault and show it to you, or better still, verify if a documented opinion exists with either revenue department. Some brokers suggest that clients leverage and borrow or remortgage and invest the proceeds for tax savings and future opportunities. Many clients do not understand the peril they may put themselves in. Ultimately, clients are responsible for their own actions, not the broker. Make sure you clearly understand what you are getting into. Make sure the tax free product comes with a get out of jail free card.

• Be wary when you hear the words offshore. Offshore is where you take a vacation – not where you should invest your money. While you may come back from an offshore vacation, your money will likely disappear. Carefully check the name of the company in which you are being advised to deposit your savings. Scammers often create company names that sound similar to genuine financial institutions,giving them an appearance of legitimacy. Ultimately there is no foolproof way to protect yourself, but you can take simple prudent measures to greatly reduce risk.

Death policy mitigates risk

Ivan Cons

Everybody knows we’re living through difficult times. People are carefully reevaluating their investments and reassessing their retirement needs. With portfolios so badly devastated, I’m receiving more calls about clients purchasing life insurance policies. The basic idea is that the policy will replace the investment savings that have been lost in the current financial turmoil.

Life insurance guarantees that monies will be available on the death of the insured therefore making certain that the surviving spouse maintains their quality of life and is not held hostage to any unprecedented negative economy or worldwide crisis.

I am often asked if it is hard for people aged fifty plus to obtain life insurance. Generally speaking, the insurance company evaluates your profile. After obtaining blood and urine samples, which are standard, they may ask for an ECG or complete physical. It is also common for the insurance company to refer to your attending physician to confirm various medical information highlighted in your application. Other issues they look at are your build, driving record and family history as well as smoking habits. Past history such as a criminal record or alcohol or drug abuse are also considered. This information is assessed by an underwriter at the insurance company and a decision is made as to whether to offer insurance or not. Sometimes a decision is levied that carries a substandard risk which translates into an additional premium charge on the basic cost of insurance.

Each applicant is evaluated uni­quely. People who have endured major illnesses such as cancer or heart attack may still be eligible for insurance. It’s important when going through the application process that all pertinent information is properly disclosed to the insurer. If the insurer uncovers additional information after the policy is issued, they do reserve the right to rescind their offer. While this rarely occurs, it underscores the importance of being honest.

I can state that after 18 years in the business, every death claim I’ve seen submitted – and they’ve been numerous – has been resolved satisfactorily.

To summarize, life insurance is a guaranteed future payout of a lump sum of money. Take the market risk out of your retirement portfolio by adding a life insurance component.

Taking stock and reevaluating

Ivan Cons

Canadians have much to be thankful for as we watch the unwinding of the global economy. Although we’re not immune, our banking system was recently ranked as the best in the world. It’s safe to say we can expect some difficult times ahead in many sectors of our economy, and one of the sectors already showing signs of a slowdown is housing.

Depending on your region, housing prices will be affected differently. Some owners will see more significant reductions in market value. For most Canadians the purchase of a house is the single largest investment they’ll make, and the single largest asset they’ll own.

The last few years have seen emerging trends that have a particular impact on seniors. Firstly, there are many seniors with paid-off mortgages who are house rich but cash poor. Municipal governments have raised property tax evaluations significantly. Also, a large majority of Montreal’s housing stock is old, requiring major renovations. As a result, many seniors on fixed incomes can no longer afford to live comfortably in their own homes, or are forced to take home equity lines of credit to do so.

The second trend is that because of low interest rates, many seniors are opting to buy condos instead of renting, thus taking on mortgages that may never be paid off in their lifetime. Once these individuals hit retirement, they may have trouble maintaining their mortgage payments and taxes.

Worse, with the severe decline in the equity markets worldwide, many seniors are now faced with substantially reduced investment portfolios, and many who are retired or approaching retirement may no longer are able to live in the way which they had planned.

There are options available and they all centre on taking stock and reevaluating your complete financial portfolio and living expenses. For those strapped for cash, solutions like reverse mortgages and home equity lines of credit may be suitable in some instances. It is important to consult with an independent financial advisor to evaluate your needs.

Safe havens for an unsafe time

Ivan Cons

With all the uproar in the US relating to financial markets, I am often asked by clients approaching retirement or living on fixed income if there are any safe havens or strategies to keep their retirement assets from eroding or being severely diminished.

These are difficult times we find ourselves living in and no matter how secure we feel living in Canada, the impact of US market troubles will extend here. We are in no way immune. Unfortunately these troubles have really taken a toll on seniors who are largely dependent on fixed incomes and company pensions. Many have investments in mutual funds and blue chip financial stocks which have been decimated.

Seniors living on fixed income or approaching retirement have options. It is essential to review your investment portfolio and understand what asset classes you hold. Examine the prospectuses of your mutual funds to evaluate risk and determine whether they measure up to your level of tolerance. This is easiest to do online.

There are some very interesting guaranteed income products that are now available in the marketplace such as Manulife’s Income Plus which is designed to offer guaranteed sustainable income at retirement and limit the downside risk of market investing. In addition, annuities offered by insurance companies provide guaranteed income for life. These products offer greater levels of security.

Segregated Funds offered by insurance companies guarantee your invested capital at maturity, which is usually a ten year period, and guarantee your original capital at death. Some plans even allow you to lock in your guaranteed returns up to three times a year, providing higher maturity values.

It pays to shop around for GIC rates and bond yields. Make sure youère comfortable with the companies underwriting these products. Ratings are easily checked online as well.

Now more than ever it is essential to review your portfolio. Take stock. Some simple measures can go a long way to ensure that your nest egg is safe and sound.

Estate planning calls for tough questions, experienced advice

Ivan Cons

I'm often asked: what does estate planning mean and how does it apply to me? Proper estate planning ensures that your wishes will be met when you are no longer around. In addition, it allows for the orderly transfer of assets with a focus on reducing the impact of taxation.

Proper planning can dramatically increase the value of an estate. People are often shocked at the taxes owed to the individual governments on final disposition of RRIFs once both spouses are deceased. In addition, capital gains on non-residential real estate and recapture of depreciation on final disposition of these assets can lead to enormous tax exposure for future generations. Clients with large investment portfolios can be subject to huge capital gains liabili­ties once both spouses are deceased. One can easily roll over assets between spouses tax free, however the same rules do not apply to the children. I've seen many estates greatly diminished through poor planning or indifference.

One area of estate planning that requires particular interest is that of second marriages and blended families.

Without proper guidance it is possible that the deceased natural children lose out completely due to assets being transferred to the second spouse, and upon the demise of this second spouse, assets are inherited by the second spouse's own natural children. In this scenario all of the original family's wealth has just been transferred to an entirely different family due to poor planning.

Sometimes the use of Family Trusts are recommen­ded as a way to creditor-proof estates and reduce taxes. There are instances as well where adult children are incapable of managing large sums of money on their own and the proceeds of the estate are governed through a third party who dispenses money accor­ding to the wishes of the deceased for a finite time period. There are many examples of businesses in Canada that have not survived multiple generations due to infighting amongst siblings contesting the desires of their parents or squan­dering fortunes through mismanagement.

There is so much information readily available to address these issues. Do the research. Ask yourself some difficult questions. How will you be perceived by your own children after you are gone?

Seek out the resources of a trusted professional with proper accredi­tation and a good track record. Don't leave things to chance. Make sure your heirs (and not the government) receive the fruits of your lifelong labours.

Protector, provider, paymaster

Ivan Cons

While traveling on a cruise holiday a few years ago, I noticed that one of the most popular T-shirts for sale was a simple stylized kind with the slogan “Bank of Dad” boldly emblazoned on top of a bank machine. I thought it to be quite amusing, however my 12-year-old daughter was even more amused and insisted that I purchase it.

It amazed me how she understood, although in jest, the significance of the traditional male role of providing for a family and the expectations that her needs would be met. Granted, that role has changed somewhat over the years but still, for most of us men, it is a reality. That role often continues even when our own children are grown and still depending on us financially for one reason or another. When hardship comes calling who else can you depend on but good old Dad?

Unfortunately for some of us, the role of provider can be seriously impacted due to an unexpected event such as illness, accident, or in the worst case imaginable, death.

Fortunately there are some very simple solutions to ensure that everything will be covered should the need arise.

It is always a good idea to have adequate disability, critical illness, and life insurance. As we go through life our needs change and we should periodically review each component to ensure that the family’s well-being will be looked after. In fact, as we approach the retirement years, there are some new innovative products that take all the worry and risk out of whether you will outlive your retirement money, thus ensuring that the “Bank of Dad” never runs out of cash!

As Father’s Day approaches, sit back and enjoy how much you are appreciated by others and what impact your efforts have made in the lives of your children and significant others, and don’t forget that this is a day to relax and treat yourself.