The Misconceptions of Financial Planning

Mar 05, 2019 | Kyle Sarai


The Misconceptions of Financial Planning

We all hear investment firms offering “holistic wealth management” these days, but what does that even mean? Most people have no idea. Wealth management consists of investment, tax, retirement, business succession, estate, will and trust planning, and you should be receiving all of these services from your current advisory firm at no additional cost. Holistic wealth management should be the rule, not the exception.

Many individuals in the Lower Mainland who purchased homes and property before the run up in prices over the last 10 to 15 years, likely have enough assets to be financially secure for the rest of their lives. They have done exceptionally well through their real estate investments and, upon retirement or the selling of their real estate assets, are looking to invest and preserve their wealth for their retirement dreams or to pass down to their families. What we are most often focused on with clients are the following services:

1. Tax Planning – Nobody likes to pay the government more than they have to during their retirement years. Recently, we had a client selling his business and closing his doors. Between him and his wife, they had around $2 million in non-registered investments, RRSPs and TFSAs. Their biggest concern was not if they had enough money to last the rest of their lives post-retirement, but which accounts to withdraw their assets from and how to withdraw assets to minimize taxation. We provided this couple with a detailed retirement plan outlining the amount of CPP and OAS they would receive, how much in dividends their taxable portfolio would generate per year and a road map of where they should be withdrawing assets from and when. We determined they would need $80,000 per year after tax to live comfortably in the first five years of retirement. We decided to draw from their non-registered portfolio first, and wait until they turned 72 to start withdrawing assets from their RRSPs (which would be RIF at that point). By laying out a detailed financial plan for their retirement, we ultimately saved them the most money possible in taxes and enabled them to draw out their retirement savings longer.

2. Estate Planning – One of the biggest concerns for clients is what happens to their assets when they pass away. We have found that the majority of individuals have not thought much about what will happen to their assets once they are gone. Recently, we asked each client if they would like to have their families join in on our annual review meetings. The majority of our clients responded positively to this. We used these meetings to educate our clients' children about the investment and estate planning strategies we put in place, should something happen to their parents. We showed them how much estate tax would be paid out, and how much money would be coming to each child. Additionally, we asked our clients' families what they would like to see done with their parents assets after they passed on. This exercise was beneficial to both my team and to our clients and their families It jump-started an important dialogue and a necessary conversation that can often be difficult to broach within families.

The question you should be asking yourself is are you getting these services from your Investment Adviser or Portfolio Manager? If you would like to schedule a complementary introduction to our services, please feel free to contact me directly at 604-257-3225. For more information please visit my website at


Kyle Sarai MBA