Global Market Commentary

[Meet Sue and Drew RBC Wealth Management Clients]

[DREW:] Sue and I met at University. I was getting a coffee in the lounge and saw her and just fell in love. Just that simple.

[Drew and his partners recently sold their national network of veterinary hospitals “Calgary North Veterinary Hospital and Emergency Service”]

When the sale of the company came on there's a lot of things that came with that and taxes and creating trusts and things like that that you know aren't really our strength.

[SUE:] You're just relying on what you hear from friends, what you get online and you know, it's difficult because you're always worried you're going to miss something.

[DREW:] We had our goals. They were pretty roughed in goals. We didn't really know exactly how they would be actuated and the team pulled it together and sort of said, “Okay well if you want to do it, here’s the options.”

[VI LIVINIUK:] Drew and Sue sold their Veterinarian Practice.

So that meant that things on the financial front became a little more complicated, and they didn’t really know where to start.

[Vi Liviniuk, CIM, CFP, B.Ed. Vice President, Associate Portfolio Manager. RBC Dominion Securities Inc. RBC Wealth Management]

At that point it was important that would that I bring in all of my financial partners that are specialized in helping clients with different facets of their financial well-being. Whether it's a state planning, tax planning, insurance planning, right down to charitable giving.

[VAN THAI:]

[Van Thai, PFP. Private Banker. RBC Wealth Management]

If you're dealing with the advisor on investment front, and you dealing with me on the personal private banking front, it's just seamless. We are a team.

[Cody Cormier:]

[Cody Cormier, B.B.A. (Finance), LL.B., TEP Vice President, High Net Worth Planning Services RBC Wealth Management]

(Sue and Drew wanted to impart their values and beliefs to their son, but I suggested that they schedule annual family meetings and at that family meeting one of the things they could do is talk about philanthropy and setting up a private endowment fund inside a public foundation would be a good idea, and that endowment fund would generate income annually and it could get directed to the parents’ favorite charity or the son's favorite charity.

[DREW:] To have a fund that's of itself can can make its own wealth and not just be a stagnant donation every year that comes out of your general account. And it's doing quite well so that's also good for our charities.

[SUE:] Whenever we want to make a contribution, we just give them a call and it's all taken care of. We just have to give them the name of the charity and that's it.

[DREW:] It's a rewarding thing to put something together and then have it come through exactly how you envisioned it.

[SUE:] We have this team of people and they know us and they know what we want to do, what our goals are, what our aspirations are and I can’t say enough about it.

[UNKOWN WOMAN SPEAKING]

RBC Wealth Management is Canada's leading Wealth Manager. Our approach brings the best of RBC to you. Our resources solutions and full access to our team of experts, through one single contact, your Wealth Manager.

Simply put, there's wealth in our approach.

[Wealth Management Dominion Securities logo]

These days it can seem like there's a tax on everything and with Canada's progressive tax system the more income you earn the higher your tax rate.

If you face a high tax burden, you'll be interested in how you can reduce it or at least manage it.

One way is with insurance.

Most people think of insurance for their home, their Auto and life.

But did you know that life insurance can help cover the taxes due when your estate is settled?

What's more there are Insurance based investment strategies that can provide tax free income during your retirement and tax-free benefits to the beneficiaries of your Estate.

Another way is with family income splitting.

Family income splitting involves transferring investment income that would otherwise be taxed at your higher tax rate to family members who are taxed at lower rates.

Here are two additional ways to split income with your family.

One, a family trust which enables you to provide funds for your children or grandchildren’s needs while reducing taxes.

Two, a spousal loan strategy which enables your lower income spouse to earn investment income at their lower tax rate.

Here's some other ways to reduce tax.

If you have an RRSP contribute as much as you can to maximize the tax deferred growth over time.

Also take advantage of the tax free savings account if you haven't done so already to earn tax-free investment income.

Next look at your non-registered savings and how the different types of investments are taxed.

Capital gains and dividends from Canadian corporations received preferential tax treatment while interest income from GICs or bonds is fully taxable at your marginal rate.

Here's a tip - put more of your interest-bearing investments in your registered accounts like your RRSP where they are sheltered from taxes, then put more of your taxed advantage dividend-paying investments into your non registered accounts.

And here's one more tip.

Always make sure you speak with a qualified professional tax advisor to get the right tax advice for you.