Business Succession

150 150 juliepower

Succession is enviable,  a business owner can either plan for or it will plan for them. In a recent study, only 40% of business owners were found to have a transition plan in place. This is quite remarkable considering the vast amount of business owners are baby boomers, and are getting to that stage in life that won’t be able to keep the pace that owning a business requires. Further, one who plans for their transition will have not only an easier time in the next phase of life, they will have planned to meet their personal goals, as well as hopefully a legacy transition in keeping the business (that they worked so hard for) going if that’s the strategy they chose.

In our seminar, The Enterprise Transition Plan – A Strategic Approach to Successful Business Exits – we discuss a three-part process of planning for transition: Situation Assessment, Review and Selection, and Plan and Implementation. The information provided is based on best practices worldwide in transitioning a very important asset and achieving a successful business transition. It isn’t easy, and does require a lot of work, but it is strategic as starting or growing the business in the first place..

Call Vern today to learn more about the 3-stage transition plan.

We recommend the following article: High Net Worth by National Post.

Active vs. Passive Investing

150 150 juliepower

There is a lot of talk about which investment strategy is better in achieving your goals. We believe in active management, and have supporting studies to show it will outperform passive investing over the long run. Why is this?  It is based on two major premises:

    1. The first is the active manager can’t be closeting the index, meaning their stock selection is merely following along with the index, as active managers will have higher fees than their passive counterparts, (well not always), fees have to reasonable – fees that are too high will rob the investor of performance gain.
    2.  Secondly, to be invested with a passive strategy and to be effective is that one needs to use the lowest cost account vehicle as by definition one is always going to under-perform the index, since passive management is merely a stock portfolio that tracks an index less a fee. This means that one either uses a self directed account with a small trading fee or a robo advisor which will pick an index for you, however most investors are emotional and will generally do the wrong thing at the wrong time, (buy high and sell low), an advisor’s hardest work is during these times; if the investor stays with a properly structured program they will achieve their goals in the long run.

This is not to say passive investments don’t have their place, a portfolio manager will use them where warranted i.e.: foreign income strategy, or a particular market index strategy but the investment choice will fit with the investors overall asset mix and risk tolerance.

Here is a great article for you  on the topic.

Fischer Financial Services Implements a New Online Insurance Application Process

150 150 juliepower

Fischer Financial Services is pleased to announce its implementation of a new 3-step seamless online process that takes just 90 minutes from needs analysis to the submission of application.

Step 1: Needs analysis is performed with professional licensed insurance advisor using an online guide on our tablet computer. This includes reviewing of all clients’ needs: life, disability, critical illness insurance for both adults and children.

Step 2: The application is filled out online instantly.

Step 3: Signatures are gathered: utilizing pen technology with the tablet and/or electronic signature with email verification. (If the clients are in good health, under 40 and applying for less than $1M of Life Insurance, or up to $500,000 of Critical Illness Insurance. In some cases the approval can be obtained within a few minutes of the applications being submitted online.)

And that’s it!

The whole process is about 90 minutes long and can be done in the first meeting.

Fischer Financial Services team works hard to build a lifelong relationship with all clients so this isn’t a one-time transaction. We are here to look after all of our clients’ financial needs, including their family members and/or their businesses if applicable.

This is a VERY personal story about the importance of health and protecting yourself with insurance.

150 150 juliepower

Victoria Goddess Run participant encourages women to care for their inner Goddess
Julie Power eager to share her cautionary tale as a cancer survivor…

Why wealthy families lose their wealth in three generations…

150 150 juliepower

About Last Night…a response to the election from our partners at Guardian Capital Advisors.

150 150 juliepower

About Last Night

The people have spoken. The 45th President of the United States will be Donald Trump. In the first-wave after
any seismic event people look for the quick answers. On the morning after, everyone is trying to discern what
this means for the American economy; the spillover impact will be felt throughout the Global economy, given the
USA’s leading position in the world. So what will the impacts be?

The platforms that Trump has run on suggest reduced immigration, barriers to trade, lower taxes, and reduced social
programs. Having won the Presidency alongside the Republican majorities in the House of Representatives and
the Senate, he will have the ability to enact legislation almost unopposed, the platform he ran on will very likely
be 2017’s legislative calendar. Trump’s plans in the campaign were often shy on specific detail, which lends a lot
of hope; politicians and their policy mandarins will step into the breach and offer guidance, making the legislation
less arbitrary and more constructive. Obviously it is impossible to offer specific comments on theoretical laws, we
can only visit his policies from what we know to be publicly disclosed.

Running on a platform of reducing immigration ignores the benefits derived from it. Immigration offers the
opportunity to enhance culture, science, commerce, and the arts by admitting the talented. Immigration offers a
labour class to do the ‘dirty work’ that Americans would prefer not to, gardening and bussing dishes and driving
taxi cabs. Immigration lowers costs and creates opportunities for growth. Ironically, the US, a nation of immigrants
and built by immigrants, now views a closed border as preferable.

Trade treaties viewed as unfavourable by Republicans are in danger of being ripped up. While this makes for an
excellent talking point, it dismisses the fact that nations are not obligated to accept terms they cannot live with,
it dismisses the fact that open trade is good for everyone – even Americans, and it dismisses the advantages to the
average consumer who can buy goods from their least costly provider. Trade is good, more trade is even better.

Taxes are likely to come down for Americans, which means that deficits are likely to rise. While this enriches a
certain constituency, it leads to increased interest expenses, which means every day more American productivity is
taken out of their economy and exported overseas. Interest on borrowings is already a non-trivial portion of Gross
Domestic Product, reduced taxes are a wonderful promise, but it comes at the cost of having more national debt,
which is a tax in and of itself.

The initial reaction from the markets was negative, but there have been more than fifty days where the markets
have moved more than 3% since the 2008 financial collapse; markets crest and fall, but over the long run they
turn positive. The Global economy digested Brexit in a matter of weeks, with myriad outcomes and so much still
unknown about Britain’s future the FTSE100 is up 9.3% including dividends. Instead of a knee-jerk reaction,
adopting a sober long-term view will benefit investors. The unemotional, patient, and calm tend to be the most
successful investors. The global economy has shown itself to be incredibly resilient time and time again, the US
economy led the way out of the last recession. Time is still on our side, we intend to stay the course.

A look at current market conditions from Christie Rose, CFA.

150 150 juliepower

September and October are well known for months of volatility for various reasons. Interestingly enough the market environment has seen more of a sideways move since the September 30, 2016 statements have been printed.

Our current portfolio strategy takes into consideration that in Canada we have been recovering from a correction in Energy and Materials contributing to a higher market in comparison to last quarter. Interest rates in Canada are at an all-time low. The U.S. market is intimidating as it keeps crawling higher, while looking forward, the market has to face the likelihood of rising interest rates and the outcome of a hotly contested election in the United States. The stock valuations in international and emerging markets are more reasonable and provide opportunities in our portfolios.

We remain under-weight fixed income relative to equities. We continue to expect equities to outperform bonds.

  • We are keeping the average life of bonds relatively short to minimize interest rate risk. We are maintaining exposure to high yield within fixed income to enhance yield. High yield also has less exposure to rising interest rates and low correlation to other asset classes.
  • Over the past year we have decreased our exposure to the U.S. market due to higher valuations and a strong U.S. Dollar. Earlier this year we took advantage of the weakness in Canadian markets as an attractive area to move some of the U.S. exposure into.  This strategy has been successful and as now become less attractive due to some recovery in the energy and material sectors. We are considering pulling back on our Canadian equity exposure, bringing the weighting to a slight over-weight compared to neutral stance. This trade is offering opportunity to take some of these funds and start building a small position in emerging markets, where appropriate.
  • The U.S. market has been flirting with all-time highs. It is expected that the Federal Reserve will start increasing interest rates either at the end of this year or the beginning of next year. This will likely result in higher volatility in equities. Of course, there is the upcoming election….. We continue to keep portfolios under-weight U.S. equities.
  • We have been over-weighting the Guardian Global Dividend strategy. This is a Canadian dollar strategy that looks globally for the strongest dividend payer and growers. Currently, it is just over 55% U.S. exposure and it generates a yield of approximately 3.7%. The country mix is most attractive while having approximately 55% U.S. exposure and 45% to other countries. We felt this would offer protection in the event of an increase in volatility in U.S. markets and acts as an alternative to our pure U.S. strategy. This strategy is also based on a quantitative model which can change quickly with an adaptive management style.
  • Our portfolio strategy has been to have exposure to dividend payers in order to add a cushion during weak stock performance periods. Portfolios have been balanced across countries and sectors. The portfolio yield has been in the 3.5% to 4.0% range. This range suggests there is opportunity in our portfolios to also benefit from capital appreciation – not just the dividend.

We know the market environment is changing and our strategy of being adaptive has resulted in portfolios being well positioned with a balance of growth and income characteristics.