by Scott Ronalds

From a business point of view, it was an email we love to see. From a senior looking out for his spouse perspective, it was even better.

The note went something like this (I’m paraphrasing the actual email).

I’m in my mid-80s and in good health. My wife is a few years younger and wants to hand over our investments to a reputable organization in case something happens to me. We have several portfolios, factoring in accounts I handle for children and grandchildren. Including RRIFs, TFSAs and non-sheltered investments, we have close to $1 million. We want to preserve and grow our capital to continue to finance our lifestyle. Is this something you can help with, and if so, how?

The short answer: Yes, we would love to discuss how we can help you.

I’ll get to that, but first, a little about Phil (not his real name).

After reaching out to him, we learned that Phil has always managed his own investments and has done an admirable job of it. Following the market is something he enjoys, although the last few years have been a wild ride. Phil’s looking for a firm he can trust to manage his portfolio and provide his wife and children with peace of mind, both while he continues to lead an ‘85 is the new 75 lifestyle’, and after time catches up with him.

Although he’s still very capable of managing his own money, Phil has come to the realization that his wife would be in a challenging situation from an investing perspective if something were to happen to him. She’s aware of their financial picture at a high level but isn’t well informed about their individual holdings and wouldn’t have anyone to turn to for help (who's abreast of their investments). Moreover, she’s not interested in managing a portfolio.

Their situation is not unique. There are many households in Canada where one partner is the point person for financial decisions, and the other is in the dark (or uninterested). It can lead to a lot of anxiety and frustration when the “numbers person” passes away or loses their capacity to make decisions.

On this last point, studies have shown that financial literacy declines with age, suggesting it’s sensible for seniors who are DIY investors to seek to work with a trusted adviser or firm. One such study from Texas Tech University in 2016 stands out:

“Financial literacy declines at a consistent rate after retirement. This is worrisome because households aged 60 years and older control more than half of the wealth in the United States … What was even more concerning, however, is older respondents didn't report a loss of confidence in their ability to make financial decisions.”

Whether Phil decides to make the move to Steadyhand or another firm, it’s great to hear that he’s turning over the keys to a group of professionals to do the heavy lifting, and that he plans to involve his wife in the investment conversation. It’s a responsible financial decision that will go a long way in making life easier for his family.

Turning back to his question of whether we can help, here’s how we’d be a good fit for Phil, and other retired Canadians looking for professional oversight of their investments.

All accounts under one roof, with Powers of Attorney

We can handle all of Phil’s various account types (RRIF, TFSA, non-registered) and can set up his wife or one of his children as a Power of Attorney for each account, if desired, so that she/they can act on them if he becomes unable to (we would offer any investment advice she requires; more on this in a minute). They’ll receive consolidated reporting on their portfolio, making it easier for Phil and his wife to see what they own, how they’re doing, and what their all-in fee is.

An aligned investment approach

Preservation of capital along with some growth is Phil’s stated mandate. Our investment approach is well suited to his objectives. We focus on building well-diversified portfolios comprised of best-in-class businesses that trade at reasonable prices. This means we stay away from speculative areas of the market and avoid hyper-volatile stocks. Likewise, we do not take undue risks in our management of bonds. We also offer a savings fund with an attractive yield for investors choosing to hold cash.

Advice and conversations involving both partners

Phil is an experienced investor and probably doesn’t need a lot of advice. Nevertheless, we’re here to help. We can assist him in determining a suitable Strategic Asset Mix (breakdown of stocks, bonds, and cash), and suggest a combination of our funds that best fits with his objectives. We would also encourage him to include his wife in all conversations, including an annual portfolio review, so that she has a good grasp of their investments. In the event that Phil pre-deceases his wife, we would guide her through the estate process.

A retirement withdrawal strategy

Our Retirement Withdrawal Program was designed for investors like Phil. It would help him draw a steady income from his portfolio without having to worry about selling his investments at the wrong time (i.e., when markets are down).

A team to handle multi-generational accounts

We’ve been around long enough to see multiple generations of families invest with us, which I have to say is very cool. Phil could open accounts for his children and grandchildren, providing they’re of legal age (the accounts would be registered in the family members’ individual names).

We have a team of eight Investor Specialists who service our clients, each with a different background. One of the benefits of this is that multi-generational clients can choose to work with the same Specialist if they like, or work with someone closer to their demographic. And because we have a team-based approach to servicing clients, any one of our Specialists can help at any time (within business hours).

Low all-in fee

Given the size of Phil’s portfolio and his investment objectives, his all-in fee with us would be less than 1.0%. For context, a client with three-quarters of a million dollars in our Founders Fund would pay 0.97%. If they held our Income Fund, the fee would be 0.76%. The fee on a blend of the two funds would fall somewhere in between (check out our Fee Calculator for details).

As Phil ponders his decision, he should consider that the switch of hats, from picking his own investments to relying on a firm to do it for him, is also sure to relieve him of some stress and second guessing. Just another reason we think he’d look particularly good in a Steadyhand hat.

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