The Distinguished Advisor Conference November 14-17

Winnipeg, Manitoba. Influential thought leaders, executives and multi-disciplinary advisory teams from across the ranks in the Canadian financial services industry will gather November 14 to 17 at the Distinguished Advisor Conference to discuss family wealth management at a pivotal time in history, when a global economy is facing a series of difficult scenarios.

"The times are new, they are tough, and for some, they are scary,” says Evelyn Jacks, President, The Knowledge Bureau, founder and host of this event. "The best advisors and their associated firms need to know how to navigate families towards their best possible financial outcomes, as the developed world continues to experience the effects of significant change including deleveraging, recession, unemployment, lower tax revenues, and persistent challenges to a family's required investment returns.”

Twenty influential speakers will take the stage to help advisors plan strategically to take on the challenge of these and other key issues facing advisors today including:

• Robert Ironside, who will discuss how the end of the "Debt SuperCycle” will impact the wealth of families and their current investment strategies
• Richard Croft on how flat investment returns, and erosion of purchasing power will require new product solutions while Evelyn Jacks explains how tax and economic change impacts Real Wealth Management.
• Gordon Pape, on whether this is the right time to buy property—in Canada, Florida or other retirement havens
• Ron Thiessen, Debbie Hartzman and Enzo Calamo on how to broach the emotional impact of financial change on family structures
• Terri Williams, Louise Guthrie, Doug Nelson, Roland Chalupka, Alan Rowell and Lea Koiv on how planning can increase cash flow in lifecycle transition periods, particularly in retirement, health and estate planning
• Don Stewart, on how financial illiteracy affects the financial health of Canadians and what can be done by advisors to help
• Greg Pollock, Lisa Langley and Anthony Morris on how global economic change defines the new financial advisor and their family practices, with vital discussion on how to survive and thrive in hard times
• Paul Bates, Al Emid, Kish Kapoor and Mick Kelly on fostering successful relationships with families in good times and in bad. . . .Cont'd.

Early registration for the DAC is now possible, with a discount offered until September 30. The event takes place at the Hard Rock Hotel in Orlando; detailed information is available by phone at 1-866-953-4769 at www.knowledgebureau.com/dac.

Contact: Evelyn Jacks, President, evelyn@knowledgebureau.com

The Minister of Finance, The Honourable Jim Flaherty, has once again released the Fiscal Monitor, this time for the three months ending June 2010, announcing a deficit of $2.8 billion for the first quarter of the 2010-11 fiscal year, compared to a deficit of $5.0 billion for the same period ending June 2009. Although at first glance this looks like good news, we need to remember that for the same period in 2008 there was a budgetary surplus of $2.9 billion.

During the period personal and corporate income tax revenues were decreased by 3.4% and 5.1% respectively. Other revenues consisting of net profits and revenues from Crown corporations and returns on investments were down as much as 15%. EI premiums revenues were up $11 million, just under a 1% increase.

What does this mean to the average Canadian?

As discussed previously in the Knowledge Bureau Report, today's deficits are always of concern for several reasons:  will they become the taxes of tomorrow?  This is of particular significance to the ten million or so baby boomers who make up approximately one-third of our population and just under 50% of the tax filers, who may be concerned about the future purchasing power of what’s left of their retirement savings.

By the year 2011, the first boomers will reach age 65. Those aged 65 and over, according to Infrastructure Canada, are the most intensive users of the health care system, a financing burden yet to come for Canadian governments. What effects will this continued deficit spending by both federal and provincial governments have on public pensions and the health care system? How should elder Canadians prepare for higher costs of medical treatments, hospital care or the requirement for private home assistance resulting from an overburdened health care system?

A review of retirement income plans, critical health care plans, family succession and estate plans would be timely in an attempt to better understand financial needs for a future with less government capacity to assist and the possibility of increasing taxes on income or capital.  What can be done today to plan for these uncertainties when returns on investments are minimal and inconsistent?

Do you think the rules for utilizing Tax-Free Savings Accounts are clear?

We had an overwhelming response to our July poll question regarding the TFSA rules and if the rules were clear to those that took advantage of the accounts. Almost 70% of the voters felt that the rules weren't clear, and with over 70,000 taxpayers having reviews of their TFSA transactions by CRA, we think your responses were right on the mark.

Here is a sampling of what we heard from our readers:

Margaret Tofflemire - No
It was not made clear enough that these were not really "Savings Accounts" to be used as regular bank accounts.

- No
The rules for TFSA are pathetically unclear. When TFSA first came out, it appeared that one could contribute up to $5,000/year, and take money out, put it back in to top back up to the $5,000/year limit, at will, as long as in 1 year, the total of all in/out transactions didn't exceed an 'end of the year' total of having over $5,000 for THAT year in your TFSA. This appears now, not to be their agenda.

Martin - No
All clients have some questions about TFSAs. Although the accounts themselves are a great idea, the government has not done a good job of explaining what they are, what their purpose really is, or how they work. Even for advisors, there is no one up-to-date official source that clearly and simply explains them. Plus they keep changing the rules. To keep up to date with valid knowledge, one must continually check to see if there have been changes or new info. And not all provinces allow beneficiaries - it should be consistent across Canada.

Maureen - Yes
For most clients, it takes a bit of searching and reviewing to decipher the rules, which is typical of anything new, but for tax advisors and financial institutions I think the rules are pretty clear. It just puts the onus on us to ensure our clients are advised well enough.

- Yes
Instead of trying to figure out how to overcontribute tax free, accountants should be focusing on legal tax strategies for their clients. There are always tax 'specialists' willing to push the envelope for clients who do not want to pay their fair share of taxes, for a fee .

Dan Allen - Yes
The rules are perfectly clear and my clients have not had an issue after we take the time to describe how TFSAs work. Clearly, TFSAs are not the same as savings accounts and should be used more as investment vehicles within a financial plan.

SANDRA GIBBS - No
The rules of excess contributions are not clear, particularly when there have been withdrawals. A better way to formulate these rules would be "$5,000 when contributed in the calendar year MUST be left in the plan until at least the following year when the new contribution amounts are published for the individual TFSA"

- No
Companies and investors seem to be confused by the lack of information from CRA on documentation that should be provided by the companies offering TFSA's to the investors. There is an critical need for standardized information on contributions and withdrawals.

And we'll let the final word go to:

Pete Coles - No
A lot of clients decided to switch their TFSA to an institution offering better rates without doing it directly or waiting until the end of the year. For this mistake they get penalized 1 per cent per month ($50 per month if they moved the entire $5,000). Yet they still only have a TFSA worth $5,000. They are essentially being taxed on a phantom excess contribution. I don't know if this was made clear or not but I fail to see the logic in it from the standpoint of tax policy.

TUITION FEES

Students may claim the fees paid for courses taken in the tax year. To qualify, each tuition fee must be more than $100. Eligible tuition fees include:

• Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in Canada,
• Fees paid to an educational institution in Canada certified by the Minister of Human Resources Development for courses (if the student was 16 or older in the year) to develop or improve skills in an occupation,
• Fees paid for courses at a post-secondary school level paid to a university, college, or other educational institution in the United States if the student lived in Canada near the border throughout the year and commuted to the school, and
• Fees paid if the student was in full-time attendance at a university outside Canada, for courses that were at least 13 consecutive weeks long, and that will lead to a degree.

Other eligible fees include:

• admission fees,
• charges for the use of library or laboratory facilities,
• examination fees,
• application fees (but only if the student later enrolls in the institution),
• charges for a certificate, diploma, or degree,
• mandatory computer service fees,
• academic fees,
• the cost of any books that are included in the total fees for a correspondence course, and
• fees, such as athletic and health services fees, paid to a university, college, or other educational institution in addition to tuition for post-secondary courses, when such fees are required to be paid by all students. If not all students are required to pay them, then amounts eligible are limited to $250.

Non-qualifying tuition fees include:

• Costs for secondary education at a private school or for private music, dance or other such lessons, do not qualify.
• students' association fees,
• medical care,
• transportation and parking,
• meals and lodging,
• goods of lasting value that you will keep, such as a computer, microscope, uniform, or an academic gown, and
• initiation or entrance fees to a professional organization

Also, fees cannot be claimed if:

• they are paid or reimbursed by an employer, where the amount is not included in the employee's income,
• paid by a federal, provincial, or territorial job training program where the amount is not included in income, or
• the fees were paid (or are eligible to be paid) under a federal program to help athletes, where the payment or reimbursement has not been included in income.

Current question

Do you feel that the economy has stabilized since the beginning of 2010?

Current poll results: Yes: 26%  No: 74%   Read what other readers have to say

Media Passes Available: Contact The Knowledge Bureau toll free: 1-866-953-4769. Join us for a concentrated, focused day on issues of concern to taxpayers, investors and professional planners in major centres across North America. At this time, we run workshops two times each year: January and November. The Knowledge Bureau workshops are designed to be a solid investment of your time and money. The sessions begin with 8:00 a.m. registration, session begins promptly at 8:30, provide a one-hour break for lunch and end promptly at 4:00 p.m. They are structured to cover taxation topics in the morning and wealth management topics in the afternoon.

The dates are:

• November 2010 Tax Planning Workshops: Year End Strategies for Individuals and Business Owners: Focus on the Family Business - November 3rd - 9
• January 2011 Annual Line by Line T1 Tax Update, ALL TAX, ALL DAY - January 11- 27

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TARGET AUDIENCE:

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Erika Penner is an independent Certified Financial Planner with over 30 years of experience in the financial services industry. She also holds RPAC's Professional Retirement Planner designation as well as The Knowledge Bureau's MFA designation in Retirement & Estate Planning. Erika has been interviewed by the media on a variety of topics and has given presentations to professional groups such as Advocis, The Academy of Financial Divorce Specialists, RPAC and others. With her designations in retirement, Erika is placing greater emphasis in her practice on retirement transitions for boomers, of which she is one!

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Register Program Venue Accreditation

We are pleased to offer all delegates attending the Distinguished Advisors Conference on November 14-17, 2010 a 10% discount off of WestJet's regular fares at time of booking (excluding web and special fares). Attendees must make their travel arrangements through the WestJet specialty sales team 1-877-952-4696 and quote account # C6632. Discounted rates are available 3 days prior and 3 days after the event.

Intro to Personal Tax Prep!

Call to register: 1-866-953-4769 to inquire

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