Why Advisors need to be knowledgeable about the TFSA!

Your clients are getting bombarded by information about the TFSA – TV promos, radio spots, newspaper ads, etc. They will be asking you about the TFSA, and if they are not asking, you need to be talking about it with them. Manage your clients entire investment portfolio. Build that trust and relationship with them by introducing them to the TFSA and its possibilities.

In a time of economic uncertainty, where account market values that have declined, a good news story is a welcome respite. The TFSA is a good news story.

TFSA account assets will build up over time – better to be in on the ground floor with your clients, than trying to convince them to transfer the TFSA assets at a later date. As the economy and markets recover, the potential for significant assets to accumulate in TFSAs is compelling. Look at the Roth IRA introduced in the U.S. in 1999; assets are now at $225 billion US. Likewise the Investment Savings account in Britain, introduced in 1998, now contains assets of $582 billion Canadian. Neither of these accounts are exactly the same as the TFSA, however, the adoption rates should be an indication of what might occur when Canadian investors embrace the TFSA.

An MRS Advisor Perspective on the TFSA – a conversation with Connie Renna of IPC – an excerpt from our November 20th eConference on TFSAs.

» MARTY
Great, so let’s talk TFSAs. Why is it important for an advisor to be knowledgeable about the TFSA?

» CONNIE
TFSAs provide an opportunity to all clients to tax shelter some of their current and future savings. As an advisor I feel it is my responsibility to recommend these accounts to my clients.

Advisors need to recognize how important TFSAs will become to a client’s overall financial plan and be knowledgeable in their implementation. TFSAs will not only give advisors the opportunity to strengthen their relationships with their clients. The annual increases to the savings limits of these accounts will also give them the opportunity to increase the size of the assets they manage for each client.

» MARTY
How do you plan to incorporate TFSAs into your business?

» CONNIE
I have developed strategies to implement the TFSA based on my knowledge of my clients and will be tailoring these based on their unique situations. For example:

• For clients at the beginning of their savings cycle, we are recommending the TFSA to help them shelter their savings from tax and to help them build these savings for their short term needs, such as their children’s education or a down payment for a home. In some cases, a TFSA strategy may benefit them more than an RSP contribution.
• For clients currently focused on saving for retirement and transitioning to retirement, the TFSA will allow them the opportunity to tax shelter dollars in addition to their annual RSP contributions. TFSAs will give these clients increased savings incentives, and allow them in the future to put off having to tap into their RSP savings.
• For our retired clients, TFSAs will be an opportunity to reduce tax on current non-registered savings and also to house excess RIF payouts that are not necessary for their day-to-day needs.

» MARTY
How do you plan on letting your clients know about the TFSA?

» CONNIE
MRS has developed wonderful client prospecting letters as well as an investor brochure for me to share with my clients. These tools, along with presentation material and additional information found on their website, give me all I will need to communicate with my clients about the TFSA.

» MARTY
Why have you chosen MRS as your TFSA partner?

» CONNIE
MRS has allowed me to bring efficiencies to my practice. Through MRS I can offer my clients a range of account types, from open to registered accounts. Clients benefit from getting consolidated statements, having web access, and the opportunity to receive their statements by eDelivery.

Since making the decision to work with MRS my staff and I have received great support through their call center and have developed a great relationship with our Business Development Manager.

MRS has shown me that they are committed to helping me grow my business.