Investment Management Archives - TLS Financial Services

Benefits of Setting up a Holdco

Is a Holding Company (Holdco) right for you?

Depending on your particular situation, a Holdco can provide significant benefits which I will outline below, but first a definition.

What is a Holdco?

A Holdco is a company you create in addition to the Company that carries on your business activities – often referred to as an Opco. The Holdco is used to accumulate and hold various investment assets and may also hold the shares of your Opco or shares of other businesses or partnership interests.

What are the benefits of setting up a Holdco(s)?

Creditor Protection

A Holdco effectively separates investment assets from your Opco, so if your Opco runs into Creditor or liability issues, Holdco assets are generally not at risk

Facilitates Sale of Opco

Potential purchasers usually only want to pay for your business, not assets it has accumulated. A Holdco will allow the sale of the Opco to reflect the value of the business interests and the Holdco assets will remain with you.

Optimizes access to your Lifetime Capital Gains Exemption

Your ability to claim the lifetime capital gains exemption (LCGE) can be negatively impacted by investments and other assets not related to your Opco business. Assets held in a properly structured Holdco will not impact the LCGE on the sale of Opco shares.

Other Benefits

Minimizing taxes through Income splitting and Income Deferral
Facilitating Succession and Estate Tax Savings
Tax preferred Acquisition of other Companies

While there are many instances where a Holdco may be beneficial, you should first consult with both tax and legal professionals.

Feel free to contact us to discuss more about Holding Companies and if they will work for you.

COVID-19 Economic and Market Updates

Industrial Alliance’s Weekly Economic Updates

Clément Gignac is Senior Vice-President and Chief Economist at iA Financial Group. He serves as the company’s spokesperson on economic matters and presents weekly video updates and publications on the current market conditions.

Watch videos and market updates

Impact of the Coronavirus

As usual, I have waited for the Coronavirus (COVID-19) situation to trend before issuing this article.

The virus has created health, travel and financial concerns. I found the article excerpt from *Mark DeCambre provides an interesting historical perspective on the financial impact of past worldwide health issues.

“Historically, however, Wall Street’s reaction to such epidemics and fast-moving diseases is often short-lived.

“According to Dow Jones Market Data, the S&P 500 posted a gain of 14.59% after the first occurrence of SARS back in 2002-03, based on the end of month performance for the index in April, 2003. About 12 months after that point, the broad-market benchmark was up 20.76% (see attached table):”

A tweet to this article reminded readers that, to date, just over 3,000 deaths have been reported worldwide from the coronavirus compared to approximately 80,000 flu-related deaths in 2018 in the U.S. alone.

I present this article not to marginalize the concerns on this virus, it is serious and currently having a significant impact on worldwide events. However, it is not the first virus the world has faced nor will it likely be the last.

Your funds have fared well due to their conservative portfolios. At the time of writing, Balanced Funds are between 1-2% points lower and our Preferred Equity Funds 3-4% lower from the start of the year (January 1, 2020).

Just a reminder that your Balanced and Equity Funds returned between 10-12% and 18-21% respectively in 2019.

Please feel free to contact me at 1.800.665.7707 to discuss your portfolio or other financial matters.

~ John Shelling CGA, CPA, CFP

BlackRock US Equity Index Fund

TLS introduces IA’s BlackRock Fund

BlackRock US Equity Index Fund offered through IA Financial Group has been added to our list of preferred segregated funds.

The fund’s objectives are to achieve medium and long term capital growth through indexed portfolio management built by investing directly in US stocks on the S&P 500, a key benchmark of the US stock market.

The fund invests in stocks of some of the largest companies in the world currently, they include Apple, Microsoft, Amazon, Facebook, Visa and more.

While boasting significant returns, what I find even more impressive is that as of December 31, 2019, the fund had never produced a negative return in any calendar year since inception.

To-date through the COVID-19 crisis, the fund has displayed significantly less downward volatility than the S&P index.

For the fund fact sheet click on the link below and please contact our office for more details on this fund and our other funds, financial products and services.

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TLS Financial Services Ltd. is licensed in Life, Accident and Sickness Insurance in B.C. and is a Managing General Agent (MGA) for IA Financial Group. John Shelling is licensed for Life, Accident and Sickness Insurance in Alberta and Life Insurance in Ontario.

Past performance is not a guarantee or an indication of future returns.
BlackRock is equity-based and likely to be more volatile than your balanced funds.
Stock markets are 10+ years into a growth cycle – a correction is possible.

This information does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or any other product or service by TLS Financial Services Ltd. or any other third party regardless of whether such security, product or service is referenced in this brochure. Furthermore, nothing in this website is intended to provide tax, legal, or investment advice and nothing in this website should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. TLS Financial Services Ltd. does not represent that the investments, products, or services discussed in this website are suitable for any particular investor. You are solely responsible for determining whether any investment, investment strategy or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

Is an Individual Pension Plan right for you?

Based on a C.D. Howe Institute report that suggested one possible solution to the alleged retirement crisis was simply to go back to the half-century-plus RRSP and raise contribution limits for the (relatively) few affluent people who are forced to save in taxable accounts because they’ve maxed out on RRSP room.

If you’re at top executive or own your own business and are 40 years of age or older, there may be another way to get the benefits of RRSPs. The Individual Pension Plan or IPP is an employer-provided program that replaces RRSP savings by an employee, says Stephen Cheng, managing director of Vancouver-based Westcoast Actuaries Inc. To be eligible for an IPP, you need to receive pension-eligible T-4 employment income. Self-employment income, partnership income and dividend income are not pension-eligible, Cheng says. So if you own your own business, you’d have to pay yourself a regular salary that generates T-4 employment income.

See advantages and the whole article here: moneysense

From Jonathan Chevreau

Call our office at 1-800-665-7707.
Our Advisors are available for a complimentary review of your situation to help you determine if our Cost Recovery Programme, or any of our other proven financial strategies, are right for you.

Contact Us For A Review

The Best Strategies for Your RRSP and TFSA When Money’s Tight

Whether you have limited funds to invest or need to withdraw some hard cash, explore a tax-friendly solution.

If you have limited funds this RRSP season, and you can’t maximize both your RRSP and TFSA contributions, you likely will have to choose which plan is best for you this year. Both an RRSP and TFSA allow you to invest in variety of things, including GICs, mutual funds, bonds and equities, and both may allow you to effectively enjoy tax-free investment income while the funds remain in the plans. But there are two main distinguishing factors.

The first is the tax rate differential for RRSP contributions and withdrawals.

But the second, often neglected, differentiating factor between an RRSP and a TFSA is the additional flexibility that comes from a TFSA.

Read the full article here: Financial Post

From Jamie Golombek

Why your TFSA is just what your Over-taxed RRIF needs

As RRSP season closes and many Canadians prepare for tax time, a CBC Marketplace investigation reveals that financial advisers at some of Canada’s top banks and firms are giving consumers inaccurate, misleading and inappropriate advice.

Meanwhile, consumers face a complicated patchwork of regulatory bodies if they want to complain about bad investment advice, as some investor rights groups call for more robust consumer protection rules.

Read the full article here: Financialpost

From Fred Vettese.

Investments – What Would October Be Without Some Market Volatility?

Well before we start running for the hills let’s look at where we have come from to see if we can crystal ball where we are going.

Investments – Financial Planning

Since the market last bottomed out in 2009, Canadian and U.S. Markets have rallied on an accumulated basis over 110% and 200% respectively. During that 5 year period of extraordinary growth, we have endured US political deadlock, the Greek default of 2010, Eurozone crisis in 2011 and now we have the conflicts in the Middle East, Russia acting as a bully and slowing economies in Russia and China.

Countering that is:

Steady growth in the U.S. and record low jobless claims with falling prices (in the U.S. anyway) at the gas pumps.
The investment funds we recommend continue to produce positive return in 2014 following their very strong 2013 returns.

So what does this mean?

In my opinion this is a normal and healthy correction necessary when markets tend to get ahead of themselves.

Our fund managers actually anticipated this event and recently moved to more defensive positions in their portfolios.

In other words – it is business as usual and we continue to be satisfied with your fund allocations and management.

Contact Us

Call us at 1-800-665-7707 for a complimentary review to see if any of our proven financial strategies will work for you. Please do not hesitate to contact Ron or myself if you have any questions or want to discuss your portfolio.