Holding company

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.

Clément Gignac

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.

Virus markets

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):”

Virus 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

Stock charts

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.

  1. Past performance is not a guarantee or an indication of future returns.
  2. BlackRock is equity-based and likely to be more volatile than your balanced funds.
  3. 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.

Litt Farm

Settling Estate Assets Through your Will

As many of you know, I have produced a variety of articles and presentations on the shortcomings of settling financial assets through your Will.  However, there is nothing like a real-life situation to substantiate a point of view.

An article from the Vancouver Sun illustrates one of the many risks of settling estate assets through your Will:

Read article »

To summarize the article, a BC judge overturned a Will that left 93% of the estate to their sons and 7% to four daughters.

This ruling was made under the Wills Variation act, which empowers Judges, to amend the settlement of estate assets through a Will if they feel it is inequitable and unfair.

The purpose of my article is not to question the Variations Act or the Judge’s decision but to make you aware that your Will, in certain circumstances, can be legally challenged which may materially alter the disposition of your Estate assets to beneficiaries.

Even if your Will stands up to a challenge, the legal costs and stress to beneficiaries will greatly reduce the value of your final gift.

The solution:  incorporate, where appropriate, financial strategies that will provide you with living benefits and bypass the Will / Probate process to settle your estate assets directly, quickly and privately to your beneficiaries when you pass.

Contact Us

For information on Direct Settlement strategies, contact us at 1-800-665-7707 or email

The Year Ahead

“History Doesn’t repeat itself but it often rhymes”
– Mark Twain

The quote above is one of my favourites and is relevant to the recent downward cycle and volatility we have seen in the stock markets.

For the first time since 2011 (some of you since 2008), your 2018 fund statements will be showing a negative return. Negative returns are never pleasant however, they are a normal and necessary occurrence in the investment cycle.

Over the past 30+ years, I have experienced at least 5 down cycles and to paraphrase Mr. Twain, here are some historical “rhymes” that have been constant with your funds:

  1. Negative returns come, on average, about every six years and usually last only one year;
  2. Periods of negative returns were followed by much longer and larger periods of investment growth; and
  3. Even in negative years the 5+ year average return of your funds remained positive.

As expected, media experts who were telling us 6 months ago that the market growth would be going on forever are now full of gloom and doom. They cite tariff wars, political issues, world unrest, etc. – all of which were issues long before this recent downturn and will be with us long after we enter our next growth cycle.

I always encourage my clients to do their own research and go back to previous down cycles in the market and economy (1987, 2000-2003, 2008) to read the news of the day and also to track the growth cycles that followed. It provides a much better perspective than relying on media, experts, friends and colleagues.

I am not saying you have to be thrilled when you read your statements, however, try and remember what got you here and for our newer clients, where your fund will likely be trending.

For many of you, the Guaranteed Income options attached to your accounts will continue to grow and/or produce a lifetime income and are not affected by current or future market volatility.

Contact Us

For those of you interested in finding out about these guaranteed growth and income option, contact us at 1-800-665-7707 or email

Direct settle your estate

Direct Settlement

I would like to share with you an illustration from a slide that is an integral part of my Estate Planning seminars.

This slide illustrates how Smart Estate Strategies enhance your Legacy and provide Direct Settlement to your Beneficiaries.

I hope you enjoy this illustration which can be accessed through the link below:

Smart Estate Strategy »

(603 kb .PDF file)

Contact Us

To set up a no nonsense confidential review to determine if our Smart Estate or other proven financial strategies will work for you, contact us at 1-800-665-7707 or Email

Retirement Income: Can your RRIF Survive the Stress Test?

Investing your registered retirement income fund in stocks and bonds will produce some troubling losses every so often, but you have little choice these days if you want to achieve a decent long-term return on your investments.

The question is, just how unstable will returns be in a portfolio that includes stocks? We can get a good idea of how a RRIF portfolio might behave by looking at historical returns achieved by Canadian pension funds. Over the 54-year period 1960-2013, the average equity weighting in pension funds would have hovered in the 50% to 60% range with the rest being invested primarily in bonds. As for investment results, here is what happened to the median Canadian pension fund since 1960:

  1. Only once were fund returns negative two years in a row (1973-74).
  2. The worst cumulative loss over any two-year period was 14.6% (in 2007-2008).
  3. The worst cumulative loss over any three-year period was just 4.1% (2006-2008).
  4. In any given decade, we can expect one or two calendar years of net losses.
  5. Every decade has included at least two, and as many as seven, years with returns over 10%.
  6. The average annual return was about 8%, after fees.

See more and read the whole article here: (from Fred Vettese

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 7 new Retirement Financial Strategies

Canadians can no longer rely on pensions, government benefits and bull markets.

There was a time when many Canadians retired right at age 65—whether they wanted to or not. It was a full-stop kind of retirement: you worked for the same company for most of your career, they threw you a party on your last day, and the next morning you woke up to a life of hobbies and doting on grandkids. Government benefits and traditional employer pensions kicked in immediately and they were often sufficient to take care of you, even if you had no other savings.

That traditional notion of retirement is pretty much dead. Today most Canadians are able to say goodbye to a full-time career sometime during their early 60s, but the new retirement comes in many forms. It might include golf, travel and volunteering, but it’s also likely to involve contract or part-time work, too. More and more, the goal of retirement is really about achieving financial independence—or to use the word coined by MoneySense editor Jonathan Chevreau, “findependence.” That’s the point in life where your career and lifestyle choices are no longer driven by financial necessity, and it may occur decades before traditional retirement.

The challenge, however, is that the responsibility is more on your shoulders than it was in the paternalistic past. Defined benefit pension plans are dying out, except in the public sector. And the government is starting to scale back seniors’ benefits such as Old Age Security, which will eventually start at age 67 instead of 65. Increasingly, your retirement income depends on how much you save and how you manage your own money. Unfortunately, just while this is happening, your nest egg has no doubt been afflicted by low interest rates and uncertain stock markets. All this makes the new retirement more precarious.

In what follows, we describe seven strategies that will speed you towards financial independence, preferably while you’re still young enough to enjoy it. You’ll also meet seven Canadians who are living out their lifelong dreams and reinventing the traditional notion of what it means to be retired.

  1. Reinvent your job
  2. Protect your savings
  3. Boost your income with dividends
  4. Cash in on your home
  5. Think differently about debt
  6. Wait before you buy an annuity
  7. Reduce your tax bill

Read the full article here: MoneySense

From David Aston

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