When you are considering hiring a financial advisor in the Sudbury area, it is important to note that investing is not a one-size-fits-all approach. The cost structure varies depending on the preferred pricing model used by the advisor’s office, but there are two common approaches:

Hourly Consultation or Fee for Service

The first option is an hourly rate, which usually falls between $250 and $1,000 per hour. Depending on your priorities, this could be a good fit. For instance, if you are looking for one-time advice on a specific item as opposed to ongoing guidance to meet your long-term objectives.

Alternatively, our team offers specific services like Retirement Plans, Estate & Will Reviews, Insurance Consultations, Defined Benefit Pension vs Commuted Value analysis on an à la carte basis with a set fee. Contact us today to find out more!

Assets Under Management (AUM)

The alternative is a fee structure based on the value of the total assets the advisor manages for you, known as Assets Under Management (AUM). This fee is typically a small percentage, which can range from 0.5% to 2% annually, depending on the size of the portfolio and the level of service provided. For example, if your portfolio is valued at $100,000, and your advisor charges a 1% annual fee, the advisor would have a gross compensation of $1,000 for managing those assets. The fee structure can change as your assets, or financial advisory needs, grow. This means that larger portfolios may incur a lower percentage fee.

At Innova, we believe in aligning our interests with those of our clients.  For that reason, the assets under management model is primarily how our advisors are compensated.  This means that our compensation moves in-line with the value of your investments, rewarding good performance.

Definitely! Financial advisors are able to assist clients by guiding them to make informed decisions about their financial situation. This can include investments, retirement plans, taxes, trust and estate planning, and more. There are several strategies an advisor may use to optimize tax efficiency with regards to investments:

• They can leverage tax-advantaged accounts like RRSPs (Registered Retirement Savings Plans), TFSAs (Tax-Free Savings Accounts), FHSAs (First-Time Home Savings Accounts) and RESPs (Registered Education Savings Plans) to either lower taxable income, or help grow investments in a way that is tax-free or tax-deferred, which is dependent on the type of account. With an RRSP, contributions are tax-deductible. The funds that are held in an RRSP grow tax-deferred, which means that taxes aren’t paid on the earnings until the funds are withdrawn. On the other hand, the contributions made to a TFSA are not tax-deductible, but you do not pay tax when the earnings are withdrawn. RESPs, which are used to save for a child’s education, are also not tax-deductible when contributed to, but they are tax-deferred. In addition to that, the Canadian government offers grants to enhance those contributions. When the funds are withdrawn, they are paid in the child’s name, taxed at a student’s rate which is minimal, or no tax.

• An advisor can manage capital gains that occur in your portfolio. These gains are the profits made from selling select investments, which are taxed at either 50% or 66% of the rate of your regular income in Canada. Decisions can be made to hold onto your investments for a longer period of time, or by selling them in a strategic way to further reduce the tax payable on these types of investments.

• The family tax burden can be reduced by income splitting. This involves the practice of shifting money from a family member with a higher income to one with a lower income in order to benefit from the lower tax rates of the lower earner. Families or married couples will find this especially helpful. This can be done using Spousal RRSP accounts, enabling the higher-income spouse to contribute and the lower-income spouse to withdraw the funds in retirement. Another way to reduce a family's total taxable income is to use a family trust to allocate money to beneficiaries who are in lower tax brackets.

• Another method would be selling investments at a loss in order to offset taxable capital gains, which is known as "tax-loss harvesting." Your taxable income and, eventually, your tax bill may be decreased as a result.

• Making sure you pay the least amount of taxes on your retirement income is a crucial component of retirement planning. This entails arranging your withdrawals from non-registered accounts, RRSPs, and TFSAs in the most tax-efficient manner possible. Common strategies include prioritizing withdrawing from TFSAs, as they are tax-free, followed by managing when and how much to withdraw from RRSP accounts.

• In order to ensure that your assets are transmitted to your beneficiaries with the least amount of tax impact, a financial advisor can also help with estate planning. This can be done through the use of TFSAs, life insurance, and family trust accounts.

• Another strategy that can be used to create tax savings is to thoughtfully restructure investments and your debt to make your borrowings tax deductible. Popularized as the Smith Manoeuvre, advanced planning can convert regular debt to tax-deductible debt.

• Lastly, advanced tax strategies like Flow-through share investing can decrease your tax burden. Flow-through shares are high-risk investments in junior mining exploration companies that generate significant tax savings. Generally recommended for individuals in high tax brackets, strategic use of these shares can compound tax savings over several years, potentially helping clients reach the alternative minimum tax, the legal minimum tax payable.

Ultimately, a financial advisor may assist you in putting a variety of tax-efficient techniques into practice that will optimize your financial future while also lowering your present tax burden.

Yes, there are bilingual financial advisors in Sudbury who offer their services in both French and English. With a sizable Francophone population, Sudbury is a multilingual city with financial experts serving both English and French-speaking clients. By speaking both of these languages, these advisors can ensure you understand the strategies and solutions provided for your future financial planning. Innova Wealth is proud to feature four qualified Certified Financial Planners who are native francophones and communicate effectively in both languages. On vous invite à nous contacter si vous recherchez des services en français!