Does your Business have a great Financial Team?

What makes a great financial team?  We are glad you asked. 

Every business needs a great Bookkeeper, Accountant, Financial Advisor and Lawyer on their financial team.  

What can these people do for your business?  Read on below: 

Bookkeeper

• Takes care of the day-to-day and month-to-month business. They will prepare all items at year-end and pass them along to your accountant. 
  
  

Accountant

• There to take care of your financial planning and tax planning. They complete your year-end financials and process your income tax. 
  
  

Financial Advisors

• These folks are here to help with your investing plans.  Some financial advisors can even set your company up with employee benefits programs! 

Lawyers

• Legal advice is imperative in business.  Lawyers will help with the proper setup of corporate structures.  They can provide advice and agreements on partnerships.  Every business should have a great lawyer. 

Do you need some help getting your financial team together? 

Check out:

 Trusted Saskatoon Financial Service 

Trusted Saskatoon Legal and Professional Services

 Trusted SASKATOON INSURANCE expert!

Here experts answers questions on Personal Insurance on the SASKATOON DIRECTORY:

PART 2:

1. Jennifer Sparks: How much life insurance should a single parent have with 2 children who just entered their teens?

A: Again a needs analysis should be done. There are many variables. Who would the teens live with in the event of your death? Could that person afford to support the kids? You need to consider eliminating any debt that may be present when you die and of course providing enough income to support the kids until they are old enough to be on their own. Add your debt and at least 75 to 80% of your income x 10 years.

2. Melodie Poorman: How long is the coverage period of life insurance?

A: The coverage period on life insurance depends on the type of policy you have. Term insurance plans definitely have an expiry date but that varies from plan to plan and company to company. Most permanent plans have no expiry date and the coverage will be in place until the date of your death.

3. Corry Stewart Dorosh: If you got your children life insurance at birth and they get medical issues can you still purchase them more life insurance or if they choose when they are older can they get more?

A: Even if you purchased a life insurance plan for your child at birth their ability to purchase more life insurance in the future will depend on the type and severity of their medical problem. Depending on the problem it is possible that they will not be able to purchase any other life insurance in the future. To prevent this from happening I advise my clients to add a guaranteed insurability option to their children’s policies. For very little additional monthly premium this option can be added and allows your child to purchase more life insurance numerous times in their life without difficulty or having to answer any medical questions.

4. Kimbrolina Linke: What kind of life insurance should parents get and when should they get it?

A: The type of insurance parents should get can vary according to individual need. Why are they getting it? The most common type for young new parents is term insurance. It allows a young couple to make sure they have protection in the case of unexpected death to cover debt, mortgages, children’s education and to replace their income for the family, all at an inexpensive rate. If they are looking at purchasing insurance as an inheritance for their children or for estate planning then permanent insurance is the product of choice. Again a proper needs analysis will help determine the right amount and the right product.

5. Amanda Starosta: I'm a funeral director and have heard some horror stories about families trying to obtain life insurance benefits after a death, is there any advice I could give them to make sure they have all the documents/information they need to go through the process with ease?

A: Generally speaking obtaining life insurance benefits shouldn’t be difficult for a person. I think a lot depends on the type of life insurance policy. It may be more difficult to obtain benefits that are provided through creditor protection plans than from individual life insurance contracts. In my experience I have had no problems obtaining the benefits for beneficiaries. The usual documentation required is a death certificate or funeral director’s certificate, claimant’s statement completed by the beneficiary and sometimes a copy of the deceased’s birth certificate. If everything is in order they usually receive the benefit with a week to two weeks

6. Andrea Pyle: Jennifer, do I need to get more life insurance, even though I'm covered with my work? Is it beneficial to do so?

A: I always advise my clients to have additional insurance to their coverage at work. Today it is very, very common for a person to change jobs or careers a few times. The life insurance coverage you have through your work is tied to the group benefits plan at that job. If you leave that employer the life insurance does not go with you and the next employer may not have a plan offering the same coverage or if you become self-employed you may no longer qualify for life insurance if your health has changed.

7. Ann Lyte-Maille: Jennifer, are there any policies that cover critical illness? Such as Chron's disease?

A: There are critical illness policies that cover a large list of illnesses, usually anywhere from 24 to 28 illnesses. However, at this time I do not know of any that cover Crohn’s disease.

8. Trish Planchot-Voldeng: Jennifer, I have heard it is hard for cancer survivors to get any form of life or travel insurance. Is this true or do they pay a very high premium? Does it ever decrease if a person is cancer free for a number of years?

A: First I will respond to the travel insurance. A cancer survivor can get travel insurance but depending on the type of cancer. They are not eligible if they have received any treatment for pancreatic or liver cancer or had any type of cancer that has metastasized. If this is not a problem they can qualify for travel insurance as long as they have no reasonable expectation of needing to see a doctor and are not travelling against their doctor’s advice. Now this applies to people under age 70 travelling for less than 36 days. For client’s older than 60 travelling for an extended period of time, they will have to answer a detailed health questionnaire and they could find it more difficult to qualify for the travel insurance or pay an extra premium.

Now for life insurance, it is possible for cancer survivors to obtain life insurance but there are many variables that need to be considered; what type of cancer, what stage or grade of cancer, age of diagnosis, what type of treatment was required, how many years since the person has been considered cancer free. Was there any metastases? For example: someone diagnosed with malignant melanoma or skin cancer that had the cancer removed and it was in the low stages may be able to obtain life insurance within a year; for higher stages it may be five years. Prostate cancer: again this depends on the age of diagnosis and the severity. In this case the older you are at time of diagnosis the better. Breast Cancer: This can be harder to get life insurance. Even with the lowest grade of cancer you would need to be 5 years post treatment. With any type of cancer a rating or additional premium may be applied but it is important to note that with these ratings, as the years go by and the length of survival increases, the rating/ premium can be reduced. If you are a cancer survivor don’t assume you won’t qualify for insurance. Talk to someone or call me.

9. Tanis Macala: Jennifer, Saskatchewan has some of the highest percentages of smokers. Currently, Saskatchewan has the highest number of smokers between the ages of 15-19 (20%)... a title we've had for nine straight years. Can you explain the effects this has when it comes to obtaining life insurance and the difficulties it may cause?

A: Generally speaking if you are in good health being a smoker won’t cause any difficulty in obtaining life insurance. However, it definitely will increase the cost. Smokers see an additional 40 to 70% increase in premiums compared to non-smokers depending on the type of life insurance, the amount and whether they are male or female. The good news is that if you quit smoking and maintain this for 12 months, you could have the smoker rate reduced to non-smoker rates, providing your health is still good.

Are you nervous about meeting with a financial advisor?

Many of our clients have told us that it was difficult for them to make that initial first appointment. Naturally, we think we are easy to get along with, so we wanted to know the reasons that made them hesitate.

When we listened, we found that there are basically 4 main reasons:

1) Fear of the Unknown

If you have never worked with a financial advisor, you just aren’t sure what will happen. This is what we do: We explain exactly the type of services we provide to our clients, we explain how we get paid, we explain the products and companies that we work with and then discuss our process. We talk about our client’s current situation and what their goals and dreams are. We don’t charge for the initial consultation. If you would like to proceed, we then set up another meeting to discuss your individual plan that we have developed on your behalf and then proceed to implement your plan. We are happy to answer any questions along the way because it is important to us that our clients learn along the way.

2) Afraid to be “Sold”

We all have the same fear of being “talked into” something that we don’t need, whether it is buying a car, a computer, life insurance or investments. Our goal is to make sure that every decision is based on our client’s needs, goals and understanding. We know that a long term relationship is based on trust and education. We want client relationships – not transactional customers.

3) Should be able to do it on your own

There is so much information, people think that they should be able to do everything themselves. However studies have proven over and over again that working with a financial advisor not only increases your long term wealth but definitely increases your peace of mind.

4) Embarrassed about your current financial situation

Sometimes people look around and wonder why they aren’t further ahead and that maybe they don’t have enough assets to meet with a financial advisor. No matter what stage of life you are at – starting a plan is the most important aspect of financial planning. We find great satisfaction is developing a plan for each of our clients that sets them on track to their financial goals and to help them overcome any obstacles along the way.

 Trusted Saskatoon Financial Tip!

Do I need a will?

Dear GPS Financial, I read an article about estate planning and it says that everyone should have a will. I think I am ready to have one prepared. Some people recommend just going straight to a lawyer, others recommend seeing a financial advisor before meeting with the lawyer. Can you tell me why I would meet with a financial advisor before a lawyer? What can you offer that a lawyer can’t? It also said that part of completing a will is assigning an executor. What does an executor do and how do I pick one? Yours truly, Jane

Dear Jane,

Congratulations! You are making a responsible choice in preparing a will. Thank – you for your inquiry about estate planning. A lawyer will prepare your will but a financial planner can help you understand what to be aware of when structuring your will.

For example:

• Identify assets that could be appropriately transferred outside your will such as joint assets with the right of survivorship, registered investments that are eligible for the spousal rollover, and insurance proceeds.

• Calculate how much liquidity (cash) your estate will need to meet your estate’s liabilities (any outstanding debt you may have), your bequests (inheritance you plan to leave) and pay your final taxes.

• Calculate how much you would need to set aside in trust for your children’s education and cover their care until they are at least 18 years of age.

• Identify ways to structure your assets to minimize taxes and probate fees upon your death.

Having all of this information when you visit your lawyer will ensure you are making informed decisions and your lawyer is fully aware of what must be included for your personal situation.

An executor is the person that you choose to carry out the instructions in your will. It can be a family member, friend, lawyer, trustee, whomever you choose but it should be someone you believe will act in the best interest of the estate to carry out your instructions to the best of their ability ie: someone you trust.

It is a good idea to consider the complexity of your estate, the skills of the person you are choosing and where they live. Some people choose to appoint an alternate executor in case the original is unable to fill the role. The executor is responsible for accounting for all of the assets of the estate, paying any outstanding debt, distributing the assets as outlined in the will, and completing the personal and estate income tax returns. He or she is legally obligated to follow the instructions in your will subject to any limitations imposed by law.

I hope this information was useful and if you have any further questions please contact us!

Half of Canadians don’t have Emergency Savings – Which half are you in?

An emergency savings account is the essential component of every successful financial plan. The key to an emergency account is to start allocating a dollar amount every pay period. Many Canadians are lulled into thinking that a line of credit or a credit card is their emergency account – it is not! If you have an emergency, such as a job loss or a medical crisis, the last thing you need is more debt that would only add to your stress.

Set up your emergency account separately from your other savings.

The savings could still be within your Tax Free Savings Account (TFSA), but in a separate, low risk fund. Start by contributing a regular amount from every pay cheque – you can have it withdrawn directly from your account so that is automatic and simple. Increase the amount every time you receive a raise. Your goal is to build it so that it could cover 3 months of your net income. Use it only for emergencies or opportunities and replace as soon as possible if you do have to dip into the account.

Here is another tip: Deposit half of every tax refund, bonus or any other lump sum of money that you receive into your emergency savings and then have fun with the rest!

When you have an emergency account in place – you will never have to cash in RRSPs, put debt on your credit card or line of credit. You will be able to handle emergencies with less stress or be able to take advantage of opportunities knowing that you have a cushion to fall back on. You will be able to sleep at night.