The WISDOM OF WEALTH MANAGEMENT BLOG

A few weeks ago, I published a critique of Questrade’s marketing and brand promise. As the post gained traction, several people publicly commented both in support and opposition to the article, and many more reached out privately.

More and more Financial Advisors are having to act as their own Chief Technology Officers. In order to help facilitate advisors’ efforts, I have complied a market survey of technology products that can help advisors to enable their practice.

There’s one company in Canada that financial advisors almost universally hate: Questrade. It’s no mystery as to why; after all, Questrade has – for years – focused its marketing efforts on ads attacking the advisory industry, questioning our value and above all else, our cost.

In recent years, podcasting has grown from its humble hobbyist origins to become a big, global business. It’s estimated that there are currently over 1 million active podcasts, featuring 30 million podcast episodes available in over 100 languages. Stats tell us that more than one in five Americans currently listen to podcasts weekly, and the numbers are only going in one direction: up.

I have asked the question countless times when meeting with representatives from various product and service providers.

“When am I going to be able to do this digitally?”

The typical response to this question? “Don’t hold your breath.” Usually accompanied by some sort of either laughter or awkwardness.

My response to this nonsense and heel-dragging has always been the same. “What year, exactly, do you think it is?” After all, DocuSign was founded in 2003.

Needless to say, in the wake if COVID 19, companies’ apathy to digitization is no longer funny. In fact, it never was.

I have asked the question countless times when meeting with representatives from various product and service providers.

“When am I going to be able to do this digitally?”

The typical response to this question? “Don’t hold your breath.” Usually accompanied by some sort of either laughter or awkwardness.

My response to this nonsense and heel-dragging has always been the same. “What year, exactly, do you think it is?” After all, DocuSign was founded in 2003.

Needless to say, in the wake if COVID 19, companies’ apathy to digitization is no longer funny. In fact, it never was.

The one blessing of the COVID-19 outbreak is that it didn’t happen 25 years ago. Back in the pre-internet days working from home would have been a non-starter for most advisors. Vital systems were typically only available at the office and literally everything was on paper.

Fast forward to today and countless financial advisors are finding themselves in a work from home/self-quarantine situation with varying degrees of readiness.

Given my reputation as a technophile within the industry, I have had several advisors reach out to me asking how I am coping, and how they can better enable remote work for both them and their co-workers. While my firm picked up with no effort, many of my peers that I have been speaking with find themselves with no choice but to go into the office if they wish to keep servicing their clients. Unfortunately, there are limits to what can be done quickly and now that we find ourselves in this situation.

What’s the main thing that Amazon, Microsoft, Alibaba, Google and IBM have in common? They all compete in one key area: on-demand cloud computing. What if they decide to start offering “banking as a service” to enable neobanking in Canada?

Then, in 2002, Amazon launched a new division that would end up, over time, changing everything. This new division was initially designed to meet Amazon’s internal needs by developing a common architecture, tools, and storage for Amazon’s various projects, and. there was some early discussion about offering this new server infrastructure as a service to third parties.

Two years later, Amazon Web Services (AWS) – “the world’s most comprehensive and broadly adopted cloud platform” – launched to the public, and we’ve all been feeling the impact ever since.

How faith often trumps logic in dividend investing – and why it shouldn’t

One of the first theories university finance students learn is Modigliani-Miller irrelevance theory: the idea that a company’s dividend policy is largely irrelevant to investors because they can always generate cash flow from their shares by selling them.

In the real world, however, one of the first things you learn as a financial advisor is that despite this theory, investors love dividends. To be fair, the allure is easy to understand. I know I feel good when I get money handed to me with no effort on my part.

Does this mean that dividend irrelevance theory doesn’t hold up outside the ivory tower? Nope: Modigliani and Miller are right – and investors’ love of dividends is really just mental accounting at work.

On death, a surviving spouse can transfer the assets within the deceased TFSA to their own TFSA without affecting their own room. However when the taxpayer dies, any unused room dies with them, and unlike an RRSP, an estate cannot contribute to a TFSA. The unused room is gone forever.

So where does that leave the surviving spouse? As of 2020, with a lost opportunity to shelter up to $69,500, even if the estate has sufficient assets to fund the account. Unless they move quickly before their spouse’s death by making a deathbed TFSA contribution.

On February 7th, the Globe published an article – Why Wealthsimple and robo-advisors aren’t scaring Bay Street anymore – concluding that “the robo-revolution has been a flop:” “the harsh reality is that [Wealthsimple] simply isn’t growing fast enough. Even more sobering, the whole sector is facing a reckoning.”

Since then, several people have reached out to ask my opinion of the piece. In response, I thought I would take the time to share my thoughts in this blog post.