WEALTH Matters — SPRING 2010



Page and Associates ltd:

Phone:    905-884-5563

Fax:         905-884-3365

E-mail:     experience@askpage.com

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Fortunately, through our involvement with the Registered Deposit Brokers Association, we were able to keep a standard ‘Client Information and Consent Form’ on file for each client, and submit this with each investment instruction we received from them and passed on to a financial institution (FI). This has worked well for us and our clients for the past 5 years.

Unfortunately, financial industry regulation is getting tighter each year, and many FIs that issue GICs now refuse to accept our form if it lacks the expiry date for each piece of ID, or the ID has expired by the time we place the order for a new GIC or reinvestment of a maturing GIC. Some FIs also require the former occupation of retired investors. This means we may need to ask you for updated information about your identification before your next GIC maturity. We think this is an unnecessary extra burden on both you and us, but we have no choice but to collect this information or avoid FIs which require it.

There is an alternative which may be easier for you and for us – the Self-Directed account or Nominee account. Since 2006 we have been able to offer Self-Directed accounts through Worldsource Financial Management Inc. These accounts can hold GICs (and mutual funds) from any number of FIs, and avoid the need to provide updated ID information to the FI each time the ID expires. In this structure, we do need to reconfirm your information once a year, but an expired ID does not prevent you from continuing to buy new GICs or roll over maturing ones.

There is no fee to have a Self-Directed account for non-RRSP/RRIF investments. For RRSP accounts there is an annual administration fee of $95, and for RRIFs it’s $100. These are among the lowest fees in our industry, and they are waived for accounts over $200,000. There are other benefits that may make it worthwhile to pay the annual fee to have this structure on smaller accounts in which the fee is not waived. These include:

· interest rates on GICs in a Self-Directed plan are often 0.25% higher than a RRIF you hold directly with a Financial Institution. This alone can offset the cost of the plan if you have $40,000 or more in total GICs across all your RRIFs.

· some FIs don’t accept deposits directly from clients because of the additional requirements, and only accept deposits from self-directed plans. A self-directed plan gives you access to a larger number of FIs, making it more likely to find a higher rate.

· if we can get a better rate on a maturing GIC, we can move the money instantly. This avoids the mailing delay on such transfers with client-held RRSPs/RRIFs, as well as the transfer out fee some FI’s charge to transfer a GIC to another FI.

· a Self-Directed RRIF can hold any number of GICs from different FIs and still has only one Annual Minimum Payment to administer, and produces only one T4RIF slip. This can greatly simplify your cash flow planning and income tax preparation.

We would be glad to review your portfolio with you to show you how you might benefit.

Clients who have dealt with us for many years will recall that back in 2004, we began asking for identification for new investments. This was in response to federal legislation called the Proceeds of Crime, Money-Laundering and Terrorist Financing Act (PCMLTFA) which aims to limit the ability of criminals and terrorists to launder their criminal gains through the legitimate financial system.


Investment Market COMMENTARY

INterest rate UPDATE


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