Leaving Your Employer Group Plan - Part 1

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Globe and Mail - Behind the Advice Feature

Thu, 11 Dec 2025 00:04:04 GMT

Below is an article that was licensed from the Globe and Mail where William Chan was featured. Click the image to direct you to the original content.

Buy, Re-fi, or Upsize - Master Your Mortgage

williamchan@modernvisionplanning.com (William Chan) — Sat, 12 Apr 2025 20:56:16 GMT

How you can set up your mortgage to BEST fit your needs

Choosing the right mortgage is a crucial step in the home-buying process. With so many options available, it can be overwhelming to determine which mortgage best suits your financial situation and long-term goals. Here are some key factors to consider when selecting a mortgage.

Assess Your Financial Situation

Before diving into mortgage options, it's essential to have a clear understanding of your financial health. This includes evaluating your income, savings, credit score, and existing debts. A strong financial foundation will not only help you qualify for a mortgage but also secure better interest rates.

Understand Basic Terms and Jargon

You should know the basic terms that are used in mortgage conversations such as mortgage types being fixed or variable, the difference between amortization and term of a mortgage, deposit vs. down payment, etc. Each component is of equal importance and should be structured accordingly to meet your personal situation

Compare Interest Rates and Fees

Interest rates and fees can significantly impact the overall cost of your mortgage. It's important to shop around and compare offers from different lenders. Pay attention to the Annual Percentage Rate (APR), which includes both the interest rate and any additional fees, giving you a better idea of the total cost.

Evaluate Your Long-Term Goals

Your long-term goals can influence the type of mortgage that best fits your needs. If you plan to stay in your home for a long time, a fixed-rate mortgage might be a good option. If you anticipate moving or refinancing in a few years, a variable-rate mortgage could be more suitable.

Don't Waste Money on Insurance

williamchan@modernvisionplanning.com (William Chan) — Sat, 12 Apr 2025 20:56:07 GMT

Setting it up right the first time will save you $$$

Many people start thinking about different types of insurance to protect their loved ones during this time of their lives. At it's core, insurance is meant to protect others as much as oneself and it's a topic people tend to rush through, which can become costly over time. Here are the three biggest mistakes having reviewed thousands of insurance policies throughout my career:

Understanding your need
People may unnecessarily insure themselves or loved ones given their situation.
Being overly reliant on workplace plans and the coverage amount provided.
Not conducting a needs analysis and exploring their situation to understand the dollar amount required. This can result in over or under insuring for their particular circumstances.
Believing a policy that may have been set up years ago is sufficient for current needs.
There are different types of insurance that can cover a wide range of situation, which one fits?

Choosing the wrong structure
Some people view insurance as a single product and not solution. A single policy may only serve a specific purpose. It's important to understand how to layer different policies for the best long term benefit.
The wrong type of insurance is selected which could cost a lot more than necessary from a needs basis.
Overlooking a specific product that could address a possible personal health concern or others'.

Selecting the right carrier/provider
Many people have the tendency to select the most popular brand just to "get it over with". This could obviously lead to overpaying if selecting the wrong company.
Each carrier slightly differs in what is covered, so it's important to know WHY one option may be less costly than others.
Different providers for different needs. Companies may offer a better solution for one type of insurance versus another, so based on one's solution, it could involve one or more companies.

Although insurance may not be the most exciting part of one's personal finances, it can have a long term impact given the length of time someone may be committing to payments without realizing there is a gap or issue. Simply put, work with a professional by setting it right the first time to avoid costly mistakes. Click below to book a session to learn more!

The Truth Behind Registered Education Savings Plans (RESPs)

williamchan@modernvisionplanning.com (William Chan) — Sat, 12 Apr 2025 03:38:19 GMT

Common myths about RESPs and why you shouldn't rush it

A Registered Education Savings Plan (RESP) is usually a must have account for any parent planning to save for their child's education. The government offers a 20% matching grant up to $500 annually and $7200 over a lifetime (Canadian Education Savings Grant - CESG), while low income families (if eligible) can receive even more with a 30% matching grant for the first $500 of contributions, an initial $500 deposit through the Canada Learning Bond (CLB), AND an annual $100 each year through the CLB as well.

However, many parents don't realize how a simple account can make a world of difference to one's finances when signing up. With the best intentions, they open up accounts without doing the proper research. Here are some of the myths that surround RESPs:

Only specific "RESP companies" can provide the plan - FALSE
ALL major banks AND many investment institutions allow an individual to open an account AND receive the grants mentioned above.
Lower investment management fees are the best option - FALSE
Although fees can impact future values of savings, there are many other factors that can play a part as well. Performance, hidden costs, and penalties, just to name a few.
You need to open an account as soon as possible - FALSE
RESP grants AND bonds will NOT be lost if you open an account a few years after your child is born. Grants can be carried forward and available in the future (up to $1000 annually), while the Canada Learning Bond can be received retroactively if eligible.

Many new parents are understandably excited about their new bundle of joy and want to provide them with a great start by saving for their education. However, rushing into things rarely is a benefit to anyone. Working with a qualified Certified Financial Planner you can determine the following:

Is it better to start a RESP now or later?
What are the differences between RESP plan types (yes, there is more than one) and providers?
How much should I invest and why?

Lastly, make sure you do your own research! It's good to have strong government resources like the:

Ontario Securities Commission - https://www.getsmarteraboutmoney.ca/learning-path/resps/
Can ada Revenue Agency - Registered Education Savings Plans (RESPs)

If you want to learn more from professional in the financial industry, just click below for a consultation.

Why You Should Stop Contributing to Your Personal RRSP

williamchan@modernvisionplanning.com (William Chan) — Wed, 21 Feb 2024 18:16:40 GMT

Prioritizing Your RRSP Over Other Financial Priorities Can be Costly

Many people rush into making a RRSP contribution during the "first 60 day" window each year in hopes of getting a refund on their taxes or avoid owing the government money. I was recently interviewed for a Globe and Mail article and mentioned a few of the items below. There's a big marketing push to have people make deposits and even make loans to do so. However, is making a personal RRSP the right move. Here are a few things to consider:

·Are you properly using your workplace plan throughout the year?
Maximize your RRSP employer matching contributions from work first
Applying a bonus directly to a RRSP from your employer
Are you improperly prioritizing a RRSP contribution OVER debt or other financial needs.
Pay down debt vs making a contribution.
If a RRSP loan is needed, why? And considering the repayment timeline, is it worth the cost?
Is cashflow better served elsewhere? Setting an emergency fund? Other accounts or products?
·Are you OVER SAVING in your RRSP?
Are you on a defined benefit pension plan?
OAS “claw back”, GIS if low income. You may be losing out on government income
Your projected retirement income is estimated to be higher than current/past employment income.
Estate taxes upon death
·Do alternative accounts with other benefits make more sense?
If you don’t own a home, the First Home Savings Account should be your new number one option.
Will not apply when filing your 2023 tax return since it doesn’t have the first 60 days contribution benefit.
A Registered Education Savings plan can offer government grants AND be more attractive to lower income individuals who can receive additional grant enhancements.
Tax Free Savings Accounts offer greater accessibility to your money and tax-free gains.
Registered Disability Savings Plans for those who qualify, will receive better value from deposits through grants and other government support.

Many people manage their finances from a transactional perspective, opening an account, making a deposit, purchasing a product, but it's usually not the most effective way to approach your finances. Speaking with a professional can really help save thousands of dollars that would have been lost otherwise. Tax planning, costs savings, product comparisons are just a few things we can help with.

5 Common Myths About Independent Financial Planners

williamchan@modernvisionplanning.com (William Chan) — Thu, 11 Mar 2021 06:16:46 GMT

Myth #1 - It Will Cost More Money

It is understandable why people think working with an independent financial professional would cost more, since you can simply walk in and out of banks without knowingly paying.

Most people are already being charged on their investments and insurance products through a commission-based model where costs are bundled . MERs on mutual funds generally include the “advisor fee”, while insurance products have compensation “priced in” as well. Normally the company will collect these fees if the advisor is an employee. In other cases, it would be paid as commission to a self-employed contracted advisor or financial planner. In both cases, you are not paying more.

A fee-based model for investments separates the cost of the product and service provided with investments. Generally, this structure is used when dealing with non-mutual fund products or through fee agreements when using mutual funds. This does not increase costs compared to commission models.

In any case, the client is usually not paying directly unless they are working with a fee-only financial planner who charges an hourly rate or based on specific services. They exist as a small fraction of the industry and may be a good fit for certain clients.

Myth #2 - All Financial Planners are the Same

It is important to have a conversation with ANY advisor, to better understand their qualifications and potential areas of focus (which may not be investments). There are some financial planners who may not be familiar with product specific knowledge as generalists.

As mentioned in a previous article about being an independent financial professional, there are various levels of knowledge and different specializations. By having a conversation, an advisor can better understand your needs as an individual and how they can best help.

It is generally understood that a fast-food employee is different from a chef, or a carpenter and plumber are different even with both working in construction; the same concepts apply to the financial industry.

Myth #3 - You Need to be Wealthy

Although there are some investment advisors who require a minimum amount of investable assets (you will usually find this in fee-based models only) or select a specific group of clients to work with, others may open their doors to a more diverse group of clients. There are many financial gaps that may exist during different stages of life; the role of the planner is to help make pro-active decisions, which is helpful to those looking to build for the future.

The key is to understand whether your needs as a client can be better met by an independent vs. alternatives. As I always say, “you don’t know what the don’t”, so having a conversation is the best way to find out whether you can work with the right professional.

Myth 4 - It is Riskier to have Savings with an Independent

Since becoming an independent, I am usually asked by clients if their savings have a greater risk of “disappearing” and the simple answer is NO . Some people believe their money is transferred TO the independent advisor personally, which is not how it works. The advisor does not hold client money . Period.

The Canadian financial industry is structured with a few banks and insurance companies being the dominant names known by people; however, the independent market has been growing steadily as the public gains greater awareness.

Without going into too many details, most advisors operate through a broker or dealer regulated and protected by the following:

Canadian Investment Regulatory Organization (CIRO)

Canadian Investor Protection Fund

Canada Deposit Insurance Corporation primarily for savings, chequing accounts, and GICs.

There are coverage limitations for the protection listed above. However, most risk is not based on the broker or dealer, but mainly on the investments held by a client . Another area of risk falls on the advisor, since lack of knowledge, fraud, or misconduct can exist.

Working with a reputable individual possessing strong qualifications and work history should be safe.

Myth 5 - Commissioned Professionals Only Care About Sales

Last, but not least, the big elephant in the room between clients and commissioned professionals, the compensation bias.

As an independent financial planner, it becomes slightly less of a conflict than in most cases. Here are some of the reasons:

As a Certified Financial Planner, one holds a fiduciary duty to the client as part of their designation. This may be a deterrent in some cases to sell an inappropriate solution.
Is not committed to a specific company or their products.
Relies more so on relationship and reputation since they are not associated with a large brand.
Compensation model may be more flexible to meet the needs of clients.
You will rarely find an independent who is new to the financial industry. Certified Financial Planners require at least 3 years of experience to qualify for the designation.

Commission and trailer structures have been a hotly debated area of the financial industry for years, with logical arguments for either side. The fact is some people may not be able to afford fee-only advice, or do it themselves, so commissions appear to be a logical solution for those cases.

What is an “Independent Financial Planner”?

williamchan@modernvisionplanning.com (William Chan) — Tue, 09 Mar 2021 00:33:58 GMT

Being an "independent financial planner" has more to do with how I operate vs. what I do.

The simplest way to help people understand is by breaking it into two parts, “independent” and “financial planner”.

Independent

There are many advisors who are either employees of a specific company or are contracted to one as a representative. You will notice they may exclusively or primarily recommend their company’s products or those of “preferred partners”.

For example, as an independent, investment and insurance products are not developed by the companies I am contracted with. I operate through a “distributor” which is called dealer for investments and managing general agency (broker) for insurance. This allows for unbiased financial recommendations.

I can also operate as an independent planner on a fee-only basis, which means no specific product recommendations would be provided. Advice can be charged hourly or as project based financial plans.

Financial Planner

I am considered a Certified Financial Planner® having completed the designation requirements. Only those who are qualified to do so can you use this title and offer financial plans to clients. It basically shows a level of proficiency when it comes to knowledge, skills, experience, and ethics when examining a client’s entire financial picture.

As an “independent financial planner” I have a fiduciary responsibility to the client and their interests, with the ability to not only strategize, but also implement those plans.

What is the difference between an advisor and planner? Advisor is a general term, whereas a planner is more specific, requiring additional education and experience.

The easiest way to understand how financial advisors can vary is by comparing the role to restaurant cooks . There are many levels and areas of financial advice, like there being different roles in a restaurant kitchen and cuisines in the world. Similarly, there are some great home cooks who can prepare meals of restaurant quality, self taught through hard work, similar to how some people may manage their own finances.

Unfortunately, it can be overwhelming for people to know the difference in quality and clearly identify an advisor’s abilities. There are those who may be newer to the financial industry and have just completed sales licenses, and those advisors operating for decades with no additional designations.

Certain advisors can be specialists in areas such as financial management, investments, insurance, tax, retirement, and estate planning, while there may be some that have all the above. It comes down to asking the right questions and knowing what you are looking for in an advisor.

Leaving Your Employer Group Plan - Part 1

williamchan@modernvisionplanning.com (William Chan) — Thu, 28 Jan 2021 18:25:26 GMT

What to Do with Your Group Retirement Savings Plan

When leaving an employer, the last thing you are thinking about is the group plan that was in place. People usually rely on the advice of a company representative, make a decision, then neglect to make any changes in the future.

Being a corporate professional leaving to build an independent financial advisory practice, I wanted my first article to have a personal touch; to better guide others who were also transitioning during this time or simply did nothing with those savings.

Rather than going into detail about group retirement savings plans since they can be structured differently, the focus is to decide what to do with the account after leaving your employer. There are 4 options:

Leave it with your existing group plan provider.
“Registered transfer” to your new employer plan (if you have one)
“Registered transfer” to a personally held individual retirement account.
Cash it out and face the tax consequences.

So which option is the best? It depends on the individual. I will quickly outline the problems with each one:

Your “fees” may be higher since you are no longer with your employer (gets transferred to an individual plan held under the group administrator), and it is still generally a Do-It-Yourself account when it comes to managing it. There is a limited investment selection . You may also forget and neglect the account.
Generally, a Do-It-Yourself account as with most group plans and limited investment selection .
You will pay regular investment fees (whatever are being charged in your existing individual accounts and the transfer fee out fee which varies based on the group plan company) and you will be working with whomever has been managing your investments (could be a good or bad thing, haha)
Taxes on withdrawal and loss of RRSP lifetime contribution room . Amount that can be withdrawn is generally limited by what you had personally contributed to the plan and may not include the employer matched portion.

These are just quick pointers that may help, but I would still recommend speaking with a qualified financial professional. I have noticed many people go with the most convenient option as they are most likely handling other priorities in life. However, this is done without recognizing the impact proper management of these group retirement accounts could have on their future. The biggest mistake many people make is doing nothing at all. Feel free to reach out if you would like to discuss your situation in more detail.