Some clients may enjoy a game of poker, and that's okay.brazzo/iStockPhoto / Getty Images
Last week, some of the best financial planning minds in Canada gathered at the Lac Leamy Casino in Gatineau, Que., for the Institute of Advanced Financial Planners’ annual symposium. It was an interesting choice of venue, given some financial planners see investment management as a lot like gambling. I was supposed to be there. I could’ve taken the train but gambled that my old car would get me there just fine. Not a smart bet, as it turned out.
Fortunately, I caught up with Aravind Sithamparapillai, associate at Ironwood Wealth Management Group in Fonthill, Ont., to find out what I missed. He gave a presentation about the enhanced CPP with Jason Yee, principal investment analyst and financial planner with Finepoint Solutions Inc. in Saskatoon.
Mr. Sithamparapillai shared some highlights from the symposium.
What should we know about the enhanced CPP?
Jason Yee went through a lot of the changes with that enhancement. One that I found quite interesting, and furthers the case for being mindful about CPP contributions around parental leave, is that the enhancement [doesn’t use] a drop-out provision. With the enhancement, it’s going to be drop-in.
What will happen is, [for those] with a child under seven, if [income] in those five years before the child was born is higher than while you’re off with your child, they will give you extra credit for those years. So, if you have a chunk of years in which there’s a gap now, they’re going to pretend that those [previous] five years basically replicate into those years where you’re off on leave.
The bottom line people took away is it’s quite complicated. The enhancement is basically like a different CPP and the calculations are all different. So, you’re going to be doing a calculation for base and a calculation for enhancement and then blending the two of them when you start collecting, which is wild.
How do you see the significance of holding a financial planning conference in a casino? [Ed. note: the conference was actually in the hotel beside the casino.]
I think the buzzwordy point would be like, ‘Hey, are we encouraging the right behaviours?’ [But a] great workshop [at the conference, from Brian Portnoy at Shaping Wealth] was about how do we help clients talk about their own story with money. All of a sudden, people were talking about how their parents impressed upon them that you have to be cheap, you can’t buy a nice car, you shouldn’t go on trips. And that changed how they see the world. But maybe they wish, in hindsight, that they had travelled more because now they’re older [and] they have other responsibilities.
So, bringing that back to the casino, if we think about values, what people enjoy, there’s something to be said for empowering people to make choices with their money the way they want. If it fits within the context of a financial plan, for some people getting together and playing poker is not that different from paying to fly somewhere and enjoy some time drinking on a beach.
With that in mind, should I buy a new car?
I would weigh the cost-benefits. But it sounds like yours is pretty beat up. Do you like new cars?
No, not really. I don’t care about cars. It’s a 2011 Subaru. It’s old.
Until 2018, I was driving my parents’ 2001 Toyota Corolla. It was a massive joke at the company I worked at, so it was a big company moment when I got a new car. Everyone was cracking up.
My recommendation is you could always look for a three-year-old used car. That’s typically what I try to go for and I’m not a big car guy.
–This interview has been edited and condensed.
Any other highlights to share from the IAFP symposium? Let me know: mburgess@globeandmail.com. Car advice is also welcome.
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Editor’s note: A previous version of this article stated that under the enhanced CPP, extra credit would be applied to years a parent is off with a child under six. In fact, the child-raising period applies for children under seven.