This is Globe Advisor’s weekly newsletter for professional financial advisors, published every Friday. If someone has forwarded this newsletter to you via e-mail, or you’re reading this on the web, you can register for Globe Advisor, then sign up for this newsletter and others on our newsletter sign-up page. For more from Globe Advisor, visit our homepage.
With winter weather now here, snowbirds are returning south of the border to escape the cold. But life is more expensive, so to save costs, they may just stay for part of the season instead of the maximum 180 days, says Michael Camacho, president of The Travel Health Insurance Association of Canada in Toronto.
He notes that snowbirds spend quite a bit of time investigating travel insurance policies and comparing prices. Mr. Camacho spoke recently with Globe Advisor about those options and how advisors can best assist their snowbird clients.
What sorts of travel insurance options are available to snowbirds?
Snowbirds typically have two options for travel medical insurance. They have per-trip plans for a specific number of days away from their province, and multi-trip annual plans in which they choose the maximum number of days for each trip during a 12-month period. So, it could be 15 days, 30 days or 40 days. If any one trip is longer, they can buy extension coverage for the extra days.
Has the pandemic made travel insurance more expensive?
Yes, it has, and like everything else, inflation, in particular medical inflation in the U.S., has caused insurance rates to increase. Exchange rates are also a large factor in setting premiums, as are older snowbirds who have multiple medical conditions. And if the snowbird is going south for six months, for example, then the exposure faced by both the snowbird and the insurer is greater.
The majority of companies offering travel medical coverage now cover COVID-19 so the client should make sure they speak to their travel provider to ensure they are covered.
What do advisors need to tell snowbird clients about travel insurance?
Given the high cost of claims, clients need to know why it’s important to have travel insurance. They need to know the stability period of their policy and about other exclusions. Does it cover mountaineering or scuba diving, for example?
Clients should also investigate whether they have any retiree benefits and the length of that coverage.
Advisors should review the travel questionnaire with clients. Clients don’t want to miss or not disclose a condition. And when they get the actual travel insurance policy, review the answers again, along with the coverage. If something isn’t right, call the travel insurance provider right away and let them know to correct the response.
– Deanne Gage, Globe Advisor reporter
This interview has been edited and condensed.
Must-reads from Globe Advisor this week
An advisor’s personal lesson on market diversification and what keeps her up at night
In this new series, Behind the Advice, we ask advisors about their relationship with money from a young age, lessons learned over the years, and how their experiences influence the advice they give clients today. Trixie Rowein, senior portfolio manager and financial advisor with PAX Portfolio Advisory at Raymond James Ltd. in Edmonton, discusses her brush with entrepreneurship as a child growing up in Edmonton and offers advice for women looking to pursue a career in finance. As told to Brenda Bouw.
How life insurers are simplifying the application process to increase uptake
Per Homer doesn’t miss the bulky life insurance contracts he used to drive over to clients’ homes for signing. There would be multiple home visits, a lengthy medical questionnaire to fill out, a nurse’s visit to do bloodwork, and a requirement for the applicant’s physician to prepare a report. Then, the pandemic hit and the changes that life insurers had been toying with became the new way of doing business, says Mr. Homer, senior financial planning advisor with WWH Financial Group at Assante Financial Management Ltd. in Mississauga. Anna Sharratt reports.
How this portfolio manager achieved double-digit returns amid volatile markets
Money manager Ed Sollbach isn’t buying big bank stocks to balance his portfolio or betting on the hottest artificial intelligence play for growth. Instead, the portfolio manager at Spartan Fund Management Inc. in Toronto puts together a mix of high-yielding large and medium-cap equities and lesser-known micro and small-cap securities he believes are set to rebound. Mr. Sollbach refers to it as a “core and more” strategy for the $65-million Spartan Fund Management MM Fund he oversees. He says the strategy has enabled the fund to generate double-digit compounded annualized returns since its inception in 2015. Brenda Bouw asks what he has been buying and selling.
Wealth management firms leverage advanced financial planning tools as battle for advisor talent intensifies
A technology arms race is underway among wealth management firms in Canada to retain and attract advisors. Specifically, they’re investing in advanced financial tools to ensure advisors can engage in more complex financial planning for clients, serve them better and gain an edge. Notably, several non-bank-owned wealth management firms are embracing the innovation fray, often able to adopt new financial planning software more quickly. “Smaller firms have that ability to pivot,” says Cameron Smith, vice-president of advisory services and client-relationship manager at Nicola Wealth Management Ltd. in Vancouver, a boutique wealth management firm that serves high-net-worth clients. Joel Schlesinger reports.
Also see:
Six dividend stocks for bargain-hungry investors
More ESG-driven investors may be reconsidering defence companies amid threats to democracy
Recession readiness has made businesses stronger but three key risks remain
How changes to the alternative minimum tax will affect large donors’ charitable contributions
Q3 GDP to show whether Canada is in a technical recession in this week’s Advisor Lookahead
What you and your clients need to know
Securities regulators propose dispute settlement system for investors
Canada’s securities regulators want to design a binding dispute resolution process that would require investment firms to pay monetary fines if it is determined they committed wrongdoing against retail investors. The Canadian Securities Administrators – the umbrella organization of Canada’s provincial and territorial securities commissions – is proposing to modify the industry’s complaint handling process to require all Canadian investment firms to comply with any final decision made by a “designated ombudservice.” Clare O’Hara provides more details.
Ottawa to exempt Canadians from underused housing tax filings, with one exception
In the latest twist around a new federal tax on foreign-owned underused and vacant homes, Ottawa is proposing to largely scrap filing requirements that would also affect many Canadian and permanent resident homeowners and some Canadian corporations. But the changes would only apply starting in 2023, excluding the year 2022, when the measure first came into effect. The government presented the proposed amendments to the underused housing tax (UHT) in its 2023 fall economic statement. Erica Alini reports.
Government impersonation, phishing among biggest financial scams targeting Canadians, survey finds
Government impersonation is one of the most common financial scams plaguing people across Canada, a new survey from payment processing company Interac Corp. has found. The report, released Tuesday, said 42 per cent of survey respondents reported dealing with scammers pretending to be representatives of official government institutions. That was followed by 41 per cent for phishing scams and 33 per cent with fake banking, credit card and online account scams. Rikita Dubey has more.
Boomer women are mostly ignoring annuities in their retirement planning – is that a mistake?
Now happens to be a great time for all retirees to consider an annuity for retirement income, but particularly women. It looks more and more like we’re at a peak for interest rates, which play a big role in determining the payout from annuities. Lower interest rates in the future mean a lump sum of money used to buy an annuity will pay out less than you’d get today. If you don’t have a company pension, an annuity is worth considering as a way to convert a slice of your retirement savings into a guaranteed stream of income for life. Annuities can be a fit for all retirees, but women especially because they live longer on average than men. Rob Carrick provides some details.
– Globe Advisor Staff