Conservative Investments

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You must understand the level of risk you can tolerate to achieve your desired return. Too little and your returns may not be enough, too much and you not be able to stop worrying. Risk is something that cannot be entirely avoided when investing, it is something that you must be able to tolerate on the road to achieve your financial goal. However; there are some unique investments that provide reasonable returns and are guaranteed.

Annuities*

Consider an annuity if you require regular income from your investment. An annuity is a contract between the investor and an insurance company. A lump sum is deposited from the investor and in return the insurance company provides a guaranteed monthly income.

An annuity may be suitable for you if you want a risk free, predictable income for life and you don’t want to worry about investment decisions, investment volatility or outlive your income. An annuity is a worry-free income stream.

Insured annuity*

The insured annuity uses two products:

1. A prescribed annuity typically provides more after-tax cash flow then a GIC due to its preferred tax treatment. It is for conservative investors with at least $100,000 of invested GIC assets who want to maximize income in a guaranteed investment-and who want to preserve the capital for their heirs. The annuity is purchased with non-registered funds.
2. The face amount of the life insurance typically equals the amount of the capital used to purchase the annuity.

The annuity gives you guaranteed cash flow during your lifetime. You use part of the annuity income to pay the insurance premiums. When you die, the insurance company pays the death benefit to your heirs, thereby replacing the capital used to purchase the annuity.

Should I consider an insured annuity?

Yes, if:

• You are insurable
• You want to avoid high-risk investments
• You wish to generate additional cash flow from non-registered liquid assets
• You want to pass on an estate to your heirs
• You wish to maintain cash flow but increase the estate you pass to your heirs

The increased yield offered by an annuity over a GIC can be significant. The after-tax cash flow of an annuity is enhanced when the Pension Income credit is factored in.

The advantages of an insured annuity:

• Your cash flow is increased as there are tax advantages that result in more after tax income than GICs
• Your annuity income is guaranteed and payable for life
• Your lifestyle is enhanced by using this capital to produce greater net after-tax cash flow while preserving your estate for your heirs
• If you are 65 or older in the taxation year, the taxable portion of the annuity qualifies as pension income for purposes of the pension credit

Once the program is started, the annuity cannot be redeemed.

Capital is only repaid at the death of the insured.

Segregated Funds*

Segregated funds are similar to mutual funds but are issued through an insurance company. Advantages to segregated funds generally relate to protection such as a death benefit, maturity guarantees, ability to bypass probate and the potential for creditor protection. Segregated funds are very useful for naming a beneficiary when it is not generally possible through other investments because it is in an insurance product. This facilitates transfer of wealth directly to a beneficiary and bypassing probate.

Term deposits

Term deposits are available through a variety of financial institutions supplied through Canaccord Wealth Management. Term deposits are guaranteed to a limit by the Canadian Deposit Insurance Corporation up to $100,000. Please contact me to find out the most up to date rate as we are competitive in this market.

Through our insurance division we can offer term deposits through insurance companies that come with added value besides the deposit guarantee. Sometimes, the most important thing is safety however; insurance company term deposits offer a high-interest alternative to GIC and Canada Savings Bonds as well as safeguard your income.

Advantages include:

• Guaranteed interest income
• Beneficiary designation
• Potential for creditor protection
• Potential for Pension Tax Eligibility
• Potential for Pension Splitting Opportunities
• Deposit Protection

Bank GIC' can only guarantee interest income and deposit protection.

Manulife Bank Investment Savings Account

A diversified portfolio often includes a cash component to provide liquidity and flexibility. Canaccord clients have access to the Manulife Bank Investment Savings Account. It is a high-interest savings account that combines the best features of a bank account, a Treasury Bill and a money market fund. This account offers a premium interest rate similar to what is available from government Treasury Bills. There are no service fees

Guaranteed Withdrawal Balance Investments (GWB)*

• Do your retirement plans ensure you have guaranteed income for life?
• Are you concerned about outliving your income in retirement?
• Does market volatility keep you up at night?

There are investment solutions that supply a predictable and guaranteed income that has the flexibility to pay you either a five per cent income stream or your RRIF minimum, no matter how your investment performs. A sustainable income that will last for a lifetime. An opportunity to grow your capital and receive potential increasing guaranteed income to help offset inflation and access to your investments at any time at market value.

*Offered through Canaccord Estate Planning Services Ltd.