At the end of the day, the most important element that exists between an advisor and their client is credibility. A client wants to know that their advisor has their best interests at heart.
If a business is generating more than $100k in net revenue than a family trust is something they should be looking at. It is estimated that of all the businesses in Canada that could benefit from this vehicle, 50% or less are doing so. The trust allows the business owner to take advantage of the great capital gains exemption of $800k while at the same time freeing up capital in lessening the tax burden and providing creditor protection. This capital could be used for sizable segregated fund sales which also provide creditor protection and estate benefits.
On the issue of credibility again, last week, the current federal government proposed changes to legislation governing these changes which would limit these exemptions. Clients should be aware of this. Whether or not these changes are implemented remains to be seen. If they are, they would then open up opportunities on the risk side. At the very least, informing either existing or new clients of information such as this would go a long way in enriching the relationship. I would also suggest that a qualified tax accountant work with the advisor in these endeavours.
Please contact me if you would like to learn more.
Business Development Specialist
Qualified Financial Services