Questions and Answers

Questions & Answers

More about Wealthstack and financial planning in general.

What is a financial planning dashboard?

All individuals have three categories when it comes to financial goals or financial planning. We help you define, track and ultimately reach your goals by suggesting the correct, and most cost-effective investment and insurance products to you.

These goal categories are:

Wealth protection goals: Your biggest asset is your health and your ability to generate income. Does it not then make sense to protect yourself and your family’s income against situations that could impact you negatively? There are three main risks to protect yourself against and these are: major illnesses, any form of disability and death.
Wealth creation goals: Once you protect your family’s income and savings against these risks, the next step is to generate and grow your asset base. Some of the most common wealth creation goals are retirement, emergency fund, home deposit, and tertiary education for the kids. In addition, you may decide to create any other short, medium or long term investment goal.
Wealth preservation goals: Ultimately, you want to leave a legacy. This requires you to have some basic things in place like a will and power of attorneys. It also means that you need to take care of the taxes your estate will pay one day. You can reduce these taxes with the correct planning in place.

Do you feel overwhelmed? You don’t have to. With our step by step process we can help you have peace of mind when it comes to your long term financial planning.

Why do I need a “Critical Illness Insurance goal?”

Your health is the biggest asset you have. With good health you work, earn income and save towards your other goals. However, if you are not healthy then you spend additional cash to become healthy again which affects your normal level of income.

In Canada the provincial health system will take care of your basic health needs, but it doesn’t protect you against the financial consequences of major illnesses e.g. cancer, stroke, blindness etc. Critical Illness insurance protects you against 25 predefined major illnesses and pays out a lump sum (tax free) to you if you contract one of these illnesses.

Why do I need a “Disability Income Protection goal?”

Your ability to earn income is the biggest asset you have. If you become temporarily, partially or completely disabled you will not be in a position to earn income. This will cause you to dip into your emergency fund and possibly your retirement savings.

However, Disability Income Protection insurance protects your monthly income in case of disability. This insurance pays out a monthly income (tax free) to you, or a portion thereof, depending on whether you are partially or completely disabled.

Why do I need a “Life Insurance goal?”

In case of death, your family will need cash to fund their existing lifestyle for say the next 20 years. The key here is to think about how much of your monthly income your family will need if you pass away today. Alternatively if you don’t earn income (e.g. stay-at-home parent), the question is how much the family will need to pay someone else to do your current job in the home.

The second reason why we need life insurance is to pay off any outstanding debt so that your family will not have that financial burden.

Term Insurance for say 10 or 20 years is the most common life insurance product to use for these scenarios. This insurance pays out a lump sum (tax free) to your estate or beneficiaries so that they can pay off any debt and then live from the remaining capital up to retirement or for the next 20 years.

How much do I need in my emergency fund goal?

A good rule of thumb is to have at least three months of salary for the main breadwinner and then 1.5 months for the supporting spouse’s salary as an emergency fund.

How much do I need to save per child for tertiary education?

Tertiary education is a bit like “how long is a piece of string”! However, we assume that an average three year degree with living expenses, tuition and books will cost around $50 000 per child.

The regulated contributions towards the Registered Educational Savings Plan (RESP) of $2 500 per annum, plus $500 per annum from the government over 17 years supports this assumption (i.e. $51 000 excluding growth).

Can I implement any life, disability and critical illness insurance through Wealthstack?

The short and long answer is Yes! Our licensed experts will implement the choices you make based on the information you have available. Alternatively you can always discuss it first with one of the experts.

Which of the insurance companies will you make use of to implement my insurance?

We have access to the whole market. But to be honest, we place most of the insurance with 2-3 large insurance companies. You may ask why?

The pricing of insurance contracts between insurance companies are actually very similar. The difference in pricing you will see on the internet is due to the difference between term insurance and whole-of-life insurance.
In the world of insurance it is very important that you (through our licensed experts) have a close relationship with the underwriters and claims adjudicators. We prefer quality products for our clients.
We make use of the largest insurance companies in Canada who have strong balance sheets and who are going to be around in 50 years from now.

How will you implement my investment products?

Firstly, we recommend a combination of products to you based on your profile and tax status e.g. TFSA, RRSP, RESP, investment accounts;

Secondly, based on your risk profile we will recommend the correct asset allocation strategy to you, and;

Thirdly, in order to reduce the cost to our clients, we offer a robo-advisor type solution that makes use of: Exchange Traded Funds (ETFs) and Managed solutions. The key is to get the best performance with the lowest volatility and lowest cost structure.

Is Wealthstack a robo-advisor?

No, robo-advisors only give investment advice and then subsequently implement those portfolios for you. Wealthstack gives holistic financial planning advice and then recommends investment and insurance products for you. Wealthstack does make use of robo-advisors’ technology to implement investment portfolios.

What fees do I pay when you implement insurance products for me?

You don’t pay any fees to us, only the premiums to the insurance companies. The insurance company pays us the regulated commission.

What fees do I pay when you implement an investment product for me?

The total fee your portfolio pays is a yearly fee of 1.25% on the value of the investment portfolio. This is much smaller than normal mutual fund fees in Canada. Of the 1.25%, Wealthstack’s fee is 0.65%. Therefore, if you have a portfolio of $100 000, the fee to us will be $100 000 x 0.65% = $650 (or $54 per month). The balance of the fee goes to the portfolio manager.

We also do not charge initial fees on any of our clients' portfolios.

Our fees are super easy and transparent.

Can I consolidate my other insurance contracts and investment products onto my Wealthstack Dashboard even though Wealthstack is not managing it?

That is the whole point of Wealthstack. We want to make sure that our clients can track their goals with all of their insurance and investment contracts they have available, whether they are privately owned or provided through your employer group benefit plans.

Can I speak to any of your experts / financial advisors and how much does it cost?

There is no charge to speak to one of our financial advisors.

How can Wealthstack help me if I want to connect with a qualified expert / financial advisor to guide me through my financial planning dashboard and implementation?

The next step is to schedule a time with one of our experts.

If I am a business owner with complex company structures and trusts, can Wealthstack still help me?

Yes, of course we can help. We have a number of highly qualified experts (Actuaries and CPAs) that can assist you with your complex structures and financial planning.

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