Michael Curtis, a guest speaker at the forthcoming Wealth Professional Leadership and Tech Summit, questions realism of financial plans
Are you offering clients a realistic retirement plan? Does it factor in the dynamism of life?
Michael Curtis, president of Visions Systems Corp, questions whether the majority of financial plans factor in realistic circumstances like how much money people save each year, how much they need to accumulate for retirement, and the possibility and implications of second marriages and blended families.
Curtis will address these issues, among others, as a guest speaker at the Wealth Professional Leadership and Tech Summit, which takes place on May 30 at the Westin Harbour Castle in Toronto.
VisionWorks's USP is that it offers the “only realistic program for personal lifetime financial management and estate planning in Canada”.
And the industry veteran, who helped open the first financial planning department on Bay Street in the fall of 1984, will also talk about how advisors need to bring a value-add to the table to meet the robo-advisor challenge. For example, how advisors can uncover State issues with regards to second marriages that a cheaper robo plan, on its own, simply can’t.
The former stockbroker admits two issues get him on his soapbox. The first relates to how much income someone needs when they stop working.
He said: “People will think in terms of when they first retire. The math may be perfectly correct – 2 plus 2 equals 4 – but conceptually it’s really flawed because they will not be spending as much when they are 85 or 90 as when they first retire.
“What our software does, it takes how much income you want and inflates and projects that over the entire period.”
He added: “The idea that we will spend as much as 85 or 90 as when we first retire, substantially overstates people’s capital accumulation needs. Therefore, it misleads people as to how much they have to save and what rate of return they need to earn on their capital.”
The second topic that sticks in Curtis’s claw is the aforementioned effect of second marriages and the “Bill and Sue” assumption that when Bill dies all his assets roll tax free to Sue and when she dies they go to Bill, Jr and are then taxable. This, Curtis says, does not take into account Canada’s 40% divorce rate, which is actually higher among over-50s.
“It’s ignored because no other software apart from ours factors it in,” Curtis said. “Given the divorce rate, there are lots of second marriages and lots of blended families and lots of instances where Bill will leave assets or money to Bill, Jr which will profoundly impact how much is left over for Sue.
“Wills and second marriages are key to doing a retirement projection. Wills have to be integrated into plans when doing a retirement projection for people in second marriages that have blended families.”
For more details about the Wealth Professional Leadership and Tech Summit on May 30, along with details of the event speakers and how to buy tickets, go to www.wealthprofessionalsummit.com
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