Grow Together - December 2024

In this issue: Message from the President & CEO | What's the alternative? | Turning yesterday's hindsight into tomorrow's insight

Message from the President & CEO

Jim Andrews, CA, CPA, MBA

President & CEO

With four active children, much of my time outside work is spent shuttling between kids’ hockey, basketball, volleyball, and theatre. This makes for a very busy household, especially as we go into the holiday season and the new year. But there’s nothing I enjoy more than being busy, navigating through these activities with my family. The importance of balance, adaptability, and being present are all lessons that resonate just as deeply at home as they do in leadership.

As I step into my new role as President and CEO, I’m struck by how much these personal lessons, especially those learned from watching my kids grow through team environments, shape my approach to leadership. Just as I’m committed to helping my children thrive, I’m equally dedicated to fostering growth and success within our team and with our clients. That’s why I’m excited to share this issue of Grow Together, themed From Hindsight to Insight: Reflections on Building Wealth. It celebrates the lessons we’ve learned—both personal and professional—and highlights how these insights will guide us with clarity and confidence into 2025.

With about 25 years in this industry, I know that trust is earned through transparency, consistency, and authenticity. It’s the foundation of our business and enables us to adapt and thrive in a constantly changing world. Managing your wealth is only part of what we do—it’s the relationships we build with you that truly matter. Hearing your stories and understanding your goals through our advisors has been a privilege, and I’m committed to continuing to strengthen the connections at the heart of our work.

Throughout my career there is one truth that has stood out: clients find reassurance in the support of their advisors. That’s why I focus on empowering our advisors—because when they feel supported, it directly benefits you. As we move forward with our integration with National Bank, these principles of transparency and authenticity will continue to guide how we serve and communicate with you.
Looking ahead to 2025, we hope the insights shared in this issue will guide you and your loved ones through the year to come. Inside, you’ll find thoughtful perspectives from Scott Blair, our Chief Investment Officer, on alternative investing, along with 5 valuable lessons from some of our advisors on how they’ve helped clients lead more fulfilling lives. A special thanks to Carrie Benoit, Matthew Sears, Bernadette Churchill, David Dilworth, and Terry Willis for sharing their insights.

I’m proud of the culture we’ve built here—one that’s rooted in genuine care, shared values, and always doing what’s best for you. Thank you for your trust and continued partnership. You inspire us to keep raising the bar. As we move forward, we’ll embrace the opportunities ahead with purpose and confidence, ensuring a smooth transition and staying true to the values that have brought us here.

What’s the alternative?

Why are alternative investments gaining popularity?

A prolonged period of low interest rates after the financial crisis had some investors searching for higher-income yielding vehicles. Others were looking for higher returns, diversification and a way to hedge against the typical ups and downs of the stock market. Alternatives have the potential to offer all of that, and for some, they can look like an appealing way to step away from the stock-and-bond routine.

What really sets alternative investments apart is that they often appear not to move in sync with publicly traded markets. When stocks take a hit, many alternatives—like private real estate or infrastructure investments—may hold steady or even grow. That’s because these assets are insulated from the daily volatility that stocks face. 

In a world where market swings are a constant worry, alternatives can seem to give investors a chance to add some stability to their portfolios. This is particularly appealing when the stock market is correcting.

Realities and restrictions

That said, the notion of stability is also a common misconception because they aren’t as stable as they may appear to the common eye. Sure, they may seem immune to the swings of the stock market, but in reality, they can be just as volatile. Why? Their valuations are typically based on appraisals or third-party evaluations, conducted quarterly rather than driven by daily market forces. While their value doesn’t shift as visibly or frequently as a stock price, it can still fluctuate significantly—just on a different timeline. This can create the impression of stability, even when that’s not entirely the case.

When it comes down to it, alternatives are just like any other investment—they’re just not publicly traded. What’s important is understanding their structure the risks, and the rewards. There’s nothing inherently mysterious about them, though a little bit of homework goes a long way.

One of the biggest challenges in this space is liquidity—or lack thereof. Unlike stocks or bonds, which you can buy or sell daily, alternative funds may require you to lock in your money for a certain period of time. Or you may only have the option of quarterly redemptions, which means you can only access your money just four times per year. 

For many, this is a nonstarter. If things go wrong for the fund, the manager may have the option to limit redemptions further or even “gate” the fund which means all redemptions are suspended for a period of time. We’ve seen this recently with several private real estate funds where clients are looking to withdraw money but are unable to do so as managers are unable to sell properties to accommodate the withdrawals. A recent example is KingSett Capital which has halted distributions and withdrawals for the next year in one of its Canadian property funds.* 

Another hurdle is transparency. As mentioned above, traditional investments are traded daily, so you always have a pretty clear idea of where things stand. Alternatives, on the other hand, are often valued less frequently, making it more subjective and fairly opaque. 

And don’t forget about fees. Alternative investments funds—whether it’s private equity, hedge funds, or real estate—often come with higher management fees compared to stocks or bond funds. That’s something you need to factor in when deciding whether the potential return justifies the cost.

The takeaway—another potential tool in the toolbox

Alternative investments aren’t for everyone, but they can be a valuable strategy when used correctly for the investor. They offer potential for diversification, higher returns, and some stability—especially during market volatility. But there are no guarantees. They also come with their own risks and complexities, so they should be approached with caution, skepticism, and a clear understanding of the landscape.

Success with alternatives relies on research, due diligence, and carefully choosing your partners. For our part, we’ve focused on investing in private debt, real estate and infrastructure with carefully curated partners. As alternatives become more accessible, a trusted advisor can be invaluable in helping you decide if they align with your goals. They bring new opportunities, but also new challenges, so approach them thoughtfully.

*Canada’s KingSett freezes payments on US$3.5B property fund 

Sources: CAIA Association

Turning yesterday’s hindsight into tomorrow’s insight—5 wealth lessons for 2025

Lesson 1: Keep emotions in check when making investment decisions

How to make smart financial decisions during emotional times

Why cashing out in a downturn can hurt your wealth

When markets drop, it’s natural to feel uneasy—but selling everything and going to cash can often make things worse. Terry Willis, Senior Private Wealth Advisor and Associate Portfolio Manager, remembers a client who panicked during the March 2020 downturn, exited the market, and missed the recovery, losing $500,000 in potential gains.

David reminds clients that history shows staying invested during market ups and downs leads to better long-term outcomes. The data shows how costly it can be to sit out of the market entirely (see figure 2).

A smarter approach during turbulent times is to keep some savings in cash for short-term needs while leaving the rest invested for the long term. This strategy allows you to weather market dips while still benefiting from recoveries.

Figure 2: Long-term gains outweigh reasons not to invest (S&P500 / TSX Index price returns*)


* Total return data not available for this time period. Price return data does not include dividends received.

Source: Bloomberg

Lesson 2: Steer clear of retirement myths

Retirement planning is often muddled by myths, conflicting opinions, and well-meaning advice from friends, family, or "finfluencers," which may be based on personal experiences rather than expert insight. While sharing concerns is natural, retirement should focus on enjoyment. A trusted advisor can help cut through the noise, identify opportunities, and craft a plan tailored to your goals. 

“Surprisingly, many clients worry they won’t have enough money in retirement, even with a solid financial plan that accounts for returns and inflation,” says Terry. “I remind them it’s important to enjoy life!” Retirement isn’t just about finances—it’s about living the life you’ve worked so hard to build. 

MYTH 1: You must put everything into cash or a super-safe investment

A common fear among retirees is running out of money, leading many to consider shifting everything into cash or ultra-safe investments like gold or GICs. However, this is a result of “retirees often overestimating their short-term needs for living comfortably or managing retirement expenses,” says David. 

“Every client situation is different, but most people only need a portion of their investment portfolio to balance their living expenses in retirement. This could range anywhere up to 20% over a 5-year period, assuming they redeem 3% of their portfolio on a yearly basis. The rest should stay invested to grow over time, generating both capital gains and dividend income. By staying invested, retirees can make their savings last longer and enjoy the lifestyle they've worked hard to build.”

David further notes that some of his clients don’t put any money aside for yearly redemption and stay 100% invested in the market at all times. “They’re able to do this as their yearly dividend income, which is typically about 4% of their investment portfolio, supports their income needs." 

MYTH 2: It’s better to hedge your bets and take your CPP or OAS sooner rather than later 

When planning for retirement, key decisions like when to collect CPP or OAS or draw from your RRSP arise. While many default to collecting benefits as soon as they’re eligible—after all, "a bird in the hand is worth two in the bush"—this might not always be the best option. For instance, if you have a company pension to support your early retirement years, delaying CPP can lead to higher monthly payments later, whereas starting earlier results in smaller contributions.

“Retirement planning isn’t one-size-fits-all. These decisions depend on your retirement timeline, financial goals, health, lifestyle, and family situation. With the help of an advisor, you can model different scenarios, weigh the pros and cons, and adjust your plan as needed,” says Carrie. 

MYTH 3: You can base your life expectancy on your parents’

“Many clients base their life expectancy on family history rather than statistical reality.  They expect to live until their mid-80s, but a significant number will live well into their 90s or even past 100. That’s why it’s critical to plan for a longer life span,” says Matt Sears, Private Wealth Advisor and Associate Portfolio Manager. Overall, this assumption can lead to retirement missteps.

“We use the Financial Planning Standards Council’s mortality tables which estimates that 25% of people live beyond 97, and there’s a high probability that one partner in a couple will reach their late 90s. Planning only to age 85 or 92 can leave retirees financially vulnerable in their later years,” says Matt (see figure 3).

Regularly revisiting and adjusting your retirement plan is key to aligning it with your evolving goals and circumstances. This ensures your money lasts while allowing you to live fully. Adjustments might include revising savings, refining spending, or tapping into home equity.

Figure 3: FPSC’s 25% mortality range is ideal for longevity planning

Source: Financial Planning Standards Council

MYTH 4: You have your will—you’re all set!

A will is important, but it’s only part of a complete estate plan. A full plan considers tax liabilities, beneficiary designations, and contingencies like incapacity. Carrie highlights the importance of keeping up with provincial laws, “Outdated beneficiary information or overlooked tax implications can derail even the best-laid plans.”

Many think a simple will is enough, but family dynamics, changing laws, and unexpected disputes can create complications. David shares, “I’ve seen situations where children avoided discussing their parents’ wishes during their lifetime to prevent conflict, but later initiated disputes after their passing.”  

The key is to go beyond a will with a comprehensive estate plan that accounts for family needs, current laws, and tools like trusts. Financial and legal advisors can help ensure your plan aligns with your intentions and minimizes conflict. 

Lesson 3: Be intentional and informed in executing your wealth transfer 

Estate planning isn’t just about dividing up your assets when you're gone, it’s about shaping your legacy while you're still here. As Matt puts it, “It’s not just about preserving estate value. It’s about helping our clients live well now and still leave something for their children.”

Whether you're giving a living inheritance to loved ones or helping the next generation manage their inheritance responsibly, estate planning gives you clarity and control. Your advisor can help you create a plan that reflects your values, so you can share your wealth today while planning for the future.

Avoid living inheritance or charitable giving traps

Rising inflation, housing costs, and interest rates are driving more retirees to explore living inheritance and charitable donations to support loved ones and meaningful causes. However, careful planning is essential to avoid unintended consequences.

A living inheritance lets retirees help family members with immediate financial needs, like housing or childcare, by gifting assets now rather than through traditional estate planning. Matt cautions this should be done mindfully, “We work with clients to assess what they can comfortably gift now without compromising their future. For example, giving $200,000 today could have more impact than leaving $2 million in 20 years.” Consulting an advisor can balance generosity with long-term security.

Charitable giving also has risks without precautions. Terry recalls a client tempted by a charity promising large tax write-offs, “It sounded too good to be true—and it was. Two years later, the CRA cracked down on the charity, leaving donors to repay their deductions.” Luckily, Terry’s client consulted with him first and avoided this misstep. Researching a charity’s legitimacy and consulting with financial advisors—many of whom partner with organizations like Canada Gives—can help structure giving effectively.

Whether through living inheritance or charitable gifts, thoughtful financial planning ensures you leave a meaningful legacy while protecting your goals.

How can you divide your wealth fairly without creating conflict?

What’s “fair” isn’t always “equal.” Terry believes open communication should be a best practice for all families. It can ease resentment and confusion when helping adult children in different ways who have differing financial needs. “One child was going through a divorce and needed immediate support, while the others were stable. We worked on a plan to provide more now for the one in need, with the estate later equalizing things for the others.” This is an example of how a living inheritance can be put into practice in an equitable way. As Terry says, “A gift with warm hands is better than a gift with cold hands.”

In Terry’s experience, most children are empathetic towards a struggling sibling, as long as there's open communication about the support and why it's needed. For example, a high-earning child is likely to understand if a sibling is facing job loss. Terry has learned that transparent discussions help prevent resentment. In situations where siblings and heirs just don’t see eye to eye, Terry suggests clients use a third-party executor to ensure their wishes are carried out.

How can you help your children manage inherited wealth responsibly?

Generational wealth is often strained when the next generation lacks the tools to manage it, which is why Carrie advises parents to start early. “Teach your children the basics of investing, compound interest, and financial responsibility. Involve them in advisor meetings so they can better understand their future holdings and take part in key decisions.” 

Involving adult children in financial planning helps them confidently continue the family legacy, and transparency is key. Sharing financial successes is valuable, but discussing your mistakes can teach important lessons and prevent future missteps.

Terry adds, “For kids who struggle with money, a trust or annuity can provide structured, conservative cashflow to meet their needs and goals securely.” Trusts or staggered distributions can also protect younger or inexperienced heirs, ensuring a smoother financial transition.

Lesson 4: Be proactive to avoid costly mistakes

In the fast-changing world of finance, it’s often what you don’t know that costs you the most. Staying ahead of evolving tax laws, understanding the fine print and doing thorough research can save you from costly mistakes. Sometimes, the most impactful moves are the ones you didn’t realize were right in front of you, and your advisor can help you find them.

As Bernadette notes, lacking tax knowledge can not only cost you money but could also prevent you from tapping into potential earnings. “I can’t tell you how many times investors are hesitant to take profits solely because they will trigger capital gains and have to pay taxes.” Smart planning with your advisor can ease these hesitations and help build a stronger portfolio. 

How can you avoid costly mistakes as tax laws evolve?

Tax changes can sneak up on even the most prepared individuals. Matt recalls one client who missed the chance to realize gains under the previous capital gains inclusion rate due to slow action by their accountant. As a result, they now face a 60% inclusion rate instead of 50%, significantly increasing their tax burden. 

“The lesson is to be aware of tax changes. Being too slow to react can have an impact on your taxes. The benefit of working with an advisor is that they’re always up on the latest tax law and can coordinate their efforts with your accountant to help you stay on top of things.” 

Timely guidance ensures you’re not caught off guard when regulations shift. This will help you optimize savings and minimize unnecessary liabilities.

What should you know before jumping into a real estate investment?

Rental properties can be a rewarding investment, but they come with risks many landlords overlook, such as rising interest rates, unexpected repairs, and unrealistic rental income projections. Matt recalls a client who ignored advice to focus on cashflow-positive properties. When interest rates rose and rental prices fell, they struggled financially. “If your property can’t cover its costs in tough times, it’s not a sound investment,” Matt advises.

Other pitfalls include buying in remote areas without assessing market demand or underestimating repair costs. Getting a second opinion from a trusted advisor and real estate expert can help avoid costly surprises.

Lesson 5: Meet clients where they are 

Finding the right wealth advisor goes beyond qualifications—it’s about connecting with someone who truly gets you. Advisors quickly learn that the key to truly supporting clients lies in meeting them where they are, listening closely, and responding in ways that resonate. Whether it’s breaking down complex ideas in an accessible way or providing steady reassurance during turbulent markets, these moments reflect the core of what advisors do.

Tailoring support to clients’ needs

For advisors like David, Carrie, Matt, Terry, and Bernadette, it’s all about recognizing what makes clients unique—their learning style, their emotional needs—and tailoring the approach accordingly. This personalized touch helps clients feel confident about their decisions and reassures them when times are tough.

As Bernadette explains, “An advisor’s role is to be a stabilizing force during uncertain times when fear and panic can disrupt rational decisions.” Markets aren’t always logical, but the combination of expert advice and human connection makes the advisor-client relationship truly impactful.

Terry adds, “Listening closely to my clients allows me to filter their goals through their unique needs. It allows me to thoughtfully respond and guide them toward their end goals. At the end of the day, it’s all about the relationships we’ve built.” 

From hindsight to insight

It’s natural to reflect on financial decisions and wonder what might have been. These moments of hindsight often uncover growth opportunities for both clients and advisors. Open communication and proactive guidance are essential to navigating challenges, whether it’s managing market downturns, adapting to life’s changes, or refining long-term goals.

Ultimately, wealth is about more than numbers—it’s about the peace of mind and opportunities it creates. With thoughtful planning and trusted advice, you can confidently build a brighter future while living well and leaving a meaningful legacy.

Source: CWB Wealth

Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of CWB Wealth or its affiliates. Investment decisions should be based on an individual's own goals, time horizon, and tolerance for risk. Nothing in this content should be considered to be legal or tax advice and you are encouraged to consult your own lawyer, accountant or other advisor before making any financial decision. Quoted yields should not be construed as an amount an investor would receive from the Fund and are subject to change. Investors should consult their financial advisor before making a decision as to whether mutual funds are a suitable investment for them. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.

Please read the prospectus, which contains detailed investment information, before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. CWB Wealth uses third parties to provide certain data used to produce this report. We believe the data to be accurate, however, cannot guarantee its accuracy. Visit cwbwealth.com/disclosures for our full disclaimer.