Investments
02 Aug 2019

Beyond Basic

Sandstone’s Top-Five Features for a Holistic Financial Plan

We create, monitor, and update comprehensive plans that encompass all aspects of a family’s wealth.

Holistic Wealth Planning is a pivotal part of Sandstone’s wealth-management services. We create, monitor and update comprehensive plans that encompass all aspects of a family’s wealth. Managing family assets and maintaining the spirit that created the wealth takes strategic planning and active management.

We view the creation of a holistic wealth plan as a collaboration between the client family, Sandstone, and other essential professionals. This coordination of your entire network of subject experts aligns all parties and utilizes everyone’s ‘expert skills.’ We collaborate on and analyze every requisite piece (insurance, wills, trusts, corporations, etc.) that typically comprises a fulsome wealth plan, intertwining Sandstone’s core planning strengths and strategies in a manner supporting individual clients’ situations.

Five Important areas of holistic wealth plans

1.      Financial Planning - Family, Retirement & Estate

The best plans are straightforward and take a collaborative approach. Our discovery meetings are a core component of a holistic wealth management and family-planning process. They are great opportunities for client family members (sometimes including different generations) to express their values and concerns, creating discussion and transparency. This also provides the opportunity to raise financial acumen for younger generations. It’s through the implementation of this initial discovery process that we’re able to provide:

  • Education planning (RESP contributions and grants)
  • Retirement cash-flow planning
  • Estate, gifting, and wealth-transfer strategies
  • Legacy and philanthropy planning (trusts and foundations)

2.      Tax Minimization

An easy way to maximize family wealth is to minimize taxes incurred. Understanding and utilizing simple and/or complex tax strategies is important in maximizing wealth. Tax minimization strategies can include but are not limited to: 

  • Maximizing registered contributions (including Spousal and TFSA)
  • Enacting estate freezes and butterfly clauses
  • Utilizing income-splitting strategies (i.e. pension and spousal loans)
  • Advising on gifting and donation strategies (i.e. in-kind)

3.      Cash-flow management

At Sandstone, we believe cash flow is key to proper wealth planning. "A portfolio with the ability to generate cash flow that matches or exceeds spending requirements (i.e. lifestyle, disbursement) adds a layer of stability," says Sandstone CEO & Chief Investment Strategist Sharon Watkins.

"Knowing that your bills are paid without dipping into capital. This helps clients look past short-term market fluctuations and stay focused on their long-term goals."

If you require foreign currency for lifestyle expenses, we can reduce currency risk by employing a ‘matching strategy’ of lining up cash flow and expenses in desired currencies.

4.      Stress testing

Unplanned and extraordinary expenses can happen to anyone, at any time. These expenses can be as simple as a vehicle replacement, or can involve major illness requiring expensive long-term-care, or medical treatment abroad. It’s our practice to run scenarios to stress test the ‘worst-case’ of these expenses—effectively, withdrawing a large lump sum, both now and in the future—to determine potential asset- and cash-flow impacts. We feel gauging clients’ real-life financial situations against these ‘what-if’ scenarios are one of the most important aspects of holistic wealth planning.

5.      Investment Allocation

It’s a given that risk management and investment oversight are paramount components of any sound wealth plan. Thereby, it follows we take a well-diversified and dynamic approach to clients’ investment allocation. We diversify geographically so all assets and cash flows are not tied to the same area (i.e. Canada), as well as by sector, to smooth out market peaks and valleys that naturally render asset classes in and out of favour, accordingly.

The ‘dynamic’ factor exists in the fact a portfolio’s investment allocation (fixed income and equity) are altered at different stages of life, while still matching up goals and expectations as outlined in the Investment Policy Statement (IPS).

A portfolio with the ability to generate cash flow that matches or exceeds spending requirements adds a layer of stability, knowing that your bills are paid without dipping into capital.

Sharon Watkins, CEO & Chief Investment Strategist