Financial services in St. Albert

A large salary, full registered accounts, and nowhere obvious for the rest to go. CWCC works with St. Albert households, incorporated professionals and business owners on wealth creation, insurance and capital strategy. The firm is licensed to place insurance in Alberta with the Alberta Insurance Council and matches you with an advisor licensed in the province. Every meeting is held online.

Where to start

St. Albert is one of the higher earning communities in the province. The City’s own economic development office reports average income about 18 per cent above the rest of the Edmonton region and about 13 per cent above the rest of Alberta. Most financial advice is written for a household that has not yet used its registered room. This one is written for the household that has. Choose the situation that looks most like yours.

What you get

Seven areas, one team, and your accountant and lawyer in the conversation when the question belongs to them.

• Wealth creation. RRSP, TFSA, FHSA and RESP first, in that order, and the honest answer about what comes after them.
• Capital strategy. Infinite Financial Sovereignty®, described below.
• Life insurance. Term, permanent and participating whole life, sized to obligations rather than to a sales target.
• Living benefits. Critical illness, disability and long-term care, read against what your employer already provides.
• Investment options. Segregated funds and education across the full menu available to Canadians.
• Group benefits. For your company, and a proper read of the plan you already have.
• Succession planning. Corporate shares, the Capital Dividend Account, and what the estate will owe.

The year the room runs out

Registered accounts are the best deal available to a Canadian household and they are also finite. RRSP room accrues at 18 per cent of earned income up to an annual dollar limit. The TFSA adds a set amount each year. The FHSA has a lifetime cap and exists for a first home. A household that contributes the maximum to all of them every year is doing exactly the right thing, and it will still, at some point in its forties, notice that the contributions have stopped absorbing the savings.

That moment is not a problem. It is a milestone that nobody prepares you for, because almost every article ever written about personal finance is addressed to someone who has not reached it. The advice on offer past that point tends to be either silence or a product.

The order matters more than anything on this page, so it goes here rather than at the bottom. Registered accounts come first. Employer matching comes before everything, because a match is not a return at all: it is part of your pay, and you give it up by not claiming it. Protection sized to your actual obligations comes before accumulation of any kind. Nothing described further down this page displaces any of that, and any advisor who suggests it does should be shown the door.

Where the next dollar goes, and what it costs to leave it alone

Once the room is full, additional savings land in a non-registered account, and non-registered money is taxed while it grows rather than only when it is used. Interest is taxed annually at your full marginal rate. Eligible Canadian dividends carry their own treatment. Capital gains are taxed when they are realized, which is the one piece of good news in the paragraph.

For a household at a high marginal rate, the drag on the interest-bearing part of the portfolio is the largest cost in the whole plan and the least visible, because it never appears as a fee. It appears as a smaller number on a tax return, and nobody attributes it correctly.

This is the point at which participating whole life belongs in an honest conversation, and it is a narrow point. Growth inside a life insurance policy that meets the exempt test under the Income Tax Act accumulates without annual taxation while the policy remains exempt, and the death benefit is generally received free of tax by the named beneficiary. Those are real features and they are the reason the contract is discussed here at all.

Now the parts that are usually left out. This is insurance, not an investment, and its primary purpose is the death benefit. The early years are the expensive ones and a policy surrendered early is a poor outcome by design. Dividends are never guaranteed. Under section 148 of the Income Tax Act a policy loan is a disposition and a taxable gain can arise where the proceeds exceed the adjusted cost basis. And none of it makes sense for a household that has not yet done the ordinary things in the ordinary order.

A high income and a high property value, in the same province

A St. Albert balance sheet usually has two large entries: the house and the registered accounts. The house is generally the larger one, and it is not liquidity. A paid-off home produces no income, cannot be partly sold, and takes months to convert into cash on terms you would accept.

The second observation is less comfortable. A household here typically earns its income in Alberta, owns its largest asset in Alberta, and holds its employment in an economy whose fortunes move together. That is a concentration, and it is a household concentration rather than a portfolio one, which means no amount of rebalancing inside an investment account addresses it.

What does address it is dull and effective: protection that pays regardless of what the local economy is doing, a cash reserve that is genuinely reachable, and capital held somewhere that does not depend on selling the house or keeping the job. That is a shorter list than most people expect and a harder one to actually complete.

The strategy

In almost any financing arrangement, someone supplies the capital and someone else owns the structure it moves through. Most people occupy neither role. Infinite Financial Sovereignty® is about changing which side of that you are on.

It draws on the educational approach known as The Infinite Banking Concept®, set out by R. Nelson Nash in his book Becoming Your Own Banker®. CWCC is not affiliated with, sponsored by or endorsed by Infinite Banking Concepts, LLC.

In practice: capital accumulates inside a participating whole life contract issued by a Canadian mutual insurer, on a tax-deferred basis, and you reach it through a policy loan from the insurer rather than by applying to an outside lender.

Why it reads differently for a household with full registered room. Most people asking about this strategy are trying to solve a shortage of capital. A St. Albert household with a large salary usually is not. What it lacks is a place for surplus that is not taxed every year on the way through, and a way to reach that surplus later without liquidating something at whatever price is available that week. The reason for owning the contract is therefore different from the business owner’s reason, and the conversation should say so rather than reuse the same pitch.

Three points, without exception. A policy loan is a real loan, it accrues interest, and it reduces the death benefit while it remains outstanding. Dividends are never guaranteed. And this is insurance rather than a deposit account: protection comes from Assuris, within its published limits.

The full mechanics, including an entire chapter on where the strategy does not fit, are set out in Infinite Financial Sovereignty®, Simplified.

For the incorporated professional

A significant number of St. Albert households are professional practices: medicine, dentistry, law, engineering and consulting, many of them serving the Edmonton region rather than the city they live in.

The pattern in an incorporated practice repeats wherever it is found. The corporation earns more than the lifestyle requires, the surplus stays inside because taking it out costs tax immediately, and it accumulates in company-held investments. That is a sensible response to the tax system and it produces a corporation that is gradually becoming an investment holding company nobody planned to build.

The Capital Dividend Account enters here. Where a corporation owns and is beneficiary of a policy, the death benefit generally credits the CDA by the excess of the proceeds over the adjusted cost basis, and that balance can be paid to shareholders as a capital dividend, generally free of tax subject to the rules in force. It depends entirely on how the policy is owned, and a policy held by the wrong entity can create a taxable shareholder benefit rather than the intended effect. It requires your accountant, your lawyer and us.

Where a practice has more than one shareholder, a buy-sell clause with no funding behind it is a promise that the surviving shareholder will find several hundred thousand dollars in the year the practice has just lost a principal.

Who this fits, and who it does not

It fits a household that has filled its registered room and wants a straight answer about what comes next, an incorporated professional with retained earnings, or a family that wants protection sized properly before anything else.

It does not fit someone looking for a short-term investment. A participating whole life contract is a long-horizon instrument and the early years are the expensive ones. It does not fit a household that has not yet maximized what the registered accounts will absorb, because that household has a better option available and should use it first. And it does not fit anyone hoping to be told that a strategy will outperform a market, because that is not a claim this firm makes.

The first meeting

Thirty minutes, online, no cost and no obligation. Bring your most recent notice of assessment, which shows your remaining RRSP room on its face, and a rough figure for what the household saves in a year beyond the registered accounts. Those two numbers decide whether the rest of this page is relevant to you, and they decide it quickly.

Frequently asked questions