Financial services in Winkler

This city builds things people buy when they feel rich, and finance when rates are low. CWCC works with Winkler households, manufacturers and business owners on wealth creation, insurance and capital strategy. The firm is licensed to place insurance in Manitoba with the Insurance Council of Manitoba and matches you with an advisor licensed in the province. Every meeting is held online.

Where to start

Winkler puts about thirty per cent of its workforce into industry, a remarkable share for a Canadian city of its size, and what it makes is recreational vehicles, trailers, modular housing, farm equipment and handling gear for buyers who live somewhere else. Everything below follows from that. 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, in the order that suits an income with a peak and a trough in it.
• Capital strategy. Infinite Financial Sovereignty®, described below.
• Life insurance. Term, permanent and participating whole life, sized to what a household or a company would actually need.
• Living benefits. Critical illness, disability and long-term care, which matter most where the work is physical.
• 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. Shares, key person coverage, the Capital Dividend Account, and the plan that keeps a company running.

Overtime is not income. It is a good year

A plant that builds recreational vehicles or trailers runs hot when credit is cheap and buyers are confident, and cold when either changes. On the line that shows up as long weeks followed, eventually, by short ones. The pay is good and the average over a decade is genuinely good. The trouble is that households do not spend an average.

The single most useful discipline here is to build the household on the base rate and treat overtime as what it is. A mortgage payment, a truck payment and a premium set against a peak year are three fixed obligations sized to a number that will not be there in year six. The households we see in difficulty are almost never the ones who earned less. They are the ones who committed at the top.

Two protection questions follow, in this order. Disability coverage first, because the income depends on physical capacity in a way an office salary does not, and because the question is not whether you have it but what it says: own occupation or any occupation, how long the waiting period runs, and whether it stops at two years. Then life insurance, sized to what your family would need rather than to a multiple of salary chosen by an employer.

And a note on group coverage, which is generally good in these plants and is generally tied to the job. If the plant slows and the employment ends, the coverage usually ends with it, at exactly the point when replacing it privately is hardest to afford. Owning a modest amount yourself, outside the plan, is the cheapest insurance against that particular sequence.

The person the company cannot replace

Winkler’s manufacturers are mostly private companies, and in a private company of forty or two hundred people there is usually one person who carries something that is not written down anywhere: the dealer relationships, the engineering judgement, the bank’s confidence, or all three. Frequently that person is the owner. Sometimes it is not, which is worse, because nobody has thought about it.

Key person insurance is a company asset, not a family one. The corporation applies, the corporation owns the policy, the corporation pays the premium, and the corporation is the beneficiary. If the insured person dies, the money arrives in the company at the moment revenue is falling, a replacement is being recruited, and a lender is deciding whether to stay.

What it buys is time, and time is exactly what a manufacturer in that position lacks. It does not buy back the relationships, and it does not make anyone a substitute for the person who is gone. Anyone who tells you otherwise is selling harder than they are thinking.

Sizing it is a judgement rather than a formula. The usual starting points are the cost of recruiting and carrying a replacement, the gross profit at risk on orders that would not close, and any bank facility that would be reviewed. It is worth doing arithmetic on all three, with your accountant, before deciding on an amount. It is also worth checking whether the coverage should be paired with a disability version: for most private manufacturers, a key person who is alive but unable to work causes the same revenue problem with none of the resolution.

If your shop supplies the plants

Around every manufacturer sits a ring of machine shops, fabricators, coaters, electricians and carriers. Their order books are short and concentrated: three customers, sometimes two, occasionally one. That is efficient and it is fragile, and the fragility does not appear in a good year.

Concentration means two things at once. If a customer slows, the revenue drops and the receivable ages at the same time, so the shop is short of cash exactly when it is short of work. And if a customer is lost outright, the loss is not proportional; it is a step.

Then there is the signature. Most owners of a business this size have personally guaranteed the operating line, the equipment lease, or both. That is normal and often unavoidable. What it means is that a business debt is also a household debt, and that a death or a disability does not extinguish it. The estate inherits the guarantee along with everything else.

This is the least glamorous item on this page and the one we most often find unaddressed. It is also the easiest to fix: the guaranteed amount is a known number, it can be covered by a term policy owned personally, and the premium on it is usually smaller than the owner expects. Ask your lender for the current balance and the guarantee wording, and bring both to the first meeting.

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 life 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 in a cyclical town. A lender’s appetite for a manufacturer moves with the manufacturer’s sector, which means credit is easiest to obtain in the year it is least needed and hardest in the year it decides everything. Capital reachable on terms already written into a contract does not have a view about recreational vehicle sales. That is the entire argument, and it carries a condition: the contract has to have been started years before the trough, because it cannot be started during one.

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 are declared annually by the insurer’s board. 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.

The money sitting inside the corporation

A manufacturer that has had a run of good years usually holds a substantial pool of company investments, because taking the surplus out costs tax immediately and leaving it in does not. That pool changes what the shares are worth and what happens to them.

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 there is more than one shareholder, a buy-sell clause with no funding behind it is a promise that the survivor will find a very large sum in the year the company has just lost a principal. In a plant, that year is also the year the order book is being questioned.

One provincial note. Manitoba abolished its probate fee in 2020, so the fee-avoidance arguments that drive a great deal of planning elsewhere do not apply here. Probate still exists and still takes time. What remains is the honest reason to plan: liquidity on the day it is needed.

Who this fits, and who it does not

It fits a household that would rather size its commitments to the base rate than to the good year, an owner who has never worked out what losing one particular person would cost, a supplier carrying a personal guarantee, 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 or a company that cannot sustain the premium in a poor year, and in this town that year will come. 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. Useful things to have nearby: your benefits booklet, any policy you already own, and, if you own a business, the current balance on the operating line together with the guarantee you signed for it. That last document is the one people have never read. The firm has one office, in Laval, and no Manitoba client needs to go to it.

Frequently asked questions