“The TFSA is going to be the biggest problem because you can pull your money out with no penalty to shore up their real estate,” says MacBeth, “and even people will cash in their RRSPs in order to shore up their real estate which is absolutely the wrong thing to do. They should do the exact opposite.”
“This is the nightmare scenario for [advisors]. If you’ve [the client] got extra real estate, sell it now, while it’s still good because I don’t want you coming to me in two years saying you’ve got to cash in your RRSPs and TFSAs.”
Skeptics might say MacBeth wrote his book out of self-interest which is a fair argument until you consider that he manages $220 million in assets for almost 200 high-net-worth households and has seen numerous corrections both in real estate and equities in almost four decades as an advisor.
He’s genuinely worried that clients, including his own, could face serious consequences should they try to ride out a significant correction while holding on to excess real estate.
I’m sure there are lots of real estate professionals in Toronto who are scoffing athis predictions and while they might not come to fruition, advisors are wise to at least have a plan B.
For your clients… and for yourselves.