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Wealth Professional | 23 Jun 2015, 09:15 AM Agree 0
If one B.C. advisor had her way, the TFSA would get a name change – thereby solving one of the biggest problems facing this generally misunderstood retirement product.
  • Stephen Duquette | 23 Jun 2015, 09:51 AM Agree 0
    Well said by the other advisors! I have spent an inordinate amount of time explaining to clients and prospective clients that the TFSA is available to them and not only through a bank, but more importantly, that the various options for investment choices are no different than the investments that they have in their RRSP"s, non-registered investment accounts, RESP's etc. I would agree that a name change would help in dispelling some of this confusion and potentially misleading information about this type of account structure.
  • Michael Clarke, CFP | 23 Jun 2015, 09:55 AM Agree 0
    I agree that the name TFSA is misleading and doing a disservice to Canadians. I've been in this business since they were created, and I'm amazed that I still see countless people (typically dealing with a bank branch or PC financial or Tangerine) who do not understand these accounts and treat them like a savings/chequing account - moving money in and out on a frequent basis and basically having it parked in cash within it. If used correctly, its essentially our only tax sheltered investment vehicle, whereby over time, people can have socked away a large nest egg to be used in retirement - TAX FREE! I'm for calling it a Tax free Investment account, or something of that nature. Let's start a "TFIA" campaign.
  • douglas swanson | 23 Jun 2015, 10:46 AM Agree 0
    The banks have a great big edge in marketing this product due to the name. Again the majority of Canadians are so slow building up to accumulating wealth for future lifestyle. The banks are the first in line. We need a change to get the idea of accumulating capital into the average persons thinking, not saving.
  • Greg | 23 Jun 2015, 11:18 AM Agree 0
    Yes, another account for the banks to give out 1% or less, while lending that client money out at maybe 19% on a credit card. And all the while the public thinks it's great that they saved tax on $100 per annum (1% on $10,000). 90% of these accounts seem to be for the big banks to increase their deposit base, therefore allowing them to lend out more at high interest rates. Very few people seem to realize that they can actually "invest" the TFSA dollars, and potentially receive a "real" tax savings on gains in their accounts.
  • Tim Affolter | 23 Jun 2015, 11:36 AM Agree 0
    Completely agree. I always tell clients, "This is the last money you will spend on this earth. It is the best asset you can leave in your estate, because it can go to your kids tax-free. If it's the longest-term money, then it should be the most aggressive assets, so forget about using it for short-term savings. Pay the tax on the 1% you're getting at the bank, and save the tax on the 7% we are shooting for on your equities." That's tax-optimized product allocation in action.
  • Mark | 23 Jun 2015, 11:37 AM Agree 0
    Agree 100% and I have been saying this for years. Great legacy of Harper & Conservatives but they dropped the ball with naming it.
  • Niki | 23 Jun 2015, 11:51 AM Agree 0
    Yes--I concur. People say TFSAs are not worth it because same as with RRSPs, they confuse the account with the assets they have become accustomed too.

    BTW, anyone have any experience with the issues surrounding US persons and US citizens in regards to TFSAs? The lack of clarity in information available is astounding!
  • Gerald Kaz | 24 Jun 2015, 02:06 PM Agree 0
    Yes please change the name.

    Albert Einstein said - Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” So one of the most powerful things is compounding and now Canadians can compound in a tax free investment account. For many younger folks even better than a rrsp (look at the growth over 30- 40 yrs and decide if you would later rather pull from a taxable rrif or a tfia). Have retired clients think of three buckets 1). short tern needs (bank account ... loc) 2). near term (rrsp....) and you will often find the long term money will best in 3). tfia.

    I have been in the business over 20 years and actually see very few "emergencies". Most of the time a monthly savings or investment plan can solve them...but again long term investing best in a tfia.

    Oh ya and tell me banks don't have a conflict of interest leaving clients $ in a no interest account to lend it out a huge spread!

    Gerald Kaz
  • Gordon | 24 Jun 2015, 05:58 PM Agree 0
    Firstly the name change is a red herring. RRSP, RESP, RDSP all have savings in their description and no one is asking for a change to RRIP.
    The failure of many Advisors in 2009 and the early years of the TFSA to set up and advise on these accounts is/was the biggest problem.
    Working in both the independent and banking channels over the years I saw many people come into bank branches to open TFSAs because it "wasn't worth it" for the client's Advisor to open these accounts for $5000.
    Well when you allow your client to work with another entity you run the risk of losing that client.
  • Bob White,CLU | 25 Jun 2015, 12:49 PM Agree 0
    I agree with Sarah.

    I have said since the beginning, and tell my clients it is a tax free investment account, because you and invest in all the same things as you can with an RRSP.

    When it was first launched, it was promoted by banks and Credit Unions in a big way

    Could there be a little collaboration with lenders and Government? Just asking?

    A need for liquidity in the lending business, and at the same time reduce T5 reporting and the cost of that for both banking industry and government.

    Bottom line, it was a cash grab of the seniors funds at very low rates, vs an opportunity to do some planning with consumers and save some real tax dollars.

    Bob White, CLU

  • Niki | 25 Jun 2015, 04:29 PM Agree 0
    Gordon--not really a red herring as none of them say "account" they say "plan" You do raise a good point--maybe better as a TFSP, a Tax Free Savings Plan? Would be far more consistent with all the other registered accounts. Or perhaps a TFIP? A Tax Free Investment Plan?
  • Kathy | 02 Jul 2015, 02:51 PM Agree 0
    Love the TFIA, TFSA and TFIA are both boring, but more importantly, the TFIA at lease says exactly what it is. This should be proposed to Ottawa.
  • Colin Marks | 03 Jul 2015, 08:03 PM Agree 0
    I agree the name needs to be changed but I see little chance of this happening.
    Its too much of a safe cash cow for the banks.As much as this is a generlisation, I would be shocked if Banks will agree/want a name change that will potentially take business from them.
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