A 12-month approach to RRSP season

Advisor explains why she plans for RRSP season year round, how she uses RRSPs in her content marketing, and the work she does during RRSP season itself

A 12-month approach to RRSP season

Laurel Marie Hickey thinks the industry does a pretty great job of talking about RRSPs at this time of year. These registered accounts have been around since 1957 and sit firmly at the core of most Canadians’ consciousness when it comes to their own retirement planning. Advisors know how to use them, too, both as a tax deferral tool and as a marketing tool during January and February in the so-called “RRSP season.”

Hickey is a Wealth Advisor & Portfolio Manager at iii Global Wealth of National Bank Financial in Calgary and she works to set herself apart during the other ten months of the year. Her approach to RRSPs with most clients is to develop a plan based on consistent commitments that suit their own tax needs. As an advisor with her own content marketing channels, too, Hickey uses her platform to talk about RRSPs and market her RRSP approach year-round. She explains that by approaching RRSP plans outside of RRSP season, she can use the first two months of the year to focus on clients with acute needs and more challenging circumstances.

“This time of year is for the special situations. In January and February we really focus on clients who are not making contributions throughout the year,” Hickey says. “Clients with a very smooth income can make a pre-authorized contribution (PAC) plan and make contributions at very similar rates all year. But we find there are a lot of special situations at this time of year.”

Those special situations, Hickey says, include clients with less consistent monthly income, those who maybe receive more in bonuses or other forms of less regular compensation. Those could also include clients who qualify for matching plans with their employers, who need to wait until January 1st to confirm what will be matched. They also include clients who are coming closer to retirement, and maybe still have carry forward room to fill.

That doesn’t mean that in January in February Hickey’s clients don’t hear from her about their RRSPs. She begins the calendar year with a newsletter that covers RRSPs, this year’s deadlines, and a video explainer. That newsletter invites questions and input too.

Hickey notes that many clients who have a PAC plan but also have leftover contribution room get a bit of FOMO at this time of year. They see the prospect of some tax savings and start to wonder if their own retirement plans are on course. Hickey can talk them through the calculations and tax considerations that inform their monthly RRSP contributions. Those conversations, though, can result in a change in the PAC plan and higher contributions, if the tax and saving decision is right for the client.

While many clients see RRSPs as the be all and end all of their retirement plan, Hickey stresses that these are primarily a tax tool within a wider set of planning decisions. She highlights the tax implications of various RRSP decisions for clients once they enter retirement, including the risk of old age security clawbacks. She emphasizes that TFSAs can also play a crucial role in the wider retirement plan, especially if the accounts were opened at an earlier point in an investor’s life. If they have room in their TFSAs, Hickey encourages her clients to fill that too to access additional tax free compounding.

Beyond her interactions with clients about RRSPs, Hickey produces content in the form of YouTube videos covering RRSP questions and strategies. She discusses the account in the context of wider retirement planning and positions herself as a holistic planner. By creating that content and positioning it to capture interest throughout the year, she can market herself and her knowledge of RRSPs during periods when the largest voices in the industry aren’t talking about these accounts. She drives home the importance and advantages of regular RRSP contributions outside of just RRSP season, highlighting that spreading out contributions throughout the year can open up greater investment opportunities rather than making investments at a single point in the year, when the market may be at a peak.

As advisors work with their own clients during RRSP season and beyond, Hickey emphasizes the importance of understanding their circumstances and making them feel known and understood.

“Clients will always have a little bit of FOMO, so if you can address their questions right away your clients will know that their advisor has their back,” Hickey says. “They’ll know why they’re making a contribution or why they’re not making a contribution. They’ll know they have a team at their back who knows exactly where they are at in their unique situation.”