Optimizing Wealth Management Strategies for Business Owners

By Laura Fitzsimons

Dear Business Owners,

I hope this message finds you well. As we navigate the evolving landscape of tax regulations, it’s imperative to adapt our strategies for wealth creation and preservation, especially in light of recent changes by the Canada Revenue Agency (CRA). I understand that these adjustments, particularly in areas such as income sprinkling, capital gains stripping, and flow-through shares in the oil and gas sector, might present challenges for business owners.

In this context, I’d like to propose a comprehensive approach to lifecycle wealth planning. This strategy, refined through my 21 years of collaboration with CPAs and lawyers, is designed to seamlessly integrate insurance and investments within corporate structures. The goal is to achieve an efficient total personal and corporate tax rate – ideally between 15% to 20% for smaller businesses and 25% to 26.5% for larger ones.

Many business owners consider their enterprise as their most valuable investment, and rightly so. However, I also view it as a pivotal tax shelter and a foundation for corporate wealth accumulation. A critical aspect of this approach involves safeguarding the health and life of business owners, as they are instrumental in wealth creation for themselves, their businesses, and their families.

I suggest starting with term insurance for its cost-effectiveness and the opportunity it offers to lock in insurability. This can be a stepping stone to more comprehensive coverage, like a “corporate owned TFSA” (a permanent life insurance policy), at a later stage of success. Such policies can be invaluable in aligning with CPAs’ and lawyers’ tax strategies to minimize passive income tax during working years, retirement income taxation, and estate taxation.

I am keen to share with you a concise series of ideas to assist your business clients in thriving within the Canadian context. My belief is that, by collaborating, we can provide business owners the necessary protection and tax advantages, leveraging corporate rates of 12.2% to 26.2% in Ontario, to enhance their financial security across their lifetime.

I look forward to the opportunity to demonstrate how these strategies can be beneficial for both you and your clients. Your insight and feedback would be greatly appreciated as we strive to offer the most effective solutions in wealth management.

Warm regards,

Laura Fitzsimons