What RRSP rush?

Conventional wisdom suggests that RRSP season is the busiest time of year for the financial services industry. This year though, more and more advisors say the weeks leading up to the March 1 deadline was hardly a time of stress or concern.

In fact, RRSP season sounds like a relatively relaxed affair for planners with fee and transaction based practices alike this year. Although looking back, most are usually able to point to different trends emerging in the industry &#151 clients are saving more or less, spending on housing, preferring certain types of funds — this year, interestingly enough, no general themes seem willing to present themselves.

Preliminary IFIC sales numbers for February suggest that net new sales rose slightly in January and February, compared to the same time last year. In January, foreign equity sales rose, following 21 straight months of net redemptions, but by and large, the most popular categories continued to be balanced funds, dividend and income funds and income bond funds.

Ryan Beebe, partner at Caplan Beebe & Associates, says people are still preferring to stick close to home with their investments, particularly in Alberta where clients see their neighbours reaping the benefits of that province’s oil industry boom. At the same time though, he says many are starting to come around to the idea that the rally in Canadian stocks can’t last forever.

“If you’re not in oil and gas or financials right now, your Canadian returns are probably mediocre compared to others,” he says. “People are still sticking close to home and ignoring the international funds, but they’re starting to come back to reality.”

He says the majority of his RRSP business comes in from his clients systematically and as a matter of course throughout the year, rather than in a mad rush in February.

And the sentiment is being echoed by other advisors more frequently with each passing year — more planners are developing established practices and training their clients to make contributions as a matter of course throughout the year, rather than waiting until the very last minute.

“Personally I didn’t work one evening or one weekend,” says Beebe. “It took a few years to get people into that position, but it’s just a matter of training your clients. I think many advisors are starting to get into that position and leaving the mad rush of people who want to take their $724.64 and put it into an RRSP on the last day to the banks.”

Warren Baldwin of T.E. Financial Consultants agrees.

“Most of the people I deal with — virtually all of the people I deal with — are in a position where the RRSP contribution is done as a matter of course,” he says. “If it’s something that should be done, it’s just done. There’s no waffling around about it.”

Cynthia Kett, a fee based planner and partner at Stewart & Kett Financial Advisors, points out that her firm doesn’t sell product at all. In this case clients usually only call to confirm how much contribution room available.

One trend that is becoming more apparent however, is the effect of employers moving away from registered pension plans to adopt group RRSPs for clients.

“We are finding some of our clients were having difficulties from time to time, where they participate in group RRSPs and the company is putting in money to match what the employee puts in,” says Kett. “Sometimes clients find themselves in situations where they over-contribute. Most of our clients get in ahead of the game, so this time of year is usually pretty light for us.”

Filed by Kate McCaffery, Advisor.ca, Kate.McCaffery@advisor.rogers.com