Frequently Asked Questions
General FAQ
-
Financial advisors are licensed individuals who have extensive knowledge of the industry and the markets, and bring expertise to make informed decisions for any circumstance. In our case this means we manage our clients’ savings, and invest them into a portfolio of mutual funds.
In this day and age, many people are comfortable managing their own investments. The question is, how well does it perform?
Having a financial advisor gives you peace of mind knowing there is a professional managing your portfolio, doing the work behind the scenes so you don’t have to, and we are always a call or email away from any questions you may have.
-
When banks offer their own investments and insurance, this may create a conflict of interest as recommendations may favour their own products over their competitors. This may be a conflict as the client may receive biased advice or product recommendations.
Herner Financial Services does not have any obligation, or incentive to offer one particular product over another. The investment and insurance recommendations we provide are solely based on client needs, preferences, and our professional opinions to provide what is in the best interest of the client.
-
Yes. We operate solely in Ontario, and are regulated by several organizations.
This includes our sponsoring firm Portfolio Strategies Corporation (PSC), the Canadian Investment Regulatory Organization (CIRO), and the Ontario Securities Commission (OSC).
Advisors are regulated for the benefit of the public. Having regulations from several organizations ensures you can trust the advisor is acting in accordance with those rules, and serving the clients’ best interest at all times.
Have your own questions?
Investment FAQ
-
There are several reasons you may want to invest your money. The ultimate goal is to grow your savings, but the reason behind it may differ, which may also change the type of investments appropriate for your situation.
Growth - Investing can be a great way to have your money working for you, to generate growth for educational expenses, large purchases (ie. a house), or retirement.
Income - Investing your money can be a great way of generating a monthly or annual income. By investing a large amount, you can prolong your retirement by living off the interest, and keeping the initial amount invested to continuously generate returns.
Inflation - By having your money invested, you can protect your savings from diminishing in value as a result of inflation. If you were to never invest, a thousand dollars today might be worth considerably less in 20+ years, therefore it’s important to keep your money ahead of inflation by keeping it invested.
-
We primarily deal with Mutual Funds, however we also offer ETFs, GICs, and Segregated Funds.
We find that Mutual Funds are the best way for us to generate above-market average returns, while remaining diversified and mitigating risk.
-
Mutual Funds act as a collection of investments designed to be diversified in nature, in order to reduce risk. A mutual fund can hold several company stocks, bonds, and even commodities in one.
When you invest into a mutual fund, you purchase shares (or units) of a fund, and your money get pooled with other investors investing into the same fund. When it comes time to withdraw, you exchange your shares for the market price of the fund.
-
An ETF is an Exchange Traded Fund. Similarly to mutual funds, ETFs contain several investments in one, which helps reduce risk by being diversified in nature.
The key difference between an ETF and a mutual fund, is that individuals are able to trade ETFs themselves on an exchange, hence the name.
There are both benefits, and downsides to ETFs depending on your situation. It’s best to consult with us if you are interested in purchasing ETFs as an investment.
-
A TFSA, or Tax-Free Savings Account, is an investment account that allows individuals to save and invest money while earning tax-free returns.
Contributions to a TFSA are not tax-deductible, and any investment growth, dividends, or capital gains earned within the account are not subject to tax. Additionally, withdrawals from a TFSA, including both the original contributions and the investment earnings, are also tax-free.
TFSAs have contribution limits set by the government, and unused contribution room can be carried forward to future years. The account can hold various types of investments, such as cash, stocks, bonds, and mutual funds, providing individuals with a flexible savings and investment option.
-
An RRSP, or Registered Retirement Savings Plan, is a retirement savings account that allows individuals to contribute pre-tax dollars towards their retirement savings.
Contributions made to an RRSP are tax-deductible, meaning they can reduce the individual's taxable income for the year. The investments within an RRSP can grow on a tax-deferred basis until withdrawal.
Upon retirement, the funds can be withdrawn, and they are taxed as income at that time, usually at a lower tax rate since retirees typically have lower income. RRSPs have contribution limits set by the government, and any unused contribution room can be carried forward to future years.
The account can hold various types of investments, such as stocks, bonds, mutual funds, and other qualified investments, providing individuals with a means to build their retirement savings.
-
An RESP, or Registered Education Savings Plan, is an investment account specifically designed to help individuals save for a child's post-secondary education.
It allows parents, guardians, or other contributors to contribute money into the account on a tax-deferred basis. The contributions are not tax-deductible, but the investment income earned within the RESP grows tax-free.
Additionally, the government provides grants, such as the Canada Education Savings Grant (CESG), which matches a portion of the contributions made to the RESP. When the beneficiary (the child named in the RESP) enrolls in post-secondary education, the accumulated funds can be withdrawn to cover educational expenses. At that time, the withdrawals are taxed in the hands of the beneficiary, typically resulting in lower tax liability due to the student's lower income.
RESP accounts have annual and lifetime contribution limits, and specific rules govern eligibility, grant entitlements, and withdrawals.
Have your own questions?
Insurance FAQ
-
Life insurance is a contract between an individual and an insurance company. In exchange for regular payments, the insurance company provides a death benefit payout to the policy's beneficiaries upon the insured person's death.
In addition to life insurance, there is also Disability insurance, which protects you against lost income and expenses in the event of a serious inury, and Critical Illness insurance which protects you against lost income and expenses in the event of a serious illness.
-
The purpose of insurance is to protect you, or your family in the event of death or injury, from financial stress and expenses. This isn’t to make a profit, but rather to replace lost income.
Life Insurance - When your family relies on your income, either partially or entirely, your death may place them in a position of no longer having the income necessary to continue living their quality of life. This may come at the expense of having to sell assets, such as cars and houses, to make up for lost income, and pay off any existing debts (loans, mortgage) as well as covering for funeral and estate expenses.
Disability - When you get into a serious injury, you may no longer be able to work for several months. Having adequate disability insurance can replace your lost income while you are in recovery, which can help sustain and support your family’s quality of life, and help cover medical expenses.
Critical Illness - In the event you get seriously ill, you may be unable to continue working and providing income towards your family. Having critical illness coverage ensures you will receive income towards your family, in order to support their standard of living, as well as covering any related medical expenses.
-
There are a few types of life insurance which serve their own purpose. The type of insurance you may want will depend on your health, financial situation, family, and lifelong goals.
Term Insurance - This type of life insurance is typically the most affordable. This insurance specifies a set period of time (term) where the individual will be covered. Upon the terms expiration, the insured may have the option to rollover to another policy, or let it expire. This policy may be good for individuals wanting to remain insured only for a specific period of time (for example, 20 year term for the duration of raising a child into adulthood, and then no longer needing insurance once they are an independent adult).
Whole Life - This type of insurance lasts the entire life of the insured. A benefit of this type of insurance is the cash value component, which takes a portion of your regular payments, and sets it aside as cash, which accumulates over time. This gives the option to access this cash as needed, however this may reduce the ending payout upon death.
Universal Life - This type of insurance lasts the entire life of the insured. Unlike whole life insurance, universal insurance allows you to change your monthly premiums, and policy coverage. This type of insurance also allows for a cash value to accumulate on the side, however unlike whole life, you can choose where to invest this money.
This is only a general overview of insurance types, for specific details, it is recommended you contact us and book an appointment for your specific insurance needs and concerns.
-
Compared to banks and industry insurance providers, we have no insurance products of our own, and therefore have no bias or incentive to recommend one product over another.
We recommend what we think is appropriate for each unique individual. This would vary based on age, financial situation, family situation, and lifelong goals.
The carriers we work with vary on a case-by-case basis, if you would like more information, please contact us.
Have your own questions?