By Stewart Lewis
(June 1 – 18:00 ET) – By the year, 2005, the average Canadian inheritance will be $700,000, says Kurt Rosentreter, senior vice president of wealth mangement at Berkshire Investments. But, even though the number of high net worth clients is expected to grow by more than 10% a year, financial advisors tend to treat tax planning like a pariah, he says. Rosentreter made the comments today in Toronto at the 16th annual conference of the Canadian Association of Financial Planners.
Last year Rosenterter conducted a study of seven of the most profitable mutual funds in Canada. While some showed significant performance, returns were significantly reduced after taxation on the contents of the funds was factored in, says Rosentreter. The best performing fund had a 31.3% return, but after tax that return dropped to 24.48%. Other funds did not fare as well.
One of the biggest implications for choosing a good fund is the extent to which investments inside the fund are turned over. The maximum rate of turnover is 20% says Rosentreter. Yet the average rate of turnover for Canadian equity funds is a whopping 80%.
Rosentreter urges advisors to look into turnover rates, but he laments that such information is not readily available from mutual funds or in the general media