mother-child

In the first 10 minutes of a meeting, your client says:

“Here is a photo of Aidan’s first birthday. Now that my mat leave is over, Sheryl will be the one to stay at home. We think we can make it work but she’ll have to freelance.”

At that moment

  • Congratulate your clients and ask how their son is doing.
  • Ask whether they’ve registered for government benefits; offer to send them information on federal and provincial ones they may be eligible for.
  • Ask the moms how the reduced income from maternity leave has impacted them.
  • Ask if the couple knows how they’ll restructure their finances as they transition into different roles at work and at home.

Later in the meeting

    • When you review your clients’ portfolio, explain how RESPs could fit into their plan and suggest investments that balance growth over the next 17 years with capital preservation.
  • Explain that, until the freelance business takes off, they will have to rely on a single income and may have to tap into their savings. Offer to model that scenario.
  • Find out if the freelancing partner has a business plan, and offer to send her information she’ll need to be succesful. Issues to consider include the following:
  • Will she incorporate or work as a sole proprietor?
  • What kind of insurance does she need to be able to work from home? She may want to consider errors and omissions insurance to protect herself from costly mistakes, for example.
  • What is her timeline to turn a profit? Are her goals realistic based on market conditions, a different work schedule and the demands of a toddler?
  • How will they adjust their long-term investment goals?

At your next meeting

  • Share the results of your modelling.
  • Follow up on your clients’ progress:
  • How are they adjusting to their changed lives?
  • Is the freelancing plan moving according to schedule?
  • Have they decided to open an RESP for their son?
  • Continue to adjust their financial plan as the new business matures.

These links may help clients thinking about or expecting their first child:

Get finances in order for parental leave
advisor.ca/parentalleave

Should a self-employed parent-to-be pay into EI?
advisor.ca/EI

Is being a single-income household financially feasible?
advisor.ca/singleincome

RESP advice inspired by The Mindy Project
advisor.ca/mindy

by Gil Martinez, art director of Advisor Group

Originally published in Advisor's Edge

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