Partnering like a pro: Advisors and accountants, part two

For the most part, Janine Guenther’s contact with accountants is minimal. About once or twice a year, she’ll call one to ensure she’s devised an efficient tax-loss harvesting strategy to minimize a client’s overall tax liability.   

But with David Heidt, she’s formed a true working partnership that involves considering taxes throughout the entire financial planning process. And the advisor-accountant duo will tackle more complex tax questions, whether it be a cross-border client, convoluted family tax structure or entrepreneur who just sold their business. Neither collects nor pays referral fees. 

“The ultimate perk, from my perspective, is that I can make sure that the investment and planning work that I do for clients is done in the most tax-efficient, tax-smart way,” said Guenther, portfolio manager and senior family wealth advisor with Bellwether Investment Management in Vancouver.  

For Heidt, chartered professional accountant and principal with DJ Heidt CPA Inc., which operates under Heidt Financial Corp. in Vancouver, there are benefits to this years-long collaboration too.  

“Any time there’s an issue with clients, Janine and I connect,” he said.  

“We’ll come up with a plan, a solution together, and it’s the best advice for our client — something that I could not provide on my own. It just works seamlessly.” 

Here are two case studies where the pair worked together.  

Case study #1: Helping a young entrepreneur  

The first time Guenther referred a client to Heidt was about eight years ago. She had just onboarded a young entrepreneur, who had sold a technology company to a U.S. public company for a large sum of money.  

As Guenther recalled, the client had lived “very frugally” up until that point — they had “no RRSP, no TFSA, no suit, no nothing.” She walked the client through investments, accounting, legal and insurance.  

She also looked at how the client was compensated for their business — whether in the form of employment income, dividends, shares or cash — and how much of that wealth could be sheltered in the first year from taxes. 

Then, she told the client, “Here are the things that you need to have in place and the tax planning that you need to do. I can’t do it, so I want you to work with somebody who understands technology companies, understands what needs to happen for you, for today, for this year, for this transaction and out into the future.”  

Enter Heidt.  

“I was not involved in that sale [of the tech company], but post-sale, there was a host of tax planning and cash flow needs,” he said.  

Guenther advised the client on how to invest the money they made from the sale of their business, while Heidt worked to ensure the client’s tax liabilities associated with these investments and their overall financial plan were at a minimum.  

Also, since the two started working with the client, the client purchased real estate in Vancouver. Heidt has been “instrumental in helping them have the most advantageous principal residence and doing the math on purchases and sales of properties that they have owned, to make sure that they’re totally on side and that [the client] understands what needs to be done when they sell it as a property,” Guenther said.  

In a recent meeting with the young entrepreneur, who grew up in an “extremely debt averse” family, Guenther said the client expressed wanting to pay off all their debt and switch their principal residence. 

She explained to the client that instead of taking out a conventional, non-tax-deductible mortgage for their new home, they could use their non-registered investment portfolio as collateral and borrow against it through a margin loan, using that borrowed money to keep their investments intact.  

“Helping people make that mind shift and having a professional like David show them the math and how that’s going to benefit them over the long term, it is extremely useful,” Guenther said. 

Heidt also offers ongoing tax support and compliance to Guenther in terms of preparing the client’s corporate tax and personal tax returns. 

Case study #2: A complex intergenerational wealth transfer 

The two are also working with a woman who’s been managing her family’s finances after her spouse died.  

As Guenther explained, this client is concerned about transitioning wealth to her three children. She’s “really worried that the money is not going to last, … to keep those kids in good stead.”  

For that reason, Guenther and Heidt are working to set up the structures that will give the client peace of mind that her kids will “be taken care of and they’re not going to [be irresponsible] with the wealth that they’re going to receive.”  

But the finances are complicated.  

“There’s an operating company, hold co, shareholder loans, and we need to make sure that we have the right cash flow to keep the companies going and their obligations met in a way that’s as tax efficient as possible for this [client] and their family,” Guenther said. 

The two worked on an estate freeze for the client and her children, which Heidt said was “super complicated” and they brought in advisors from two other companies — one that did the work on the legal side of the estate freeze and another that worked on the client’s will.   

Throughout the planning process, Guenther met with the client’s children and siblings who co-own a real estate company with her. 

One aspect that was especially difficult for the client was the fact that her previous accountant, whom she worked with before Guenther and Heidt entered the picture, “had not been doing [tax] filings correctly, so it took quite a bit of work to fix,” Guenther said. Also, some of the tax benefits that were available to her couldn’t be realized because it was too late in the tax filing process.  

“That was very emotional for this client to hear that news from David,” Guenther recalled, which left the client second guessing whether Heidt was guiding her in the right direction. 

Guenther and Heidt had multiple conversations after that, which gave Guenther an understanding of what went wrong. She reassured her that Heidt was going to help her realize tax benefits going forward. 

All the while, Guenther has been reviewing the client’s portfolio and other aspects of her financial plan: “While they do have a RRIF that pays out most of their public securities portfolio, it needs to be dividend and capital gains oriented, because we need to be tax smart.” 

Having a competent accountant by her side has made the financial planning process a lot smoother, Guenther said, adding that she encourages other advisors to collaborate with partners too, “to be able to ensure that you’re at the top of your game on the tax policies and procedures so that you can help your clients.” 

For his part, Heidt said he would’ve worked alongside a financial advisor to serve clients sooner, had he known the perks that would come with such a partnership.  

“I would have done this years ago,” Heidt said. “We both act as a team, providing the best service.”