The Case

Mr$.$ Bob Smith Age $40$ and Mrs$.$ Helen Smith Age $32$ live in Calgary with their $2$ Children Anna age $8$ and Hanna age $11.$

Bob has worked as an engineer for $15$ years in the Energy Sector for Canadian Natural Resources $($CNRL$).$ His income is $$150,000$ CAD Per year with a $1\%$ Stock option bonus appx $1,500\mathrm{.}00$ shares issued per year.

He also has a $($DCP$)$ pension plan $($Conservative portfolio $4-5\%$ return expectation$)$ he matches his employer contribution of $6\%$ of his income per year into the program that is managed at Sunlife. He sees himself as a conservative risk averse investor preferring safety of capital over growth. He is concerned he has to concentrated a position in oil and gas stocks related to his CNRN stock. He would like recommendations on reducing that risk.

He has a will, POA, and PD and Helen is the sole beneficiary. Bob has a $3$ X annual salary term Life insurance policy with his employer. He also has disability insurance, Critical Illness $$50,000$ and a comprehensive family health benefits program including prescriptions, eye car, dental for the entire family.

Bob wants to retire at $55$ with $$200,000$ per year family income. Assume a $90-$year life expectancy. Bob and Helen would also like to sell his $($inherited $)$ condo and buy a new recreation property at Sylvan lake for approximately $1,300,000$ in the next $5$ years.

Helen is a stay at home mom, she is also a $33\%$ shareholder in a family owned private business that is operated by her brother $($KYC Enterprises and Property$)$ she receives annual dividends of $$45,000$ per year and expects those to remain as long as the business remains in the family.

She intends to pass her business interest off to her children as part of her estate, or in the event of an untimely passing her husband is named beneficiary under her current will. She also has a POA and updated PD as part of the estate plan.

She currently holds an individual $500,000$ T$-20$ Life Insurance policy with Bob as Beneficiary.

She sees herself as a growth$-$oriented investor, preferring to take on more risk in an effort to achieve a higher return. She would like to invest some of her Cash currently in savings she expects an $20\%$ Return on any Investment.

Helen wants to retire fully with Bob at age $55$ and agrees that $$200,000$ per year as a family income in retirement is a good goal. Assume a $90-$year Life Expectancy for Bob and Helen. They also wish to leave a $3,000,000$ estate to the kids split $50/50.$

They will consider a variety of tax efficient investment options including individual stocks, bonds, Mutual Funds, ETF$$s$,$ and insurance related products.

KYC Information

Utilizing the BMO Investor KYC Questionnaire

Bob and Helen wish to retire fully at age $55.$ Key goals $200,000$ income, purchase a new property at Sylvan Lake $1,300,000.$ In $5$ years.

Bob: Identified as a Conservative Investor looking for inflation protection and safety, willing to accept a $-1-6\%$ volatility in YOY returns.

Helen: Identified as a growth investor interested in growthless concerned with near term portfolio volatility. Able to accept $-11-15\%$ YOY volatility in returns.

Constraints: $($Liquidity$,$ Time Horizon, Tax, Regulatory, Personal Circumstance$)$

Recreation Property goal, $15$ years to save$-90$ year life expectancy, extensive estate goal for children, taxation of small business assets.

The Current Net Worth Statement:

Assets:

Home $900,000$

Personal Property $200,000$

Recreation Condo$-$ Sylvan lake $400,000$

Car $90,000$

Truck $120,000$

Investment Assets:

Cash CHQ Acct and Emergency Fund $75,000$

Cash $($Savings Acct CIBC$)500,000$

KYC Preferred Shares $(4,500$ X $1000\mathrm{.}00)4,500,000$

CNRL Stock $22,500$ Shares Current Price $($$$80\mathrm{.}00)1,800,000$

CNRL $($DCP$)$ Pension $($Sunlife$-$ Balanced Fund$)300,000$

Total: $$8,885,000$

Liabilities:

Credit Cards $80,000\mathrm{.}00$

Personal Loans HELOC $($Prime $+\mathrm{.}50)250,000\mathrm{.}00$

Auto $160,000\mathrm{.}00$

Total

Make an asset allocation for them!!