Weekly wrap: TFSA fever & the looming election, how robo-advisors affect human advisors, and more

“Glad I saved up in my super-sized TFSA for these new shoes. These are almost twice as big as my old pair.”

By Jonathan Chevreau

Judging by the post-budget media coverage, Tax-free Savings Accounts or TFSAs are now a household name. Little wonder, with nearly 11 million Canadians enrolled in them. (For any American readers, the TFSA is the equivalent of Roth plans: no tax deduction going in but no tax going out. The TFSA was introduced in Canada in January 2009).

Seeing as the TFSA is shaping up to be a major political issue, this topic won’t be going away any time soon. On Twitter following the budget, I highlighted several note-worthy pieces that touch either on the mechanics of the new $10,000 TFSA limit, the political implications or both.

Yes, Ontario followed up with a budget of its own but by definition that’s a bit “provincial.” You can find all you really need to know by reading Andrew Coyne’s piece in the National Post: Little Difference Between Ontario and Federal budget, until it comes to deficit.

No, the big kahuna was the federal budget and – as part of the Findependence Trifecta I wrote about on Tuesday – the TFSA expansion. As regular Hub readers know, we were quick to make the extra $4,500 contribution and by Friday the papers were reporting finally that CRA had blessed the strategy of topping up the TFSA immediately. For instance, the Globe’s Bill Curry in CRA clarifies time line of new limit. And John Heinzl did a Q&A with CIBC’s Jamie Golombek on some of the mechanics of transferring securities in-kind from taxable accounts to TFSAs

Over at the National Post, columnists did a good job explaining the political battles that are swirling around the TFSA, and which will continue to as the fall election gets closer.  As I noted on Twitter, I really enjoyed columnist Kelly McParland’s analysis of why the Liberals and NDP hate super-sized TFSAs: Harper continues to bamboozle opposition with his instinct for the pocketbook.

Terry Corcoran (@TerenceCorcoran on Twitter) does a nice job on Tax Free and Loving it in 2080. And right below it in the print edition of Friday’s FP is Lawrence Solomon’s Everyone’s a Millionaire in Joe Oliver’s Revolution. That’s Finance Minister Joe Oliver in the photo above, by the way. I thought we’d have a bit of fun with the caption: those who can do better are invited to append their own as a comment to this blog, or email me at jonathan@findependencehub.com.

Finally, financial planner Ted Rechtshaffen and insurance specialist Asher Tward do a nice job explaining why it’s the middle class that especially benefits from TFSAs, not the so-called “rich.” Perhaps Liberal leader Justin Trudeau should read it before declaring he cares about the middle class while simultaneously agitating to push the TFSA limit back to the previous $5,500.

Motley Fool robo-adviser special report

Enough with TFSAs. This will require a subscription to one of Motley Fool Canada’s services but it recently ran a special report I prepared on robo-advisers, CRM-2 and how both are affecting the business of dispensing financial advice. It’s called Robo Advisers and the Future of Financial Advice in Canada (subscription only).

For those disappointed they can’t access the piece, here are three consolation prizes. The InvestorJunkie.com site recently ran a freely accessed piece entitled Robo Advisors vs Financial Advisors: Which One Should You Use? The Wall Street Journal ran an interesting piece entitled Schwab CEO praises fast ‘robo advisor’ start, laments low rates, as well as a useful one pointing out the differences of firms like Betterment or WealthFront: Putting Robo Advisors to the Test.

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