LIVE IN L.A. Your all access pass to complete Wealth Management Corporate insurance uses for high net worth individuals Breakout 1B Terry Marek and Brad Charlton

Assante Estate and Insurance Services (AEIS) update Exempt Test Rules – TBD, targeted implementation January 1, 2016 with grandfathering 10-8/9-7/5-3 Policies – Must be unwound by January 1, 2014 (no taxable policy gain), no grandfathering – Lose CDA credit, lose interest deduction, lose premium/NCPI deduction – Legitimate Immediate Finance Arrangements (IFA) and traditional Insured Retirement Plans (IRP) alive and well

AEIS update (Cont’d) Triple Back to Back Annuities – Policy will be non-exempt, loss of interest deduction, reduction in CDA credit, value of the annuity will be deemed to be its purchase price – Regular Insured Annuities, both Personal and Corporate, are unaffected and remain valuable concepts New Group and Product Providers

LIVE IN L.A. Your all access pass to complete Wealth Management Corporate asset transfer strategy Terry Marek

Corporate Insurance Planning

The conversation Premature Death Long Term Care Litigation Disability Out of Country Medical Director Liability Critical Illness Property & Casualty Premature Death Long Term Care Litigation Disability Out of Country Medical Director Liability Critical Illness Property & Casualty Specialized Strategies Tax Offset Estate Optimization Asset Protection Privacy Compliant No Risk “Need” Insured Asset Class Specialized Strategies Tax Offset Estate Optimization Asset Protection Privacy Compliant No Risk “Need” Insured Asset Class Most Often Temporary & Essential for that Period “Need” Most Often Temporary & Essential for that Period “Need” Most Often Permanent & Optional “Want” Most Often Permanent & Optional “Want” Risk basedOpportunity basedNet worth Low High

Estate Surplus Joint Lives Holdco Large Open Portfolio Business Owner Philanthropic Wealth Plan Desire to Optimize Estate Low Risk Tolerance Large Surplus Cash Flow Large Surplus Cash Flow Older Age Older Age Healthy Characteristics The opportunity

Private Equity Globally Diversified Portfolio Direct Real Estate Specialized Strategies Strategic diversification – the four pillars

Overview Diversifies core investment strategy to reduce risk Reduces tax Utilizes existing tax laws (not aggressive tax planning) Creative use of insurance as an investment and tax savings vehicle For people who do not necessarily need insurance Increases percentage of asset able to flow through CDA

PERSONAL TRUSTS HOLDCO The opportunity Taxable Accounts

TAXABLE INCOME PORTFOLIO LONG TERM CAPITAL (that likely will never be required) Before

PORTFOLIOTAXABLE INCOME LONG TERM CAPITAL (that may never be required) SHELTERED INCOME After

OPEN TAXABLE RRSPRRSP OPEN TAXABLE RRSPRRSP SHELTERED LONG-TERM CAPITAL The result

The “how” Utilize an exempt life insurance policy to shelter investment income

Cost of insurance is offset by tax savings, government “subsidizes” TAXABLE INCOME COST OF INSURANCE Economic rationale

Key points Benefits while living: Tax sheltered investment growth Low risk, fixed-income portfolio Tax efficient retirement income stream Asset protection Estate benefits: Reduction of tax Philanthropic legacy Virtually tax-free transfer to next generation Privacy (second will may not have to be probated) CDA maximization

Client Profile Large “tax-exposed” investment portfolio in Holdco Large excess cash flow No need for designated capital over the next 5-10 years No need for life insurance Healthy Desire to optimize estate

YearDepositsCash Value Net to CorpNet to Estate After Tax ROR Pre- Tax ROR 150,00019,0331,094,5641,078,6432,089%3,881% 5250,000110,0021,385,2371,306, %118.5% 10500,000349,4431,714,0831,560, % 15500,000493,6451,586,7901,445, %20.7% 20500,000956,6561,653,3721,528,7437.9%14.6% 25500,0001,270,4282,001,2951,902,3646.9%12.8% Assumptions: 10 deposits of $50,000 each, Male, 55 non-smoker & Female, 56 non-smoker, Current dividend scale, 6.50% The numbers

ASSET TRANSFER Status QuoCorporate Asset Transfer CAT % Incr. Value$848,536$1,270,42850% Estate Value After Tax $692,690$1,902, % ASSUMPTIONS Initial Investment of $500,000 Time frame of 25 years GIC rate on alternative investment 5.0% Enhancing Wealth

YearDepositsCash Value Net to CorpNet to Estate After Tax ROR Pre- Tax ROR 150,00018,657575,842560,5811,052%1,954% 5250,000107,570727,134655, %70.6% 10500,000317,903904,710773, %19.6% 15500,000389,650824,280727,4504.8%8.9% 20500,000694,572837,178778,4283.4%6.2% Assumptions: 10 deposits of $50,000 each, Male, 75 non-smoker & Female, 76, non-smoker, Current dividend scale, 6.50% The numbers

Low fees, institutional rates (7.2 basis points) Stable track record – dividends paid since 1848 Dividend average for last 60 years is 8.9% Large fixed-income portfolio, 80% fixed, 20% equities Tax sheltered dividends pay for insurance with pre-tax dollars Participate in company profits on all participating policies - Longer lives provide premium income for longer periods -Policy loans to policyholders, (prime plus 4%) are paid into dividend pool The “participating” account

How it works

Tax-exempt growth Peace of mind Privacy (second will may not need to be probated) Preserve estate Enhance estate Enhance living benefits Reduce investment risk Enhanced CDA exposure Benefits

Thank you For advisor use only Assante Wealth Management’s advisory services are offered through Assante Financial Management Ltd., Assante Capital Management Ltd. and Assante Estate and Insurance Services Inc. Assante Estate and Insurance Services Inc. is owned by Assante Financial Management Ltd. and Assante Wealth Management (Canada) Ltd. ®The Assante symbol and Assante Wealth Management are registered trademarks of CI Investments Inc., used under licence.