1. RRSP Loans from Manulife Bank If you think nothing grows in winter, think again!
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Today we’re going to discuss how to get your clients’ RRSPs back on track in top condition.
RRSP Loans from Manulife Bank can help boost your clients’ financial plans and save taxes!

2. Today’s Agenda The Government’s Gift Ignored RRSP Loan Opportunity
What’s new
Loan Parameters
Key opportunities … by age
Investment loans overview
Questions

3. RRSP Loan Overview – The Government’s Gift Ignored
$600 BILLION in combined unused RRSP contributions as of 2013
We should have new statistics soon but in 2013 there was over $600 Billion with a B in unused contributions. The RRSP and the refund are a gift that is often ignored. Our goal is to reduce this gap by helping your clients focus on retirement by using this incredibly powerful investment tool.
Source: Money Sense online – March 24, 2014 by Stefania Di Verdi

4. RRSP Loan Overview – The Government’s Gift Ignored
2016 RRSP contribution limit
18% of earned income
Maximum $25,370
61% of Canadians contributed in 2015 tax year
The Average Canadian – 2016 Tax Year
Income
$49,660
18% RRSP limit
$8,938
RRSP contribution
($3,984)
RRSP loan opportunity
$4,945
In 2015 the RRSP contribution limit is 18% of earned income to a maximum of $24,930
Only 61% of Canadians contributed in the 2015 tax year.
If we break down the contribution figures of the 2014 average Canadian, we see that with an average income of $49,660 the average client had $8,938 contribution limit but the average contribution was just $3,984. This leads to an RRSP loan opportunity of $4,945.
The Canadian Press | 01/28/2016

5. RRSP Loan Overview – The Government’s Gift Ignored
Thanks CRA – Refund Spending Plan:
34% – savings or investing
15% – pay down mortgage
13% – home renovations
11% – travel/purchase leisure items
When Canadians were surveyed on how they planned to use any tax refund they received, their spending plans included:
34% – savings or investing
15% – pay down mortgage
13% – home renovations
11% – travel/purchase leisure items
As you can see, at least 1/3 are going to bring more money into their savings plan – which could also improve your assets under management and bottom line. More than 60% are making a financial improvement, with 15% paying down their mortgage and 13% reinvesting in their home.
Of course some clients see it as a gift back from the government and treat themselves.
The Canadian Press | March 4, 2015

6. RRSP Loan Benefits Exploits unused contributions
Creates disciplined saving plan
Reduces expected income tax payment
Boosts savings for impending retirement
Allows clients to catch-up on unused contribution room
Creates a disciplined savings plan – easy, automated monthly payments
Client concerned about income tax bill? Stress “Don’t pay the government if you don’t have to”
Enables clients to add to their retirement funds when retirement getting closer and they haven’t saved enough

7. RRSP Loans from Manulife Bank If you think nothing grows in winter, think again!

8. RRSP Loans from Manulife Bank If you think nothing grows in winter, think again!
Introducing
RRSP Accelerator Loan
RRSP Accelerator Max Loan
120-day payment deferral
RRSP Loan Optimizer tool
Introducing the RRSP Accelerator Loan and RRSP Accelerator Max Loan (formerly known as RRSP Catch Up loans which we piloted last year to select dealers);
A 120-day payment deferral on 2 year RRSP loan terms; and
An RRSP Loan Optimizer tool for advisors to calculate the RRSP Loan amount that would match a client’s expected tax refund, so the client can use the refund to pay off the loan (less borrowing costs).

9. RRSP Accelerator Max Loan
Loan Parameters
Standard
RRSP Loan
RRSP Accelerator Loan
RRSP Accelerator Max Loan
Minimum Loan
$1,000
$5,000
$10,000
Maximum Loan
$25,370
$50,000
$150,000
Interest Rate
Prime %
Prime %
Prime %
Loan Term
1 to 2 years
1 to 5 years
1 to 10 years
Credit Adjudication
Credit check
Full credit adjudication

10. Investment Options Group Retirement Solutions (GRS)
Manulife Investments products:
Manulife Mutual Funds
Manulife Segregated Funds
Manulife Investments GICs
Eligible Nominee Name Accounts
Contact your IIROC dealer
Manulife Bank products:
Registered Advantage Account
1- to 5-year GICs
Group Retirement Solutions (GRS)
Read slide
Eligible Manulife products include Standard Life
*** Delete Select Nominee Name Accounts Contact your IIROC dealer*** if audience is IAs or MFDA members

11. RRSP Loan Advantages Age 20s – 30s:
Low interest environment available now
Boost savings while borrowed money is cheap
Compounding effect of long investment horizon
Save for first home
Will company pensions/CPP/OAS be there?
Use refund to:
Reinvest in RRSPs
Pay off higher-interest student loans

12. RRSP Loan Advantages Age 40 – 50: Catch up!
Low interest environment available now
Compounding effect of long investment horizon
Stay focused with a disciplined savings plan
Use refund to:
Pay off higher interest debt or renovate
Reinvest in RRSP/TFSA

13. RRSP Loan Advantages Age 50+: Catch up; retirement’s almost here!
Low interest environment available now
RRIF age is 71
Up to 20 years for funds to compound
Consider segregated funds with a Guaranteed Minimum Withdrawal Benefit (GMWB)
Use refund to:
Reinvest in RRSP/TFSA
Pay off other debt

14. The Bigger Bang RRSP Scenario
Your clients would like to optimize their RRSP investment
Cash on hand is less than the amount they would like to contribute
You help them contribute what they can now and invest the tax refund later
If your client makes an RRSP contribution every year but never has enough available cash to invest as a lump sum, this strategy may be of interest to you.
*This strategy applies to a client making an RRSP contribution in the first 60 days of the calendar year so that they can claim the deduction on the previous year’s tax return. The strategy assumes that there are no other factors that would impact the client’s total tax refund.
The typical scenario is one where your client have less cash on hand than the amount of RRSP contribution they would like to make. As the advisor you are able to recommend that they also invest the tax refund when they receive it.

15. The Numbers … Client has $7,000 in cash Marginal tax rate is 40%
Tax refund will be $2,800
Your client has $7,000 in cash and their marginal tax rate is 40%. They contribute this in the first 60 days of 2016 so that they can claim the deduction on their 2015 tax return. This will give them a tax refund of $2,800 which they will put into their RRSP and claim next year (on their 2016 tax return).

16. The Result … 2016 RRSP contribution $7,0001
+ Tax refund invested $2,8002
Total RRSP contribution $9,800
Although the tax refund of $2,800 can’t be claimed until next year’s tax return, your client has increased their RRSP contribution to $9,800. While this is a better strategy than just spending the refund, there is an alternative that can allow your client to optimize this RRSP contribution this year with very little cost.
1 $7,000 contributed in first 60 days of 2017 and claimed on 2016 tax return.
2 Tax refund invested in RRSP and claimed on 2017 tax return.
For illustration purposes only

17. The Alternative … Client borrows $4,667
Adds it to their cash contribution of $7,000
They use the refund to pay off the loan
This alternative will give your client a larger contribution for this year by borrowing the amount of the tax refund and then have the option of using the refund to pay off the loan.
Your client borrows $4,667
They add it to their cash RRSP contribution of $7,000
They use the refund to pay off the loan
For illustration purposes only

18. FOR ILLUSTRATION PURPOSES ONLY
Loan Optimizer
The biggest news of this sales concept is that Manulife Bank took all those manual calculations and created a loan calculator on Repsource.
Just look for the RRSP Loan Optimizer for a quick and easy calculation.
This calculator is ideal when your clients are on monthly contributions and don’t need loans. Your response can now be: Now we offer a loan that boosts your RRSPs for the price of a few months interest cost.
FOR ILLUSTRATION PURPOSES ONLY

19. TOTAL RRSP CONTRIBUTION
The Bigger Bang …
TOTAL RRSP CONTRIBUTION
Reinvest Refund
RRSP (2016) $7,000
Refund (2017) $2,800
Total $9,800
Borrow
Cash (2016) $7,000
Loan (2017) $4,667
Total $11,667 1
By borrowing an additional $4,667 your clients increased the overall contribution to their RRSP by $1,800 and were able to use the full amount as a deduction in The full amount was deducted in the 2014 tax year. Your clients also have the money working for them sooner.
Costs are covered on next slide
1Full $11,667 contributed in first 60 days of 2017 and claimed on 2016 tax return.
For illustration purposes only

20. The Cost … Refund $11,667 x 40% $4,667 Loan - $4,667
Interest for 90 days $40
Not covered by refund $40
And the cost to your client is minimal. Depending on when and how your client files their return, their refund should take no longer than 8 to 10 weeks. Early returns using NETFILE are often processed within 10 days. Even if we assume that it took 90 days to receive the refund and if they paid off the loan immediately, the costs would be covered by the refund.
Again, this strategy applies to someone making an RRSP contribution in the first 60 days of the calendar year so that they can claim the deduction on the previous year’s tax return. The strategy assumes that there are no other factors that would impact the clients total tax refund.
For illustration purposes only
A rate of 3.50% is used in this illustration for an RRSP Loan.

21. RRSP Loans from Manulife Bank If you think nothing grows in winter, think again!
Case Studies
Housekeeping note: Please mute your line to minimize background noise. If you have a question, press star-7 to unmute your line. If you’re experiencing background noise, please use the chat box.
Today we’re going to discuss how to get your clients’ RRSPs back on track in top condition.
RRSP Loans from Manulife Bank can help boost your clients’ financial plans and save taxes!

22. Case Study – John and Linda
Young professionals
31 years old
No kids … yet
Saving for first home
Major expenses
Rent: $1,200
Credit cards: 18%
Student loans: 6.5%
Assets
RRSPs: $16,000
TFSAs: $5,000
Case Study 1
John and Linda are young professionals , both 31 years old with no kids … yet. They want to buy a house to start that family and are saving for their first home
Right now, they don’t have a lot of major expenses
Rent is $1,200
Credit cards balances sit at $3,000 which is costing them 18% interest
And they are still trying to pay down their student loans of 6.5%
Without owning a home and concentrating on repaying student loans their assets are fairly low – just $16,000 in RRSPs and $5,000 in TFSAs
They’re ready to start ramping up their savings because they’ve heard of the First Time HomeBuyers Plan which allows them to use their RRSPs for their down payment.

23. Case Study … Opportunity for RRSP loan
Build assets for First-Time Home Buyers Plan
Get used to loan payments like a mortgage
Large difference in retirement savings through compounding
Opportunity for RRSP loan are fairly straight forward
It helps them build assets quickly for First-Time Home Buyers Plan
It gets them used to higher loan payments like they will take on with a mortgage
And, by investing at such a young age, it can make a very large difference in retirement savings through compounding over time

24. Case Study … $24,000 RRSP loan Cost $1,037* monthly (2 years)
$50,000 income each
Refund: $7,440*
What would you do?
*3.50% RRSP loan/31% tax bracket in Ontario
They decide to take out our Standard RRSP loan program because they have plenty of unused contribution room
The 24,000 RRSP loan will cost them $1,037 monthly and they plan to repay it over %*
They have $50,000 income each and their total income tax is a 31% tax bracket for living in Ontario
Therefore the refund will be: $7,440
What would you do?

25. What would you do? $24,000 RRSP loan Leave for long-term planning?
Investment value, age 65: $174,025*
Use RRSP for First-Time Home Buyers Plan?
$ 24,000 + $16,000 existing RRSP
$200,000 condo = no CMHC fees
Saved $6,624 in CMHC fees
Investment value, age 65: $112,090*
It’s not that easy of a decision when you look at the long-term planning numbers
If they took out the $24,000 RRSP loan and left it invested until retirement at age 65 they would have an investment value of $174,024 assuming a 6% average rate of return
Using this larger RRSP for First-Time Home Buyers Plan will give them $ 24,000 from the repaid loan + $16,000 existing in RRSPs
Buying a $200,000 condo and avoiding CMHC fees means they could save over $6,000 in insurance fees
Saved $6,624 in CMHC fees
But if they only reinvest in their RRSP in the 15-year repayment period outlined in the First-Time Homebuyers Plan, it will have a strong impact on the investment value at age 65: Just $112,090* - $62,000 less than leaving the RRSP untouched.
In this case, however, the primarily financial goal is home ownership and the RRSP loan works really well for their down payment, avoids CMHC fees and they will have more than $112,000 in RRSPs by retirement. It’s also hoped the condo will also appreciate and they can sell it with tax-free gains to move into a larger family home (building wealth through real estate).
6% rate of return.

26. What would you do? $24,000 Loan – Refund: $7,440
Reinvest refund in TFSA:
Investment value, age 65: $53,945*
Reinvest in refund RRSP:
$2,305 tax refund for 2017
$9,745 in total RRSPs contributions
Use refund to pay off other loans:
18% credit card: $540 saved yearly
6.5% student loan: $285 saved yearly
$825 extra cash flow per year
Here’s another great “What would you do?” scenario. John and Lynda have plenty of choices when it comes to their refund of $7,440
If they reinvest in their TFSA and leave it until age 65 the Investment value could grow to $53,947*
If they reinvest in their RRSP they could get another $2,306 tax refund for That’s another $9,746 in RRSPs added to First Time Home Buyers Plan ($7,440 + $2,306)
Or instead of paying down the investment loan they could pay off their Credit Card and a bit of their student loan to end up with $826 in extra cash flow per year
6% rate of return.

27. It’s not too late for an RRSP loan …
Cheryl and Barry just turned 60
Fallen behind in their RRSPs
They borrow $50,000
5 year term is $925 monthly
Reinvest 2016 tax refund of $19,000 into RRSP
$7,220 from 2017 tax refund reinvested into RRSP
By 2018: $76,220 in RRSPs are now invested
*Ontario tax bracket of 38%
Cheryl and Barry just turned 60.
They’ve fallen behind in maximizing their RRSPs
They borrow $50,000
5 year P+1.50%
Cost is $ per month
Ontario tax bracket of 38%
Reinvest 2016 tax refund of $19,000 into RRSP
Reinvest 2017 tax refund of $7,220 into RRSP
By 2018: $76,200 in RRSPs are now invested

28. Key Advisor Messages
Investment at age 71
$143,910
- $50,000 loan
- $5,520 cost of borrowing
$88,390 Net growth*
Compare to monthly investment:
$925 monthly for 5 years
$70,354 Net growth*
RRSP vs PAC: $18,038 more!
*11 years of 6%
Cheryl and Barry’s investment at age 71 (11 years of 6%):
$143,913
$50,000 loan
$5,521 cost of borrowing
Net growth: $88,392
Compare to monthly investment
$ monthly into RRSP for 5 years – at age 71: $70,354
RRSP vs PAC (preauthorized credit/monthly payment): $18,038 more!

29. Final Considerations Midnight, March 1, 2017:
Deadline for clients to sign RRSP loans to have 60-day contribution receipt
Midnight, March 2, 2017:
All online applications must be submitted and faxed through BankLink

30. RRSP Loan Benefits Recap
Low interest environment
Catch up on unused contribution room
Creates disciplined saving plan
Reduces expected income tax payment
Boosts savings for impending retirement
Let’s just recap the RRSP loan benefits
First, it’s a low interest environment so it can help clients catch up on unused contribution room and create a larger tax refund – a gift from the government today
Unused contribution room is one of the main reasons for a loan
It creates a disciplined savings plan because Canadians, in general, loyally pay their lenders
It reduce an expected income tax bill – whether the client sold stock, had a severance or a bonus that was not taxed properly at the source.
Impending retirement is probably the most common in that the client finally realizes they haven’t saved enough
The large lump-sum to maximize compound-return potential
Finally, an RRSP Loan is a great way to boost the down payment for the First- Time Home Buyers Plan or pay tuition through the Lifelong Learning Plan

31. Before you begin
Manulife Bank Standard RRSP Loan applications must be submitted online using BankLink
Accelerator Loans are paper applications only
Complete application and courier/mail to Manulife Bank for underwriting
Ensure you have a current Repsource ID and password at manulife.ca/repsource
Ensure your computer is connected to a printer
Manulife Bank RRSP Loan applications must be submitted online using BankLink. Before you can begin submitting online RRSP Loan applications, you’ll need to confirm a few details:
Ensure you have a current Repsource ID and password. Two business days may be required to approve a new Repsource ID, so it’s a good idea to register now if you don’t already have one.
Ensure you have version 7 or higher of the Acrobat® Reader® software on your computer in order to print the loan documents.
And finally, ensure your computer is connected to a printer.
Acrobat and Reader are registered trademarks of Adobe Systems Incorporated in the United States and/or other countries.

32. Selecting a sales process
Standard RRSP loan sale made in your office (recommended)
Complete the online application with your client
Have them sign the loan documents all in one meeting
It should take you about 10 minutes to complete the online application
There are three ways to use the online RRSP Loan application, depending on your sales process. Each of these processes is outlined in greater detail in the “RRSP Loan Application Instructions” document available on the BankLink welcome page.
The first, and recommended, process is a sale made in your office. If you’re meeting with your client in a location with Internet access and a printer, you can complete the online application with your client and have them sign the loan documents all in one meeting. It should take you about 10 minutes to complete the online application.
The second process is a sale made away from your office after prior discussion with your client. If you’re meeting with your client in a location without Internet access or a printer and have had a phone conversation to verify they’d like to proceed with an application and obtained their consent for Manulife Bank to view their credit history, you can start the online application, completing as much information as possible. Print the documents that are generated and bring them to your client meeting to complete any missing fields and have your client sign and date the documents and initial any changes made to the information you originally entered. Upon your return to the office, complete the online application with any missing or changed fields.
The final process is a sale made away from your office without prior discussion with your client. If you’re meeting with your client in a location without Internet access or a printer and you have not previously discussed the possibility of an RRSP loan with your client, complete the Client Authorization Form during your client meeting and upon your return to the office, complete the online application.

33. Selecting a Standard Loan sales process
Sale made away from office after prior discussion with client
Confirm with your client over the phone that they would like to proceed with an application
Start the online application and bring system-generated forms to your client meeting for signatures
Upon your return to the office, complete the online application
Sale made away from office without prior discussion with client
Complete the Client Authorization Form (AB0404E) during client meeting
Upon return to the office, complete the online application
Accelerator and Max Accelerator loans are paper applications and can be done at the office or a client’s home
There are three ways to use the online RRSP Loan application, depending on your sales process. Each of these processes is outlined in greater detail in the “RRSP Loan Application Instructions” document available on the BankLink welcome page.
The first, and recommended, process is a sale made in your office. If you’re meeting with your client in a location with Internet access and a printer, you can complete the online application with your client and have them sign the loan documents all in one meeting. It should take you about 10 minutes to complete the online application.
The second process is a sale made away from your office after prior discussion with your client. If you’re meeting with your client in a location without Internet access or a printer and have had a phone conversation to verify they’d like to proceed with an application and obtained their consent for Manulife Bank to view their credit history, you can start the online application, completing as much information as possible. Print the documents that are generated and bring them to your client meeting to complete any missing fields and have your client sign and date the documents and initial any changes made to the information you originally entered. Upon your return to the office, complete the online application with any missing or changed fields.
The final process is a sale made away from your office without prior discussion with your client. If you’re meeting with your client in a location without Internet access or a printer and you have not previously discussed the possibility of an RRSP loan with your client, complete the Client Authorization Form during your client meeting and upon your return to the office, complete the online application.

34. BankLink for Standard Loans
BankLink is the online application and client information tool
Makes it easier than ever to provide your clients with an RRSP Loan
Guides you step-by-step through the application process*
Pre-populates client’s information
Provides a customized instruction sheet and loan documents
You can:
Save and close the application and return to complete it later
Request a pre-approval
Track the status of your loans on the BankLink homepage
* Accelerator loans are by paper applications only
BankLink, our online application and client information tool, makes it easier than ever to provide your clients with an RRSP Loan:
BankLink guides you step-by-step through the application process presenting you with fields and choices based on information you’ve already entered.
It pre-populates the client’s information if they are a previous Manulife Bank client under your advisor code.
You can request a pre-approval prior to completing the full application so you’ll know sooner whether the client will qualify for the loan.
You can save and close the application at any time and return to complete it later.
You are provided with a customized instruction sheet and all the required loan documents.
And, you can easily track the status of your loans on the BankLink homepage.

35. Launching BankLink in Repsource
Select “BankLink” from the right-hand ‘Tools & Illustrations’ menu bar.
Click on “BankLink”
Next, select “BankLink” from the right-hand menu bar.

36. Application tips
You must select the “submit” button to complete the application process, even if you’ve previously requested a pre-approval
RRSP loan documents should be faxed to Manulife Bank – please include a void cheque
No need to forward originals
Do not fax and mail the documents (this may result in two loans being funded)
For your own personal loan application
Have another advisor or licensed marketing assistant:
Sign the Representative assertions section
Confirm that they have seen your original, valid, and unexpired identification
To ensure the smooth processing of your RRSP Loan applications, there are a few tips that you should keep in mind:
You must select the “submit” button to complete the application process, even if you’ve previously requested a pre-approval.
RRSP Loan documents should be faxed to Manulife Bank – no need to forward originals. Do not fax and mail the documents to Manulife Bank, as this may result in two loans being funded.
For your personal loan application, have another advisor or licensed marketing assistant sign the Representative assertions section to confirm that they have seen your original, valid, and unexpired identification.

37. Support
If you require assistance with the application, click on “Help”
Click here for support
If, at any time, throughout the application you require assistance, simply click on the “Need Help?” button at the top of the screen. This will provide you with important phone numbers that you can call for help with the application.
Also keep in mind that the BankLink welcome page contains various support documents to help you use the online application.

38. Think nothing grows in winter. Think again
Think nothing grows in winter? Think again. Grow your clients’ savings with a 2.50% rate
Limited time rate offer
Your clients can earn 2.50% interest until April 30, 2017 on every new dollar they deposit to a:
Manulife Bank Tax-Free Advantage Account (TFSA) or
Registered Advantage Account (RRSP)
December 5, 2016 to March 15, 2017
Now is the perfect time to grow your clients’ savings – and your business – with RRSP-TFSA investment offerings from Manulife Bank.
Limited time rate offer
Your clients can earn 2.50% interest until April 30, 2017 on every new dollar they deposit to a Manulife Bank Tax-Free Advantage Account (TFSA) or Registered Advantage Account (RRSP) from December 5, 2016 to March 15,

39. Think nothing grows in winter. Think again
Think nothing grows in winter? Think again. Grow your clients’ savings with a 2.50% rate
How to apply
For new Tax-Free Advantage Account and Registered Advantage Account clients:
Open the account using BankLink
Or complete and submit the Tax-Free Savings Account Application (AB0490) Or the Retirement Savings Plan Application (AB0154)
Applications must be received and accepted by Manulife Bank from December 5, 2016 to March 15, 2017
For existing Tax-Free Advantage Account and Registered Advantage Account clients:
Transfer funds from an external bank account
Mail cheque to Manulife Bank
Local deposit at any Royal Bank via their advisor
Get growing with these new sales and marketing tools:
Client
Facebook posts
Postcard
Print ads
Lobby screen message
Web banner

41. Important Notes
Borrowing to invest in an RRSP may not be appropriate for everyone. Your clients will need the financial means to meet their loan obligations. In addition, investments held in an RRSP may fluctuate in value. Your clients should be aware that, regardless of their RRSP’s performance or value of any investments held in their RRSP, they will be required to meet their loan obligations in full. Please ensure clients read the terms of their loan agreement and the investment details for important information. Manulife Bank of Canada solely acts in the capacity of lender and loan administrator and does not provide investment advice of any nature to individuals or advisors. The dealer and advisor are responsible for determining the appropriateness of investments for their clients and informing them of the risks associated with borrowing to invest. RRSP Loans are offered through Manulife Bank of Canada. Manulife, Manulife Bank, the Block Design, the Four Cubes Design, and Strong Reliable Trustworthy Forward-thinking are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.

42. Thank you
What questions do you have?