Jeffrey Scott Sheldon

Jeff Sheldon of Cardinal Point Wealth Management is interviewed by the Wall Street Journal. He examines a client situation where tax and estate planning were complicated due to cross-border financial and investment planning concerns.

Cross-border opportunities between the U.S. and Canada have been given a boost by the Canada California Business Council and Cardinal Point Wealth Management, who today announced a strategic partnership.

John McCord discusses the importance of defining financial goals and responsibilities in his piece discussing Investment Policy Statements (IPS). While not a financial plan, an IPS is a critical component of a holistic financial plan that takes into consideration insurance, estate, and retirement planning. Critical in any client-financial advisor relationship is a mutual understanding that reflects the client’s financial planning situation. An IPS assists in this mission and details and defines a client’s needs, goals, investment knowledge, net worth, time horizon, and risk tolerance. With an IPS document, clients have a more clear understanding of a financial advisor’s investment philosophy and reference point to adjust when a change in personal financial situation occurs. Cardinal Point wealth Management works with clients to ensure a customized cross-border financial planning strategy and to develop Investment Policy Statements that reflect the unique situation of each client.

The Canada Nevada Business Council, has announced that Cardinal Point Wealth Management, LLC has become a Charter Partner. ‘Their long-standing commitment to providing personalized investment, wealth planning, and cross-border solutions to families, individuals, and related institutions is a perfect fit for [us]” said Frank Spady, Founder and CEO of the Canada Nevada Business Council, a non-profit dedicated to providing a voice for businesses committed to furthering bi-lateral trade between Nevada and Canada. As a Charter Partner, Cardinal Point Wealth will be provided with the opportunity to publicize key corporate announcements via the CNBC network and be given priority in the development of policy papers and related topics at CNBC events. This, in addition to invitations to CNBC VIP briefings and special meetings, will allow the Cardinal Point Wealth Management Firm the ability to further communicate with individuals in need of a disciplined approach to wealth management and share news of the best methods for this audience to building lasting wealth – a mission supported by the CNBC and the cross border businesses it supports.

John McCord’s article focuses on the IRS (US Internal Revenue Service) policy that taxes the worldwide income of US residents. Many US residents are unaware of this policy and the law that requires the disclosure of the majority of foreign accounts, as they are subject to US taxation. Disclosure rules also apply to Registered Retirement Savings Plans, pensions and bank accounts. In order to enforce these policies the IRS is aggressively pursuing civil and criminal penalties for noncompliance and maintains close communication with the CRA (Canadian Revenue Agency), references the FBAR (Report of Foreign Bank and Bank Accounts) and, beginning in 2013, will enforce the FATCA (Foreign Account Tax Compliance Act) in order to do so. FATCA will focus on the compliance of foreign-based accounts and increase communication with foreign financial institutions in order to identify US residents who do not report their foreign-based accounts. For both Canadian Expats and US residents with foreign accounts, McCord stresses it is critical to consult with a cross-border financial advisor in order to ensure compliance and identify the right solution that may include tax, legal and investment professionals depending on your personal situation.

In this article, John McCord discusses Canada’s two-part public pension program and how pension benefits are applied to Canadian expats living in the US. Eligibility for the first part, Old Age Security (OAS), is determined by age, time spent as a Canadian resident and legal status, but not retirement status or employment history. The second part, the Canadian Pension Plan (CPP), is directly tied in to salaries. The specific CPP benefit is determined by the amount and duration of CPP contributions (from prior employment). The highlight of both benefit programs is that, due to the Canada-US Tax Treaty, expats are not subject to Canada Revenue Agency tax rates or foreign withholding taxes. With lower US tax rates, this provides a clear benefit for Canadian expats living in the US. As each program mentioned has strict qualifying criteria, McCord details some of the specific regulations and emphasizes that it is important to partner with a qualified team of tax, legal and investment professionals who have specific experience in cross-border financial planning strategy.

This article outlines financial planning concerns for Canadian buyers who want to take advantage of real estate opportunities in the United States for either financial or lifestyle choices. Author John McCord highlights complex issues such as estate, insurance, financing, residency, immigration and taxation that are important considerations in the purchase of property in the U.S. In addition to potential tax advantages, a unique real estate investment opportunity through the EB-5 visa program also offers the possibility of a streamlined Green Card approval process. To understand the merits and the pitfalls, McCord recommends consulting with a qualified team of professionals who specialize in Canadian and United States cross-border transitioning and asset management in order to develop the best individualized strategy.

This article focuses on the cash flow and net worth statement as essential to the financial planning process, serving to both quantify and qualify one’s financial affairs. When updated annually, these documents can help set goals and be useful in tax planning and risk management. The cash flow statement shows inflows and outflows of cash receipts and disbursements over a time period. Subtracting total cash outflows from total cash receipts produces a number that shows the individual or household’s spending patterns. Cash flow statements also help project future income and spending patterns. The net worth statement is comprised of three components: assets, liabilities, and net worth. Net worth is determined by subtracting total liabilities from total assets; it helps indicate one’s level of financial freedom and flexibility.

John McCord’s article highlights the start of 2012 as the perfect time to reassess the state of your financial plan, including your investment, taxation, insurance, retirement and estate needs. When cross-border complexities are present, the need for a coordinated review is even more pronounced. The process starts with a qualified advisor and a planning analysis of the preceding year’s after-tax cash flows. An advisor should also review goals, values and time frames, and financial plans should be updated to reflect significant events. In addition, account consolidation should be considered in areas such as retirement accounts.

New Rules Target U.S. Citizens With Accounts Abroad and Noncitizens With Deposits at U.S. Banks.

An aggressive move by the U.S. to put an end to tax havens is hitting some Canadians with dual citizenship hard. Beginning in 2013, the U.S. Internal Revenue Service will require Canadian financial institutions to identify their U.S. customers to the IRS. Since the United States taxes its citizens based on worldwide income without taking residence into account, these citizens will probably have to file U.S. tax returns for many years back.

This article emphasizes the need to review financial planning and investment matters with a team well-versed in cross-border issues prior to any move, as a lack of proper planning can often result in higher taxation, poor estate planning and enhanced risk. It can be hard to identify an advisor who is qualified to offer financial advice on both sides of the border. The best strategy is to employ an advisory team that has the ability, platform and knowledge to manage assets in Canada and the U.S. under one cohesive strategy. A successful strategy requires in-depth knowledge of Canadian and U.S. tax systems and collaboration between cross-border professionals (financial advisors, CPAs, attorneys, etc).

Many Canadians are tempted to buy property in the U.S., especially considering the rising loonie and the low prices on many U.S. properties. Before you rush in, you might consider that purchasing property in the U.S. could lead to numerous tax implications in both countries. Things to know: You must file a return even if it’s only for personal use; if you are renting the property you must report the income in both Canada and the U.S.

This profile of Cardinal Point’s Jeff Sheldon on the Canadian Expat Network (CEN) talks about his transition to the U.S. and his role in starting a multi-office, cross-border financial planning firm. He also discusses how the firm is uniquely positioned to understand the Canadian mindset and cater to those specific financial planning and investment management challenges.

Cardinal Point Wealth Management, LLC and Cardinal Point Wealth Management, Inc. announces the formation of an independent, cross-border wealth management firm that will provide a holistic and integrated approach to managing the financial and investment planning issues of US and Canadian citizens with assets in both the US and Canada or those transitioning wealth between the two countries.

Cardinal Point’s John McCord looks at some of the key differences between a broker-dealer and a registered investment advisor (RIA). First, an RIA is held to the “fiduciary standard,” which legally requires the advisor to act in the best interest of clients and place client interests before his/her own, among other responsibilities. The broker-dealer model holds advisors to a less strict “suitability standard,” which requires that investments and services be merely suitable for clients. Compensation is another key difference, as the broker-dealer structure puts advisors under intense pressure to generate profits through higher revenue transactions. By working under the fiduciary standard, an RIA advisor is freer to focus on prudent investment processes and holistic strategies that meet client objectives. The article closes with the importance of selecting a fiduciary advisor who utilizes a fee-only compensation model and the services of a third-party custodian.

If you are a U.S. taxpayer with any foreign financial accounts, including overseas life insurance policies or non-bank accounts, you need to know about the Foreign Bank Account Report (FBAR). According to one accountant, “It can be more dangerous not to file an FBAR than not to file a tax return.” Penalties are $100,000 or half the value of the account per year. Congress and the IRS are making sure U.S. taxpayers are paying what they owe on foreign accounts. To make sure you follow procedures and avoid costly penalties, click here to read the full article from The Wall Street Journal.

Read this article that talks about how some U.S.-based advisors are counting on relationships with Royal Bank of Canada and TD Ameritrade to help bring in business from high net worth Canadians.

This profile in RIABiz.com discusses how Cardinal Point is carving its niche as a cross-border wealth management business. President Jeff Sheldon recalls that the Canadian practice, which got its start in Toronto, continually lost clients who moved to the United States for work or retirement. The firm determined that there was enough opportunity to open up a U.S.-based RIA and co-brand it with the Canadian business. After a year of hard work and red tape, the U.S. firm began to bring on assets in January 2010 and now has two thriving offices on the West Coast (Newport Beach, CA) and East Coast (West Palm Beach, FL).