Financial Advice Across Borders

September 19, 2019

Terry RitchieMatt Cavalho

Terry Ritchie
Cardinal Point Wealth

Matt Cavalho
Cardinal Point Wealth







Globalization is no longer a buzzword but a fact of life. More people than ever before live in one country and work, retire—or invest—in another.

But taking one's finances over the border isn't easy. Between immigration law, differing tax regimes and uneven access to social programs like universal health care or Social Security, it can become incredibly complex to reconcile the finances of someone living in two countries (or more).

Enter Cardinal Point Wealth. With offices in both Canada and the U.S., this $500 million RIA specializes in serving clients living in both countries, or who are moving from one country to the other. recently sat down with Terry Ritchie, partner of Cardinal Point Wealth and director of cross-border wealth services, and Matt Carvalho, Cardinal Point's CIO, to discuss some of the unique challenges—and opportunities—of cross-border financial planning. Roughly how many of your clients have a dual-country living situation?

Terry Ritchie: The majority of our clients all have some U.S.-Canada connection. Many of them are citizens of Canada from way back when. We also have clients who might choose to be snowbirds and sunbirds, meaning they live in Canada for the summer months, then move to Texas or so on for the winter months.

People often ask if it's about Trump or not. Before he became president, there was that whole discussion of, "If he wins, we're moving to Canada!" But we didn't see that wave of folks coming up. It's a lot harder to financially uproot your life than people might've realized.

Ritchie: Yes. And there are immigration rules, too. You can't just cross the border and say, "I live here now; I'm going to work here and get free health care." There's a process.

So that's not the main reason people move. But we do have a number of clients who, from a lifestyle perspective, want to live in Canada. Our job as planners is to make sure they understand what they're getting into.

For example, the tax environment in Canada is very different than it is in the U.S.; if you're going to have socialized health care, you have to pay for it. Currency is a big issue, too. The Canadian dollar likes to go up and down a bit. So to the extent that the client has U.S. dollars coming in, they can enhance their lifestyle [because of the exchange rate]. But we also have people moving to the U.S., but with Canadian dollars and Canadian sources of income. So that can be a challenge. You must have to implement a fair bit of currency hedging for your clients.

Matt Carvalho: It's certainly a big topic for our clients who are dual citizens, or who were in one location and headed to another. We do a fair amount of hedging on our Canadian dollar portfolios, because you just have so much more exposure to currency risk there.

But with other clients, we also discuss a schedule of dollar-cost averaging to spread out the impact over a couple of years or so, because we don't feel we can predict where the dollar’s going to move.

Ritchie: It's hard to peg where we think the domestic equity markets are going to be, much less where we think the dollar’s going to go.

Carvalho: Dealing with currency is a big part of our practice, because it has so many potential impacts on health care, retirement pension schemes, and so on. How did you get into serving dual-residency clients?

Ritchie: The majority of us live it ourselves. I was raised in Canada, but my mother was an American. In the ’70s, we moved down to Arizona. I never expected I'd return to Canada, but in 1995, I moved back because I discovered I had an affinity to work with Canadians.

Doing what we do, we don't have much competition. Some large Canadian banks try to do this, but they don't do it very well. And they can't, from a regulatory perspective.

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