For advisors, getting control of the RRSP deadline, the “silly season,” is a matter of planning, organization and good time management. But even the most organized advisors can find themselves pressed to meet all the clients who want to discuss their RRSPs and make last-minute contributions as the February deadline approaches.

You already know to urge your clients to make monthly contributions to their RRSPs throughout the year, but not all clients have the kind of regular, predictable income that makes monthly contributions possible. And even those who do make contributions every month often find at the last minute that they have extra cash to deposit and some RRSP room to accommodate it. And then there are the new clients who, spurred by media buzz and the advertising campaigns of banks and fund companies, decide they would like to open their first RRSP — as the last few days of February draw near.

The result can put pressure on advisors and their staff to meet all of the demands.

MONTHLY CONTRIBUTIONS

“We try to cajole, intimidate, persuade — in the most friendly way possible — all our clients to make their contributions early or on a monthly basis,” says Naguib Kerba, a branch manager at Investment Planning Counsel in Mississauga, Ont.

To get clients thinking about RRSPs early, Kerba arranges for them to book appointments as soon as they get their notice of assessment from the Canada Revenue Agency, usually in the spring. Kerba draws their attention to the RRSP room specified on the slip, and starts the conversation about contributions they can make throughout the year.

“We try to do the monthly plan where possible,” Kerba says. “We ask the client, ‘How much do you want to put away for your future? How much money can you afford to put away?’”

While many planners use a “10% of income” rule to help clients decide how much to save, Kerba uses a different approach. His rule of thumb: if it doesn’t hurt, it’s not enough. “We want you to top up to your comfort zone and then a little more, on a monthly basis,” he says.

Getting clients to make monthly contributions is the way to minimize deadline pressure while maximizing clients’ earnings, says Tom Merianos, an investment advisor and certified financial planner at Edward Jonesin Ottawa. “Dollar-cost averaging is the way we’ve taken care of a good percentage of our business,” he says.

Merianos finds it relatively easy to convince clients of the benefits of monthly contributions. Using dollar-cost averaging to purchase stocks mitigates some of the risk, he explains: “If we’re buying every month, whether the stock is going up or going down, we’re continuously purchasing units, so we’re taking some of the risk out of it. Using some of the tools we have, we can illustrate how the fluctuations will actually get balanced by dollar-cost averaging.”

From a budgeting point of view, he adds, it’s a lot easier on the client come February if he or she has already made monthly contributions throughout the year.

But not everybody can make monthly contributions, Merianos says. Some clients, such as business owners and commissioned salespeople, can’t contribute regularly because they don’t know what their income will be from one month to the next. “They may not have a consistent enough cash flow to make a monthly contribution,” he says. “Those are the ones you have to see in January and February.”

Such clients can also make lump-sum contributions throughout the year when they do have cash.

“I think retirement season is all year,” says Peter Schenk, an investment representative at Edward Jones in Kingston, Ont. “There are people who do lump-sum contributions in March or in the fall. I view it as a year-long process.”

MANAGE APPOINTMENTS

Accommodating clients who come in during January and February — the busiest months for most advisors — is a matter of planning that starts at least six months in advance. Schenk generally sees his clients twice a year, and most appointments are booked at the previous meeting. He makes an effort to restrict January and February appointments to RRSP clients and books retired clients, for example, on other dates whenever possible.

Merianos sets his own RRSP deadline two weeks early. His office begins booking appointments on the first business day in January, spreading them out over the next six or seven weeks.

@page_break@“We try to be completed by Feb. 15,” he says. “We push our deadline up a couple of weeks in our minds. It allows us to pick up the people who have cancelled, and those few people who procrastinate right until the end. And sometimes we pick up a few referrals who need last-minute advice.”

RRSP catch-up loans can take extra time to arrange, and Kerba’s team tries to help last-minute clients who want to use catch-up loans get a head start on the paperwork. One member of his team is dedicated to contacting clients who have used RRSP loans in the past and starting the paperwork for them early.

“We approach them in the beginning of January, telling them not to wait until the last minute for the loan,” Kerba says. “We try to make it easier for them.”

The assistant will even take the loan application to the client’s home to get it signed.

Sometimes the busy season means working extra hours. Schenk, who normally works from 7:30 a.m. until 5:30 p.m., may stay an extra hour during the week and work on Saturdays in February to meet clients who can’t see him during regular business hours. “It’s busy, but it’s not a pressure situation because we’re well organized,” he says.

Merianos is in a similar situation, working perhaps two eve-nings a week during the RRSP season.

Merianos finds that technology can help ease the pressure. Some clients who call late in February can transfer their money electronically from their bank accounts to their advisor before making an appointment. “I get the money, put it into their RRSP and we book the appointment for the following week if we have to,” he explains. “We can even do the portfolio review on the phone.”

If a new client comes in just before deadline, Kerba will put off the fact-finding and risk assessment until later. He’ll park the money in a money market account to meet the RRSP deadline, then arrange to meet the client later for an in-depth discussion about the portfolio.

“The money is in cash for a matter of weeks,” he says. “I don’t know what level of risk they should be taking, and at that point I don’t have time to do a really thorough analysis of their risk. The government may have imposed a deadline, but that doesn’t mean I have to panic and risk putting the client in the wrong investment.” IE