Almost 40% are not certain that they are taking advantage of tax incentives and most do not consider tax implications every time they invest.

The majority of Canadians are not thinking about tax implications every time they are making investment decisions, according to a survey commissioned by BMO Nesbitt Burns.

As a result, they are either paying too much in taxes or not reaping the full benefits from their investments, says BMO Nesbitt Burns. This presents an opportunity for advisors to assits their clients.

Among the survey’s key findings:

• 76% of Canadians do not take tax implications into consideration every time they make an investment decision.

• 37% are not confident they are taking advantage of all tax incentives available to them

• 89% are not certain how recent changes in federal budgets impact their personal tax situation.

“The results clearly indicate that many Canadians do not fully understand their personal tax situation,” says John Waters, manager, tax planning, BMO Nesbitt Burns.

This knowledge gap provides an opportunity for advisors to the let their clients know how these changes will impact their personal financial strategy.

“People have the opportunity to pay less tax if they take the time to understand the basics and seek advice when needed,” Waters says.

“They need to ensure they are up to speed on which recent changes may affect them in order to build a sound financial strategy for the future.”

While considering overall investment objectives and factors such as risk tolerance and expected return should be top of mind for investors, BMO Nesbitt Burns is also recommending that Canadians keep in mind personal tax implications when planning their investment strategy.

“Ensuring you’re making sound investment decisions that fit within your personal financial plan means weighing the risks against the possible rewards, but taxes can have a significant impact on the net returns ultimately achieved,” Waters concludes.

IE