Episode 41: Cross Border Wealth Management for Americans and Canadians

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Calgary immigration lawyer Evelyn Ackah talks to Wealth Manager Gerry Scott about cross border wealth management for Americans in Canada and issues for Canadian snowbirds who winter in the United States, and financial and tax issues for foreign business owners. Gerry is a portfolio manager and branch manager with Snowbirds Wealth Management of Raymond James Limited with over 30 years experience, and divides his time between Canada and the U.S.

• financial and tax priorities for immigrant business owners and foreign entrepreneurs in Canada
  
• tax and retirement issues for cross-border Americans and Canadians
• why Gerry created apps for Canadian Snowbirds and American expats in Canada: Snowbirds US Day Tracker and the Canada Physical Presence Tracker
• the importance of immigrants finding reliable, trustworthy professional services

About Evelyn Ackah

Evelyn Ackah is the Founder and Managing Lawyer at Ackah Business Immigration Law. We work with individuals and business owners from all over the world who want to cross borders seamlessly. For more information on immigration to Canada or the United States, Ask Evelyn Ackah at Ackah Business Immigration Law today at (403) 452‑9515 or email Evelyn directly at contact@ackahlaw.com.

Transcript

Evelyn Ackah:
Good day, everyone. This is Evelyn Ackah from the Ask Canada Immigration Lawyer, Evelyn Ackah podcast. I am really excited today because I have the distinct pleasure of welcoming a colleague and now friend, Gerry Scott to our podcast. Welcome Gerry.

Gerry Scott:
Thank you. Thanks for having me, Evelyn.

Evelyn Ackah:
I really appreciate it. And we've been talking over the last couple years and doing different things together. So this is wonderful to have the opportunity to introduce you to our listeners and people participating and listening to Ackah Law's podcast, but also for you to share more about what you do. So I'm going to give a quick bio, everyone, on Gerry Scott, and then we'll start. Okay?

Gerry Scott:
Sounds great. Thank you.

Evelyn Ackah:
So Gerry is a portfolio manager and a branch manager with Raymond James Limited. He has over 30 years experience in the industry. Gerry established his own IIROC dealership branch in 1998. And in 2011, he joined Raymond James Limited and services his clients from his office in Coquitlam. He holds a certified financial planner designation, a chartered investment manager designation, and a certified retirement planning counsellor designation, and is also a life insurance representative. Gerry is an advisor at Raymond James that is licensed in the United States. He's licensed to serve clients in Hawaii, Arizona, California, Utah, and Washington, just to mention a few. He is the creator of two apps, one is called Snowbirds US Day Tracker and the Canada Physical Presence Tracker. And these two apps are available on iTunes and Google Play and I have them as well on my phone. And Gerry splits his time between Vancouver and Maui, both gorgeous places. He's a true outdoors person when it comes to his time away from the office. So that is Gerry Scott. Welcome again.

Gerry Scott:
Thank you. Thank you.

Evelyn Ackah:
So Gerry, can you tell me, before we get into kind of the questioning that I have in terms of how you work and what you do for clients cross-border, why did you get into this area? What was it that got you interested?

Gerry Scott:
Well, there's two sides to every business, one, to run a successful business, you have to be very entrepreneurial. I honestly believe that anybody is entrepreneurial. 10, 15 years from now, we're going to be treating you with drugs because it's a very interesting business. There's ups and downs and all the above that comes with owning your own business. The reason why I got into it, like a lot of folks, you find out at a very young age your passion in life. And my passion in life was always asking questions from the time I was four years old. Your parents would give you direction, and I was the sibling that always asked why. I wanted to have a definition of the yes or no answer. So curiosity has always been something that's been... If you can list that as a hobby.

Gerry Scott:
But I really do enjoy helping people. And in the space that we're in, when an American moves up north here or Canadians move south, it really is very complex. And they will move for many reasons, love, politics, we're finding COVID, people coming home because of COVID and borders being locked up. But being a money person, being very, very young and wanting to have a nice lifestyle, maybe more than what my parents were able to provide with the trades that they chose, I really did want to help people with one of the most complex things they can manage, which is money. So I believe I got into the business for all the right reasons. I'm never one to be shy, always asking the questions and always wanting to help people. And every time we meet somebody and if we have mutual friends, Evelyn, we always say, "Be kind to everybody because you never know."

Evelyn Ackah:
You never know.

Gerry Scott:
We're all connected. We're all connected.

Evelyn Ackah:
Mm-hmm. Oh, I love that. I love that. And I know that's been an experience of the clients and the people we've sent your way is they just feel very cared for, very respected and very understood. And I think that is really important when you're doing this kind of very important work. You want to know that you feel good with the person that's taking care of your money. So let's get started in our questions, Gerry. You have a very unique business model as a wealth management provider in Canada. And you also have the designation of being licensed in both the US and Canada, which is pretty unique. Can you expand on the services you provide for Americans moving to Canada once they have their PR cards?

Gerry Scott:
Yeah, the biggest thing that shocks a lot of Americans when they move up to Canada is they have all these retirement vehicles, may they be the Roth IRAs, the IRAs, the 403(b)s, the 401(k)s, what they find out very quickly when they move to Canada, they got their Canadian address, they believe that they're able to maintain that relationship with that advisor that they've worked with for many, many years. Sadly, that advisor in the United States, as soon as there's a change of address to a Canadian address, that account gets frozen and the American firms do not have the exemption, in most cases, to be able to continue to manage that relationship.

Gerry Scott:
So that's the biggest thing that usually we get calls from yourself or the US accountants that are going to continue to file their US tax returns. We get that call and there's a problem and we're here to solve that problem because when you're licensed in both countries, you're able to accommodate that person. We can use a Canadian address. We are licensed with FINRA, so we're going to continue to maintain those assets in United States. So that's the biggest thing that we're finding when Americans move up to Canada.

Evelyn Ackah:
That's great. No, I think it makes perfect sense because I definitely have clients who do a lot of cross-border work and they don't think about that. What's going to happen to my investments? And I think it's one of those things, just like you buy a house or whatever, you put your kids in school in Canada, you have to think about what happens to all that money that you've worked accumulating and now you've left the country. So I think having somebody like you with that expertise is really critical. And I know it's come up even in terms of somebody we know who lost a spouse, and then you have to deal with the state issues on top of all of that before you can even move money. So it's very, very complicated for sure. Are you one of the few people that is licensed on both sides? It seems very rare.

Gerry Scott:
Well, we find that with Raymond James, there is a lot of advisors that are taking their Series 7 and becoming US-licensed. So there are a lot of advisors that can do a very good job. And other advisors are just starting to get into this field. And there's so much to learn, I mean, fast forward six years, and I'll tell you something. I mean, every day we're learning something. I mean, when Canadians are moving back home, they're going through that immigration process. And if they've had a green card, and you could expand on this as it's almost as if they were renouncing.

Evelyn Ackah:
I know.

Gerry Scott:
And what are the tax implications? So there's advisors that know this well and then there's advisors that are just starting to get into it. And I always caution people that make sure that you're sourcing out the right advisor, not just doing a friend of favour because he's now licensed in the States.

Evelyn Ackah:
Yeah. There's a lot of potential risk, right?

Gerry Scott:
Oh, it's ongoing. And what we also find is that the advisors that are not licensed in the States, through the treaty, you're able to transfer some of these pensions through, I think it's called a 60(j) rollover. And sadly, a lot of the Americans that move up to Canada here might want to go home one day, we all want to go home. So, I think you got to be careful that sometimes if you do the 60(j) rollover where you're taking a pension plan and rolling into an RSP, you might be doing that client a disservice if they intend to go home one day because you're trapping them in a... As beautiful as Canada is, and you and I talk about this all the time, Canada, you have to pay a lot higher taxes, and you don't want to trap somebody in a higher tax jurisdiction. So you want to make sure that you're looking at all the possibilities and options available for these Americans.

Evelyn Ackah:
That's great.

Gerry Scott:
And that's the biggest [inaudible 00:08:54].

Evelyn Ackah:
Mm-hmm. That's great. No, I really appreciate that insight because what I do is purely immigration and then, we find them you, or also finding them a cross-border accountant. Does Raymond James... do you provide that accounting support or usually refer that out too?

Gerry Scott:
Most times, because it's very important for all of us professionals to have multiple relationships on the immigration side, the US side, we form these teams were clients are well looked after. Raymond James does provide US tax services and Canadian tax services. I haven't been a big user of that service because I have friends like yourself that can provide great tax advice and great immigration advice. So I tend to kind of look for the third-party, looking for the personalities that we can match people with, that's the biggest thing that we're trying to do when someone is introduced to us and looking for other services.

Evelyn Ackah:
Okay. No, that's perfect. So Gerry, I know you've created two very interesting day tracking tool. Can you tell me about them and what was the motivation to create them? I think they're fabulous.

Gerry Scott:
Well, the first app, now we're into our eighth year, I believe.

Evelyn Ackah:
Wow.

Gerry Scott:
And there's a new version coming out that's being just submitted to Apple and Google Play, it's called the Snowbird US Day Tracker. Now, I have to say it selfishly, these apps were designed for myself initially and our clients initially that have homes down south. And being an avid golfer, it's very complex. I mean, people get immigration and tax, US tax, they kind of put them two together and they confuse everybody around them. And it's not uncommon for a bunch of Canadian Snowbirds to be sitting around the campfire in their RVs and somebody being knowledgeable and just giving this crazy advice about the six months rule or the 183 over three years, one being immigration and of course, one being tax.

Gerry Scott:
So we created these apps and intended for our clients and our friends and it's become a very, very large business out there that's turned into everybody in Canada's downloading the Snowbird app.

Evelyn Ackah:
That's great.

Gerry Scott:
We get a lot of questions. So I think, more importantly, what it's really allowed us to do, Evelyn, is create an audience. It's set up as an OBA, outside business activity away from Raymond James. And it's allowed us to create referrals for the partners that we work with, people like yourself and then on the US tax side. But it's been fun. I mean, people call you up and you would've never met these people. So it's nice to share what we've learned and not getting in the lane of the immigration officer or getting in the immigration lawyer and not getting in the lane of the US tax, but really, being very generic and then providing the right professionals that they can deal with to really take care of their concerns. Well, it's been fun.

Evelyn Ackah:
Yeah, no, it sounds great and it looks great and I've got to use it, but I haven't been travelling to the US as much as we used to before COVID but we're back to that again. But tell me, what is it? How does it work? I mean, basically, when they travel, they're indicating if they're in the States every time?

Gerry Scott:
No, what we've done is that rather than using a... Oh, I can't, not being a technical person. Usually what happens, Canadians, when they go down south, they turn off their phone.

Evelyn Ackah:
Yes.

Gerry Scott:
So we don't want to use this notification where they go across the border. What we like people to do is they learn a lot more if they filled each trip in individually.

Evelyn Ackah:
Okay.

Gerry Scott:
Because what happens is that I don't know if the technology, or whatever, helps somebody who actually left, kept on going back and forth across the border. That, from a GPS point of view, that would be very, very difficult to monitor. So this way we say, go to the app and they spend more time on the app and it becomes one of their favourite apps, I hope, that they can enter all this information in. So that was the Snowbird US Day Tracker, just making sure you build all this information. And what this app is going to be and what it becomes down the road, I mean, we have relationships with realtors, buying a place in the States is so complex for a Canadian person. So we want to make sure that we build that audience and we do these little avatar videos which you've participated in. And it's really out there to educate that Snowbird traveller heading down south and just providing a really nice, honest group of professionals that they can work with.

Evelyn Ackah:
That's great. And so, you also created another one, that's the one for people coming into Canada, the Canada Physical Presence Tracker. This is newer, correct?

Gerry Scott:
Yeah, this one was released in 2021. And like you mentioned, it's called the Canada Physical Presence Tracker. That is really set up for a lot of the Americans that are coming to Canada or any foreigner or immigrant that comes to Canada. And you could expand on this, but when you do get your permanent residence card, and Evelyn's being successful in getting that whole process set up for yourself, you are required to track 1,095 days over the next five years physically in Canada, which then will lead to the renewal or even citizenship. And of course, that's your field. But we set up that app for people like Evelyn that you could pass it on to your clients. And once again, being in the cross-border space, there's so much to know, and we just wanted to build a tool that was going to be able to help people rather than going to the spreadsheet and trying to figure it out so that was our motivation.

Evelyn Ackah:
I think it's a great idea. I mean, one of our plans now that things are kind of stabilizing with cross-border immigration is to be able to send that app out with our clients once they get their PR. So I think they'll be more people reaching out and looking at that because it is easier if you have that constancy in your mind that you got to keep track, especially now that people are travelling again back and forth and all over the world. So to help them to maintain their permanent residents before they get citizenship is really valuable. So is there anything else? I want to talk to you about business clients, so for instance, what are the services you provide for entrepreneurs and business owners, Gerry?

Gerry Scott:
Well, really what it is in Canada, it really comes down to your stay in Canada. So outside of the business market, people that are coming home, entrepreneurial people, we also work with professional athletes. And these athletes, once they get traded to the Vancouver Canucks, what they end up doing is their intent is, sometimes, the Sedins and some of these other people make Vancouver their home and continue to work for the club. Some of them come over on a five-year contract, six-year contract, and we set up things that are called a retirement compensation arrangement.

Gerry Scott:
And really what that is is because we've got a tax treaty with Sweden, these people can put a bunch of money into this trust, into this compensation arrangement. And the intent is when they go home, we have a tax treaty with Sweden, they pay their 25% tax on this, on the bind up of the RCA. We'll give it the acronym. And it just allows them to setup. So that takes care of those people that are hockey players that are. Coming to Canada and want to go home one day. And I've never been to Sweden in this case. And I hear Sweden, it's beautiful as Canada. I mean, very friendly people.

Gerry Scott:
And then, when it comes to business owners, there's all kinds of things that we could be doing for them, it could be individual pension plans, it could be our RRSPs. Some things we have to avoid, things like TFSAs if they continue to file US tax returns. We always take the direction of the accountant. It's really, one accountant says, "Do it," the other one says, "Don't do it," and that's why we take the advice from the accounting firms, if that makes sense.

Gerry Scott:
And then, the other thing is really just making sure that these immigrant business owners or entrepreneur people that come into Canada, running businesses in Canada is tough even if you were born and raised in this country, so I can imagine it could be very difficult for an immigrant person coming into Canada setting up a business. And one of the things that you and I have talked about a lot is you establish a team, you have your advisor that you can feel comfortable with, making sure that your immigration lawyer is working with that advisor. The referral that goes off to the banking people, the referral that goes off to the accountants, just making sure that you have a really good team in place and you're aware of everything and the benefits that you're going to provide for your employees. We have a referral that we work with a very experienced person in Vancouver. Yes, we're licensed to do it, but trust me, when you're doing Canadian investments, US investments, US law, Canadian law, we farm off, there's a specialty, we have to farm that out because we can't be everything to everybody.

Evelyn Ackah:
Mm-hmm. I'm the same. We do exactly the same thing. I think it gives the client a better experience for sure because you're in your wheelhouse, you're doing what you do well. So let me just ask you another question. In your opinion, do immigrant business owners have the same priorities and concerns as Canadian foreign entrepreneurs?

Gerry Scott:
I think they do. I think there's so many more things. Like I say, being raised in this country and being born in this country, it's difficult for myself to build businesses and move forward, I would imagine it's got to be that much more difficult for a person who's coming into Canada as an immigrant with the point of establishing a business. As beautiful as Canada is, we do pay the Piper. We pay a lot of tax. Our tax system, I think can be very, very complicated. The US system, when I get to learn it, from my point of view, it seems to be a little bit more favourable. I don't know if you agree or disagree, maybe it's just the lower tax rates.

Evelyn Ackah:
Yeah, I agree.

Gerry Scott:
Put a bigger smile on my face. But Canada is a very high-taxed country. We provide all these wonderful benefits for people, but they don't come free. So I would say that it's got to be very, very intimidating and the importance of people like yourself and the bankers and all these other professionals you need to surround yourself with, I think it becomes even that much more important.

Evelyn Ackah:
Mm-hmm. Mm-hmm. I totally agree with that. I mean, from my client experience, we work with a lot of business owners and they may have been very successful back home, but when they're transferring or doing intercompany transfer or buying a business in Canada. It is more about how things work, the systems, the registry. All the different things are different. And also having a network. So I think a part of our job too is to help them, to help them develop a network, just like you said, who you would advise them to contact? Of course, they have to choose who they want and feel comfortable with, but it helps if we can help them with a nice group or a team that they can choose to kind of establish themselves with. It just gives them that extra security that they're working with credible professionals, because you hear about a lot of people that are not professionals and take advantage of immigrants. And so, I think, for us, you and I both and the people we work with, that personal referral goes a long way to establishing credibility.

Gerry Scott:
Yeah. Well said. And of course, we add and people... Yeah. There's another podcast.

Evelyn Ackah:
How COVID affected all of us, that's the next podcast.

Gerry Scott:
Yeah, exactly. But yeah, just having the workforce and the younger workforce and all the things and their views and working from home. And I think it's like every business, you want to build this culture and you want to have people around you. Yeah, so I think the world is changing. And like I say, business is tough, obviously, it's very rewarding. The business owner does get off at 5:30 PM on Friday afternoon, which is an early day. So there's a lot of benefits of being the business owner. And I don't want to be a Debbie Downer, but there's great benefits to building a great business-

Evelyn Ackah:
No, but it's true. It's true. And I mean, you've done that and you, with your career of 30 years plus your time at Raymond James, I mean, it's wonderful what you've built. One thing I really like working with Gerry is he's got that entrepreneurial spirit, he still has that excitement and energy. And I think sometimes it ebbs and flows for me based on the border situation or the politics, but you always bring out that passion and that support. And I think that it really comes through in terms of how you take care of the people that you work with. So I am very grateful for your time today and I really appreciate you joining US on our podcast today and I look forward to continuing our working relationship over many years to come, Gerry.

Gerry Scott:
Well, thank you, Evelyn. And like yourself, I mean, we feel off each other. You have that passion and that care. And I'll leave with one last story. When I came into this business 30 years ago, it could be very intimidating. I mean, there was bankers and accountants and lawyers and professional athletes in our training class. And that very first day, I just remember, the biggest advantage one could ever have is knowledge is king, but caring is everything.

Evelyn Ackah:
It is.

Gerry Scott:
And I think that's where you and I enjoy each other's company is that we have the same agenda and that is look after people.

Evelyn Ackah:
Absolutely. Well, I really appreciate that. It's true. We wouldn't be doing this for all these years if we didn't love it and we didn't love our clients and the difference that we can make in their lives. So I'd love to thank you so much for joining me on the Ask Canada Immigration podcast. And I look forward to speaking to you soon, Gerry. Thank you.

Gerry Scott:
Thank you Evelyn. All the best. Stay safe.

Evelyn Ackah:
You too.

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