Darren Devine, CFP®, CLU®
Financial Planner, Sun Life
President of Devine and Associates Financial Services Inc.
Hello, and welcome to Money Monday, where we help simplify your financial journey. I'm Darren Devine, Financial Planner with Sun Life and President of Devine & Associates. Today, we’re talking about Market Value Adjustments, or MVA's, and how they can impact your investments—particularly when they’re passed on to beneficiaries.
Here’s what you need to know: an MVA is a financial adjustment applied to certain investment products, like older Insurance GIC's or Trust GIC's, when the annuitant owner passes away or if you break the guaranteed investment before the maturity date. If interest rates have increased since the original investment, the adjustment can reduce the payout your beneficiaries receive.
For example, if someone expected their family to inherit $280,000 from their Insurance GIC, but interest rates have risen, the payout could drop significantly—perhaps by $15,000 due to a negative MVA. This can be a shocking and unexpected outcome during an already emotional time.
The good news is that there are ways to help minimize the impact of MVA's. By reviewing the terms of older investment products and understanding their risks and benefits, you can make informed decisions to help protect your legacy and avoid surprises for your loved ones.
At Devine & Associates, we’re here to help you navigate these complexities. If you have questions about MVA's or want to review your financial plan, reach out to us today. Let’s make sure your investments are aligned with your goals and help safeguard your family’s future.
Thanks for tuning in, don’t forget to like and comment for more episodes filled with tips to make your financial journey a breeze. Until next time, I'm Darren Devine, and you can always talk to us today at DevineAndAssociates.ca!