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b. 23, 1994 THE OAKVILLE BEAVER ,,c '_'f_"s, flfififi%fll li| 1 21 Every tye of investment has some inherent risk BY R. P. MILLER Special to the Beaver nterest rates have fallen steadily over the past four ears and are now at he lowest level in ecades. The search for higher returns has many people to abandon e "safe" shores of Guaranteed vestment Certificates, and dip eir toes into the unknown waters f mutual funds. In addition to igher rates of return, Mutual Funds ffer several other attractive feaâ€" res. Two of the most important are ie safety which is provided through iversification of your investments, and professional management. If the ability to access your money at any time may be of importance, the high level of liquidity afforded is a defiâ€" nite plus. Companies such as Investors Group permit movement between funds in the family. This flexibility can be helpful if used properly to improve returns and reduce fees. Despite the many advantages of mutual funds you may have reservaâ€" tions regarding the "safety" of this type of investment. Nearly everyone is familiar with Canadian Deposit Insurance Corporation and the guarâ€" antee it provides for GIC investâ€" ments. Few people are aware that investments in mutual funds are similarly protected, and there is a high level of safety inherent to investment funds as well. he Investment funds Institute of Canada is required by law to maintain a Contingency â€" Trust Funds which assures protection from loss due to illegal activity. The investor is protected by the trust fund against fraud or theft however it is noteworthy that there has not been a claim since its inception 30 years ago. The Contingency Trust Fund proâ€" vides an unlimited amount of insurâ€" ance, and further safety is rendered by the nature of investment funds. Investment, or "mutual", funds are a legal entity separate from the manager. That is to say a fund is either an incorporated company or a trust, which is an organization indeâ€" with Risk always rises the opportunity for higher returns pendent of the fund manager or sales agent. Only the investors, they being the shareholders, have a claim to the assets of the fund. Neither the manager, nor creditors of the manâ€" ager, share that access. In the event of a business failure your investâ€" ment is well protected. To guard against flyâ€"byâ€"night operators secuâ€" rities regulations require all of the assets of a fund be held by a custoâ€" dian, which is usually a major bank. Together these safeguards, along with the bonding required for all FILE means quicker returns for most here‘s never been an easier â€" or faster way â€" to file your personal income tax return‘". That‘s Susan Diane Brown‘s profesâ€" sional assessment of Revenue Canada‘s EFILE method of filing personal income tax returns. A chartered accountant operating an independent practice in Oakyville, Brown was a designated EFILE agent last year and has been approved as an Electronic Filer again for 1994. Her experience with the new system has convinced her that Revenue Canada has developed a stateâ€"ofâ€"theâ€"art procedure that has the potential to dramatically reduce the time and cost of processing perâ€" sonal tax returns at all levels. EFILE was introduced to Ontario| taxpayers last year for 1992 returns.| After three years of use in western Canada and one year in Quebec, EFILE is a simple process whereby an individual‘s tax return is elecâ€" tronically transmitted from the Electronic Filer‘s computer directly to Revenue Canada‘s computer. The Electronic Filer agent receives acknowledgement of the transmisâ€" sion within three hours, and, if no further information is required, the return is processed right away. That means that a refund cheque can be on its way within two weeks. If the taxpayer prefers, their refund can be deposited directly into a bank ‘account, eliminating potential mail delays. Brown believes that EFILE has proved its worth based on the results of its first year. "Of the two and a half million Canadians who EFILEd last year, 90 per cent received their refund within two weeks," says Brown. "That‘s an excellent track record." Most of those who experiâ€" enced delays still received their refund in a month. Only about four ‘per cent of those who Eâ€"Filed had to wait longer. Those delays were genâ€" erally due to unusually large deducâ€" tions that suggested further verificaâ€" tion would be appropriate, or to incompatibility between the specific details provided in a taxpayer‘s return and Revenue Canada‘s verifiâ€" cation process And those returns would have been delayed even longer had they been processed the ‘» oldâ€"fashioned way. â€" â€" "Last year, Ipersonally processed just over 300 returns through EFILE," Brown says. That‘s about the average number for an independent income tax preparer like Brown. "About 10 of these returns took longer than two weeks ~for the refund to be issued. And I can detail the reasons why every one of those was delayed. The biggest problem with EFILE is how we use â€" or misâ€"use â€" it." Control is the perâ€" ‘ sonal responsibility of the Electronic } Filer. If the tax prepared transmits ' the return as soon as it is completed, then Revenue Canada can fulfill its two week timeline for most returns. It takes more than a computer and a modem to gain approval as an Electronic Filer. "In order to mainâ€" l tain a high level of integrity in the system, potential Electronic Filers are required to pass specific screenâ€" ing criteria," says Elaine Harvey, EFILE coordinator for the Hamilton District Office of Revenue Canada Taxation. Although the prospect of getting their refunds fast is probably the issue closest to the hearts of taxpayâ€" ers, there are larger considerations. "EFILE saves us all time and money inâ€"some very important ways," explains Brown. "Information is only input once, at the tax preparer‘s office. This saves on Revenue Canada‘s manpower because they don‘t have to enter the data manualâ€" ly. The EFILE method also uses less paper because you don‘t have to fill out those cumbersome preâ€"printed forms and send along all the paper backâ€"up. So you could say EFILE is environmentally friendly, too." Calibre of service As a chartered accountant, Brown is impressed by the calibre of service that Revenue Canada offers in support of EFILE. And EFILE Help Desk is only a phone call away to answer questions in general or advise on specific issues that may come up as the Electronic Filer is preparing a particular tax return. Electronic Filers in the Hamilton area recently attended a halfâ€"day training session. At that session, they had a chance to critique the system and share their thoughts on what was good about EFILE, and what wasn‘t so good. "Revenue Canada has been extremely responâ€" sive to our comments. I believe that this year EFILE will be even more effective for us all," says Brown. But is EFILE only for the affluâ€" ent who use accountants to do their tax returns? "Not at all," says Brown emphatically. "You can prepare your own tax return and bring it to an Electronic Filer like me and for a nominal fee â€" about $25 â€" I will review your return and then transmit it for you. I might even identify a few tax savings opportunities you missed." Brown believes that the efficienâ€" cies of EFILE can make the services of a tax professional more affordâ€" able to the average Canadian. "Many Canadians are afraid to approach a C.A. because they are convinced it‘s too expensive. But last year, I was able to EFILE returns for my clients for as little as $25 to $60. And I made a point of trying to make people understand that professional consultation need not be expensive. I remember one single mother who was brave enough to ask if she could afford my help. EFILE helped her get her refund back quickly." The ‘One Decision‘ RSP Investment OneYear ThreeYear Five Year 22a9° 192" HG" The indicated rates of return are the historical annual compounded total returns for the indicated periods ended December 31, 1993 including changes in unit value and reinvestment of all distributions and do not take into account any optional charges payable by any unitholder which would have reduced the returns. RoyFund Balanced Fund * Growth * Diversification * Dependability e Low Minimum Investment e Absolutely No Load Visit your nearest Oakville/Milton Royal Bank branch today, or call us tollâ€"free 1â€"800â€"668â€"9700. ROYAL BANK Important information about RoyFund Balanced Fund is contained in the RoyFunds‘ simplified prospectus. Obtain a copy from Royal Bank Mutual Fund Services Inc. in branches of Royal Bank in Canada and read it carefully before investing. The above performance data represents past performance and is not necâ€" essarily indicative of future performance. The unit value and investment return of RoyFund Balanced Fund will fluctuate. RoyFund Mutual Funds are sold by Royal Bank Mutual Fund Services Inc. (a corporate entity separate from, though wholly owned by, Royal Bank of Canada). The Lion and Globe is a registered tradeâ€"mark of Royal Bank of Canada. Royal Bank Mutual Fund Services is a licensee of this tradeâ€"mark. R.R.SOP‘ 4 5.80% RATE SUBJECT TO CHANGE PREMIER TRUST A National Trustco Company Upper Sixth Plaza 1500 Sixth Line, Oakyville 338â€"04135 employees, ensure a hlgh level of safety. Day by day this is appreciatâ€" ed by greater numbers of people. A word of caution is in order however. None of the safeguards mentioned protect against market risk. The risk you take is your own, and the risk reward ratio always applies. Risk always rises with the opportumty for higher returns. The wise investor will consult with a qualified financial planner in order to determine the investment fund or portfolio which best meets their needs. R.P. (Bob) Milley is a Chartered Financial Planner with Investors Group Financial Services Inc. Smart. Investors RRSP. Smarter. If you don‘t think you‘re making the most of your money, you probably aren‘t. Investors will tailor a financial plan that meets your financial goals. ; BOB MI'!.LEY OR KAREN MUELLER 847â€"7776" INVESTORS‘ GROUP FINANCIAL PLANNING SERVICES INC.