Blog

2025 was the year that information provided by ChatGPT and other AI clearly made it into my client meetings.

Most frequent:  from clients who had recently been downsized: "Can I ask for part of my severance to be a retiring allowance?"  Why was this important to them?  The top question from my recently released clients is ,'How can I pay less tax on this?!"  ChatGPT told them that part of a retiring allowance can be transferred directly to an RSP, without withholding tax.  ChatGPT isn't wrong, it just didn't add that the eligible part of a retiring allowance that can be transferred applies to your time at the releasing company before 1989 and before 1996.  Oh, and the year that you receive the retiring allowance, you can't be part of a pension plan or deferred profit sharing plan at the company.  The term 'retiring allowance' isn't commonly used in the packages that I see from clients; 'severance pay' is the term used.  CRA views them as the same- taxable income in the year that it is received.

Next in line: value of a privately-held corporation.  This discussion only happened a couple of times, with clients who were separating and had a Canadian-controlled private corporation (CCPC).  These are complex to discuss in a separation, as they will be discussed as an asset (on your Net Family Property Statement) and as an income source.  It's important to talk about them in both aspects; equally important to decide how to best handle a CCPC based on the facts of your CCPC and the goals for your re-organized family.  ChatGPT gives a list of common ways to value a company; even when you give information about the revenue there is enough missing information or nuance to send back an over-valuation.  An AI business valuation summary can be a good starting point when you need to understand the scope of what a business valuation is.  I recommend holding off on attaching to the value listed there. 

ChatGPT also can't parse out which advisor is best suited for which task.  I noticed some prospective clients waiting to work with me, continuing to ask other advisors questions those advisors weren't prepared to answer.  This lengthened the time it took for those people to get clarity on their situation.

Last: wild goose chase for information or documents that don't apply to your situation.  The winner here is, "Where do I find my T4A?"  ChatGPT had included T4A in a list of documents needed, without explaining what a T4A was.  The client spent time searching for one, when it didn't apply to their situation. 

When you use AI for financial answers, I recommend that you also internet search. If you aren't familiar with a document or term- that second, non-AI search can let you know whether to keep searching or whether something, like a retiring allowance or T4A, is applicable to you!

Reminder: Tell AI that you're in Canada.  Most information that is given after an initial query is U.S. based.  Watch for this especially in financial and legal queries.  Where possible, using government websites gives you accurate information for rules about account types, tax information and legal boundaries.

Top 3 questions directly from clients:

1. Where is my money going?
2. Am I saving enough?
3. Can I afford this house/ car/ vacation/ career change/ insert whatever is important to you here