By Adrian Mastracci Business in Vancouver “Finance Focus” Column November 19-25, 2002 Issue 682

The third year of the bear market has altered many a financial plan. Some may be way off course.

Year-end planning is about examining the finances to determine if the game plan is still valid. But the 2002 year-end review has special meaning in view of the lingering uncertainty so individuals and businesses should begin by asking a few questions.

For individuals, these ideas may help:

The big picture:
Determine what you want your retirement nest egg to do for you. The portfolio is influenced by events like available time to retirement, present age, appetite for risk and investment personality.

If no game plan is in place, or it is outdated, then make it a priority.

Focus on factors you can control:
Asset allocation decisions have the greatest impact on returns. Clearly, this is the focus for every investment portfolio and a factor you can control.

So is the amount of risk you take, staying invested within your investor profile, the level of diversification and your investment horizon.

Number crunching:
Revisit the income level you need to support your retirement lifestyle. This leads to the question of how much capital you will need when you get there. Also, update the personal rate of return you will need on your investments to reach your milestone.

Yesterday's winners:
Too many investors are preoccupied with accumulating a portfolio of yesterday's winners. A portfolio with emphasis on consistent returns is better than one with emphasis on performance.

Understand the cost of investments:
Review the investment portfolio and understand the costs of each investment.

New interest deductibility proposals:
The tax collector recently outlined 18 proposals that change the deductibility of interest on borrowed funds. Please view my newsletter covering the 18 proposals.

Choose the saver and payer spouse:
Many families have one spouse who earns the higher income and often has more financial assets. If a goal is to equalize retirement incomes, the higher income spouse pays for the family expenditures. The lower income spouse can do the saving and accumulate assets.

Donate eligible securities to a charity:
Those who will be selling securities and making a charitable contribution in 2002 may consider giving the eligible securities directly to the registered charity. The incentive is that the capital gains inclusion rate on the donated securities is reduced from 50 per cent to 25 per cent.

The estate plan:
At the very least, review your will provisions. Start with the beneficiaries and the estate allocations. Then determine if the executors, guardians and trustees still want the thankless duties and responsibilities.

Meanwhile, many businesses, private and public, continue to endure the fear and uncertainty so prevalent the past couple of years.

Perhaps it's time to consider the "AAA" approach: assess, analyse and adopt. That is, assess the future prospects, analyse the present blueprint and adopt the necessary changes.

Here are some ideas:

Find a mentor:
Someone to bounce ideas at and with a wide perspective. Someone with imagination. She or he can be a terrific sounding board.

Fine tune the business plan:
Start by revisiting your business goals followed by where your industry is headed. Be realistic and ascertain if what you're doing today will still get you there tomorrow.

Business structure:
The business structure may not be appropriate. Perhaps you have a proprietorship, a partnership, an incorporated company, or a complex set of holding companies. See if you can improve the business by doing something different.

Succession planning:
Reflect on the financial ramifications and who will step in if there is a disability, retirement or death. Begin the process that identifies competent management to guide the business.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.