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    balanced fixed income and domestic equity fund categories also posted strong gains says Morningstar Canada It says 37 of its Canada fund indices had positive results for the month including increases of more than three per cent for seven of the 24 equity fund categories The top performing fund indices for the month were those that target Asian equities Funds in the U S equity and U S small mid cap equity categories also continued their strong run with increases of 3 1 per cent each for the two fund indices that track these categories However its European equity fund index another high flyer in recent months posted an increase of 0 8 per cent its worst performance since July 2012 As has been the trend for several months Canadian equities posted strong gains in February led by the financial services sector but domestic equity funds failed to keep pace with their foreign counterparts Russia Unusual For Emerging Market Russia is somewhat unusual for an emerging market economy says Igor Danilenko senior equity portfolio manager at TKB BNP Paribas Investment Partners Russia as it was once one of the world s leading economies However he told the BNP Paribas Investment Partners information breakfast seminar Russia Dispelling the Myths to Reveal the Opportunities the former communist country has created a lot of wealth from scratch over the last two decades Calling it a remarkable transformation it is now a top 10 global economy which is slightly larger than Brazil For investors it offers a number of benefits Russia compares well within the emerging markets universe with its balanced budget low economy wide leverage and relatively good macro situation with three per cent growth expected for 2013 It is a market where good active managers can significantly outperform the index and active opportunities can be found within listed companies with unique sustainable competitive advantages he said IPP Solution Overlooked Pension reformists looking for way to ensure the provision of an adequate tax assisted solution for individuals not covered by broadly based employer sponsored pension plans have overlooked a solution that has been available since 1991 the individual pension plan Jean Pierre Laporte CEO of INTEGRIS Pension Management Corp reviews some of the often forgotten characteristics of the individual pension plan its strengths and weaknesses and how if properly structured this particular vehicle could provide a partial solution to the pension coverage problem in the article IPPs The Overlooked Solution It is at IPP Solution March 4 2013 Corporate Tax Rate Consistent With Global Trend Canada s corporate tax rate dropped in 2012 as the last phase of federal cuts took effect This tax cut is consistent with the global trend in the reduction of corporate tax rates but Canada s rate fell faster than other countries rates during the year says KPMG s Global Corporate and Indirect Tax Survey Of Tax Rates Affecting Business General corporate income tax rates are important but they are only one factor in comparing country to country tax burdens says Elio Luongo managing partner tax at KPMG in Canada Sales tax property tax capital tax and other local business taxes are all considerations International companies should analyze all of these costs carefully and how they interact Canada s corporate tax rate dropped by two per cent to 26 per cent in 2012 from 28 per cent in 2011 but the decline in most regions of the world in 2012 was much smaller at less than one per cent Based on these results the survey says the global trend towards falling rates will continue in 2013 albeit at a slower pace than in the past Canada s general corporate tax rate for 2012 which includes federal and provincial tax compares favourably with the U S corporate rate of 40 per cent but is still higher than the UK rate of 24 per cent and the European region average of 20 5 per cent Great Time To Invest In U S Equities It s a great time to invest in U S stocks for a variety of reasons says Rick Przybylski chief investment officer at STYLUS Asset Management He points to a number of factors very attractive stock fundamentals excellent dividend yields relative to bond yields and the support of a slow but sustained economic recovery in employment housing prices and manufacturing Also for Canadian investors who already have exposure to Canadian stocks an investment in the U S market acts as an excellent diversifier More than 75 per cent of the S P TSX Composite Index is invested in just two sectors resource and financial stocks By comparison the largest two sectors in the S P 500 Index technology and financial stocks account for only 34 per cent of its weight A broader mix of stocks in the U S means more choice and opportunity and less reliance on volatile commodity prices The final piece of the puzzle is the fact that Canadians can invest in the U S market with the dollar virtually at par which would be an added benefit to investors in the next few years as the U S dollar strengthens Russia Unusual For Emerging Market Russia is somewhat unusual for an emerging market economy says Igor Danilenko senior equity portfolio manager at TKB BNP Paribas Investment Partners Russia as it was once one of the world s leading economies However he told the BNP Paribas Investment Partners information breakfast seminar Russia Dispelling the Myths to Reveal the Opportunities the former communist country has created a lot of wealth from scratch over the last two decades Calling it a remarkable transformation it is now a top 10 global economy which is slightly larger than Brazil For investors it offers a number of benefits Russia compares well within the emerging markets universe with its balanced budget low economy wide leverage and relatively good macro situation with three per cent growth expected for 2013 It is a market where good active managers can significantly outperform the index and active opportunities can be found within listed companies with unique sustainable competitive advantages he said Private Equity Offers Alternative Despite the North American economic recovery headwinds facing public markets private equity continues to represent an alternative investment strategy that is delivering sustained investor returns says Rick Nathan managing director of Kensington Capital Over the past several years traditional portfolios of stocks and bonds have largely failed in their core mission to create wealth generate income and secure long term retirement savings he says However the private equity market has been providing investors with a reliable avenue to participate in the steady economic growth Private equity represents an investment in the real economy where wealth creation is based on real measures such as earnings growth and profitability and the abilities of private equity managers to translate these measures into tangible gains for investors he says Low Growth Doesn t Translate To Returns Investors in Canada need to keep three things in mind says Roger Aliaga Díaz a senior economist with the Vanguard Investment Group One is that low growth does not translate directly to equity returns It s not a one to one relationship especially because markets are forward looking and trends and equity valuations are already priced in As well many investors look at countries such as Canada as a way to gain exposure to underlying commodities but it s important to keep in mind that investing in equity markets of those countries doesn t mean gaining exposure to the underlying commodities The correlation of equities in Canada to equities in the rest of the globe and in the U S is much higher than the correlation with equities to commodities As a result investors may get much less diversification than they were expecting when they use these strategies Finally they need to keep a long term perspective he says It s very difficult to time the movements in commodity prices and it s important to keep in mind long term goals and maybe focus on costs which can be controlled in the short term Morningstar Investment Conference Date Set A panel discussion on the macro economic outlook will lead off the 2013 Morningstar Investment Conference As well a panel of Morningstar analysts will provide insights on portfolio construction and the company s head of retirement research will address the factors that advisors can control in adding value for their clients It takes place June 5 at The Carlu in Toronto ON For more information visit Morningstar Conference Advocis Proposes Professions Model Canadian investors need better assurances that the financial advisor they are working with is properly qualified to manage their money says Advocis The Financial Advisors Association of Canada In the current environment anybody can set up shop and call themselves a financial advisor regardless of their training education or ethics it says This puts Canadians at risk every day as they take financial advice from people who may not necessarily be experts Advocis is proposing the implementation of a professions model for financial advisors that will tightly regulate the use of the title financial advisor and require membership in a recognized professional association Too often the headlines are about Canadians being defrauded of their hard earned money or losing their retirement savings because of the shady actions of someone who calls him or herself a financial advisor says Greg Pollock president and chief executive officer of Advocis We want to raise the professional bar and protect the wealth of Canadians by ensuring that when they turn to a financial advisor they are turning to a person they can trust If that trust is broken we want Canadians to have a reliable course of action Mandates Respond To Canadians Seeking Income And Growth Canadian investors seeking income and growth potential insightful access to worldwide opportunities and deep on the ground stock picking expertise will now have access to two investment portfolio solutions In collaboration with Lazard Asset Management Brandes Investment Partners Co has launched two mutual funds to the Canadian market a global equity income fund a total return investment solution and an emerging markets multi strategy fund a less volatile means to invest in the growth of emerging markets The two respond to the demand for prudent risk conscious strategies without sacrificing long term growth potential says Carol Lynde president at Brandes Checking Off The Bucket List With 122 countries checked off his bucket list Peter I Volny says he has seen and done a lot Yet his latest adventure Gorillas In Rwanda tops his list Visiting Rwanda to see the Silverback gorillas in the Virunga mountains Volny recounts his experiences with these gentle primates and recounts his face to face moments with them Read more Business Barometer Upward Trend Continues After a lacklustre November and December Canadian entrepreneurs are feeling more optimistic in early 2013 says the Canadian Federation of Independent Business CFIB Its Business Barometer index continued January s upward trend by rising another half a point to 66 2 in February For the first time in a while small business owners are reporting index numbers that indicate the economy is growing nearer its potential says Ted Mallett CFIB s chief economist and vice president The January and February results suggest Canadians are seeing modest but widespread economic growth Measured on a scale of zero to 100 an index level above 50 means owners expecting their businesses performance to be stronger in the next year outnumber those expecting weaker performance According to past results index levels normally range between 65 and 70 when the economy is growing at its potential Less Than Half Have Website Only 46 per cent of Canadian small businesses have a dedicated website and less than half 48 per cent of those businesses sell their products and services through their websites says an RBC small business survey With the majority of consumers choosing to research and shop for products and services online businesses without a web presence are missing a significant opportunity says Jim Mulligan national director retail RBC Royal Bank Businesses need to be visible where consumers choose to be so investing in an online strategy is fundamental to attract new customers and stay competitive In fact 56 per cent of the entrepreneurs in the survey rate finding and keeping clients as one of the top business challenges that they will face over the next year yet only 41 per cent of those surveyed promote their business using a dedicated website Family Business Sales Grow Sixty per cent of Canadian family businesses reported sales growth in the last year and in the next five years 87 per cent plan to grow steadily says the Canadian supplement of PwC s Global Family Business Survey However securing talent to drive this growth is a challenge it says It found that for the next five years attracting a skilled workforce is the top concern for 62 per cent of Canadian family businesses while the economy is the primary issue 66 per cent for global respondents Sharon Duguid director of the Centre for Entrepreneurs and Family Enterprise at PwC says the difference lies in the relative stability of the Canadian economy aging workforce and the tight talent pool Canada is facing While everyone is competing for the same talent typically family businesses are not able to compete with multi national players when it comes to compensation On the development end their conservative growth strategies are not appealing for younger talent who want to climb the ranks quickly Yet a family businesses structure can offer significant benefits particularly their agility continuity and their long term perspective mindset Family businesses need to do more to highlight their competitive advantages their commitment and loyalty to their people People are attracted to companies that have strong values and where they know their efforts will be recognized both of which are characteristics of family businesses she says February 25 2013 Americans Need More Investment Communication Nearly half of ultra wealthy Americans 49 per cent feel isolated when making financial decisions says a survey by SEI a provider of asset management services and investment processing solutions Nearly two in five 39 per cent feel most confident getting advice for difficult financial decisions from a wealth advisor and more than half 57 per cent feel their wealth advisor is not giving them all the information they need to assess investment risk The results point to a lack of communication between the ultra wealthy and their advisors when it comes to the potential risks involved in investment decisions The challenge is trying to balance the need for external input with clients instincts to take the lead on family decisions financial or otherwise It really comes down to having frequent and meaningful communication with clients in order to arm them with all the information and advice they require to make confident decisions Hopefully in doing this the client will feel more connected and more informed when assessing financial decisions says Michael Farrell managing director for SEI Private Wealth Management Results also showed that the ultra wealthy believe they would feel financially secure with double the level of assets they currently have regardless of present net worth What s more the amount needed for investors under the age of 50 to feel they have financial security is even greater coming in at more than three times their current net worth Investors Acknowledge Emotional Investing Thirty four per cent of Canadian investors acknowledge that they take an emotional approach to investing and another quarter 26 per cent are unsure of whether they do or not says Time to Take Stock a report by Franklin Templeton Investments Corp Canadians are still looking at equities through bear market glasses The dramatic market drop of 2008 continues to stand out in investors minds even as the market has climbed back up says Ronice Barlow head of strategic planning and business development Canada Franklin Templeton In fact when Canadian investors were asked if they currently view fixed income assets including bonds and bond mutual funds as a safe haven for their money 61 per cent indicated that they do Also 35 per cent believe that fixed income assets offer the best returns in today s markets These views on fixed income may be keeping many investors on the equity market sidelines and further from their long term financial goals in a period where the S P TSX composite index has risen about 68 per cent since the market bottom in March 2009 Time to Take Stock outlines three concepts as to why investors hold the beliefs and make the decisions they do These include availability bias wherein decision making is greatly influenced by what is personally most relevant recent or dramatic loss aversion whereby the pain of loss is generally much stronger than the reward felt from a gain and herding defined as an innate tendency to follow the crowd which makes it easy for investors to get caught up in what everyone else is doing Confidence Rises For Mergers and Acquisitions Confidence to undertake mergers and acquisitions M A is returning among Canadian companies says KPMG s Global M A Predictor Not only do companies appear to have their appetite back for M A they also have the capacity to transact Over the last two years the capacity for deals has been steadily rising as companies have focused on reducing debt and building cash reserves We are seeing significant transaction appetite with private equity having capital to deploy and corporate balance sheets having significant capacity to transact says Neil Blair partner KPMG Corporate Finance The outlook for 2013 is more positive than it has been for over two years the winning combination of confidence capital and capacity bodes well for the health of the Canadian M A market Manager Optimism Guarded Money managers are more optimistic about potential equity returns this year but that optimism is guarded with negative views on world growth and medium term government

    Original URL path: http://www.privatewealthcanada.ca/private_wealth_news.php?date=2013-03-14 (2016-04-27)
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  • Private Wealth Canada News
    number one challenge Respondents cited finance about four times more often than any other issue The Canadian innovation challenge boils down to great people and great ideas but many entrepreneurs are poor at commercialization says Michael Grant director of research capital markets Centre for Business Innovation Although small firms are often more innovative than larger firms they are also the ones that are most likely to lack the internal cash flow to fund innovation projects The report outlines a range of other actions by businesses governments and academia that could improve access to financing for innovation Russell Launches Alternative Pools Russell Investments Canada Limited has launched a global infrastructure pool and a global real estate pool for Canadian investors seeking to diversify their portfolios beyond traditional stocks and bonds Institutional investors have been looking to invest in global infrastructure and real estate opportunities for increased diversification and we believe retail investors would benefit from this same access says David Feather president and chief executive officer Russell Investments Canada In this low return and volatile market environment investors need access to additional sources of portfolio diversification in order to improve their risk return outcomes The new pools complement its existing suite of fixed income and equity solutions by offering investors the opportunity to invest in asset classes that have low correlations with traditional stocks and bonds Canadian Investors More Certain Canadian investors are more certain of their investment personality traits in 2013 and greater numbers are open to taking risks says research from Franklin Templeton Investments Its January 2013 survey found that 82 per cent of investors identify themselves as having a specific investment personality up from 68 per cent in 2009 The percentage of investors who identify themselves as risk taking has increased to 14 per cent up from a relatively steady eight per cent in the past four years The survey also found that more men identify themselves as opportunistic risk taking or analytical at 47 per cent than women at 35 per cent men are significantly more risk taking 18 per cent than women 10 per cent and people are less worried about running out of money in retirement once they are aged 55 or over 34 per cent compared to those aged 35 to 54 53 per cent and 18 to 34 56 per cent When it comes to thinking about their retirement savings and investments almost three quarters 73 per cent have little or no stress ESG Assets Rising Globally Globally at least 13 6 trillion worth of professionally managed assets incorporate environmental social and governance ESG concerns into their investment selection and management says a report from the Global Sustainable Investment Alliance GSIA This represents 21 8 per cent of the total assets managed professionally in the regions covered by the report conclusively showing that the sustainable investment industry has significant scale in the global arena Europe is the largest region with about 65 per cent of the known global sustainable investing assets under management Europe along with the United States and Canada account for 96 per cent of SRI assets The most common strategy used globally is negative exclusionary screening with 8 3 trillion in assets Assets utilizing ESG integration are at 6 2 trillion Canadian Banks Downgraded Moody s Investors Service has downgraded the long term ratings of six Canadian banks The long term senior debt ratings of the banks were all downgraded by one notch It also removed systemic support from the ratings of all rated Canadian banks subordinated debt instruments including those issued by Royal Bank of Canada RBC David Beattie a Moody s vice president says the downgrade of the Canadian banks reflects our ongoing concerns that Canadian banks exposure to the increasingly indebted Canadian consumer and elevated housing prices leaves them more vulnerable to unpredictable downside risks facing the Canadian economy than in the past However following the action Canadian banks still ranked amongst the highest rated banks in its global rating universe Entrepreneurs Feeling Optimistic Canadian entrepreneurs started 2013 with a healthy boost of optimism says the Canadian Federation of Independent Business CFIB Its Business Barometer index jumped three points to 65 7 in January Small business owners in Alberta 70 5 are once again the most optimistic the country although Newfoundland and Labrador 69 3 and Saskatchewan 66 7 are close behind Ontario 65 Nova Scotia 64 2 Manitoba 63 5 Quebec 62 7 New Brunswick 61 7 and Prince Edward Island 58 3 all experienced increased small business confidence Only British Columbia 61 6 firms saw a decline in optimism Full time hiring plans have jumped to a post recession high with 27 per cent of businesses expecting to hire additional staff in the next few months Similarly 44 per cent of business owners described their state of business to be in good shape the best score in the past four years According to past results index levels normally range between 65 and 70 when the economy is growing at its potential January 28 2013 Affluent Investors Very Optimistic Affluent North American investors are feeling very optimistic about their personal finances heading into 2013 say the Manulife Financial and John Hancock Investor Sentiment Index surveys Seventy per cent of affluent investors in both Canada and the United States agree that they are either ahead of plan or on track to meet their personal financial goals and about 50 per cent anticipate that their financial position will improve over the next two years Just one in five indicated that they are behind on their financial goals but say they are likely to catch up In Canada the overall affluent investor sentiment index strengthened in the second half of the year rising to 31 from 26 in January 2012 In the U S investors confidence held steady in the fourth quarter of 2012 with the John Hancock index ticking upward slightly to 18 from a score of 17 in the third quarter of last year Other findings from the surveys show that Canadians and Americans are aligned in their financial New Year s resolutions and how they plan to achieve their top financial goals In Canada 31 per cent and in the U S 29 per cent the top financial planning New Year s resolution is to trim household budgets Rebalancing portfolios is second at 19 per cent for both Top financial priorities for 2013 among affluent Canadians and Americans differ slightly Canadians top three priorities are to manage maintain current lifestyle 32 per cent pay down debt 18 per cent and save for retirement 15 per cent American respondents say their top financial priorities are the same However they differ in order with maintain manage their current lifestyle 35 per cent topping the list followed by saving for retirement 29 per cent then paying down debt 11 per cent Seven in 10 Canadians work with a financial advisor to achieve their financial goals In the U S five in 10 seek professional financial advice Canadian CEOs More Confident Canadian CEOs are generally more confident of their revenue prospects and the economy in the short and longer term compared to their global peers says PwC s Global CEO Survey They say they are very confident about their company s prospects over the next three years and they have a higher confidence level than their global counterparts 60 per cent versus 46 per cent globally About half say they expect the economy to stay the same in 2013 while roughly a quarter expect some improvement Last year nearly half of leaders said things would get worse in 2012 and few were expecting an improvement Half of Canadian CEOs said that all of their staff is encouraged to get involved in strategic decision making compared to 31 per cent globally CEOs also stay active in succession planning with 85 per cent saying they are identifying multiple successors for their jobs However Canadian CEOs are less likely to provide global mobility and international experience opportunities to develop their leadership pipeline than other countries including the U S the BRIC economies EU zone and Australia Only 39 per cent of Canadian CEOs use global mobility as a development tool compared to the global average 61 per cent Moreover they were less inclined to say global opportunities are an effective way to develop their leaders Brandes To Offer LAM Mutuals Brandes Investment Partners Co has arranged with Lazard Asset Management to offer Lazard mutual funds to retail investors in Canada This collaboration expects to initially offer two mandates focusing on global dividend opportunities and emerging market equity and debt opportunities Brandes has been doing business in Canada for almost 40 years says Charles Brandes chairman of Brandes In fact my first client was a Canadian so I m delighted that we are taking this step to further expand our commitment to Canadian investors by partnering with another world class manager With more than 280 investment personnel worldwide Lazard s diversified global investment platform manages in excess of 146 billion and is noted for its emerging markets capabilities and success Risk Disclosures Didn t Anticipate Market Decline The recent global financial crisis had little impact on the risk disclosures of non financial Canadian firms says a study by the CGA Canada Accounting and Governance Research Centre CGA AGRC It suggests that investors examining changes in risks faced by non financial companies between 2007 and 2008 would have been at a loss to anticipate the decline in market values that occurred in that period A change in the financial headwinds has to affect risk disclosures says Daniel Zéghal FCGA and director of the CGA AGRC at the Telfer School of Management University of Ottawa If there is no impact it s very likely that the analysis of risks is not thorough enough or risk communicating strategies used by companies are ineffective The findings in this study underline the need to pay particular attention to the quality of risk disclosures CVCA Launches Visa Pilot Program Canada s Venture Capital and Private Equity Association CVCA is entering into a partnership with the federal government in launching the new Start Up Visa pilot program It will be canvassing its venture capital fund members about participation in this new pilot program and will subsequently provide a list of those member venture capital funds to the Minister of Citizenship and Immigration CVCA will also provide regular reports to the department of Citizenship and Immigration on program utilization by its members The global competition to attract the best and the brightest entrepreneurial talent is heating up and several countries from the U S to Great Britain and Chile have introduced comparable programs designed to lure entrepreneurial talent to their shores Entrepreneurs create companies and venture capital funds are in the business of providing the necessary funds for those entrepreneurs and companies Those companies in turn provide returns to their investors and the countries in which they are located via job creation exports and R D Search For Yield Leads To Maples The search for yield in 2013 may take investors to maple bonds says Richard Usher Jones vice president of Canso Investment Counsel Ltd Speaking at a Pembroke Private Wealth Management session he said corporate bonds performed strongly last year particularly maple bonds We still see very good value in corporate bonds and as a subset of corporate bonds maple bonds as well he said Maple bonds are bonds issued by foreign entities on the Canadian bond market in Canadian dollars These types of bonds are a good fixed income investment because they offer higher yields than their domestic counterparts Red Tape Costs More In Canada Most businesses in Canada pay more per employee than their counterparts in the U S to comply with regulatory requirements says a report from the Canadian Federation of Independent Businesses CFIB The report updates the total cost of regulation to Canadian businesses and provides a first ever direct comparison of these costs to those faced by U S businesses The largest cost difference was found in the small business category fewer than five employees the largest category for businesses in Canada and the U S Businesses of this size pay 45 per cent more per employee in Canada 5 942 to comply with government regulation than their U S counterparts 4 084 The total cost of regulation to Canadian businesses is 31 billion a year which has remained relatively stable since CFIB first started estimating regulatory costs in 2005 The total cost of regulation in the U S is 198 billion The report also found that about one third of business owners in Canada might not have gone into business had they known about the burden of red tape compared to about a quarter of U S businesses January 21 2013 Cash Buildup Not Knee jerk Reaction While critics have raised alarms about the rising cash holdings on corporate balance sheets there are broader long term reasons for the move to cash that go far beyond a knee jerk reaction by business to current economic uncertainty says the report Not Dead Yet The Changing Role of Cash on Corporate Balance Sheets from the C D Howe Institute Corporate cash holdings have increased in waves over the past quarter century in response to changing economic conditions and business process improvements says Finn Poschmann vice president of research at the institute He says that while corporate cash as a share of assets has risen in the past decade the share of other non income earning current asset components such as inventories and accounts receivable has significantly fallen Businesses appear to have been responding to long term trends in economic conditions including enhanced business processes that have shrunk inventories by better managing their balance sheets Choosing Right Funds Not Simple Fifty one per cent of Canadians who own mutual funds agree that choosing the right fund is neither simple nor straightforward yet most spend more time planning luxuries instead of annual investments says a survey by ING DIRECT The survey showed that Canadian mutual fund investors spend an average of 3 4 hours a year planning their mutual fund investments By comparison they spend more time planning purchases such as a smartphone television or computer five hours a vacation 6 6 hours or a car purchase lease 9 2 hours Though not surprising it s discouraging to see that Canadians are prioritizing vacation planning and car purchases over their mutual fund investment decisions says Silvio Stroescu head of mutual funds at ING DIRECT Mutual funds are the most popular investments in retirement portfolios so to spend a little more time researching your options is worthwhile and can lead to significant savings in the long term Financial Literacy Remains Issue When it comes to finance most Canadian small businesses know they need help says a survey by Intuit Canada It indicates that 83 per cent of Canadian small businesses face a serious financial literacy skills gap In a 10 question quiz involving entrepreneurs two per cent scored great 16 per cent good 39 per cent basic and 44 per cent scored below basic which reveals both a serious skills gap and a lack of access to the tools and resources that can help says Jeff Cates managing director of Intuit Canada Fifty per cent of respondents also understand that financial management is important Canadian small business owners know what needs to be done to start closing the knowledge and skills gap as 42 per cent said they wanted to spend more time with an accountant 24 per cent indicated they would benefit from information sessions with other small business owners and 22 per cent said they would benefit from online tutorials Financial Planning More Strategic For Self Employed Self employed workers may find themselves in a difficult situation if an illness or an accident prevents them from functioning normally says Denis L Hostie senior manager financial planning at the Laurentian Bank For self employed workers financial planning takes on a much more strategic dimension requiring a global strategy and a long term vision he says The investment strategy must be adapted to the worker s income If their income is insufficient to save for retirement alternatives will need to be considered such as adapting the strategy to the individual s age or assets Generally the company is the self employed individual s main asset says L Hostie Therefore to ensure investment diversification and reduce risk they must select other investments These should be less volatile and adapted to their investor profile Regardless of the strategy selected self employed workers must be disciplined to achieve their objectives Incorporating a business is one way to gain more flexibility in a financial planning strategy Changing to a corporate status allows self employed workers to defer their taxes thereby benefiting from advantages that would not otherwise be available However this step should only be taken when the self employed individual earns sufficient income to be able to absorb the costs of incorporation SRI Assets Continue To Climb Socially responsible investment SRI assets in Canada continue to climb showing growth in virtually every major market segment and outpacing growth of total assets under management says a report by the Social Investment Organization The Canadian SRI Review 2012 shows that assets managed under sustainable and socially responsible guidelines in Canada grew by 16 per cent between June 30 2010 the effective date of the last report and December 31 2011 By comparison total assets under management grew by nine per cent in the same time period Total assets managed under SRI guidelines is 600 9 billion up from 517 9 billion At 600 9 billion this represents 20 per cent of assets under management in the financial industry up from 19 per cent of the market in 2010 Sun Life Launches Income Funds Sun Life Global Investments has launched four new income funds geared toward providing investors a source of income as well as one

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  • Private Wealth Canada News
    By comparison the transportation and warehousing industry can count on price increases and developed cost control practices to enable strong profit growth going forward December 17 2012 Woman Face Challenge of Glass Ceiling When it comes to salaries promotions important decisions and travel the glass ceiling the unseen but unbreachable barrier that keeps women from climbing the corporate ladder is a very real challenge for today s female business leaders says a survey by Randstad Canada a provider of staffing recruitment and HR services The survey indicates that Canada s female managers and executives are still seeing a divide on a range of factors when it comes to the differences between men and women in the workplace with salary topping the list Seventy seven per cent of respondents felt there remains a moderate or large divide between the financial compensation a man receives in a leadership role compared to what a woman receives in the same position Only seven per cent believe that women s workplace salary is perfectly equal with their male equivalent while 16 per cent say they notice a small divide Moving up in the organization also seems to bring about the same divide as salary with 92 per cent of those women polled feeling there was at least some divide in the opportunities for men and women to be promoted When it comes to business travel more than four out of five women feel that men are given somewhat more travel opportunities than women with half of those polled feeling there remains a very large or moderate divide when it comes to business travel Based on the survey results alone it is clear there are many divisions seen in the workplace and we still have a long way to go when it comes to salaries promotions decision making opportunities choice assignments and even business travel says Hanna Vineberg vice president Central Ontario Randstad Canada Income Inequality Holds Steady Income inequality has remained relatively flat in Canada for more than a decade contrary to conventional wisdom says a report by the TD Bank The report says income inequality also known as the income gap a country s broadest measure of what rich people earn versus what poor people make was escalating rapidly until about 1998 but has remained surprisingly unchanged since then The report bases much of its findings by looking at the Gini coefficient a mathematical figure that economists often use to compare incomes across a broad spectrum A country with perfect income equality one in which every citizen earns the same amount would have a Gini coefficient of zero Conversely a country in which one person earns all the country s money would have a Gini figure of one By giving countries a ranking on the Gini scale economists say they are able to compare them fairly In 1998 Canada s Gini coefficient was 0 43 It is still at that level today says TD Bank Nomadic Approach Key To Wealth A global nomadic approach

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  • Private Wealth Canada News
    in 2013 following a raise in the annual contribution limit to 5 500 says Ted Menzies Minister of State Finance Since the Harper government made TFSAs available in 2009 Canadians have been able to earn tax free investment income on contributions of up to 5 000 per year All Canadians can earn tax free income through a range of investment products TFSAs have become increasingly popular and approximately 8 2 million Canadians have opened an account Roughly 2 5 million Canadians contributed the maximum amount in 2011 When the TFSA was introduced the government announced that the annual contribution limit would be indexed to inflation in 500 increments The upcoming raise is the first such increment CI Investment Adds Management Teams CI Investments Inc CI has added two alternative asset management teams to its mutual fund lineup Under the changes Red Sky Capital Management Ltd is sub advisor to a portion of the CI Canadian Small Mid Cap Fund Red Sky Capital manages a multi strategy hedge fund focused on North American equities In addition Lawrence Park Capital Partners Ltd is sub advisor to a portion of the United Canadian Fixed Income Pool which is part of CI s United Financial lineup of managed solutions ETFs Gaining Momentum Financial advisors expect to see increased use of exchange traded funds ETFs in client portfolios while aversion to risk remains high says a study by Invesco Ltd Advisors surveyed believe ETFs will make up 24 per cent of portfolio allocations over the next 12 months and 33 per cent over the next three years representing a 10 per cent increase over results of Invesco s 2011 survey With continued global economic uncertainty advisors see clients remaining vigilant in their aversion to risk and 91 per cent believe their clients are more interested in minimizing losses than maximizing gains The survey also found a growing appetite for complex strategies such as smart beta ETFs but broader adoption will require more education on how these strategies can best serve investors ETF adoption rates in the U S have tended to lead those in Canada by several years suggesting that ETF usage can be expected to continue among Canadian advisors Engaging Workforce Starts With Leadership Creating an engaged workforce starts with a series of steps based on leadership says Dana Mitchell an associate partner performance rewards and talent at Aon Hewitt Speaking at its 2013 Best Employers in Canada luncheon she said one of the characteristics of its best employers is that their employees are engaged Engaged employee are more productive provide better customer service are absent less frequently and care how their company performs she said And these companies all have leaders who pay attention to what employees think and include this in their decision making They also put effective managers in place who help employees grow in their careers Engaged employees want their opinion to count and feel valued and appreciated by their managers and their co workers Tactical Allows Managers To React Tactical asset allocation is often confused with market timing but it is different says Deborah Frame vice president investments at Cougar Global Investments LP With tactical asset allocation you are doing the opposite of what 90 per cent of managers are doing she told the ETF Strategies For Institutional Investors panel at the TSX CETFA Exchange Traded Fund Conference for Institutional Investors Traditional managers are generally bound by investment policy guidelines and end up spending much of their time rebalancing their portfolios However she said this why so many lost money during 2008 s financial crisis as they are forced to reallocate assets to fixed income from equities when markets are doing well and buy more equities when they are not As well investment policies can prevent them from reacting to changing markets which means they are doomed in certain markets Succession Becomes Top Concern Business succession has very quickly become one of the top concerns identified by high net worth clients A survey by RBC Wealth Management also shows retirement planning and tax minimization remain other key concerns expressed by clients We are seeing a recent shift in the concerns of our high net worth clients While they continue to seek out advice on retirement planning and as part of that tax minimization to ensure a successful retirement they are also now increasingly putting on their business owner hat and seeking out advice around the succession of their business says Howard Kabot vice president financial planning at RBC Wealth Management Services Older Workers Offer Value An overwhelming majority 96 per cent of Canadian owners of small and medium sized businesses agree that workers 65 years and older offer more valuable experience and expertise than younger workers says research from Investors Group As well 69 per cent contend that this group is not more expensive to employ The majority of small business owners do not have concerns about lack of stamina and reduced productivity from older workers Eighty five per cent say that workers 65 years and older are just as productive as younger workers and 79 per cent concur that senior workers have the required level of energy and ambition for their jobs As more boomers and seniors continue working in their later years it s encouraging to see that their value and contribution to the workplace are acknowledged by Canada s small business owners says Dave Ablett director tax and estate planning at Investors Group At the same time finding work in later years will require thinking outside the box and a sound retirement plan to ease the transition into a new phase of life Entrepreneurs Delayed Retirement The 2008 2009 recession prompted many baby boomer entrepreneurs to delay their retirement plans and stay in business longer than they had anticipated says a report from the Canadian Federation of Independent Business CFIB Passing on the Business to the Next Generation found almost a quarter 23 per cent of business owners have delayed the timing of their exit date between one and four years Only five per cent said the downturn prompted them to accelerate their exit date The report also found that almost half of small and mid size enterprises SMEs currently have a succession plan in place Out of these small business owners one half will exit their businesses in the next five years While estimates vary Canadians will see a massive transfer of small business assets in the next decade possibly more than a trillion dollars The recession clearly had an impact on succession planning says Doug Bruce CFIB s vice president of research Instead of passing the business on to the next generation some small businesses decided to hold onto their business until its value returned to pre recession values November 26 2012 Trump Investors Want OSC Investigation Some of the investors in the Trump International Hotel Tower Toronto are asking the Ontario Securities Commission to launch a formal investigation into the investment scheme offered as part of the hotel This is a last bid effort to obtain immediate assistance before their November 29 closing dates Though promised by the developers of the hotel Talon International Inc that the hotel units could be easily financed as residential condominium units investors have come to learn that Canadian banks are treating the hotel project as a commercial enterprise and have all refused financing as a condominium purchase The investors have also discovered that their investments are running at losses of upwards of 175 a day per unit due to the current shortfall between the maintenance fees and the hotel unit revenues Most of the investors have a November 29 closing date and with the banks refusing financing investors are faced with either having to come up with substantial amounts of cash to close or resort to secondary financial institutions which will only provide partial financing for this project as a commercial investment at prohibitively high interest rates Some of these investors have already commenced a multi million dollar lawsuit against Talon and its directors as well as a number of Trump organizations and their directors including Donald Trump Sr Ontario courts have declined to hear the matter on an urgent basis notwithstanding the upcoming November 29 deadline and have pushed any preliminary hearing of this dispute into late 2013 Talon however has extended the closing date to December 13 to allow more time for it to respond to recent inquiries made by the OSC Succession Planning Risk To Economy Getting SME business owners to turn their attention to succession planning is a growing issue says Benjamin Tal deputy chief economist CIBC in a report from CIBC World Markets Close to 30 per cent of small and medium sized businesses in Canada will exit ownership or transfer control of their companies within five years Within the next 10 years one half will exit their business Close to 60 per cent of SME owners have no succession plan in place potentially posing significant risk for the Canadian economy The economic implications of the accelerated pace at which firms are changing hands should not be underestimated says Tal Given the magnitude a faulty or badly executed succession planning process could have a ripple effect throughout the Canadian economy The sheer number of business owners that will retire in the coming decade is turning this micro issue into a potentially damaging macro problem he says CFOs Positive About State Of Industry U S chief financial officers CFOs of middle market companies remain generally positive about the state of their own industries and they continue to see measured growth over the next three years says the GE Capital Mid Market CFO Survey Sentiment on the state of the U S economy and their respective industries declined slightly since the first quarter survey but remained above the levels of a year ago However the view on the current health of the world economy continues to deteriorate The majority of CFOs expect to grow their revenues this year and nearly two thirds still plan to hire in the next 12 months although both figures have fallen from six months ago Middle market CFOs still see expansion opportunities over the next three years but remain cautious as concerns about the business environment and uncertainties in areas such as tax and healthcare policy persist says Dan Henson president and CEO of GE Capital Americas From our perspective as a provider of capital we see positive year over year growth in both lending and leasing Economic sentiment while still positive is slightly more guarded than we saw in the last survey In the meantime the credit markets are very healthy providing extremely attractive terms for borrowers as credit facilities come up for renewal and as acquisition or other investment opportunities develop Fund Invests In Small And Micro cap Spartan Fund Management Inc s latest offering is the Teraz Fund Its objective is to provide investors with long term capital growth by investing in a diversified portfolio of Canadian small and micro cap companies The fund invests utilizing three strategies long positions in early stage companies run by successful entrepreneurs including start ups listed cash rich shells and merger and acquisition candidates opportunistic investing including deep value arbitrage theme investing and technical trading and short positions in companies with suspected fraud questionable management and over promotion Investors Confident About Equities Professional investors have bedrock confidence in the financial future of equities despite present and foreseeable uncertainties including growing inflation says a survey of Portfolio Management Association of Canada members It finds that responding CEOs of Canada s leading investment companies believe inflation will rise slightly but meaningfully in the next 10 years to 2 8 per cent or almost one per cent higher than the actual rate for the previous 10 years 1 9 per cent That would offset bond returns which averaged 6 2 per cent over the last decade but which will only earn 2 9 per cent over the next 10 years These trends can be addressed in the coming decade through a diversified portfolio of equities Specifically global equities which they project will earn 7 8 per cent up from 3 6 per cent and emerging marketing equities which they believe will return 9 1 per cent Emerging Markets Offer Opportunities Emerging markets continue to offer opportunities says Stephen Way senior vice president and portfolio manager at AGF Investments Inc Speaking at its Beyond BRIC discussion he said their domestic consumption remains intact and they are becoming increasingly competitive and are expanding outside of their borders However investors need to be aware of some of the long term risks in these markets With developed market currencies devaluing because of quantitative easing international currency wars could start which concerns emerging markets Increasing government intervention and reform in China Brazil and India is creating uncertainty And they also face resource scarcity both in terms of skilled labour and commodities Finally to increase productivity improvements need to be made in their infrastructure business processes and machinery However emerging markets margins have actually come down making him quite optimistic about those companies in these markets that understand what it takes to make profit Expectations Need To Be Managed Asset managers need to do a better job of managing expectations says Catherine Payne vice president and portfolio manager at Fiera Capital Speaking at AIMA Canada s How to Generate Yield session she said clients are looking for x per cent as their return but she can only give them what is coming out of the market This makes it about managing expectations and finding out if they want yield or preservation of capital going forward As well as they get older and have a shorter time horizon to save for retirement they want to preserve capital with some return The other consideration is the low interest rate environment is not going to last forever so investors have to start preparing for increases in these rates Activism Making Front Page Shareholder activism in Canada isn t necessarily on the rise says Stephen Erlichman executive director Canadian Coalition for Good Governance it may just be that there is more press coverage Speaking on a Panel Discussion on the Rise of Shareholder Activism in Canada at the CVCA Canada s Venture Capital Private Equity Association Professional Development Series he said there hasn t been a huge rise in the number of shareholder actions there is just way more coverage Major institutional shareholders with the assistance of the press are making their views known across Canada he said and the press is putting how they are going to vote on the front page of newspapers As well these same institutional shareholders are willing to team up with the hedge funds which are starting these actions and Canadian boards didn t think they would do that RBC Introduces Low Volatility Funds RBC Global Asset Management Inc has launched its RBC QUBE Low Volatility Canadian Equity Fund and RBC QUBE Low Volatility U S Equity Fund The funds use quantitative investing to offer investors the upside potential of equities with less risk and volatility than broad market indexes says Bill Tilford head of quantitative investments at RBC Global Asset Management They are monitored daily and adjusted to deal with changes to their risk and return profiles Using a custom risk model that is designed to more accurately measure and forecast risk the funds are appropriate for investors who have a long term investment horizon and who are able to tolerate a medium level of investment risk November 19 2012 Overall Economic Optimism Declines Two thirds of entrepreneurs believe the Canadian economy will grow over the next year a sharp 12 per cent decline from only six months ago says the Ivey Entrepreneurs Index Coupled with a decline in overall economic optimism high growth entrepreneurs are becoming less likely to hire additional employees This past spring 84 per cent of respondents planned on hiring however that figure now stands at 77 per cent In spite of diminished economic confidence 90 per cent of entrepreneurs still expect their revenue to grow a figure which has remained relatively steady over the past two years But over the past six months six per cent fewer entrepreneurs believe their profits will grow in the next year Entrepreneurs in Canada are becoming more cautious says Stewart Thornhill executive director at Pierre L Morrissette Institute for Entrepreneurship at the Richard Ivey School of Business This may be indicative of a wait and see attitude amongst this normally bullish group External factors such as warnings surrounding the looming fiscal cliff in the United States and unpredictable economic developments in Europe have dampened the spirits of high growth private business in this country Online Women Investors Feel Successful The majority of women who manage their investments online feel they ve been successful at closely matching or outperforming the markets says the International TD Women Investor Poll a joint poll by TD Waterhouse Canada TD Direct Investing UK and TD Ameritrade U S More than twice as many women in the U S 31 per cent and UK 38 per cent manage their investments online compared with their Canadian counterparts 13 per cent Of these women online investors more than three quarters in Canada 76 per cent say they ve consistently outperformed or performed close to the market This is consistent with women investors in the U S and UK The majority of women online investors in all three countries Canada 87 per cent U S 94 per cent and UK 87 per cent also say they are quite confident or level headed about managing their portfolio although in each country surveyed approximately one in 10 women say they re nervous and never feel like they re making the right decisions when it comes to their investments Despite that the majority of women say they have changed nothing in their portfolio in reaction to volatility in the markets saying they are confident they have a

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    leading up to December 15 to force employees to retire before they are ready to It said that the transition period should not be viewed as a licence to force aging workers out the door Forcing someone to retire because of their age clearly contradicts parliament s intent even if a defence in the law still appears to be available As a result it may be more prudent for federally regulated employers to govern themselves in the regime that will exist following December 15 where they may still offer voluntary retirement programs and may be able to justify mandatory retirement where they are able to show a bona fide work requirement As well employers should start implementing effective performance management programs for all their employees including older employees October 29 2012 Tech Enabled Offerings Leverage Growth While 74 per cent of CEOs say tech enabled offerings are the future of the media and entertainment industry they agree emerging markets hold the key to unlocking that potential revenue and growth says a survey by Ernst Young With three per cent to eight per cent projected growth in income and high mobile subscription rates in emerging economies there is a great opportunity for growth in these markets particularly where new technology and digital are concerned says Martin Lundie Canadian media and entertainment leader at Ernst Young But improving infrastructure such as broadband and mobile networks to handle the demand will be critical to realizing the opportunity Growth Anticipated For Luxury Goods Market Worldwide luxury goods market revenues will grow by seven per cent in the final three months of 2012 compared to 2011 culminating in full year growth of 10 per cent says Luxury Goods Worldwide Market Study a study by global management consultants Bain Company Revenues will see double digit increases reaching 275 billion Sales in Asia Pacific driven by China are projected to grow by 18 per cent The Americas will see revenues rising by 13 per cent by year s end However growth in Europe will be approximately five per cent half of last year Bain estimates that the luxury goods market will grow in real terms by four to six per cent per year between 2013 and 2015 pushing the market to between 312 and 325 billion by mid decade Retirement More Than Slowing Down Retirement means more than withdrawing from one s occupation It means freedom financial security and the ability to travel says a survey by TD More than half 52 per cent of Canadians said retirement isn t about stopping or slowing down It s about freedom and flexibility Other recurring themes from submitted definitions include financial security 27 per cent the ability to travel 25 per cent escape from the nine to five grind 21 per cent and spending time with friends and family 14 per cent Spending time away from work with family and friends can be done on a small budget however one quarter of Canadians submitted definitions based on hopes to travel Moderate Salary Increases Ahead A sluggish economic outlook is causing organizations to plan for another year of moderate base salary increases for 2013 The Conference Board of Canada s Compensation Planning Outlook 2013 projects average increases for non unionized employees of three per cent next year largely in line with actual gains in 2012 Employers have not yet felt the full effects of looming workforce shortages But it is apparent that the labour market is tightening especially in Western Canada and in the natural resources and professional scientific and technical services industries says Karla Thorpe its director of leadership and human resources research Assuming no significant hiccups to the global economy the unemployment rate is expected to dip in 2014 and labour supply shortages will re emerge over the medium term The survey found 69 per cent of organizations report challenges with recruiting and or retaining personnel The top professions in demand include engineering specialist information technology and skilled trades Double digit Return Days Gone The days of double digit portfolio returns are long gone says a report from TD Economics It projects that diversified portfolios will produce average annual returns of between four per cent and six per cent over the next 10 years with bonds returning three per cent and equities generating seven per cent Using those projections it projects an income portfolio with a heavy weighting in cash and fixed income will return just over four per cent a balanced portfolio should return five per cent and a growth portfolio with a heavy weighting towards equities would return 6 2 per cent While there will certainly be years where these portfolios achieve higher rates of return they will likely be offset by periods of weakness The low return on fixed income over the next few years especially given the potential capital losses on longer term bonds suggests that investors may need to have exposure to equities in order to bolster portfolio returns it says SMEs Hit Hard By Increased Premiums The Workplace Safety and Insurance Board s WSIB increase in mandatory insurance premiums on employers will hit the small business sector the hardest says the Canadian Federation of Independent Business CFIB Small business owners have anticipated higher insurance premiums since a report indicated the WSIB had a 14 2 billion unfunded liability The province s workers compensation system is entirely funded by premiums on employers Currently Ontario s average premium rate is the third highest in Canada Regardless of the business increasing taxes on payroll could not have come at a worse time for the Ontario economy Small business confidence in Ontario is lower today than it was at the beginning of 2012 says Satinder Chera Ontario vice president CFIB Rolling the dice on higher taxes will further jeopardize jobs and the province s economic recovery October 22 2012 Allocation Structure Relatively Static Affluent investors appear comfortable with their current holdings says a report from TIGER 21 a learning group for high net worth investors in

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    health benefits to employees serves as a strong incentive for workers Almost half 48 per cent believe a health benefits plan is more effective than paying employees a higher wage Economy Undergoing Fundamental Change The global economy is in more than a cycle says Warren Jestin senior vice president and chief economist at the Scotiabank it is undergoing a fundamental change Speaking at the CFA Society Toronto s Annual Forecast Dinner he said look at China Ten years ago it was a low cost producer of goods Today it leads global economic growth This means where investments are being made and the influence of traditional investors is changing and the old tools do not apply It also means Canada needs to spend less time thinking about the situation in Europe and more time on the opportunities in the emerging world Managers Less Bullish On Canada After the rally in Canadian stocks this summer Canadian investment managers are less bullish about domestic securities and are finding other global markets increasingly attractive says the Russell Canadian Investment Manager Outlook In line with that view the vast majority of those surveyed now feel Canada s stock market is fairly valued Canadian investment managers are most bullish on the outlook for emerging markets equities with 62 per cent holding a favourable outlook on that asset class compared to only 40 per cent in the previous quarter Although bullishness on Canadian bonds increased to 36 per cent from 20 per cent the bearish view on Canadian fixed income issues continues to dominate at 64 per cent However in the case of high yield bonds bullishness swung to 43 per cent from 11 per cent and bearishness fell to seven per cent from 61 per cent That reflects the search for yield among investors as well as increased issuance over the past year and relatively constructive fundamentals among the companies issuing high yield bonds Indices Increase Across The Board September saw increases across the board for the Morningstar Canada Fund Indices with positive monthly returns helping some categories achieve strong quarterly performance and leaving only one fund index in negative territory in the third quarter Bold efforts by central banks to bolster global growth have instilled some confidence in equity investors despite persistent fundamental economic concerns says Nick Dedes Morningstar fund analyst The biggest increases in the month among the 42 benchmarks came from some of the most volatile sectors including the best one month performance a return of 11 7 per cent logged by the Precious Metals Equity category Precious metals funds were also the leaders for the third quarter as the index rose 19 5 per cent in the past three months Next Year Better A majority of small business owners believe that next year will be better than 2012 says a BMO small business confidence report It also found that nearly three quarters of respondents were confident in their business prospects and the state of the economy In the report 72 per cent of small business owners described performance in 2012 as excellent to good 56 per cent believed next year will be better and 50 per cent expected their businesses to grow in 2013 With an uncertain global economy Canadian small business owners continue to focus on what matters most their own customers and markets plus growing their business says Steve Murphy senior vice president of commercial banking at BMO Majority See Importance Of Technology A majority of small and medium sized businesses SMBs view technology as very important to the success of their business However many of these same organizations also state that one of the biggest challenges they face is managing a limited IT budget says a survey from CDW Canada a provider of technology solutions for Canadian organizations in the public and private sectors Improving business processes was noted as a key driver when it comes to IT purchases and decision making Other drivers included reducing costs and keeping up with current technology trends SME Optimism Rises Optimism among Canada s small and medium size businesses rose last month for the first time since March says the Canadian Federation of Independent Business CFIB The Business Barometer index increased two points in September to 62 from 60 in August After a five consecutive month decline in business confidence through the spring and summer small business owners were a little more upbeat in September says Ted Mallett chief economist and vice president of the CFIB Despite this good news however the index level still suggests Canada s economy is growing at below average rates Avoid Mixing Business And Personal Combining personal and business accounts is one of the most costly mistakes many new business owners make and it is a mistake that can cost thousands in tax penalties and professional fees says Jamie Golombek of the CIBC A report focused on helping small business owners avoid key taxation mistakes indicates that while business owners may find it easier to deposit cheques to a personal bank account or to charge business expenses to a personal credit card these decisions can put them at risk He notes that sorting out what is a business expense and what is a personal expense at tax time can be tricky and individuals can inadvertently deduct an ineligible expense Golombek recommends keeping personal and business expenses separate keeping good records and seeking expert advice October 1 2012 Number of Entrepreneurs To Increase Canadians are expected to become their own bosses at an accelerated pace in the coming decade with more than half a million entrepreneurs in the process of establishing their own business this year says a report from CIBC Irreversible structural forces suggest that the next decade might see the strongest start up activity in the Canadian economy on record says Benjamin Tal deputy chief economist at CIBC The gradual shift to a strong culture of individualism and self betterment the role of technology in driving the transition from boardrooms to basements the more global and inter connected markets that require greater specialization flexibility and speed and a small business friendly demographic trends are among those forces that are likely to support a net creation of 150 000 new businesses in Canada in the coming 10 years says Tal Top QC Earners To Pay More Tax The Parti Québécois is moving to hike taxes on higher income earners in the province The PQ says it will introduce two new tax brackets immediately incomes over 130 000 and those over 250 000 It also said it would consider bringing in a higher tax on dividends and capital gains While the new tax rates have yet to be determined during the election campaign the party said it would consider a four per cent increase to 28 per cent on taxable income above 130 000 Another three per cent increase would be placed on income above 250 000 bringing the provincial tax rate to 31 per cent for that group Combined with federal tax rates Quebec s higher income earners will remain the most heavily taxed in the country Upscale California Townhomes Near Completion The upscale townhome rentals at Costa Pointe in Carlsbad CA are nearing completion and will be open for occupancy soon The 58 three story luxury townhomes feature three to four bedrooms with up to 3 baths and range from 1 326 to 2 042 square feet Residents can choose from four floor plans featuring such distinctions as a master bedroom on its own floor or a rooftop deck complete with a fireplace and television hook ups Homes start at 2 300 per month Collector Car Auction Breaks Records Barrett Jackson auctioneer of collector cars generated more than 23 million in sales of rare high end collectible vehicles exotics customs classics and Shelbys during its Las Vegas NV auction The company increased its overall hammer average from 2011 proving that the car market is stronger than ever Sales reached more than 660 000 a 45 per cent increase from a year ago More than 68 000 car enthusiasts attended the event representing a 10 per cent increase from last year The auction broke world records when a 1967 Mustang Shelby Super Snake sold for 330 000 a 1970 Shelby GT500 for 220 000 and a 1962 Lincoln Continental Convertible for 113 300 the highest sales for vehicles of their kind In addition to these world records the highest selling cars included a 1970 Plymouth Hemi Superbird Two Door Hardtop for 297 000 and a 1967 Ford Mustang Custom Fastback selling at 275 000 Ethics Help Restore Confidence Commitments to strong ethics high standards of education and better enforcement are needed to restore public confidence in financial markets says John Rogers president and CEO of the CFA Institute Speaking to the Economic Club of Canada on What is the Future of Finance he said the financial crisis rattled the public s trust in the financial markets breaking the social contract between clients and firms and prompting investors to move away from equities and hide their assets in real estate and gold As a result these investors will end up having a difficult time meeting their retirement savings goals It could force them to work longer on or rely on government to transfer wealth from young workers to retirees The other option is seniors can live in poverty he said To get them back into markets the industry needs to regain their trust and it can only do so by adhering to a strong ethical values Incidents Due To ETNs The incidents of spring 2012 involving the TVIX ETN issued by Credit Suisse were created by factors specific to ETNs with no relation to the particular exposure to a volatility index says an EDHEC Risk Institute study The Risks of Volatility ETNs a Recent Incident and Underlying Issues says the main factors suggested by the academic literature are the inefficient share creation process and the speculative motive of uninformed return chasing investors Under normal market conditions short selling can suppress the accumulation of positive premiums However if share creation is suspended during a significant surge in demand the security may become unavailable for borrowing which limits short selling activities The study notes that the volatility exposure through volatility exchange traded products is typically to a constant maturity VIX futures index that can differ substantially from the spot VIX index Investor Confidence Drops In September The State Street Investor Confidence Index ICI fell from August s revised reading of 91 to 86 9 North American investor confidence continued to decline this month falling 3 2 points from August s reading of 84 3 to end at 81 1 Asian investors followed suit with the Asian ICI declining 5 6 points to 87 6 Only European investors were an exception and an increase in risk appetite led the European ICI up by four points from 101 in August to 105 in September This month s decline in global investor confidence is the result of diminished risk appetite among both North American and Asian investors says Harvard University professor Kenneth Froot a co developer of the index While diminished growth expectations for Asia account for some of the reticence in that region the third consecutive decline in confidence among North American investors is more puzzling especially given recent announcements by monetary policy makers on both sides of the Atlantic It is clear that in their actual portfolios institutional investors continue to exhibit caution given the global growth backdrop Safety Ranks Higher Than Return Canadians rank safety of their investments as more important than the highest interest rates when considering Guaranteed Investment Certificates GICs says the Guarantees in Life RBC 2012 GIC Poll Four in 10 Canadians 44 per cent who hold GICs or would consider holding them place safety first highest interest rates come in second at 32 per cent While the popular belief is that the best rate is paramount when choosing to invest in GICs our findings confirm that Canadians consider guaranteed principal first and foremost for the protection and safety of their investment says Rosalyn Kent head GICs and savings We also found that most Canadians are taking a long term view of their GIC investments with 65 per cent saying that when deciding to purchase a GIC having the flexibility to cash in their GICs before their maturity date was the least important consideration GIC investors would be interested in increased benefits and flexibility such as GICs that offer an interest rate that increases every year 80 per cent GICs that provide a regular income 70 per cent and GICs that are linked to the stock market 65 per cent New Businesses Lack Expert Resources Nearly one fifth 19 per cent of all established business owners say that a lack of expertise to draw on including financial advice was an obstacle they had to overcome to be successful in their first few years of business says a CIBC poll by Leger Marketing When they look back some successful business owners realize that they would have benefited from advice about how to manage their money in the early years of their business says Jon Hountalas executive vice president business banking for CIBC The company offers tips to new business owners to help them establish a strong financial foundation including preparing your business to deal with the ups and downs of cash flow by understanding and anticipating your day to day cash needs Pain Of Loss Greater Investors are not always rational says William Jack of William D Jack Associates In an article at Irrational Investors he says this is partly due the fact that the pain of losing money is greater than the pleasure of gaining the same amount This motivates people to sell low and triggers feelings of greed when prices are rising so they end up buying high Toolkits Teach Financial Skills Your Financial Toolkit designed by the Financial Consumer Agency of Canada FCAC the Investor Education Fund IEF and l Autorité des marchés financiers AMF helps Canadians become more capable and confident financial consumers In simple non technical language it covers the basic financial topics that most Canadians have to deal with every day says Ursula Menke the FCAC commissioner It touches on everything from banking budgeting and saving to debt management fraud protection and retirement planning and provides Canadians with an opportunity to practice new financial skills and apply the information to their own situation she adds The resource is divided into 11 modules and includes worksheets quizzes questionnaires tools calculators educational videos and case studies that give Canadians the option of completing the whole program or select the topics in which they are the most interested They can also use its self assessment tool to find modules and tools that are useful for them based on their situation and needs September 24 2012 Mercedes Adds Insurance Protection Mercedes Benz Financial Services Canada is launching its First Class Insurance an automobile insurance plan designed exclusively for Mercedes Benz drivers The program will be the first of its kind in Canada and the only branded auto insurance program sponsored by a luxury automobile finance company says the company It was developed by Marsh Canada Limited an insurance broking and risk management firm and Aviva Canada Inc a property and casualty insurance company First Class Insurance is a pioneering program that will further differentiate the overall Mercedes Benz driving experience for our valued customers says Stefan Karrenbauer president and CEO Mercedes Benz Financial Services Canada The program was designed to protect our customers while providing a high level of service that is truly commensurate with the Mercedes Benz brand Highlights of the insurance program include preferred automobile insurance rates including multi vehicle discounts repairs performed at a Mercedes Benz approved collision centre genuine Mercedes Benz replacement parts new car replacement if a vehicle is a total loss within the first five years and preferred residential insurance rates including multi policy discounts The program is the latest addition to the company s suite of products which currently includes lease protection tire and rim protection and guaranteed auto protection Gaps Found In Discount Brokerage Satisfaction Although overall investor satisfaction with Canadian discount brokerage firms increases year over year closing the satisfaction gap with U S firms large gaps in the investor experience remain says the J D Power and Associates 2012 Canadian Discount Brokerage Investor Satisfaction study Survey results indicate that Disnat ranks highest 768 in discount brokerage investor satisfaction for a fourth consecutive year followed by BMO InvestorLine 720 and National Bank Direct Brokerage 719 Overall investor satisfaction with discount brokerage firms in Canada averages 700 on a 1 000 point scale representing an increase of 21 points from 679 in 2011 In comparison investor satisfaction in the U S averages 768 As well satisfaction in the Canadian discount brokerage industry trails satisfaction in the Canadian full service brokerage industry by 20 points and in the retail banking industry by 53 points The study finds that the largest gaps in satisfaction between brokerage firms in Canada and the U S are with problem resolution trading charges and fees and interaction CFOs Leading Sustainability Practices Two thirds of CFOs say they are involved in driving sustainability strategies in their organizations and more than half say their involvement has increased over the last year says Sustainability CFOs come to the table by Deloitte Touche Tohmatsu Limited DTTL Companies are sitting up and taking notice that sustainability is not just a brand or a corporate responsibility element it is becoming a key driver of financial performance and the future of business says Dave Pearson Deloitte sustainability leader Indeed sustainability seems to be increasingly operationalized with the percentage of CFOs and COOs accountable to their company s boards for sustainability issues nearly doubling from 20 per cent to 36 per cent in the past year As such CFOs have become focused on a number of sustainable operating practices such as increased

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    September 4 2012 Mercedes B Class Combines Power and Safety Mercedes Benz Canada 2013 B Class will arrive in dealerships across Canada in November Starting at 29 900 the 2013 B 250 features a more powerful yet extremely fuel efficient 4 cylinder turbo engine advanced safety systems and an array of standard equipment The vehicle will be powered by a 2 0 litre 4 cylinder turbo engine that produces 208 horsepower and 258 lb ft of torque representing a 55 per cent gain over the previous generation B 200 engine It also offers an extremely compact and variable 7G DCT dual clutch transmission that combines the comfort of an automatic with the efficiency of a manual transmission Substantial fuel savings have been achieved through the addition of the ECO start stop function In safety features collision prevention assist is a radar based collision warning system that can identify the threat of a rear end collision Other standard safety equipment includes 11 airbags adaptive brake assist with hold function attention assist and run flat tires Russell Offers Short term Income Pool Russell Investments Canada Limited has introduced a short term income pool and class The new product is suitable for investors who are concerned about ongoing volatility and future interest rate increases says David Feather president and CEO The pool will invest in a broad range of Canadian investment grade securities including a selection of domestic short term corporate bonds floating rate notes asset backed securities mortgage backed securities and other investment grade credit products with maturities of up to five years It may also invest in foreign fixed income securities on a currency hedged basis The pool will be sub advised by Phillips Hager North Investment Management AEGON Capital Management and Canso Investment Counsel Alternative Indices May Underperform New forms of alternative weighted equity indices run the risk of seriously underperforming traditional cap weighted indices says the EDHEC Risk Institute Its research paper Diversifying the Diversifiers and Tracking the Tracking Error Outperforming Cap Weighted Indices with Limited Risk of Underperformance shows that the main alternative indices on the market while superior performers over the long term have considerable relative drawdowns with regard to their cap weighted counterparts These drawdowns can be long more than two years and significant more than 13 per cent The research identifies two major sources of risk One is risks that stem from a more pronounced structural exposure to risk factors which through their associated premia lead to outperformance over cap weighted indices over the long term but which in certain conditions can negatively affect the performance of these new indices The other is that every weighting scheme whether it is qualitative or quantitative corresponds to a choice of model and therefore contains model risk On the basis of this it recommends diversifying beta investment monitoring explicit information on tracking error and extreme tracking error and managing this constraint explicitly Scotiabank Purchases ING Scotiabank will purchase ING Bank of Canada ING DIRECT from its Netherlands based parent ING Group With approximately 40 billion in assets 30 billion in deposits 1 8 million customers and more than 1 100 employees ING DIRECT is the eighth largest bank in Canada It is a direct bank that serves customers online via contact centres and mobile devices and offers savings and chequing accounts mortgages and four mutual funds It has five ING DIRECT Cafés and no physical branches The ING DIRECT branding will be maintained and any future branding will reflect the type of experience that customers receive now The acquisition is subject to regulatory approvals Goldman Sachs Invests In Social Impact Bond Goldman Sachs has signed on as an investor in the U S s first social impact bond a public private financing structure where investors bear partial risk for the outcomes of government funded social programs The investment suggests that a proper social impact bond market might not be too far away While they are a new concept to the U S there is already a developed infrastructure which supports U S bank community re investment practices It could be easily adapted for a social impact bond market This bond will cover the costs of a program designed to reduce youth recidivism in New York City by providing education training and counseling to incarcerated 16 to 18 year olds Manulife Acquires Wellington Manulife Financial will acquire independent financial planning firm Wellington West Financial Services Inc from National Bank Financial Group The deal will add 39 financial advisors and approximately 900 million in assets under administration to Manulife Securities Wellington West provides personal and corporate financial planning services through its network of independent financial advisors in British Columbia Alberta Manitoba and Ontario Confidence Down From July The State Street Investor Confidence Index ICI for August 2012 fell from July s revised reading of 94 3 to 90 9 Driving the decline was a sharp deterioration in risk appetite among North American investors The North American ICI declined 8 7 points from July s revised level of 93 1 to settle at 84 4 The European ICI was close to unchanged ticking down half a point from 101 7 to 101 2 Among Asian investors risk appetite improved for the fourth successive month and the Asian ICI rose 2 9 points from a revised level of 90 6 to finish at 93 5 While confidence among European and Asian investors has broadly stabilized this month s reading on North American risk appetite signals a clear setback says Kenneth Froot the Harvard University professor who co developed the index We did note some concrete buying of European equities excluding the UK as policy makers took pains to try to limit the tail risk of a euro currency break up but in other regions flows were negative One change we did note is that the composition of flows is slightly less defensive than was true earlier in the year For example the materials and financial sectors gained at the expense of utilities and consumer staples Average Increase For 2013 Is 3 2 Per Cent Salary budget increases for Canadian employees are improving says Mercer s 2012 2013 Canada Compensation Planning Survey It says the average raise in base pay is expected to be 3 2 per cent in 2013 the same as the average actual salary increase reported for 2012 and also up slightly from the three per cent and 2 9 per cent in 2011 and 2010 respectively For top performing employees salary increases will remain higher as companies strive to balance compensation planning budgets with retention of critical talent The survey shows that in 2012 highest performing employees received average base pay increases of 4 9 per cent compared to 2 9 per cent for average performers and 0 1 per cent for the weakest performers Iain Morris leader of Mercer s Human Capital consulting business for Canada says differentiating salary increases based on performance is the norm and remains an effective way for employers to wisely spend their reward dollars on the most impactful employees CFIB Wants Regulatory Burden Reduced The Canadian Federation of Independent Business CFIB wants the Ontario government to address the regulatory burden on small business Government red tape costs Ontario businesses a staggering 11 billion a year says Satinder Chera Ontario vice president CFIB It will meet with senior representatives from the government where CFIB will identify five priorities that would remove barriers to small business growth They include reducing the paper burden imposed by the Workplace Safety and Insurance Board WSIB undertaking a regular review of all new and existing regulations on businesses and improving customer service with online tools to enable businesses to provide feedback and obtain answers to existing regulations The province will be given 60 days to address those priorities or explain why they cannot be addressed and recommend alternative solutions The outreach follows Premier Dalton McGuinty s 2011 election commitment to CFIB members to reduce the red tape burden they face August 27 2012 Auction Offers New Perspective Sotheby s London will present its inaugural Collections auction September 27 Sourced from private collections the sale will offer clients the opportunity to acquire fine and decorative arts dating from the 16th to the 20th century Assembled from locations ranging from the state rooms of a Roman Palazzo to a Lutyens designed manor house in England previously owned by American businessman Tom Perkins the auction will offer a combination of objects including English and Continental furniture clocks tapestries rugs silver Chinese export porcelain sculpture and Old Master paintings The sale focuses on privately owned items which are fresh to the market and in the case of specially commissioned works appearing for the first time The 306 lots which have a combined estimated value in excess of 1 7 million ranging from 500 to 100 000 Mercedes Benz Opening Gatineau Location Mercedes Benz will open a dealership in Gatineau QC The ground breaking ceremony was attended by Tim A Reuss president and CEO of Mercedes Benz Canada members of the company s senior management and Philippe St Pierre president of Mercedes Benz Gatineau Construction of the facility will begin immediately and it will be operational in the spring of 2013 Covering almost 50 000 square feet the building will include an open concept showroom service department and a pre owned showroom The dealership will be designed to be one of the greenest car dealerships in eastern Canada in terms of energy and environmental sustainability Optimism Lower Among CAs The U S economy and European debt crisis are the two biggest factors contributing to a sharp drop in optimism among Canadian executive chartered accountants says the second quarter CICA Business Monitor Roughly one in five 21 per cent of the respondents surveyed are optimistic about the outlook for the Canadian economy That is down from 32 per cent in the first quarter of the year Most of the respondents 62 per cent remain neutral about the prospects for the national economy over the next 12 months The survey respondents believe the three biggest hurdles for growth in Canada are the state of the U S economy 37 per cent the European debt crisis 28 per cent and uncertainty surrounding the economy 18 per cent The executive CAs surveyed are not so optimistic about the prospects for their own companies over the coming year either Company optimism fell to 49 per cent in the second quarter report down from 57 per cent in the first quarter Most surveyed still expect revenues and profits to rise and a significant number of respondents anticipate a climb in employment numbers at their company The decline in optimism however is evident in lower projected revenue profit and employment forecasts for the next 12 months Bank All Talk On Rate Hikes The Bank of Canada is likely to be all talk and no action on rate hikes says BCA Research an independent global investment company It points out that with the Canadian economy strongly outperforming the U S during the recovery the Bank of Canada BoC is clearly showing a hawkish bias hinting that it is prepared to raise rates as the recovery gathers strength However BCA says it believes the central bank will be reluctant to deviate too much from the U S Federal Reserve Board s policy stance for fear that this could significantly boost the Canadian dollar With the Fed contemplating further quantitative easing or at the very least staying on hold for the foreseeable future any rise in interest rates would put additional upward pressure on the Canadian dollar says BCA A much stronger dollar could harm the economy it suggests which should keep the BoC from hiking rates for the time being Canadian policymakers are attuned to this risk so our base case is that the central bank will continue to threaten to hike rates to persuade households into deleveraging However policy is more likely to remain on hold until well into 2013 Automotive Auction Sees Record Sales Gooding Company the official auction house of the Pebble Beach Concours d Elegance had sales of 113 7 million a world record sale total for an automotive auction at its auctions for significant and valuable collector cars Twenty four collector cars sold in excess of 1 million highlighted by the von Krieger Special Roadster a 1936 Mercedes Benz 540 K that sold for 11 770 000 a double world record for a Mercedes Benz and a pre war car at auction A 1960 Ferrari 250 GT LWB California Spider sold for 11 275 000 a world record for a Ferrari California Spider Ferrari was a big part of the weekend with eight models between1953 and 1962 selling above 2 million each From the Sherman M Wolf collection the 1960 Ferrari 250 GT LWB California Spider Competizione attracted the most demand selling for 11 275 000 which made it the second most valuable car sold of Pebble Beach auction week The 1957 Ferrari 250 GT LWB California Spider Prototype sold for 6 6 million Americans Getting Richer Living Longer America s oldest citizens are generally getting healthier living longer and doing better financially but there s lots of room for improvement says the Federal Interagency Forum on Aging Related Statistics in its report Older Americans 2012 Key Indicators of Well being The report shows that gains in longevity continue and today s 65 year olds can expect to live about 20 more years That s a jump from 1980 when they could expect 14 more years But many developed nations have life expectancies higher than the U S topped by Japan where today s 65 year olds can expect on average to celebrate their 89th birthdays In 1980 Japan and the U S were about equal on this index Today s elderly Americans are doing better economically than their predecessors The proportion classed as poor living on less than 10 458 a year has fallen from 15 per cent to nine per cent over the past couple of decades and those considered to have higher incomes above 41 832 jumped from 18 to 31 per cent in that period Old age is still a time of increasing physical limitations Nearly half of men over 65 have trouble hearing and almost a third of women this age do too A quarter of elderly people have no natural teeth But when it comes to disability two decades ago almost half of Americans over 65 had difficulty with personal care and vital chores That has dropped to 41 per cent Older Americans are more likely to carry around extra weight these days Nearly half of 65 to 74 year old women are obese today and men aren t far behind In 1990 about a quarter of elders tipped the scales that much The report also shows that death is less likely to happen in a hospital today 32 per cent than in 1999 49 per cent and more likely to be at home with hospice care Salary Increases 2 9 Per Cent Next Year Canadian employees can expect an average salary increase of 2 9 per cent in 2013 says a survey by the Hay Group The projected increase is slightly more than that projected in 2012 2 8 per cent The sectors expecting the biggest gains are the oil and gas sector at 3 9 per cent followed by mining at 3 6 per cent However these higher forecasts are more of a reflection of the demand for key skills and the competition for skilled talent rather than boom times says the Hay Group The sectors with the lowest projections for 2013 are healthcare two per cent media 2 2 per cent and government and telecommunications both at 2 3 per cent Overall the public sector is forecasting noticeably lower salary increases 2 5 per cent than is the private sector industrial and financial at 2 9 per cent Canadian projections ranks about average against some of the other advanced industrialized nations above France 2 6 per cent and Japan two per cent but slightly behind other industrial countries such as the U S and United Kingdom both at three per cent Crestpoint Acquires Edmonton Property Crestpoint Real Estate Investments Ltd a business dedicated to providing institutional and high net worth investors with direct access to high quality Canadian commercial real estate assets has purchased a six storey office building in western Canada With this acquisition it continues to strategically diversify its real estate portfolio both geographically and by asset type We are very pleased to acquire an investment grade asset in a highly sought after market like Edmonton AB says Kevin Leon president of Crestpoint The West Chambers property is an attractive investment for a couple of key reasons Firstly it is located in an improving office node but has average rents below local market rates providing upside potential for the property s income generation Secondly the tenant quality is extremely high profile Having one of Alberta s finest law firms in McLennan Ross LLP committed as a long term tenant to approximately half of the building adds a degree of stability And finally with long term financing at historically low rates we feel the West Chambers property should provide a solid foundation for future returns for our investors Common Sense Sends Update Common Sense Investment Management is sending its Update on Market Environment letter to the Canadian marketplace for the first time The letter looks at its Common Sense Partners Common Sense Long Biased and Common Sense Special Opportunity strategies in the context of the current market environment Founded in 1991 Common Sense is an independent privately held fund of hedge funds manager whose primary focus is investing in hedge funds specializing in equities both long and short Its investor base consists of corporate and public pension plans endowments foundations healthcare organizations high net worth individuals and family offices August 20 2012 Million Dollar Home Sales Increase Sales

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    a commonsensical flaw much like that of a chain letter or yes a Ponzi scheme If wealth or real GDP was only being created at an annual rate of 3 5 per cent over the same period of time then somehow stockholders must be skimming three per cent off the top each and every year If an economy s GDP could only provide 3 5 per cent more goods and services per year then how could one segment stockholders so consistently profit at the expense of the others lenders labourers and government Asian Money Managers Have Less Control Money managers at banks in Asia have control over four per cent of client funds down from seven per cent in 2006 says the Boston Consulting Group On the other hand in Europe money managers handle 23 per cent of client funds up from 18 per cent in 2006 Asia s wealthy lost a lot of trust in their private banks and private bankers during the 2008 financial crisis says Peter Damisch report co author and Zurich based BCG partner and managing director That s bad news for large wealth management firms that have expanded in Asia even as the wealthy are pulling away from them Profits are down on a steadily falling pool of assets under management just as companies have spent considerable funds in an effort to attract larger clients and more assets under management AUM Mercedes Benz Offers Lowest Costs The Mercedes Benz Sprinter offered the lowest total cost of ownership in its class in Canada for the third consecutive year says a total cost of ownership study by Vincentric a private automotive data collection and analysis firm Additionally the Sprinter also captured three accolades in Vincentric s Best Fleet Value in Canada awards winning every category entered The study calculated many permutations for annual total distances traveled in Canada from 25 000to 60 000 kilometres per year for three four and five years The Lifecycle Cost Analysis methodology examined depreciation fuel costs insurance maintenance repairs financing fees and taxes and opportunity cost which is the loss of potential interest income as a result of owning and operating a vehicle Zuckerberg Falls From Top Ten Mark Zuckerberg co founder of Facebook Inc is no longer one of the world s 10 richest technology billionaires says the Bloomberg Billionaires Index His fortune dropped by 423 million when shares of the world s largest social media company fell four per cent and reached a record low Zuckerberg s fortune is based on ownership of 503 6 million shares of Facebook including 60 million options He also has about 150 million in cash and other liquid assets Facebook shares have fallen 47 per cent from their initial public offering price of 38 Brands Expect Increased Sales From London 2012 The Olympic Games held in London England are expected to provide boosts for many luxury brands says a study from Walpole an organization that represents more than 120 luxury brands Sixty three per cent of brands expect sales to improve as a result of the event with companies such as Burberry Rolls Royce and Bentley experiencing sales increases On the other hand some retailers have voiced their disappointment about slower than expected sales Despite the double dip recession Britain s luxury market is expected to grow by 8 5 per cent this year Emerging Markets Funds Launched Milltrust International Group one of Singapore s newest asset management businesses has launched a Dublin Ireland based emerging markets UCITS funds advised by its London affiliate Milltrust International LLP Despite being headquartered in Singapore its first range of funds are Dublin based UCITS enabling them to be distributed across Europe UCITS regulations offer a belt and braces regulatory framework that then permits the funds to be sold across Europe but also in a numerous other countries including Hong Kong and South Africa says Eric Anderson managing partner of the London affiliate We plan to distribute into our institutional client base in Asia North America and Europe Milltrust can already boast a presence in Canada France and Switzerland with distribution agreements in Japan and Australia ready for a formal launch this fall Deflation Lurks On Horizon The challenge that is on the horizon if it is not already imminently before us is indeed deflation says a The View from Burgundy from Burgundy Asset Management Its research paper Dealing With Flat Investment Markets Lessons from Long Expertise in Japan says Japan s prolonged experience with stagnant markets and deflation has typically been regarded as an anomaly related to poor or poorly implemented policy decisions and unique demographics However following the financial upheaval that began in 2008 a familiar economic pattern has emerged in North America and Europe that bears striking resemblance to Japan s experience since the late 80s While prevailing trends may create an unfavorable climate for investing at a macro level they do not necessarily have a universal impact and well managed companies will continue to perform in hostile conditions it says Key factors in handling deflation include investing in companies with a quality business and management that offer product and geographic diversity and which compete on low prices as a main strategy Better Board Leadership Needed Recent events have clearly shown us that better board leadership is needed says Matt Orsagh director for capital markets policy at CFA Institute At a CFA Institute media seminar on corporate governance he said what is needed are visionary boards with the leadership and foresight necessary to combat the short term thinking that has dominated our markets for too many years and exacerbated the effects of the current global financial crisis These boards are not only stewards of the long term interests of the corporations they serve but also of their shareowners The CFA Institute has released a report Visionary Board Leadership Stewardship for the Long Term which aims to change the historically short term thinking of publicly traded companies and to identify tangible ways in which visionary boards can foster and promote longer term thinking that restores the trust and confidence of investors globally For example a visionary board expects management to deliver investor guidance with a longer term bias and in greater detail by identifying long term value drivers for the company As well it proactively and continually sees risk as a board level responsibility overseeing robust processes for identifying managing and when necessary mitigating risks to the operations strategy assets and reputation of the company At the same time a visionary board understands that companies generate profits by taking risks and encourages intelligent risk taking that aligns with a company s strategy Confidence Rises Marginally Globally investor confidence was marginally up in the State Street Investor Confidence Index ICI for July 2012 The Global ICI rose by 0 7 points from June s reading of 93 3 to reach 94 Confidence among both North American and European investors ticked downwards while sentiment among Asian investors was slightly improved The North American ICI declined 0 6 points from June s revised reading of 93 7 to settle at 93 1 while the European ICI fell 0 5 points from June s revised reading of 102 2 to reach 101 7 The Asian ICI was up 0 8 points from June s revised figure of 90 2 to finish at 91 The message being sent by institutional investors this month is one of caution says Harvard University professor Kenneth Froot who co developed the index The pick up in equity buying that we noted last month proved short lived and flows had turned negative by the end of our July sample It should be noted that the sample ends just before the latest round of policy pronouncements from European policy makers As such it remains to be seen whether these policy moves will have a meaningful impact on risk appetite Canada s SMEs Less Optimistic Optimism among Canada s small and medium size businesses continued to decline in July says the Canadian Federation of Independent Business CFIB Its Business Barometer index dropped from 62 1 in June to 60 9 its lowest reading since July 2009 The major difference between now and two years ago was that the index was trending in the opposite direction towards greater confidence says Ted Mallett CFIB s chief economist and vice president The index s current position against GDP puts it very close to the zero growth mark suggesting Canada s economy is nearing a standstill July 30 2012 B C Policy Changes Affect Executive Compensation The British Columbia government has introduced changes to executive compensation in the public sector including the province s securities regulator Changes include immediately freezing the compensation of all current executives recruiting new senior executives at a salary 10 per cent lower than the incumbent limiting executives to 85 per cent of CEO salaries and phasing out incentive pay for new non executive staff as well as phasing out bonuses for new staff Together these measures will reduce overall compensation deliver savings and set an increased tone of restraint says the government It notes that many Crown corporations already meet some or most of these policies and if they don t their boards have to come up with plans by January 1 showing how they will align with the new policy Returns Lowest In 15 Years The U S based Institute for Private Investors IPI a provider of networking and educational resources for ultra high net worth investors says investors are evenly split into two strategy camps timing the market versus staying the course Its follow up to its Family Performance Tracking survey found 22 per cent classified themselves as making very few if any changes while 18 per cent made dramatic shifts in or out of various asset classes Families who sought principal protection while factoring in inflation did a bit better in 2011 than families who pursued growth Almost two thirds of the low risk set reported positive returns while less than half those seeking growth saw positive returns Overall returns were the lowest in 15 years Although the range of returns was significant varying from 10 per cent to more than 25 per cent a majority of members reported annual net of fee returns between 2 16 per cent and 2 28 per cent in 2011 In the past five years average returns were 2 4 per cent with the median return at 1 5 per cent net of fees Vancouver Wealthiest City Vancouver BC is the wealthiest city in Canada with an average net worth per household of 612 197 It is followed by Toronto ON at 542 039 then Calgary AB at 540 798 says Environics Analytics WealthScapes When it comes to increases in net worth the biggest jumps were seen in Regina SK at 3 8 per cent Winnipeg MB at 3 1 per cent and Ottawa Gatineau ON at 2 8 per cent In terms of real estate values Toronto leads Vancouver with both seeing over six per cent growth while growth in Calgary declined by one half a per cent Overall the wealthiest province is British Columbia and the fastest growing province in terms of wealth is Manitoba Rise Of Startup Investing With an environment that currently fosters a low barrier to entry investors have had to become more reliant on and more disciplined in their due diligence when vetting technology startup deals says Jamie Clarke of PODIUM Ventures In the article The Rise Of Startup Investing at www privatewealthcanada com he says the upside in the risk reward payoff is often greater than can be achieved through public investments However while a large and hyperactive market place does symbolize health it doesn t necessarily mean that every startup that comes along looking for investment dollars is going to be a home run In fact it is just the opposite The article is at Startup Investing Qatar Named Best Airline Qatar Airways was named Best Airline of the World for the second consecutive year at the Skytrax 2012 World Airline Awards The airline was also named the best regional airline in the Middle East as well as receiving top rankings in the categories of World s Best First Class Airline Lounges World s Best Business Class Onboard Catering and World s Best Business Class Airline Seat The Skytrax awards measure passenger satisfaction levels for 38 key performance indicators such as check in boarding onboard seat comfort in flight entertainment and staff service This year s survey covered more than 200 international and domestic carriers Hennessy Releases Limited Edition Hennessy in collaboration with graffiti provocateur Futura 2000 is releasing a limited edition VS cognac Retaining Hennessy s refined palette the ambrosia is said to emanate a delicious nose of plum almonds and walnuts The bottle has splashes of blue yellow and red with swirling vortexes helixes and the artist s signature atomic symbol on the front and cap Only 2 000 bottles of the collectable bottle will be produced and released in select stores world wide starting late August London Gets New Mercedes Dealership The Finch Automotive Group celebrated the official ground breaking of its new retail facility in London ON Construction of the facility will begin immediately and is expected to be fully operational by the end of this year The layout of the dealership follows the proprietary Mercedes Benz Autohaus concept promotes the widespread use of glass to maintain transparency and create a bright open concept feeling This design provides consistent brand identity Volatility Drives Investors To Cash Market volatility continues to drive investors to cash says a survey by BlackRock Asset Management Canada Ltd It shows a high level of anxiety among investors with at least 100 000 in investable assets More than two thirds feel much less confident about the investment decisions they make now than they did in the past And a growing number believe market conditions offer diminishing prospects for positive returns so their top priority has become protection of assets While they are turning to cash 67 per cent acknowledge their cash holdings will produce a negative return HighView Acquires Bull HighView Financial Group will acquire the outstanding shares of the Bull Wealth Management Group of Companies from EFG International a Swiss private banking group With almost 2 5 billion of client assets across approximately 150 client relationships the merger of our two firms will solidify our industry position as a leader in the outsourced chief investment officer segment in Canada and provide us with the scale to continue to prudently grow our business both organically and through select strategic acquisitions of like minded firms in Canada over the next several years says Mark Barnicutt president CEO and co founder of HighView Jim Bull founder president and CEO of Bull Wealth Management Group will be a member of the senior management team of HighView and lead the Bull Wealth Management Group The transaction is subject to regulatory approval Guidelines Make CMBS More Palatable The CRE Finance Council has published a set of guidelines aimed at making new generation CMBS more palatable to investors Its market principles focus primarily on reporting and making sure would be investors understand how new CMBS will be structured They also include provisions around liquidity a significant issue for legacy CMBS including a recommendation that arrangers set out a cash flow model in advance July 23 2012 Investor Sentiment Slides Investor sentiment in Canada continued to slide through the first half of 2012 says the latest Manulife Financial Investor Sentiment Index Results from the first half of 2012 show the index now sitting at 24 down two points from December 2011 26 and another five points from June 2011 29 Overall investor enthusiasm has decreased across almost all investment vehicles including fixed income investments investment properties balanced funds and cash The exception this period was appetite for investing in the stock market where sentiment is up by six points Measured against the December 2011 results Canadians are less likely to agree that it s a good time to invest in savings vehicles Attitudes to investing in mutual funds remain relatively steady this period with a drop of only one point In addition TFSA remains high but dropped four points and RESP RRSP and segregated funds all dropped significantly eight seven and eight points respectively Recent economic challenges including the persistent financial instability in Europe help us understand why Canadians remain cautious about investing says Paul Rooney president and CEO of Manulife Canada As these global economic challenges dominate headlines without any significant signs of recovery confidence in financial markets will continue to be uncertain Offshore Wealth A Black Hole Rich individuals and their families have as much as 32 trillion of hidden financial assets in offshore tax havens representing up to 280 billion in lost income tax revenues says James Henry economist conducting a study on behalf of the Tax Justice Network a pressure group against tax havens The study estimates the extent of global private financial wealth held in offshore accounts at between 21 and 32 trillion excluding non financial assets such as real estate gold yachts and racehorses The report also outlines the impact on the balance sheets of 139 developing countries of money held in tax havens by private elites putting wealth beyond the reach of local tax authorities Estimates are that the richest citizens of these 139 countries had amassed 7 3 to 9 3 trillion of unrecorded offshore wealth between 1970 and 2010 Henry says that private wealth held offshore represents a huge black hole in the world economy Nordstrom Moves In On Canadian Market Nordstrom Inc is finalizing its plans to set up shop in four locations in Canada including three sites that Sears Canada Inc is vacating this fall It plans to launch its first Canadian stores at the Pacific Centre in Vancouver BC the Chinook Centre in Calgary AB the Rideau Centre in Ottawa ON and Sherway Gardens in Toronto ON

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