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  • Private Wealth Canada News
    and four condominium apartments changed hands last year representing more than 500 million in total dollar volume 2015 was a banner year for real estate activity across the board Nowhere was that fact more evident than in the upper end says Cohen who participated in 13 of the 77 sales over 5 million Tight market conditions prevailed throughout much of the year with fewer ultra high end listings coming to market overall particularly in prestigious enclaves south of Highway 401 Pent up demand is expected to carry over into 2016 with affluent purchasers waiting patiently in the wings for the right product Listings were greatest in the Bridle Path and Sunnybrook Selection was scarce in upscale neighbourhoods in close proximity to the downtown core including Rosedale Moore Park and Forest Hill Dramatic Decline In Affluent Investor Confidence There was a dramatic decline in confidence among affluent investors in January driven by the stock market slide since the beginning of the year says a survey by Spectrem Group The Spectrem Millionaire Investor Confidence Index SMICI was down 14 points to minus three a 38 month low The Affluent Investor Confidence Index SAICI dropped eight points to minus four a 27 month low This is the first time since December 2012 when concern about the U S going over the fiscal cliff was at its peak that each index has posted a negative reading Global markets are continuing to experience high volatility tied to poor macro economic conditions and rising geopolitical uncertainty says George H Walper Jr president of Spectrem Group Soft Skills Important For Financial Teams Chief financial officers not only want their teams to be well versed in accounting principles but increasingly value soft skills like interpersonal communications and collaboration says a report by Adaptive Insights a provider of cloud corporate performance management CPM The CFO Indicator Q4 2015 report found the vast majority 70 per cent of the 533 global CFOs surveyed cited collaboration with other parts of the organization as a key initiative in 2016 as finance increasingly sits at the hub of big data A significant amount of time is dedicated to collaboration with 82 per cent of finance teams spending at least five hours meeting with other parts of the organization to problem solve and 51 per cent spending more than nine hours Change Almost Constant The key to investing is to focus on positive fundamental change in companies and to identify the growth drivers which haven t been fully appreciated by the market says Mikhail Zverev head of global equities at Standard Life Investments In the article The Growing Networking Opportunity at the Private Wealth Canada website he says the technology sector is one example where change is almost constant It has seen transformative change in how consumers and businesses interact with technology which now permeates everything in daily lives Year Was Historic For ETFs Last year was an historic year for the Canadian ETF industry with more than 16 3 billion in inflows says BMO Global Asset Management s ETF Outlook Report Assets under management AUM reached just under 90 billion double the AUM of the industry five years ago The report notes that in Canada equity ETFs accumulated 9 7 billion in inflows and fixed income ETFs added 6 billion Kevin Gopaul senior vice president and chief investment officer at BMO Global Asset Management says 2015 was a record breaking year for the domestic ETF industry This is particularly impressive given the turbulent markets we experienced It s clear that investors continue to gravitate towards ETFs both as core holdings and to position their portfolios strategically to address these periods of volatility Basel Challenges Hedge Funds Basel III reforms have fundamentally changed how asset managers are connected to the financial system with hedge funds challenged to understand expense usage and access to the financing power grid says a report by the Alternative Investment Management Association AIMA and S3 Partners a financial data analytics and services firm Their survey of fund managers worldwide found that financing costs have risen for 50 per cent of firms with an even split between those who quantify the level of cost increase as being greater than 10 per cent and below 10 per cent As well 75 per cent of firms expect further cost increases over the next two years and the impact is consistent regardless of a fund manager s size investment strategy or location Fund managers are also having to rethink their prime brokerage relationships with 75 per cent asked to change how they do business with their prime brokers while more than 67 per cent have had to cut the amount of cash they keep on their brokers balance sheets AGF Signs PRI AGF Investments Inc AGF has become a signatory to the United Nations supported Principles for Responsible Investment PRI in recognition of the increasing relevance of environmental social and governance ESG issues within the investment process The PRI Initiative is a global network of investors working together to put the six principles for responsible investment into practice Its goal is to understand the implications of sustainability for investors and support signatories to incorporate these issues into both their investment decision making and ownership practices In implementing the principles signatories contribute to the development of a more sustainable global financial system Kevin McCreadie president and chief investment officer of AGF Investments Inc says This reinforces our commitment to responsible investing and offers our clients a more sustainable approach Canadians Bullish On U S Equities Heading into the first quarter of 2016 Canadian advisors are still bullish on U S equities says the Q1 2016 Advisor and Investor Sentiment Surveys by Horizons ETFs Management Canada Inc Advisors were bullish on four classes only the S P 500 NASDAQ 100 the S P TSX 60 Index and the S P TSX Capped Financials Index However the degree of bullishness declined for each of these indices The decline of the Canadian dollar against the greenback has had

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2016-02-25 (2016-04-26)
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  • Private Wealth Canada - wealth management, estate planning, luxury vacations, private jets...
    not automatically redirect click here You will need to update any bookmarks that point to this page FOLLOWING IN OUR FOOTSTEPS One of the challenges in estate planning is deciding whether to limit what you pass on to your heirs so that you don t spoil them Most of us became wealthy through hard work commitment and our own ambition We hope our children end up sharing these values and

    Original URL path: http://privatewealthmagazine.ca/index.html (2016-04-26)
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  • Properly Designed Stock Options Still Rewarding
    stock options under the pre budget tax regime received the same beneficial tax treatment as stock options namely the benefit of the stock option deduction As such a cash settled tandem SAR achieved the best of both worlds the executive received cash compensation that was effectively taxed at capital gains rates and the organization was able to deduct the expense As described below the budget proposes to change this tax structure Budget Impact The budget proposes to eliminate the ability of both the employer and the employee to claim a deduction upon exercising cash settled SARs granted in tandem with stock options Pursuant to the budget only the employer can claim the deduction for the cash disbursement unless the employer makes an election in a prescribed form to waive it The employee would be eligible to claim the stock option deduction if the employer makes an election in a prescribed form not to take its deduction the employer provides a copy of the election to the employee and the employee files the election in the year the employee claims the stock option deduction These measures would apply to dispositions of stock options after 4 p m EST on March 4 2010 Income Deferral Eliminated Pursuant to the federal budget in 2000 an employee of a public company could elect to defer the income inclusion of the in the money amount from the year of exercise to the year the shares were sold to a maximum of 100 000 The budget proposes to eliminate this deferral for stock options exercised after 4 p m EST on March 4 2010 The budget does not affect the deferral of the stock option benefit for employees of Canadian controlled private companies CCPCs 4 Special Relief For Historical Tax Deferrals The financial market meltdown over the last couple of years significantly depressed the prices of the common share of many companies This negatively impacted many stock option holders who exercised their stock options before the meltdown and elected to defer their tax liability to the date of disposition of the shares Some of those who have had to sell their shares while prices are depressed have incurred tax liabilities greater than their proceeds on selling the shares The budget proposes special tax relief in these situations Essentially the special tax relief would limit the tax liability to the proceeds of the sale two thirds of the proceeds for residents of Quebec taking into account the tax benefit of the capital loss provided the shares are sold before 2015 Withholding Obligation Clarified The budget proposes to clarify an employer s obligation to remit taxes on the exercise of stock options even when stock options are exercised and the shares acquired are held rather than sold The budget clarifies that taxes must be remitted in respect of the in the money amount as if the benefit had been paid to the employee as a cash bonus If the stock option deduction is available to the employee the

    Original URL path: http://privatewealthmagazine.ca/properly_designed_stock_options_rewarding.html (2016-04-26)
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  • RRSP May Not Be Best Solution
    instead left inside the company and invested in the same manner as an RRSP At retirement instead of withdrawing funds from an RRSP or RRIF to live on the business owner would sell corporately held investments and extract the after tax proceeds as a dividend Golombek believes that Canadian business owners have long been advised to maximize RRSP contributions based on the assumption that the tax paid on salary income is exactly equal to the combined small business corporate tax paid by the corporation and the personal tax paid on the subsequent dividend by the owner The reality is however that we don t live in a perfect world he says Absolute tax savings can be realized by having income taxed inside the corporation at the small business tax rate and then paid out as a dividend rather than having the corporation pay a tax deductible salary to be taxed in the hands of the individual The result is that in every province other than Quebec the tax a business owner pays on income earned personally is actually higher than the sum of the corporate small business tax and the personal tax paid by the shareholder on income earned through a corporation and paid out as dividends Sources Of Cash For owners that have other sources of cash to fund personal living expenses and do not need to extract any funds from the corporation the advantage of the tax deferral can be even greater He advises these owners to have business income eligible for the small business rate generally up to 500 000 taxed in the corporation at the preferential small business rate and reinvested inside the company This tax deferral ranges from a low of 25 per cent in Alberta to a high of more than 35 per cent in PEI He built a model with the help of Deloitte Touche LLP s Private Company Services Group to compare the net after tax cash amounts to a business owner under two hypothetical scenarios over a 20 year period In both scenarios the funds are invested in the same portfolio of investments the pre tax rate of return on all investments is five per cent Ontario tax rates are used for both the corporation and the individual and payroll taxes are ignored In the first scenario a business owner receives enough salary to maximize his RRSP contribution and lives off his remaining after tax salary his after tax spend amount In the second scenario instead of making an RRSP contribution surplus funds are invested within the company The corporation pays the business owner sufficient dividends to have the same after tax spend amount each year as under the first scenario The model reviewed for each scenario three investment portfolios equity balanced and fixed income and concluded that under each investment portfolio after 20 years the business owner would have more after tax cash available if she he received dividends and left surplus funds inside the corporation instead of paying enough

    Original URL path: http://privatewealthmagazine.ca/RRSP_not_best_solution.html (2016-04-26)
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  • Private Wealth Canada News
    and four condominium apartments changed hands last year representing more than 500 million in total dollar volume 2015 was a banner year for real estate activity across the board Nowhere was that fact more evident than in the upper end says Cohen who participated in 13 of the 77 sales over 5 million Tight market conditions prevailed throughout much of the year with fewer ultra high end listings coming to market overall particularly in prestigious enclaves south of Highway 401 Pent up demand is expected to carry over into 2016 with affluent purchasers waiting patiently in the wings for the right product Listings were greatest in the Bridle Path and Sunnybrook Selection was scarce in upscale neighbourhoods in close proximity to the downtown core including Rosedale Moore Park and Forest Hill Dramatic Decline In Affluent Investor Confidence There was a dramatic decline in confidence among affluent investors in January driven by the stock market slide since the beginning of the year says a survey by Spectrem Group The Spectrem Millionaire Investor Confidence Index SMICI was down 14 points to minus three a 38 month low The Affluent Investor Confidence Index SAICI dropped eight points to minus four a 27 month low This is the first time since December 2012 when concern about the U S going over the fiscal cliff was at its peak that each index has posted a negative reading Global markets are continuing to experience high volatility tied to poor macro economic conditions and rising geopolitical uncertainty says George H Walper Jr president of Spectrem Group Soft Skills Important For Financial Teams Chief financial officers not only want their teams to be well versed in accounting principles but increasingly value soft skills like interpersonal communications and collaboration says a report by Adaptive Insights a provider of cloud corporate performance management CPM The CFO Indicator Q4 2015 report found the vast majority 70 per cent of the 533 global CFOs surveyed cited collaboration with other parts of the organization as a key initiative in 2016 as finance increasingly sits at the hub of big data A significant amount of time is dedicated to collaboration with 82 per cent of finance teams spending at least five hours meeting with other parts of the organization to problem solve and 51 per cent spending more than nine hours Change Almost Constant The key to investing is to focus on positive fundamental change in companies and to identify the growth drivers which haven t been fully appreciated by the market says Mikhail Zverev head of global equities at Standard Life Investments In the article The Growing Networking Opportunity at the Private Wealth Canada website he says the technology sector is one example where change is almost constant It has seen transformative change in how consumers and businesses interact with technology which now permeates everything in daily lives Year Was Historic For ETFs Last year was an historic year for the Canadian ETF industry with more than 16 3 billion in inflows says BMO Global Asset Management s ETF Outlook Report Assets under management AUM reached just under 90 billion double the AUM of the industry five years ago The report notes that in Canada equity ETFs accumulated 9 7 billion in inflows and fixed income ETFs added 6 billion Kevin Gopaul senior vice president and chief investment officer at BMO Global Asset Management says 2015 was a record breaking year for the domestic ETF industry This is particularly impressive given the turbulent markets we experienced It s clear that investors continue to gravitate towards ETFs both as core holdings and to position their portfolios strategically to address these periods of volatility Basel Challenges Hedge Funds Basel III reforms have fundamentally changed how asset managers are connected to the financial system with hedge funds challenged to understand expense usage and access to the financing power grid says a report by the Alternative Investment Management Association AIMA and S3 Partners a financial data analytics and services firm Their survey of fund managers worldwide found that financing costs have risen for 50 per cent of firms with an even split between those who quantify the level of cost increase as being greater than 10 per cent and below 10 per cent As well 75 per cent of firms expect further cost increases over the next two years and the impact is consistent regardless of a fund manager s size investment strategy or location Fund managers are also having to rethink their prime brokerage relationships with 75 per cent asked to change how they do business with their prime brokers while more than 67 per cent have had to cut the amount of cash they keep on their brokers balance sheets AGF Signs PRI AGF Investments Inc AGF has become a signatory to the United Nations supported Principles for Responsible Investment PRI in recognition of the increasing relevance of environmental social and governance ESG issues within the investment process The PRI Initiative is a global network of investors working together to put the six principles for responsible investment into practice Its goal is to understand the implications of sustainability for investors and support signatories to incorporate these issues into both their investment decision making and ownership practices In implementing the principles signatories contribute to the development of a more sustainable global financial system Kevin McCreadie president and chief investment officer of AGF Investments Inc says This reinforces our commitment to responsible investing and offers our clients a more sustainable approach Canadians Bullish On U S Equities Heading into the first quarter of 2016 Canadian advisors are still bullish on U S equities says the Q1 2016 Advisor and Investor Sentiment Surveys by Horizons ETFs Management Canada Inc Advisors were bullish on four classes only the S P 500 NASDAQ 100 the S P TSX 60 Index and the S P TSX Capped Financials Index However the degree of bullishness declined for each of these indices The decline of the Canadian dollar against the greenback has had

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2016-02-26 (2016-04-26)
    Open archived version from archive

  • Private Wealth Canada News
    the relevant data Innovation is one example GDP numbers do not capture for example the functionality of the iPhone This recovery is also abnormal in other ways he said Nominal government spending declined in the first years of the recovery and this is unprecedented It has never happened before As well debt deleveraging resulted in a contraction in household spending While spending has slowed in other recoveries this too has never happened before And he said while the dramatic decline in oil prices may not be popular in Canada he said there are enormous positive influences throughout the economy Oil producing countries account for just nine per cent of global GDP with oil consuming countries responsible for 91 per cent This will help the global economy and better and more balanced growth will result Policy Creates Lagging Confidence Lagging investor confidence in Alberta s oil and gas sector has more to do with policy uncertainty than a lack of pipelines to get oil to market says a research bulletin from the Fraser Institute Pipelines or Policies What s Behind the Fall in Investor Confidence in Alberta examines whether investor perceptions of Alberta s energy industry are driven more by negative events related to pipeline development or government policies It found there was no evidence that negative events such as the U S decision to delay the Keystone XL pipeline the announcement of twinning the Trans Mountain Pipeline and the BC NDP decision to oppose it and the announcement of the Energy East Pipeline failed to result in a significant change in the market evaluation of any of the companies It appears the market has priced pipeline uncertainty into the firms evaluations so none of the announcements we examined changed perceptions about how Alberta s oil will get to market says Ross McKitrick economics professor at the University of Guelph and co author of the bulletin Investors are prepared to play the long game when it comes to options for moving Alberta oil to market Funds Follow Contrarian Strategies Two thirds of hedge funds follow contrarian strategies However they are also the highest performing says research by the National Bureau of Economic Research s Mark Grinblatt along with Gergana Jostova George Washington University Lubomir Petrasek U S Federal Reserve Board and Alexander Philipov George Mason University It shows contrarian hedge funds or funds that tend to buy stocks that have previously had low returns outperform their benchmarks by 2 4 per cent per year For almost two thirds of managers the research shows that stock purchases tended to be contrarian although their tendency to sell recent winners was less pronounced Their most profitable trades were purchases of stocks sold by mutual funds following momentum strategies Hedge funds that utilized momentum strategies meanwhile did not outperform their benchmarks even when the benchmarks controlled for momentum Canadian ETFs Hit New Highs Canadian listed ETFs continued to challenge the adage what goes up must come down by finishing the year with a new record high of 89 5 billion in net assets says the CETFA Canadian listed ETFs experienced double digit asset growth of 16 7 per cent during the year despite continuing market turbulence during the second half of 2015 The majority of growth in Canadian listed ETFs was supported by record breaking sales full year 2015 net creations totalled 16 5 billion surpassing the previous record of 11 8 billion in net creations set in 2012 Despite comprising just seven per cent of investment fund assets as of November 2015 Canadian listed ETFs accounted for 20 per cent of investment fund inflows This was the highest share of investment fund net flows for which ETFs have accounted since 2012 In addition 2015 investment fund inflows were also at record highs TD Rebrands Wealth Business The Toronto Dominion Bank is changing its wealth business to TD Wealth Private Wealth Management The entity will be home to TD Private Investment Advice PIA the bank s full service investment brokerage TD Private Investment Counsel TD Private Banking and TD Private Trust The new brand will focus on high net worth Canadians with assets of at least 750 000 For investors this means no longer having to navigate a network of services that can leave many feeling frustrated says Dave Kelly president of TD PIA Rather a single relationship manager will be able to co ordinate all of an investor s needs and set them up directly with the specialist they require He says advisors need to be having more of a goal based conversation as opposed to just a pure investment conversation It is no longer just about a four per cent or six per cent return The move is being implemented ahead of regulatory changes known as the second phase of the client relationship model that will highlight how much a client is paying for financial advice as well as the cost of their investments January 18 2016 Organizational Leadership Still Needs Improvement Improving organizational leadership and building leadership capacity have become strategic priorities among Canadian organizations However they still find themselves struggling to bridge the leadership gap says Conference Board of Canada research Leadership Outlook Leadership Driving Organizational Performance reveals that 37 per cent of survey respondents rated their organizational leaders as being highly effective compared to 29 per cent of respondents in 2001 Similarly 31 per cent viewed their organization to be highly effective at building leadership capacity up marginally from 26 per cent in 2001 When asked to rate their organization s leadership s ability to implement major change only 14 per cent of respondents said theirs was excellent The board says this is particularly concerning as a high level of organizational preparedness with strong and capable leadership at the helm is required for organizations to anticipate and respond to the changing business and economic environment It has found that high leadership performing organizations are 30 times more likely to excel in areas such as change readiness employee engagement and customer orientation These organizations also demonstrate a strong focus on innovation and an emphasis on identifying and developing high potential employees Providers Need Transparency For HNW Investors High net worth HNW investors most frequently cite transparency as a very important differentiating factor in an advice provider says research from Cerulli Associates The global analytics firm says the first step for providers entering the HNW financial services market is to understand what characteristics these households desire in an advice provider Helping investors understand the full extent of an advisor s potential revenue streams has been a persistent challenge for both advice providers and advisors and has become even more complicated with the ongoing evolution of integrated wealth management conglomerates says Scott Smitt director at Cerulli He says the financial industry was built around the premise that investors understand the fees they pay and sign documents affirming their awareness However the research indicates that investors who truly comprehend the entirety of their costs are more the exception than the rule The overall expenses of pooled investment vehicles including management fees and other embedded fees are essentially non existent to many investors If they do not see a line item deduction from their accounts they do not recognize a transfer of wealth from themselves to their advisor or provider says Smitt While these fees and expenses are well documented within the agreements and disclosures that investors sign few take the time and effort to fully consider the cost of their arrangements Porsche Launches Compact SUV Porsche has launched the 2017 Macan GTS a compact SUV that features more power a reengineered chassis and reinforced brakes In terms of power and torque its 360 hp and 368 foot pounds place it between the Macan S and the Macan Turbo The powertrain is the 3 0 litre twin turbo V6 engine of the Macan S supplemented by the Porsche Doppelkupplung PDK and Porsche Traction Management PTM with flexible power distribution to all four wheels The Macan GTS combines a high level of typical Porsche driving dynamics with everyday utility A sportier tuning of the Porsche Active Suspension Management PASM with lower ride height along with 20 inch wheels in RS Spyder with black satin paint finish with mixed tires are features of the GTS equipment Also in keeping with the style are the standard GTS sport seats with Alcantara centre panels additional Alcantara trim in the interior and a full sounding sports exhaust system At the same time the new PCM connectivity and infotainment system with multi touch monitor extended functions and more operating comfort is celebrating its debut in an SUV The Macan GTS has exterior accents in black in high gloss above the waistline and in a matte finish in the lower areas of the body and by a special version of the Sport Design package also in GTS specific colouring that comes as a standard feature For the first time the Macan GTS is also available with LED headlights as an option It will arrive in Canada in the second quarter of 2016 with pricing starting at 73 100 Mercedes Launches Modified C Class Mercedes AMG has launched the C 63 Coupe which offers technical modifications such as flared front and rear wheel arches an increased track width and larger wheels The AMG 4 0 litre V8 biturbo engine with 469 hp in standard trim or 503 hp in the C 63 S is an in house development from Affalterbach In addition the AMG ride control suspension with electronically controlled shock absorbers the set up of the AMG dynamic select transmission modes the rear axle limited slip differential and the dynamic engine mounts have all been developed by AMG The C Class is Mercedes AMG s best selling model and forms the backbone of the company s success Since its launch in 2011 the C Class Coupe has steadily gained significance culminating with the C 63 AMG Coupe Black series It will be available in Canadian dealerships beginning in the summer Toronto Hotels Awarded Highest Rating The Ritz Carlton Four Seasons Hotel Shangri La Hotel and Trump International Hotel and Tower have been awarded the highest rating possible the CAA AAA Five Diamonds Designation by CAA South Central Ontario The hotels are all located in Toronto ON Silvana Aceto media relations consultant CAA SCO says Five Diamond hotels consistently deliver exceptional experiences to guests seeking the finest amenities in a comfortable and luxurious setting Candidates for the rating undergo multiple unannounced evaluations and a final decision is made by a panel of experts Market Disparity Offers Opportunity A market disparity that exists because of an artificial low in the gold price and an unsustainable high in financial assets has created a unique opportunity says Nick Barisheff president and CEO of Bullion Management Group Inc In the article A Tactical Opportunity Sell High Buy Low at the Private Wealth Canada website he says in the current global economy there are numerous vulnerabilities and several valuation methodologies summarize current market fundamentals and provide an excellent indicator of future trends In his view equity prices are certain to fall Meanwhile investors will again turn to gold driving up the price The opportunity for 2016 is to sell high buy low he says Three U S Tail Risks Possible There are three possible 2016 tail risks in the U S that equity and fixed income markets currently are not pricing in says What investors may expect in 2016 a Thought Leadership piece by Federated Investors Inc It says inflation surprises could result as a result of a tightening labour market Hourly compensation jumped four per cent in the third quarter well above forecasts and a sign that labour costs are rising much faster than currently anticipated This could prompt the Federal Reserve to raise interest rates faster and by more than expected If the dollar s rise accelerates instead of moderates because of additional monetary accommodation overseas at the same time the Fed is tightening and if oil stays below 40 a barrel or falls even further on new Iranian and Canadian supply and a weakened OPEC the risk is that manufacturing shrinks could result Finally spiking inflation rapidly rising interest rates and contracting manufacturing could tip over into a recession It says by including alternative strategies as part of a portfolio long term investors may potentially limit some of the downside risk that can accompany tail risk events U S Equities Overvalued U S equities remain overvalued and in a valuation range that has historically been associated with below average long term subsequent returns says Cambridge Associates Outlook 2016 Do You Know Where Your Risk Tolerance Is And while earnings growth may rebound as headwinds are fading and domestic growth should accelerate they seem likely to disappoint expectations again in 2016 given rising pressure on margins Currency is a wildcard but it seems more likely to be a minor drag than a boon especially if inflation and or Fed tightening surprise to the upside Conversely Eurozone and UK equities look more reasonably priced which should support performance though the latter may be weighed down again by a weak earnings outlook Important wildcards for the United Kingdom are what happens to commodity prices and emerging markets in light of high index exposure to both As neither is easily predictable investors maintaining large UK equity exposures should consider tilts toward more domestically oriented small and mid cap stocks Stable Oil Prices Critical For Economy Stable or higher oil prices will be critical for an improved outlook for the Canadian economy and entirely necessary for any positive performance in domestic equities says Russell Investments 2016 Annual Global Market Outlook However it says the greatest downside risk over the next 12 months for the Canadian economy remains overextended household finances Severe vulnerabilities persist in Canada and as in 2015 we believe the resiliency of the economy will be tested over the first half of 2016 says Shailesh Kshatriya director Canadian strategies at Russell Investments Canada Limited We believe GDP growth will be in the 1 2 per cent to 1 6 per cent range and expect that the economic drivers will be exports primarily but also government spending and household consumption The Bank of Canada is expected to maintain its policy rate at 0 5 per cent for 2016 However if GDP growth is at risk of coming in below our already conservative forecast an additional rate cut would not surprise us says Kshatriya Looking past the oil price shock the report indicates that the Bank of Canada s job will be complicated by housing related risks as total debt service costs remain at multi decade highs Coupled with a debt to disposable income ratio close to 167 per cent and a debt to GDP ratio of around 96 per cent the picture becomes more concerning The wildcard may well be if oil prices rise unexpectedly beyond the base case and improve economic sentiment Unfortunately the transmission mechanism for improved oil price fundamentals translating into hard economic data is not likely to be a swift one So unless oil prices accelerate over the immediate near term only moderate growth is to be expected from the domestic economy in 2016 says Kshatriya Foreign Funds Perform Better The waning strength of the Canadian dollar resulted in strong performance for foreign equity funds held by Canadian investors says Morningstar Research Inc However its 2015 performance numbers showed returns in domestic funds were disappointing The report shows 29 of its 42 Canada fund indices measuring returns of funds across various categories rose during the year including nine that gained more than 10 per cent A European equity index topped the performance The 16 2 per cent decline of the Canadian dollar against the U S dollar meant despite flat performance the U S equity and U S small mid cap categories jumped by a 13 per cent Best performance among Canadian equities fund was in the Canadian focused category which showed a 0 7 per cent decrease January 11 2016 MEI Counters CCPA Wage Gap Findings The gap between the remuneration of the 100 highest paid CEOs in Canada and the average salary in Canada has reached a point that justifies greater wealth redistribution says a report from the Canadian Centre for Policy Alternatives CCPA It says by January 2 these CEOs had pocketed the equivalent of the average annual salary in Canada By increasing income tax rates and limiting deductions the CCPA claims that governments could use these additional revenues to finance public services that would benefit the population However the Montreal Economic Institute MEI says if the total remuneration of these CEOs some 921 million were entirely confiscated this would represent just 0 13 per cent of the overall revenues of governments in Canada Assuming that these CEOs would continue to perform their duties without getting paid their salaries would be entirely spent by governments by 10 37 a m on the first day of the year There is a legitimate debate to be had regarding the remuneration of the CEOs of large corporations But it has to do with corporate governance and the ability of shareholders to have their point of view on the topic properly reflected in the decisions of boards of directors says Michel Kelly Gagnon president and CEO of the MEI In addition to being an ineffective means of increasing government revenues high tax rates hinder wealth creation and wealth creation is something that actually contributes to everyone s standard of living Dangling the prospect of being able to pay for a multitude of social programs just by excessively taxing the salaries of the CEOs of large corporations as some do is simply mistaken says Kelly Gagnon It serves only to stoke people s envy and contributes nothing constructive to serious discussions of public policy Interest Rate Increase Affects Indices The U S Federal Reserve s quarter point increase in interest rates contributed to a significant decline in

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2016-01-26 (2016-04-26)
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  • Private Wealth Canada News
    the relevant data Innovation is one example GDP numbers do not capture for example the functionality of the iPhone This recovery is also abnormal in other ways he said Nominal government spending declined in the first years of the recovery and this is unprecedented It has never happened before As well debt deleveraging resulted in a contraction in household spending While spending has slowed in other recoveries this too has never happened before And he said while the dramatic decline in oil prices may not be popular in Canada he said there are enormous positive influences throughout the economy Oil producing countries account for just nine per cent of global GDP with oil consuming countries responsible for 91 per cent This will help the global economy and better and more balanced growth will result Policy Creates Lagging Confidence Lagging investor confidence in Alberta s oil and gas sector has more to do with policy uncertainty than a lack of pipelines to get oil to market says a research bulletin from the Fraser Institute Pipelines or Policies What s Behind the Fall in Investor Confidence in Alberta examines whether investor perceptions of Alberta s energy industry are driven more by negative events related to pipeline development or government policies It found there was no evidence that negative events such as the U S decision to delay the Keystone XL pipeline the announcement of twinning the Trans Mountain Pipeline and the BC NDP decision to oppose it and the announcement of the Energy East Pipeline failed to result in a significant change in the market evaluation of any of the companies It appears the market has priced pipeline uncertainty into the firms evaluations so none of the announcements we examined changed perceptions about how Alberta s oil will get to market says Ross McKitrick economics professor at the University of Guelph and co author of the bulletin Investors are prepared to play the long game when it comes to options for moving Alberta oil to market Funds Follow Contrarian Strategies Two thirds of hedge funds follow contrarian strategies However they are also the highest performing says research by the National Bureau of Economic Research s Mark Grinblatt along with Gergana Jostova George Washington University Lubomir Petrasek U S Federal Reserve Board and Alexander Philipov George Mason University It shows contrarian hedge funds or funds that tend to buy stocks that have previously had low returns outperform their benchmarks by 2 4 per cent per year For almost two thirds of managers the research shows that stock purchases tended to be contrarian although their tendency to sell recent winners was less pronounced Their most profitable trades were purchases of stocks sold by mutual funds following momentum strategies Hedge funds that utilized momentum strategies meanwhile did not outperform their benchmarks even when the benchmarks controlled for momentum Canadian ETFs Hit New Highs Canadian listed ETFs continued to challenge the adage what goes up must come down by finishing the year with a new record high of 89 5 billion in net assets says the CETFA Canadian listed ETFs experienced double digit asset growth of 16 7 per cent during the year despite continuing market turbulence during the second half of 2015 The majority of growth in Canadian listed ETFs was supported by record breaking sales full year 2015 net creations totalled 16 5 billion surpassing the previous record of 11 8 billion in net creations set in 2012 Despite comprising just seven per cent of investment fund assets as of November 2015 Canadian listed ETFs accounted for 20 per cent of investment fund inflows This was the highest share of investment fund net flows for which ETFs have accounted since 2012 In addition 2015 investment fund inflows were also at record highs TD Rebrands Wealth Business The Toronto Dominion Bank is changing its wealth business to TD Wealth Private Wealth Management The entity will be home to TD Private Investment Advice PIA the bank s full service investment brokerage TD Private Investment Counsel TD Private Banking and TD Private Trust The new brand will focus on high net worth Canadians with assets of at least 750 000 For investors this means no longer having to navigate a network of services that can leave many feeling frustrated says Dave Kelly president of TD PIA Rather a single relationship manager will be able to co ordinate all of an investor s needs and set them up directly with the specialist they require He says advisors need to be having more of a goal based conversation as opposed to just a pure investment conversation It is no longer just about a four per cent or six per cent return The move is being implemented ahead of regulatory changes known as the second phase of the client relationship model that will highlight how much a client is paying for financial advice as well as the cost of their investments January 18 2016 Organizational Leadership Still Needs Improvement Improving organizational leadership and building leadership capacity have become strategic priorities among Canadian organizations However they still find themselves struggling to bridge the leadership gap says Conference Board of Canada research Leadership Outlook Leadership Driving Organizational Performance reveals that 37 per cent of survey respondents rated their organizational leaders as being highly effective compared to 29 per cent of respondents in 2001 Similarly 31 per cent viewed their organization to be highly effective at building leadership capacity up marginally from 26 per cent in 2001 When asked to rate their organization s leadership s ability to implement major change only 14 per cent of respondents said theirs was excellent The board says this is particularly concerning as a high level of organizational preparedness with strong and capable leadership at the helm is required for organizations to anticipate and respond to the changing business and economic environment It has found that high leadership performing organizations are 30 times more likely to excel in areas such as change readiness employee engagement and customer orientation These organizations also demonstrate a strong focus on innovation and an emphasis on identifying and developing high potential employees Providers Need Transparency For HNW Investors High net worth HNW investors most frequently cite transparency as a very important differentiating factor in an advice provider says research from Cerulli Associates The global analytics firm says the first step for providers entering the HNW financial services market is to understand what characteristics these households desire in an advice provider Helping investors understand the full extent of an advisor s potential revenue streams has been a persistent challenge for both advice providers and advisors and has become even more complicated with the ongoing evolution of integrated wealth management conglomerates says Scott Smitt director at Cerulli He says the financial industry was built around the premise that investors understand the fees they pay and sign documents affirming their awareness However the research indicates that investors who truly comprehend the entirety of their costs are more the exception than the rule The overall expenses of pooled investment vehicles including management fees and other embedded fees are essentially non existent to many investors If they do not see a line item deduction from their accounts they do not recognize a transfer of wealth from themselves to their advisor or provider says Smitt While these fees and expenses are well documented within the agreements and disclosures that investors sign few take the time and effort to fully consider the cost of their arrangements Porsche Launches Compact SUV Porsche has launched the 2017 Macan GTS a compact SUV that features more power a reengineered chassis and reinforced brakes In terms of power and torque its 360 hp and 368 foot pounds place it between the Macan S and the Macan Turbo The powertrain is the 3 0 litre twin turbo V6 engine of the Macan S supplemented by the Porsche Doppelkupplung PDK and Porsche Traction Management PTM with flexible power distribution to all four wheels The Macan GTS combines a high level of typical Porsche driving dynamics with everyday utility A sportier tuning of the Porsche Active Suspension Management PASM with lower ride height along with 20 inch wheels in RS Spyder with black satin paint finish with mixed tires are features of the GTS equipment Also in keeping with the style are the standard GTS sport seats with Alcantara centre panels additional Alcantara trim in the interior and a full sounding sports exhaust system At the same time the new PCM connectivity and infotainment system with multi touch monitor extended functions and more operating comfort is celebrating its debut in an SUV The Macan GTS has exterior accents in black in high gloss above the waistline and in a matte finish in the lower areas of the body and by a special version of the Sport Design package also in GTS specific colouring that comes as a standard feature For the first time the Macan GTS is also available with LED headlights as an option It will arrive in Canada in the second quarter of 2016 with pricing starting at 73 100 Mercedes Launches Modified C Class Mercedes AMG has launched the C 63 Coupe which offers technical modifications such as flared front and rear wheel arches an increased track width and larger wheels The AMG 4 0 litre V8 biturbo engine with 469 hp in standard trim or 503 hp in the C 63 S is an in house development from Affalterbach In addition the AMG ride control suspension with electronically controlled shock absorbers the set up of the AMG dynamic select transmission modes the rear axle limited slip differential and the dynamic engine mounts have all been developed by AMG The C Class is Mercedes AMG s best selling model and forms the backbone of the company s success Since its launch in 2011 the C Class Coupe has steadily gained significance culminating with the C 63 AMG Coupe Black series It will be available in Canadian dealerships beginning in the summer Toronto Hotels Awarded Highest Rating The Ritz Carlton Four Seasons Hotel Shangri La Hotel and Trump International Hotel and Tower have been awarded the highest rating possible the CAA AAA Five Diamonds Designation by CAA South Central Ontario The hotels are all located in Toronto ON Silvana Aceto media relations consultant CAA SCO says Five Diamond hotels consistently deliver exceptional experiences to guests seeking the finest amenities in a comfortable and luxurious setting Candidates for the rating undergo multiple unannounced evaluations and a final decision is made by a panel of experts Market Disparity Offers Opportunity A market disparity that exists because of an artificial low in the gold price and an unsustainable high in financial assets has created a unique opportunity says Nick Barisheff president and CEO of Bullion Management Group Inc In the article A Tactical Opportunity Sell High Buy Low at the Private Wealth Canada website he says in the current global economy there are numerous vulnerabilities and several valuation methodologies summarize current market fundamentals and provide an excellent indicator of future trends In his view equity prices are certain to fall Meanwhile investors will again turn to gold driving up the price The opportunity for 2016 is to sell high buy low he says Three U S Tail Risks Possible There are three possible 2016 tail risks in the U S that equity and fixed income markets currently are not pricing in says What investors may expect in 2016 a Thought Leadership piece by Federated Investors Inc It says inflation surprises could result as a result of a tightening labour market Hourly compensation jumped four per cent in the third quarter well above forecasts and a sign that labour costs are rising much faster than currently anticipated This could prompt the Federal Reserve to raise interest rates faster and by more than expected If the dollar s rise accelerates instead of moderates because of additional monetary accommodation overseas at the same time the Fed is tightening and if oil stays below 40 a barrel or falls even further on new Iranian and Canadian supply and a weakened OPEC the risk is that manufacturing shrinks could result Finally spiking inflation rapidly rising interest rates and contracting manufacturing could tip over into a recession It says by including alternative strategies as part of a portfolio long term investors may potentially limit some of the downside risk that can accompany tail risk events U S Equities Overvalued U S equities remain overvalued and in a valuation range that has historically been associated with below average long term subsequent returns says Cambridge Associates Outlook 2016 Do You Know Where Your Risk Tolerance Is And while earnings growth may rebound as headwinds are fading and domestic growth should accelerate they seem likely to disappoint expectations again in 2016 given rising pressure on margins Currency is a wildcard but it seems more likely to be a minor drag than a boon especially if inflation and or Fed tightening surprise to the upside Conversely Eurozone and UK equities look more reasonably priced which should support performance though the latter may be weighed down again by a weak earnings outlook Important wildcards for the United Kingdom are what happens to commodity prices and emerging markets in light of high index exposure to both As neither is easily predictable investors maintaining large UK equity exposures should consider tilts toward more domestically oriented small and mid cap stocks Stable Oil Prices Critical For Economy Stable or higher oil prices will be critical for an improved outlook for the Canadian economy and entirely necessary for any positive performance in domestic equities says Russell Investments 2016 Annual Global Market Outlook However it says the greatest downside risk over the next 12 months for the Canadian economy remains overextended household finances Severe vulnerabilities persist in Canada and as in 2015 we believe the resiliency of the economy will be tested over the first half of 2016 says Shailesh Kshatriya director Canadian strategies at Russell Investments Canada Limited We believe GDP growth will be in the 1 2 per cent to 1 6 per cent range and expect that the economic drivers will be exports primarily but also government spending and household consumption The Bank of Canada is expected to maintain its policy rate at 0 5 per cent for 2016 However if GDP growth is at risk of coming in below our already conservative forecast an additional rate cut would not surprise us says Kshatriya Looking past the oil price shock the report indicates that the Bank of Canada s job will be complicated by housing related risks as total debt service costs remain at multi decade highs Coupled with a debt to disposable income ratio close to 167 per cent and a debt to GDP ratio of around 96 per cent the picture becomes more concerning The wildcard may well be if oil prices rise unexpectedly beyond the base case and improve economic sentiment Unfortunately the transmission mechanism for improved oil price fundamentals translating into hard economic data is not likely to be a swift one So unless oil prices accelerate over the immediate near term only moderate growth is to be expected from the domestic economy in 2016 says Kshatriya Foreign Funds Perform Better The waning strength of the Canadian dollar resulted in strong performance for foreign equity funds held by Canadian investors says Morningstar Research Inc However its 2015 performance numbers showed returns in domestic funds were disappointing The report shows 29 of its 42 Canada fund indices measuring returns of funds across various categories rose during the year including nine that gained more than 10 per cent A European equity index topped the performance The 16 2 per cent decline of the Canadian dollar against the U S dollar meant despite flat performance the U S equity and U S small mid cap categories jumped by a 13 per cent Best performance among Canadian equities fund was in the Canadian focused category which showed a 0 7 per cent decrease January 11 2016 MEI Counters CCPA Wage Gap Findings The gap between the remuneration of the 100 highest paid CEOs in Canada and the average salary in Canada has reached a point that justifies greater wealth redistribution says a report from the Canadian Centre for Policy Alternatives CCPA It says by January 2 these CEOs had pocketed the equivalent of the average annual salary in Canada By increasing income tax rates and limiting deductions the CCPA claims that governments could use these additional revenues to finance public services that would benefit the population However the Montreal Economic Institute MEI says if the total remuneration of these CEOs some 921 million were entirely confiscated this would represent just 0 13 per cent of the overall revenues of governments in Canada Assuming that these CEOs would continue to perform their duties without getting paid their salaries would be entirely spent by governments by 10 37 a m on the first day of the year There is a legitimate debate to be had regarding the remuneration of the CEOs of large corporations But it has to do with corporate governance and the ability of shareholders to have their point of view on the topic properly reflected in the decisions of boards of directors says Michel Kelly Gagnon president and CEO of the MEI In addition to being an ineffective means of increasing government revenues high tax rates hinder wealth creation and wealth creation is something that actually contributes to everyone s standard of living Dangling the prospect of being able to pay for a multitude of social programs just by excessively taxing the salaries of the CEOs of large corporations as some do is simply mistaken says Kelly Gagnon It serves only to stoke people s envy and contributes nothing constructive to serious discussions of public policy Interest Rate Increase Affects Indices The U S Federal Reserve s quarter point increase in interest rates contributed to a significant decline in

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  • Private Wealth Canada News
    preferred pricing program and private wealth counsel service and are exclusively for affluent investors with a minimum initial investment of 150 000 The pools offer multi manager core mandates combining strategically allocated active portfolios a risk conscious approach which includes low volatility strategies a preferred management fee structure designed for the affluent investor tax efficiency within the four mandates offered through the corporate class structure and fixed rate monthly payout options across all private wealth pools Sun Life Introduces Private Client Auto enrolment Program Sun Life Global Investments Canada Inc is introducing an auto enrolment feature for investors who qualify for the private client program It will make it easier for advisors to administer accounts to this market segment and provide eligible investors the opportunity to receive the lowest fees and best features available to them within Sun Life Global Investments Starting February 5 clients holding a minimum of 100 000 based on the market value in series A F T5 T8 AT5 AT8 and AH mutual funds purchased via front end sales charge option in an eligible account will automatically be enrolled in the program Once within the program investors will automatically receive management fee reductions based on the market value of their account and may be eligible for additional private client services and features including specialized statements and account linking December 14 2015 Tax Adjustments To Cost Liberal Government The Liberal government is making good on its election vow to cut federal income taxes for middle earners by raising the rate on the richest Canadians However it now acknowledges the tax tweaks introduced in a motion in parliament won t be revenue neutral Bill Morneau the federal finance minister says that an array of new tax adjustments will have an annual net drain on the federal treasury of about 1 2 billion in each of the next five years starting in 2016 17 The headliner of the new measures is the one to lower the income tax rate to 20 5 per cent from 22 per cent on Canadians earning between 45 282 and 90 563 per year To help offset that change the Liberals have added a 33 per cent tax rate on income earned by Canadians in the top one per cent those who make more than 200 000 per year Previously the 29 per cent tax bracket which applies to incomes between 140 388 and 200 000 was the highest tax rate in the country In its election platform the Liberals estimated the tax increase on the top earners would only fall short of covering the full cost of the tax cut by less than 100 million per year But the numbers were adjusted after an evaluation by the finance department found the projected revenues of the Liberal promise were off the mark The net cost of the changes is 1 4 billion in 2016 17 a shortfall that s projected to rise each year until it hits 1 7 billion in 2020 21 About 319 000 Canadians will reach the upper tax echelon American Portfolios Plunge The stock market s sharp decline in August and September took its toll on Americans finances in the third quarter Household net worth fell for the first time in four years The Federal Reserve says Americans stock and mutual fund portfolios plunged 2 3 trillion in the July September quarter That far outweighed a 482 billion increase in home values Overall household net worth fell to 85 2 trillion from 86 4 trillion in the second quarter Americans net worth has grown 2 9 per cent in the past year That rise may have left many Americans feeling wealthier even with last quarter s decline Less household wealth can cause consumers to pull back on spending to rebuild savings That can slow growth since consumer spending drives more than two thirds of economic activity Workers CFOs Differ On Incentives When thinking about workplace perks would employees rather hit the gym or take a day off It depends on whom you ask Chief financial officers CFOs interviewed for a Robert Half survey said health and wellness benefits are what current and potential employees prize most but workers cited additional vacation days as their most coveted perk Despite the discrepancy the research suggests companies are increasingly willing to negotiate non monetary perks versus a year ago Fifty four per cent of CFOs said they are more open to discussing these benefits while none of those surveyed said they are less open This shift is not lost on workers 24 per cent think perks are on the discussion table more often at their company while just 10 per cent think the opposite The research also found that when it comes to being more willing to offer these extra incentives businesses in Manitoba Alberta and British Columbia lead the pack Investors Need To Stay Ahead Of Curve As part of incorporating climate risk into long term investment decision making investors should consider whether and how to stay ahead of the climate risk curve to preserve value in their portfolios says Cambridge Associates Its Risks and Opportunities From the Changing Climate Playbook for the Truly Long Term Investor report also says they need to determine whether and how to position themselves to capitalize on investment opportunities arising from technological advances business model innovations and policy evolution For many the first step is not necessarily making immediate portfolio changes but rather asking key questions to establish guideposts today to arrive at better decisions tomorrow Given the interconnected and systemic nature of climate risks investors will find it difficult to predict and precisely manage every potential impact on portfolios There are four approaches investors can take to better understand and manage these risks They are engagement through delegation to managers engagement through advocating for more transparency and reporting on climate risk metrics proactive hedging via low carbon index products derivatives or use of active managers that employ environmental social and governance ESG metrics and policy level exclusion of fossil fuel and other sectors Business Cycle Crucial For Gains The business cycle will be crucial for further gains in risk assets next year now that the global tide of easy money that inflated valuations in recent years has crested says BlackRock Investment Institute s 2016 Investment Outlook Cycles Out of Sync suggests investors pay much more attention in 2016 to the business credit and valuation cycles as the impact of the monetary policy cycle fades With valuations no longer cheap and corporate profit margins under pressure in many markets economic growth is needed to boost revenues Careful navigating will be critical in 2016 because key cycles now appear to be out of sync it says In particular valuations appear to have leapt ahead of the business cycle in many markets especially in the U S We have essentially been borrowing returns from the future it says and the outlook is made even more challenging because long term trends such as aging populations high debt loads and technological change are intersecting with short term cycles meaning that the high growth rates of the past may not return says Ewen Cameron Watt global chief investment strategist with the institute But the good news is that we see a modest pick up in global growth and a renewed investor focus on fundamentals Canadian Equities Offer Some Positives From a global perspective Canadian equities do offer some positives says Jeffrey Morrison an investment officer and portfolio manager at MFS Investment Management Speaking at its 2016 Investment Outlook he said monetary policy is likely to remain loose to provide stimulus to the economy As well the new federal Liberal government has promised to increase government spending and there are emerging signs of an energy supply response However on the negative side he said the commodity super cycle is over and Canada needs to find a way to rebalance Challenges here are the hollowed out manufacturing sector and consumer and government debt In 2015 he said it was a challenging year for Canadian equities as they only outperformed Columbia trailing every other country The reasons for this unattractive valuation metrics and a weak earnings outlook mean this is likely to continue in 2016 Economy Shifts Into High Gear Canada s economy switched into higher gear in the latter half of 2015 and this momentum is expected to continue throughout 2016 says an RBC Economic Outlook It is forecasting real GDP growth of 1 2 per cent in 2015 2 2 per cent in 2016 and 2 7 per cent in 2017 A surge in exports firm consumer spending and housing market activity supported a boost in the Canadian economy halfway through 2015 says Craig Wright senior vice president and chief economist RBC Growth in these sectors more than offset a decline in business investment and ongoing weakness in the energy sector Moving into 2016 we expect to see sustained economic growth A large part of the mid year recovery was due to an improvement in exports with most sectors across Canada posting gains Export volumes increased at a 9 4 per cent annualized pace in the third quarter backed by increases in energy industrial machinery transportation equipment and consumer goods In 2016 RBC expects that the strengthening U S economy coupled with a weaker Canadian dollar will generate export growth of about six per cent ETF Record Levels Continue ETFs ETPs listed in Canada have gathered a record US 11 3 billion in net new assets as of the end of November 2015 10 7 per cent above the record level of US 10 2 billion of net new assets gathered at this point in 2012 says ETFGI s Global ETF and ETP insights report for November 2015 This marks the 12th consecutive month of positive net inflows In the first 11 months of 2015 record levels of net new assets have been gathered by ETFs ETPs listed globally with net inflows of US 319 3 billion marking a 15 per cent increase over the prior record set during the first 11 months of 2014 iA Financial Group Launches Segregated Funds iA Financial Group Industrial Alliance Insurance and Financial Services Inc has launched its Prestige Series for clients whose consolidated assets with the company have a market value of 300 000 or higher These segregated funds offer a management expense ratio reduction varying between 0 10 per cent and 0 55 per cent depending on the fund The two funds series offer investors a range of segregated funds The new series are Classic Series 75 75 Prestige 75 funds and Series 75 100 Prestige 70 funds Qualification for the expense ratio reduction is determined on a weekly basis and is applied automatically without any action required by the advisor or the client When a client qualifies the reduction is applied to assets held in these series The company automatically transfers the fund units to the equivalent Prestige Series funds These series also offer all the benefits of segregated funds including creditor protection and rapid estate settlement in the event of death December 7 2015 Affluent Investors Positive Yet Cautious Affluent investors indicate they are feeling more positive about their personal financial situation says the Spectrem Affluent Investor Confidence Index It gained three points in November moving up to seven During the same period the Spectrem Millionaire Investor Confidence Index gained nine points to 15 Both indices stand at three month highs Despite gains in the November investor confidence indices affluent investors said they remain wary of market conditions and are concerned over recent terror attacks and continued threats Despite rising optimism about their personal financial situation tied to favourable economic reports in November affluent investors remain cautious and uncertain about the market says George H Walper Jr president of Spectrem Group Among their concerns include lingering doubts about the direction of the global economy the ongoing threat of terrorism following the horrific attacks in Paris and the strong likelihood of a December rate hike by the Federal Reserve Four Seasons Tops Hotel Brand Index The top five worldwide hotel brands with which the affluent are most familiar and most likely to have visited in the past year are the Four Seasons the Ritz Carlton JW Marriott the Grand Hyatt and the InterContinental says the Luxury Institute in its 2015 Global Hotels Luxury Brand Status Index On a country specific basis brands with notable spikes in familiarity and usage include Waldorf Astoria Hotels and Resorts in the U S and UK Sofitel Le Meridien and Club Med in France Kempinski Hotels in Germany Club Med in Italy the Peninsula Hotels and Mandarin Oriental in Japan and Shangri La Hotels Resorts and the Peninsula Hotels in China Affluent travelers from all seven countries spend an average of 19 nights per year in hotels with highest usage found among travelers from Germany 26 nights and France 23 nights High income travelers from Italy 13 nights and Japan 15 nights spend comparatively less time in hotels Chinese travelers are most likely 89 per cent to have spent at least one night in a luxury hotel compared to 75 per cent of affluent travelers worldwide On average affluent consumers who stay in luxury hotels spend about 11 nights per year in these hotels with the majority of nights being related to leisure travel Leisure travel with a spouse cited by 63 per cent of travelers is the most common scenario for staying in a luxury hotel while 11 per cent traveled with a business colleague and 15 per cent reported traveling solo Global Outlook Positive While the global outlook remains positive with encouraging forward readings performance will continue to be somewhat uneven says Carl Tannenbaum executive vice president and chief economist for Northern Trust Speaking at the Northern Trust Canada Economic Update on The New Normal Seeking Suitable Economic Performance he said for those used to certain economic performance levels they haven t been seen since the financial crisis Growth in developed markets has been good but not great and lower for longer than anyone would like Economies operating at less than full potential means less people working and not being able to retire debt He called debt the common ingredient It built up at household levels before the crisis due to low interest rates and loose lending practices and since the crisis in the public sector In the U S household austerity limited consumption and debt levels are back down to 2002 levels This means consumers can take vacations and replace old cars In fact auto sales are a bright spot in the U S the best they ve been in 10 years However some market debt levels are rising not falling This includes Australia and Canada At some point they have to level off Part of the problem is the low interest rates means households think they can sustain debt However if interest rates go up and they will these households could be in trouble They should be managing their debt now while rates are low he said Porsche 911 Models Boast More Power Porsche says starting next year its top models of the 911 model series the Turbo and Turbo S will boast more power 20 hp a sharpened design and improved features The models will be available in both coupe and convertible versions The bi turbo six cylinder engine in the 911 Turbo with 3 8 litres of displacement will have a power output of 540 hp This power gain is achieved by modified inlet ports in the cylinder head new injection nozzles and higher fuel pressure The 911 Turbo S will develop 580 hp thanks to new turbochargers with larger compressors The GT sport steering wheel 360 mm in diameter and with a design adopted from the 918 Spyder will come with a mode switch as standard It consists of a rotary ring with stepped positions that can be used to select one of the four modes normal sport sport plus or individual Along with the generation change in models the newly developed infotainment system and PCM with navigation are making their way into the cockpits of the 911 Turbo models as standard equipment This system consists of a multi touch monitor with high quality glass surface and offers numerous new and extended connectivity functions In addition the system can now process handwritten inputs Moreover the company says mobile phones and smartphones can be integrated more quickly easily and comprehensively than before via Wi Fi Bluetooth or cable Select vehicle functions can now be controlled remotely as well As in the previous models the Bose sound system is offered as standard equipment while a Burmester system can be delivered as an option Hillsdale Launches Equity Fund Hillsdale has launched a global small equity fund It says this fund provides investors with the significant potential of global breadth with access to 25 countries 17 000 stocks using 1 500 return drivers in 18 currencies The global small cap fund leverages the firm s 19 year first quartile track record in the active management of Canadian and U S small cap equities The company says the multi strategy stock selection process has been custom designed for each country and region Online Tool Helps Clients Meet Goals Collins Barrow Toronto LLP has launched an online tool to help advisors and their high net worth business owner clients understand their financial position and what s required of them to meet their financial goals What s Your Number is available on the firm s website and allows business owners specifically those with holding companies to plug in information about their corporate holdings personal assets and future financial plans The program s calculator will then use those details to produce an ideal amount of money that the individual needs to afford his or her chosen lifestyle which is immediately available on the screen or through a downloadable report Michael Allen a partner at the firm says By anticipating

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2015-12-27 (2016-04-26)
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