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  • Private Wealth Canada News
    end home purchase The survey shows 19 per cent of respondents say their recent career success prompted their home search 17 per cent of luxury home buyers indicated they entered the market because they are newly retired 14 per cent indicated that they are entering the market as an investment and 12 per cent have entered the market to buy their first home Alouettes Coach Lists 7 75 Million Property Montreal Alouettes coach and retired NFL and Canadian football quarterback Jeff Garcia has listed his Rancho Santa Fe CA property for sale at 7 75 million The 11 000 square foot home has a Mediterranean style and was built in 1987 Garcia and his wife former Playmate Carmella DeCesare purchased the property in March 2009 for 6 565 million Garcia began his professional football career with the Calgary Stampeders in 1994 and has since played with numerous NFL teams including the San Francisco 49ers the Philadelphia Eagles and the Tampa Bay Buccaneers Garcia is part of the advisory board for the U S Football League that is set to launch in the spring of 2015 ETFs Hit Record Level ETFs and ETPs listed globally gathered US 33 8 billion in net new assets in July pushing the year to date net new assets to US 160 5 billion says an ETFGI analysis This is a new record level for this point in the year outpacing the previous high of US 149 9 billion set in 2013 Assets declined slightly 0 4 per cent from their record high of US 2 64 trillion in June to US 2 62 trillion at the end of July The global ETF ETP industry now has 5 410 ETFs ETPs with 10 477 listings from 222 providers listed on 60 exchanges August 18 2014 Incentive And Performance Rewards On The Rise CEOs earned a median total compensation package of 9 65 million with approximately two thirds of the value coming from long term incentive grants says Mercer in its latest analysis of compensation and benefits for CEOs The report which in surveyed CEOs at 240 companies in the S P 500 also says pay in the form of long term incentives climbed to a median 6 45 million a median year over year change of four per cent Utilization of time vesting restricted stock was relatively steady over the past three years 22 per cent of the sample companies granted them in 2013 Performance shares used by 41 per cent of S P 500 companies in 2011 became a majority practice in 2013 used by 51 per cent of companies surveyed Among S P 100 companies the 50 per cent threshold was crossed in 2012 and usage increased to 56 per cent in 2013 The prevalence of stock options continued to fall in 2013 with just 25 per cent of CEOs receiving option grants down 10 percentage points since 2011 The substitution of full value performance awards for time vesting option grants is a long term trend in response to a long standing criticism that options lack line of sight to actionable goals RBC Launches European Dividend Fund RBC Global Asset Management Inc has launched the RBC European Dividend Fund for purchase by individual investors and advisors in Canada The RBC European Dividend Fund is designed to meet the needs of investors who are seeking income generating products with an economic and geographic diversification and can tolerate medium risk and fluctuations over a long term investment horizon The aim is to strike the right balance between dividend income dividend growth and wealth preservation while providing investors with the opportunity to diversify their sources of income across European markets Hard Work Unlocks Value Generating return out of secondary transactions is about working hard to unlock value from unique transactions says research from Unigestion And this is contrary to the commonly accepted view in the industry that focusing on discount is not the appropriate way to generate sustainable returns through secondaries transaction Transactions are unique either because they are less advertised than others smaller more private have to do with one fund rather than block transactions or unique because they involve some kind of complexity which requires the appropriate knowledge skill and engineering to execute Approaching secondaries transactions this way enables investors to expect steadier returns rather than just focusing on discounts it says In such transactions buyers need to be able to identify a return potential that the wider market cannot see or is unwilling to pursue Managers who can discover and release the hidden value in these less obvious and more unique deals allow their investors to benefit from NAV upside through skillful deal making rather than simply chasing discounts Investors Pull Back From Risk Investors have been pulling back from risk and building up cash levels in response to rising geopolitical risk and the prospect of rising U S interest rates says a fund manager survey from BofA Merrill Lynch It says global investors have shifted into cash over the past month with a net 27 per cent of respondents saying they are now overweight cash up from a net 12 per cent in July Cash now accounts for an average of 5 1 per cent of global portfolios up from 4 5 per cent a month ago In shifting towards cash fund managers are pulling back from equities The proportion of asset allocators that are overweight in equities has plunged by 17 percentage points in one month to a net 44 per cent in August Uncertain Path Ahead For Emerging Markets The relative performance of emerging markets equities has an uncertain path says Paul Moroz deputy chief investment officer and director at Mawer Investment Management He told the International Foundation of Employee Benefit Plan s 47th Annual Employee Benefits Conference that past returns are regime sensitive and impacted by the timing of major events such as the Asian flu or the Japanese technology bubbles Thus investors must have the willingness and ability to

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-09-04 (2016-04-26)
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  • Private Wealth Canada News
    in the first half of 2014 in line with expectations Climate linked Bonds Growing Rapidly The total universe of bonds linked to key climate changes solutions stands at 502 6 billion compared to last year s estimate of 346 billion says a report from the HSBC Climate Change Centre of Excellence Bonds and Climate Change the state of the market in 2014 shows 35 8 billion of the universe is made up of labelled Green Bonds issued by corporations and development banks The labelled Green Bonds market has grown rapidly since the 2013 report from approximately 7 billion to 35 billion outstanding Growth started in the latter half of 2013 and was driven by the first Green Bond issuance from corporations This growth has continued in 2014 with approximately 20 billion already issued in 2014 It says the broader climate themed universe is an indicator of where future bonds might be labelled Couples Fail To Discuss Retirement More than two thirds 68 per cent of not yet retired Canadians aged 50 and older have yet to discuss their hopes for their post career lives with their spouses or partners says the annual RBC Retirement Myths Realities Poll Three of the topics these Canadians have been most reluctant to discuss with their significant others are how either will manage if the other encounters health issues 86 per cent how either will manage if the other passes away prematurely 81 per cent and what activities they will do in retirement 65 per cent Couples often have more conversations about what they ll be doing over the summer or winter holidays than what they hope their retirement together will be like says Bill Hill national retirement planning consultant at RBC Yet one of the most important discussions you can have as a couple in your 50s or older is around the future lifestyle you re hoping for when you re no longer working 9 to 5 You want to do everything you can now to ensure your retirement years will be equally enjoyable for both of you The poll also revealed that men and women have very different expectations about how they will occupy their time during retirement While 57 per cent of men expected to spend more time with their spouse or partner only 52 per cent of women expressed the same sentiment Women were much more interested in spending more time with family other than their spouses or partners 53 per cent compared to 37 per cent of men with friends 51 per cent versus 36 per cent and as volunteers 63 per cent versus 50 per cent Global Investors Increasingly Bullish Global investors are increasingly bullish on the outlook for equity markets despite concerns about valuations says the BofA Merrill Lynch s July survey of fund managers It shows that a net 61 per cent of global asset allocators are now overweight equities the highest reading since early 2011 and the second most bullish stance in the survey s history This reflects a significant increase in investors inflation expectations with a net 71 per cent expecting global core consumer inflation to be higher in 12 months It also found that a net 21 per cent of investors are worried that stock markets are overvalued which is the highest reading since 2000 Other potential risks such as the prospect of Chinese debt defaults asset manias and eurozone deflation have all faded since last month Instead the prospect of geopolitical crises is now seen as the greatest tail risk and threat to financial market stability Alternative Holdings Near 6 Billion Investors worldwide now have 5 7 trillion devoted to alternative assets says research from Towers Watson It found that within the overall alternative universe the top 100 alternative investment managers were managing 3 3 trillion as of the end of 2013 up from 3 1 trillion in 2012 Real estate managers account for almost a third of this total 31 per cent followed by private equity fund managers at 23 per cent and hedge funds at 22 per cent Pension fund assets also represent a third of the top 100 alternative managers assets followed by wealth managers 18 per cent insurance companies nine per cent and sovereign wealth funds six per cent with banks funds of funds and endowments and foundations all at three per cent North America continues to be the largest destination for alternative capital with managers holding 45 per cent of global assets Franklin Templeton Offers Preferred Pricing Series In line with its pricing changes implemented at the start of the year Franklin Templeton Investments Corp has introduced the Series M which offers Canadian investors a new option for high net worth pricing in a fee based model This new fee for service series offers preferred pricing for a selection of mutual funds across a range of asset classes Series M offers further fee reductions relative to the company s existing fee for service Series F and it provides investors with growing assets a way to simplify their investment portfolio without sacrificing diversification all at a relatively low investment minimum says Philip Bensen head of national sales Canada Series M offers advisors and their clients an easy way to build portfolios from 13 different investment options covering a variety of asset classes It also offers competitive management fees that put more of investors money to work without the need for additional dealer or account level distribution agreements says Bensen July 14 2014 Wealthy Canadians Don t Plan To Become Mortgage Free While some Canadians plan to pay off their mortgage before retirement more than one quarter of wealthy Canadians with mortgages don t have plans to become mortgage free before retirement says an Investors Group survey Cashing in investments to pay off your mortgage before retirement could trigger capital gains That would mean additional taxes and less money to invest says Peter Veselinovich vice president of banking and mortgage operations Retirees in this financial demographic who are not concerned

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-08-04 (2016-04-26)
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  • Private Wealth Canada News
    in the first half of 2014 in line with expectations Climate linked Bonds Growing Rapidly The total universe of bonds linked to key climate changes solutions stands at 502 6 billion compared to last year s estimate of 346 billion says a report from the HSBC Climate Change Centre of Excellence Bonds and Climate Change the state of the market in 2014 shows 35 8 billion of the universe is made up of labelled Green Bonds issued by corporations and development banks The labelled Green Bonds market has grown rapidly since the 2013 report from approximately 7 billion to 35 billion outstanding Growth started in the latter half of 2013 and was driven by the first Green Bond issuance from corporations This growth has continued in 2014 with approximately 20 billion already issued in 2014 It says the broader climate themed universe is an indicator of where future bonds might be labelled Couples Fail To Discuss Retirement More than two thirds 68 per cent of not yet retired Canadians aged 50 and older have yet to discuss their hopes for their post career lives with their spouses or partners says the annual RBC Retirement Myths Realities Poll Three of the topics these Canadians have been most reluctant to discuss with their significant others are how either will manage if the other encounters health issues 86 per cent how either will manage if the other passes away prematurely 81 per cent and what activities they will do in retirement 65 per cent Couples often have more conversations about what they ll be doing over the summer or winter holidays than what they hope their retirement together will be like says Bill Hill national retirement planning consultant at RBC Yet one of the most important discussions you can have as a couple in your 50s or older is around the future lifestyle you re hoping for when you re no longer working 9 to 5 You want to do everything you can now to ensure your retirement years will be equally enjoyable for both of you The poll also revealed that men and women have very different expectations about how they will occupy their time during retirement While 57 per cent of men expected to spend more time with their spouse or partner only 52 per cent of women expressed the same sentiment Women were much more interested in spending more time with family other than their spouses or partners 53 per cent compared to 37 per cent of men with friends 51 per cent versus 36 per cent and as volunteers 63 per cent versus 50 per cent Global Investors Increasingly Bullish Global investors are increasingly bullish on the outlook for equity markets despite concerns about valuations says the BofA Merrill Lynch s July survey of fund managers It shows that a net 61 per cent of global asset allocators are now overweight equities the highest reading since early 2011 and the second most bullish stance in the survey s history This reflects a significant increase in investors inflation expectations with a net 71 per cent expecting global core consumer inflation to be higher in 12 months It also found that a net 21 per cent of investors are worried that stock markets are overvalued which is the highest reading since 2000 Other potential risks such as the prospect of Chinese debt defaults asset manias and eurozone deflation have all faded since last month Instead the prospect of geopolitical crises is now seen as the greatest tail risk and threat to financial market stability Alternative Holdings Near 6 Billion Investors worldwide now have 5 7 trillion devoted to alternative assets says research from Towers Watson It found that within the overall alternative universe the top 100 alternative investment managers were managing 3 3 trillion as of the end of 2013 up from 3 1 trillion in 2012 Real estate managers account for almost a third of this total 31 per cent followed by private equity fund managers at 23 per cent and hedge funds at 22 per cent Pension fund assets also represent a third of the top 100 alternative managers assets followed by wealth managers 18 per cent insurance companies nine per cent and sovereign wealth funds six per cent with banks funds of funds and endowments and foundations all at three per cent North America continues to be the largest destination for alternative capital with managers holding 45 per cent of global assets Franklin Templeton Offers Preferred Pricing Series In line with its pricing changes implemented at the start of the year Franklin Templeton Investments Corp has introduced the Series M which offers Canadian investors a new option for high net worth pricing in a fee based model This new fee for service series offers preferred pricing for a selection of mutual funds across a range of asset classes Series M offers further fee reductions relative to the company s existing fee for service Series F and it provides investors with growing assets a way to simplify their investment portfolio without sacrificing diversification all at a relatively low investment minimum says Philip Bensen head of national sales Canada Series M offers advisors and their clients an easy way to build portfolios from 13 different investment options covering a variety of asset classes It also offers competitive management fees that put more of investors money to work without the need for additional dealer or account level distribution agreements says Bensen July 14 2014 Wealthy Canadians Don t Plan To Become Mortgage Free While some Canadians plan to pay off their mortgage before retirement more than one quarter of wealthy Canadians with mortgages don t have plans to become mortgage free before retirement says an Investors Group survey Cashing in investments to pay off your mortgage before retirement could trigger capital gains That would mean additional taxes and less money to invest says Peter Veselinovich vice president of banking and mortgage operations Retirees in this financial demographic who are not concerned

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-08-05 (2016-04-26)
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  • Private Wealth Canada News
    all time low Porsche Jaguar Lexus Hyundai and Toyota were the best performing brands in this year s survey with Porsche coming out on top The worst performers were Fiat Jeep Mitsubishi Scion and Mazda Car buyers are frustrated with Bluetooth systems that won t connect to their phones voice recognition systems that don t understand them and navigation systems that aren t getting them where they need to go Dynamic Savings Overcomes Uncertainty Dynamic Savings Rates can help individuals save for retirement despite uncertainties about the future says Marlena Lee a vice president at Dimensional She said many retirement calculators ask individuals to put in values that are uncertain These include investment returns inflation and annual raises during a career However few people know how much they will be making at retirement or even 10 years before retirement Instead she said retirement saving should be based on income and escalate as income increases Then once a retirement goal is determined the savings rate can be adjusted to reflect outperformance by investment savings or periods where nothing is saved She also suggested that if people start saving early it fosters a habit of saving even when income is low Increases in saving can come as income rises and an ideal time is to use raises to increase the savings rate Part of the process involves guidepost the individual can use to make sure their savings are on track to reach their retirement goal Job Stability At Record High Job stability in Canada which was projected to be a thing of the past is stronger than it ever has been with those holding a job with the same employer for five years or longer sitting at a record high says a report from CIBC World Markets It found that there is a near record high 60 per cent chance that Canadians with stay with an employer after completing their first year on the job with the retention rate hitting nearly 95 per cent for those having five or more years at a company This stable and boring job market is the complete opposite of what was envisioned not too long ago says Benjamin Tal CIBC deputy chief economist who co authored the report The job market of the new economy was supposed to permanently alter employer employee relationships and workers were seen as becoming increasingly disposable with the implication that job stability would tumble But he finds that the opposite is happening driven by the changing needs of employers in the country that has seen vacancy rates rise without a corresponding decrease in unemployment ESG Index Launched S P Dow Jones Indices and Toronto Stock Exchange have launched an ESG index The S P TSX 60 ESG environment social and governance index is designed to track the performance of the constituent companies of the S P TSX 60 while taking into account each company s sustainability performance relative to the corresponding industry specific standards RobecoSAM an investment specialist focused exclusively on sustainability investing will evaluate company sustainability profiles using its proprietary assessment methodology It lets market participants who currently use the S P TSX 60 to deepen the scope of their stock analysis to include sustainability criteria June 16 2014 Make Sure Estate Plan Is Clear An estimated 1 trillion or more is positioned to change hands in Canada over the coming years as baby boomers age and assets begin to transfer to younger generations The country s high net worth population alone held close to 900 billion in investable assets in 2013 says RBC Wealth Management and with improving economic conditions that figure is likely to grow This impending transfer of wealth is putting the onus on baby boomers to ensure that their estate plans are crystal clear RBC Wealth Management says a comprehensive estate plan needs to consider not only the children but the surviving spouse Communication is vital the organization says and it recommends people have open and regular discussions about their intentions goals and plans Surge In Private Wealth There are millions more millionaires in the world thanks to a huge surge in private wealth globally says the Boston Consulting Group More than 16 million households passed the mark in U S dollars in 2013 up from 13 7 million in 2012 The U S has the highest number of new millionaires Gender Diversity Key Issue In recent years the Canadian business community s desire for a range of perspectives on boards of directors and in the executive ranks has made board and management diversity a key corporate governance issue for Canadian companies and policymakers says Mercer As demonstrated in part by a recent Ontario Securities Commission OSC initiative on gender diversity on boards and in executive officer positions companies are facing mounting pressure to show real progress in increasing diversity and ensuring that it is sustainable Mercer says Canadian companies already disclose the number and percentage of women on boards of directors However the proposal to require disclosure of the number and percentage of women in executive officer positions including subsidiaries is new It would likely facilitate accountability on gender diversity and may shed light on the effectiveness of a company s gender diversity policy Ethical Culture Fights Corruption One in five 20 per cent of Canadian executives believe bribery or corrupt practices happen widely in business says the Global Fraud Survey by EY That s disturbingly high says Mike Savage a partner and Canadian fraud investigation and dispute services leader Corruption interferes with fair competition for business To overcome that companies really need to create a culture where ethical behaviour is at the core of their operations not just at home in Canada but also at their overseas operations They also need to encourage people to speak up if they think something isn t right The survey finds that while 74 per cent of Canadian organizations have whistleblowing hotlines in place that number is still much lower than countries like the U S 96 per

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-07-05 (2016-04-26)
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  • Private Wealth Canada News
    all time low Porsche Jaguar Lexus Hyundai and Toyota were the best performing brands in this year s survey with Porsche coming out on top The worst performers were Fiat Jeep Mitsubishi Scion and Mazda Car buyers are frustrated with Bluetooth systems that won t connect to their phones voice recognition systems that don t understand them and navigation systems that aren t getting them where they need to go Dynamic Savings Overcomes Uncertainty Dynamic Savings Rates can help individuals save for retirement despite uncertainties about the future says Marlena Lee a vice president at Dimensional She said many retirement calculators ask individuals to put in values that are uncertain These include investment returns inflation and annual raises during a career However few people know how much they will be making at retirement or even 10 years before retirement Instead she said retirement saving should be based on income and escalate as income increases Then once a retirement goal is determined the savings rate can be adjusted to reflect outperformance by investment savings or periods where nothing is saved She also suggested that if people start saving early it fosters a habit of saving even when income is low Increases in saving can come as income rises and an ideal time is to use raises to increase the savings rate Part of the process involves guidepost the individual can use to make sure their savings are on track to reach their retirement goal Job Stability At Record High Job stability in Canada which was projected to be a thing of the past is stronger than it ever has been with those holding a job with the same employer for five years or longer sitting at a record high says a report from CIBC World Markets It found that there is a near record high 60 per cent chance that Canadians with stay with an employer after completing their first year on the job with the retention rate hitting nearly 95 per cent for those having five or more years at a company This stable and boring job market is the complete opposite of what was envisioned not too long ago says Benjamin Tal CIBC deputy chief economist who co authored the report The job market of the new economy was supposed to permanently alter employer employee relationships and workers were seen as becoming increasingly disposable with the implication that job stability would tumble But he finds that the opposite is happening driven by the changing needs of employers in the country that has seen vacancy rates rise without a corresponding decrease in unemployment ESG Index Launched S P Dow Jones Indices and Toronto Stock Exchange have launched an ESG index The S P TSX 60 ESG environment social and governance index is designed to track the performance of the constituent companies of the S P TSX 60 while taking into account each company s sustainability performance relative to the corresponding industry specific standards RobecoSAM an investment specialist focused exclusively on sustainability investing will evaluate company sustainability profiles using its proprietary assessment methodology It lets market participants who currently use the S P TSX 60 to deepen the scope of their stock analysis to include sustainability criteria June 16 2014 Make Sure Estate Plan Is Clear An estimated 1 trillion or more is positioned to change hands in Canada over the coming years as baby boomers age and assets begin to transfer to younger generations The country s high net worth population alone held close to 900 billion in investable assets in 2013 says RBC Wealth Management and with improving economic conditions that figure is likely to grow This impending transfer of wealth is putting the onus on baby boomers to ensure that their estate plans are crystal clear RBC Wealth Management says a comprehensive estate plan needs to consider not only the children but the surviving spouse Communication is vital the organization says and it recommends people have open and regular discussions about their intentions goals and plans Surge In Private Wealth There are millions more millionaires in the world thanks to a huge surge in private wealth globally says the Boston Consulting Group More than 16 million households passed the mark in U S dollars in 2013 up from 13 7 million in 2012 The U S has the highest number of new millionaires Gender Diversity Key Issue In recent years the Canadian business community s desire for a range of perspectives on boards of directors and in the executive ranks has made board and management diversity a key corporate governance issue for Canadian companies and policymakers says Mercer As demonstrated in part by a recent Ontario Securities Commission OSC initiative on gender diversity on boards and in executive officer positions companies are facing mounting pressure to show real progress in increasing diversity and ensuring that it is sustainable Mercer says Canadian companies already disclose the number and percentage of women on boards of directors However the proposal to require disclosure of the number and percentage of women in executive officer positions including subsidiaries is new It would likely facilitate accountability on gender diversity and may shed light on the effectiveness of a company s gender diversity policy Ethical Culture Fights Corruption One in five 20 per cent of Canadian executives believe bribery or corrupt practices happen widely in business says the Global Fraud Survey by EY That s disturbingly high says Mike Savage a partner and Canadian fraud investigation and dispute services leader Corruption interferes with fair competition for business To overcome that companies really need to create a culture where ethical behaviour is at the core of their operations not just at home in Canada but also at their overseas operations They also need to encourage people to speak up if they think something isn t right The survey finds that while 74 per cent of Canadian organizations have whistleblowing hotlines in place that number is still much lower than countries like the U S 96 per

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-07-06 (2016-04-26)
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  • Private Wealth Canada News
    costs so more organizations are altering their business models to strengthen these managerial relationships Five Decisions Impact Investors Legg Mason surveyed affluent investors and identified the top five decisions they made that have had a positive impact on their investment success The top five decisions were changing their spending habits so they could save invest more developing a financial plan working with or increasing the role of a financial adviser investing in products other than just stocks and bonds and taking a more global approach to investing A significant majority 70 per cent of the investors surveyed believe the investment environment that future generations face will be more difficult than the environment investors face now They say the next generation must start investing early in life make sure they understand what they invest in avoid short term decisions based on emotions make a plan and stand by it over time and employ a professional adviser CI Launches Retirement Solution CI Investments Inc has launched G5 20i a retirement solution for investors who require immediate guaranteed cash flow The new mutual fund complements the G5 20 fund which provides guaranteed cash flow after a five year accumulation phase Both funds are part of G5 20 Series and each provides 20 years of guaranteed cash flow growth potential and protection from market downturns The funds will provide cash flow that can increase but never decrease through a feature that automatically locks in a portion of fund gains The G5 20 Series funds are actively managed diversified portfolios of income and growth investments Protection against downturns is provided through advanced risk management strategies Each fund distributes an annual cash flow equal to five per cent of the investor s initial investment or the Guaranteed Asset Value whichever is greater The cash flow is guaranteed by Bank of Montreal Private Equity Makes Contribution European private equity can make an important and valuable contribution to a portfolio says Christophe de Dardel director of private assets at Unigestion However he told the European Private Equity Markets session at its media event there are fundamental questions that must be answered before deciding where to invest Generally he said it is better to look south than to look north Northern markets such as Sweden while mature and solid are saturated overcrowded and full priced Opportunity however can be found in Spain he said which is re emerging fast While it is currently deserted that won t last much longer and the economy is on the recovery path Germany is another situation There is a myth that it offers an inexhaustible source of quality businesses ready to be acquired The reality is however there is low financial pressure on companies and company owners do not embrace private equity ownership making it the solution of last resort Retirement Shock Already Here The baby boom retirement shock is already here says a Royal Bank report on trends in Canada s labour force It says the steady decline in the participation rate

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-06-05 (2016-04-26)
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  • Private Wealth Canada News
    costs so more organizations are altering their business models to strengthen these managerial relationships Five Decisions Impact Investors Legg Mason surveyed affluent investors and identified the top five decisions they made that have had a positive impact on their investment success The top five decisions were changing their spending habits so they could save invest more developing a financial plan working with or increasing the role of a financial adviser investing in products other than just stocks and bonds and taking a more global approach to investing A significant majority 70 per cent of the investors surveyed believe the investment environment that future generations face will be more difficult than the environment investors face now They say the next generation must start investing early in life make sure they understand what they invest in avoid short term decisions based on emotions make a plan and stand by it over time and employ a professional adviser CI Launches Retirement Solution CI Investments Inc has launched G5 20i a retirement solution for investors who require immediate guaranteed cash flow The new mutual fund complements the G5 20 fund which provides guaranteed cash flow after a five year accumulation phase Both funds are part of G5 20 Series and each provides 20 years of guaranteed cash flow growth potential and protection from market downturns The funds will provide cash flow that can increase but never decrease through a feature that automatically locks in a portion of fund gains The G5 20 Series funds are actively managed diversified portfolios of income and growth investments Protection against downturns is provided through advanced risk management strategies Each fund distributes an annual cash flow equal to five per cent of the investor s initial investment or the Guaranteed Asset Value whichever is greater The cash flow is guaranteed by Bank of Montreal Private Equity Makes Contribution European private equity can make an important and valuable contribution to a portfolio says Christophe de Dardel director of private assets at Unigestion However he told the European Private Equity Markets session at its media event there are fundamental questions that must be answered before deciding where to invest Generally he said it is better to look south than to look north Northern markets such as Sweden while mature and solid are saturated overcrowded and full priced Opportunity however can be found in Spain he said which is re emerging fast While it is currently deserted that won t last much longer and the economy is on the recovery path Germany is another situation There is a myth that it offers an inexhaustible source of quality businesses ready to be acquired The reality is however there is low financial pressure on companies and company owners do not embrace private equity ownership making it the solution of last resort Retirement Shock Already Here The baby boom retirement shock is already here says a Royal Bank report on trends in Canada s labour force It says the steady decline in the participation rate

    Original URL path: http://privatewealthmagazine.ca/private_wealth_news.php?date=2014-06-06 (2016-04-26)
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  • Private Wealth Canada News
    being made to executive reward programs is decreasing this year says Mercer s Executive Rewards 2013 Year End Survey It shows the impact of proxy advisory firms is slightly increasing as more organizations try to align programs with adviser guidelines It shows changes to annual and long term incentive programs use of special retention grants and grant values have increased in 2014 as a result of proxy adviser guidelines The shift away from stock options relative to the increased use of performance awards in delivering long term incentives to executives has also continued More significantly 10 per cent of organizations are planning to increase the use of performance shares in 2014 Wealthiest Showing Optimism A survey of America s wealthiest 10 per cent reveals a strong optimism about the months ahead and a continued commitment to their favorite things cautious spending aggressive saving and shopping at Costco Target and the Home Depot In its latest report the American Affluence Research Center finds the country s richest are looking forward to major home improvements with the accompanying large furniture and durable good purchases that go with them in the months ahead However as in past studies most affluents still tend to live within their means spending wisely Only 36 per cent say they are planning to defer or reduce spending in the next 12 months an improvement of eight percentage points from last spring s survey Some 25 per cent intend to remodel their homes and 25 per cent plan to either lease or buy a new vehicle Supplemental Pensions Can Retain Key Talent Private business owners are faced with various retention strategy challenges However there are new options for key employees and flexible options for their own retirement utilizing supplemental pension strategies These strategies can provide the same deductibility to the company as a bonus but can be deferred to retirement when the benefits are taken Read more on this at Supplemental Pensions And Key Employee Retention at www privatewealthcanada com Disconnect Grows In Investors As demographics shift and the aging of Canada continues a trend is emerging there is a disconnect among investors between the desire for portfolio growth to meet their income needs and the willingness to employ solutions that will get them there The overriding emotions driving this misalignment are cautiousness and volatility fears says a Mackenzie Investments poll It found 52 per cent cite market volatility as an impediment to attaining investment goals As well over 50 per cent are investing more conservatively 39 per cent or no longer wanting to invest at all 12 per cent To help investors get back on track Mackenzie is launching five new funds and is seeking investor approval to change another fund s objectives The new funds and the repurposed fund directly address the need for either volatility management or income generation amidst changing market conditions Reported Returns May Not Be Returns Be a little wary of reported returns for illiquid assets says Andrew Ang Ann F Kaplan professor of business at the Columbia Business School Speaking at the CFA Society Toronto 2014 Pension Conference he said this is because there are problems with measuring the returns of illiquid assets such as private equity and real estate The reported returns are not returns he said due to biases in how these returns are reported In some cases infrequent sampling of returns can make the returns look more attractive with low risk Measured more frequently the returns and risks can be much different In real estate sample selection is sometimes used but this sees properties only valuated when the markets are high as the property is not likely to be sold when prices are down Instead investors need to work with cash flows and what is actually accruing to investors he said European Equity Outperformance Continued European equities the top performer in 2012 continued to outperform in 2013 says research by Baring Asset Management However North American equities reached the top spot driven by continued economic growth in the U S with good employment data stronger retail sales a recovery in house prices and improvement in consumer confidence The research also reflects the improving environment in Europe However it is clear that volatility remains in a number of major asset classes with many of the best and worst performing assets changing dramatically from one year to the next The study provides one explanation why multi asset investing with an unrestricted mandate to dynamically move into and out of asset classes has found favour with investors looking to achieve their targeted returns with less volatility than investing in equities alone Six Per Cent World Looms A world with a six to eight per cent return in equity markets is looming says Bill Priest chief executive officer co chief investment officer and portfolio manager at Epoch Investment Partners In the session Focus on Fundamentals Equities in a Slow growth Environment at TD Asset Management s Sharing of Knowledge Learning Series 2014 he said that currently it is a tale of two economies For the financial economy it is the best of times while for the real economy it is the worst of times as the quantitative easing that has fuelled equity market performance has not done a lot for the real economy He expects operations margins and productivity gains to continue because of globalization and technology Globalization means production can be moved to where it is most beneficial while the growth of technology is changing the way people do work However we are living in a world where growth is slow due in part to the threat of deflation and low interest rates which he doubts will rise very high Advisors Predict Negative Returns Canadian investment advisors are predicting negative stock returns for Canadian stock markets and 11 other asset classes for the second quarter of this year a dramatic departure from the positive outlook they shared in the first quarter of 2014 The change in sentiment was reported in the second quarter edition of Horizons ETFs Management Canada Inc s 2014 Advisor Sentiment Survey The survey asked Canadian advisors to share their outlook on 15 distinct asset classes and express their sentiment bullish bearish or neutral on the anticipated returns for these asset classes in the second quarter Collectively advisors were over 50 per cent bullish on only three of the 15 asset classes surveyed Less than half 47 per cent of the Canadian advisors surveyed expect Canadian stocks to deliver a positive return over the next quarter This is a stark turnaround in sentiment compared to the onset of 2014 in which 74 per cent of advisors stated they were bullish on the S P TSX 60 Index s performance for the first quarter CFIB Wants Broader Use The Canadian Federation of Independent Business CFIB supports the federal government consultations on more sustainable pension plans for federally regulated industries and crown corporations However it is disappointed that the target benefit plans which share risk between employers and employees would not apply to the core public service where this kind of plan is badly needed to address massive unfunded pension liabilities With the private sector moving quickly away from traditional defined benefit pension plans a shared risk model will be a terrific addition to Canada s pension landscape says Dan Kelly its president A shared risk plan could also help taxpayers get out from under massive unfunded pension liabilities such as the 6 5 billion liability at Canada Post alone We hope the federal government doesn t stop with Crown corporations and considers moving the core civil service to a less costly shared risk pension plan Canada Has Richest Middle Class In The World For the first time in history the Canadian middle class is the richest in the developed world says a New York Times study After tax middle class incomes in Canada substantially behind in 2000 are now higher even than the middle class in the U S This shows that middle class incomes have increased faster in Canada than anywhere else Canada s poor also seem to be better off than similar families in the U S the study shows U S families at the 20th percentile of the income distribution make significantly less money than a similar family in Canada April 21 2014 Affluent Consumers Buying More Online Affluent consumers were 73 per cent more likely than non affluent consumers to make a purchase on luxury brand retail websites during the fourth quarter of 2013 says an index by Martini Media While one would expect affluent consumers to make more luxury purchases the degree to which the affluent were more likely to purchase jumped 57 per cent from the year ago period The index also addresses how affluent audiences engage with luxury brands notably there was 46 per cent more engagement with luxury fashion brands than non luxury brands Organizations Face Succession Challenges As many senior and second level executives retire or approach retirement Canadian organizations face serious leadership succession challenges says the Conference Board of Canada s Human Resources Trends and Metrics HR Measurement Benchmarking The survey says developing leaders who are capable of stepping up to successively senior executive roles continues to be one of the top human capital challenges The study shows that for every two senior executives organizations have only one job ready or near job ready successor Co operators Partners With DAS Canada The Co operators and DAS Canada have formed a partnership that will see legal expense insurance included as part of the Prestige Plus coverage for high value homes This will give policyholders immediate and unlimited access to legal advice as well as coverage for legal expenses related to things such as employment disputes tax issues property protection and bodily injury Legal expense insurance is relatively new to the Canadian insurance market and DAS Canada will partner with insurance carriers to create customized and innovative programs that add value to existing insurance portfolios and increase access to justice for Canadians Optimism Leads To Increased M A Activity Seventy nine per cent of Canadian executives believe the global economy is improving up 24 per cent from October 2013 says EY s Capital Confidence Barometer As a result companies are planning on pursuing more M A activity in the next 12 months In fact 66 per cent of Canadian companies have up to three deals in their pipeline and a surprising 34 per cent are looking at four or more deals Fifty six per cent are focusing their acquisition capital on emerging markets and 44 per cent are focusing on developed or mature markets Canadian Economy Keeps Surprising The Canadian economy like its housing market continues to surprise doubters and is expected to grow between two and 2 3 per cent says Russell Investments 2014 Global Outlook Second Quarter Update It reflects the most recent guidance from Russell s global team of investment strategists While the Canadian economy is currently trending below our forecast level growth should accelerate as the year progresses as a result of our lower Canadian dollar boosting exports and an improving U S economy says Shailesh Kshatriya associate director client investment strategies at Russell Investments Canada and author of the Canada market perspective section of the global report However we remain concerned about employment trends She believes that declining job growth rates coupled with high household debt may adversely impact consumption and weigh on growth this year despite the offset of the expected growth of exports and a lower Canadian dollar At the same time Kshatriya is keeping an eye on business investment A lower Canadian dollar relative to the U S may be positive for exports but it makes new purchases to improve efficiencies more costly if those purchases are to be sourced externally Meaningful business investment has largely been absent over the last several years when our dollar was hovering at parity with the U S The question is whether business will business feel confident enough in domestic and global growth trends to spend now that our dollar has declined by roughly 10 per cent April 14 2014 Affluent Say Heirs Have Financial Savvy Affluent Canadians plan on leaving on average almost one third 30 per cent of their wealth to their children says a study on high net worth Canadians by BMO Harris Private Banking They plan to divide the remainder of their estates with their spouse or partner 60 per cent other family members four per cent charities three per cent and a board or company three per cent Additionally almost 80 per cent of high net worth Canadians feel that their children are ready to manage their inherited wealth This sentiment could perhaps be attributed to educational efforts Two thirds 65 per cent reported that they spend time educating their kids about money matters Affluent Canadians value leaving a legacy and will be passing on a significant portion of their wealth to their offspring says Yannick Archambault vice president and COO BMO Harris Private Banking However with wealth comes complexity It s reassuring to see that so many are taking the time to help their children become more savvy about finances Website Tracks Investment Data Objectives The SEI has launched a private wealth management client website The online resource provides individual and family clients an overview of all their assets in relation to their established goals which can be organized by self family and community in one centralized place It gives clients the reporting flexibility and full transparency to customize views of their data There is a section that provides a cash flow summary including deposits withdrawals and overall projections and charts progress towards set targets Clients can track how each goals based portfolio is doing in achieving its objective through the use of a variety of success metrics Concentration Explains Performance The disappointing behaviour of low volatility stocks in 2013 is a result of their heavy sector concentration says research from Unigestion It says low volatility stocks belong largely to non cyclical industries such as utilities and telecom Over the past nine months these sectors have been highly sensitive to interest rate increases Its results demonstrate that historically defensive sectors such as pharmaceuticals and utilities are the most exposed to the risk of an increase in interest rates Guide Brings ESG To Private Equity The Principles for Responsible Investment PRI has a new guide to assist with the integration of environmental social and governance ESG factors within private equity Integrating ESG in private equity a guide for general partners provides general partners with a link between the integration of ESG and organizational governance structure and culture The guide can also help limited partners to understand the different ESG integration practices currently being implemented in the market The guide and a selection of case studies can be found at Private Equity PRI Rate Hike Lower Than Predicted While interest rates are going to be heading up a CIBC World Markets report says the hikes will be lower than in previous cycles and fall below what many including the U S Federal Reserve are predicting The nature of the upcoming expansion will dictate that even at full employment U S rates will have to be lower than in past cycles in both real and nominal terms says Avery Shenfeld its chief economist Similarly Canadian overnight rates could end up reaching a plateau at surprisingly low levels The report shows that in both countries the neutral rate the level at which interest rates neither stimulate nor restrain economic growth could be only 2 5 per cent well below the four per cent the Fed forecast at its latest meeting Canadians Have Bullish Outlook Canadian investors have a more bullish outlook for the markets compared to 2013 yet are also more risk averse when it comes to their investment portfolios says Franklin Templeton s 2014 Global Investor Sentiment Survey Nearly two thirds 65 per cent of Canadian investors think Canada s stock market will be up in 2014 compared to 60 per cent who thought their market would be up for the year when asked in 2013 Interestingly Canadian investors aged 65 and older are most likely to think that the market will increase this year Globally 62 per cent of investors believe their local stock market will experience positive performance in 2014 This positive outlook transcends into investors long term financial view The overwhelming majority of Canadian investors 81 per cent are optimistic about reaching their personal financial goals roughly on par with investors in the U S 84 per cent and globally 80 per cent who hold this view Companies Must Think In Broader Context Sustainability not just about the environment and the impact of carbon footprints says Kathy Bardswick president and chief executive officer of the Co operators Group Limited In the session Sustainability A Key Component to a Healthy Corporate Culture at the CPBI Saskatchewan Regional Conference she said companies need to think about it in a broader context healthy communities and an economy that is fair and just to all To do so they need to build a healthy culture which starts by asking if you are truly living the company mission statement do you take it to heart she said And they need to make sure employees know what it is and follow it You need to make your mission statement part of who you are and it has to drive decisions and tactics However the task of doing so should not fall to human resources and if it does they need to resist It starts with the CEO and is owned by everyone across the organization People are more engaged if they are brought into the strategy and can get their arms around it she said Businesses Lack Plans For Falling Loonie More than one third of small business owners are worried about the impact the falling Canadian dollar will have on their business yet nearly seven in 10

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