The Globe and Mail recently published an investigative report entitled "Through Canada’s Insurance Loophole" (Saturday, December 18, 2010)

The Globe and Mail recently published an investigative report entitled "Through Canada’s Insurance Loophole" (Saturday, December 18, 2010), on the role of the Managing General Agency or MGA in the distribution of insurance products.

The article goes into great detail on the growth of MGAs and the lack of regulation of this distribution channel.

I was made aware of the article in an email from both Advocis’ Chair and President/CEO.

I am posting my response to them on this blog.

“It has been a long time coming but the opportunity to raise the bar is now here. The conflict in the advisor's role as a professional is exacerbated by the ongoing 30 year disconnect between the insurance companies' 'manufacturer', 'wholesaler', 'retailer' distribution model and the Advocis Professional Practitioner model of service to the consumer. The MGA is a 'wholesaler' and the Financial Advisor is a professional practitioner in the current independent channel. The confusion faced by the consumer is "What is it that I am purchasing? A commodity or professional advice or both?" The insurance industry markets commodities. We market solutions (Rx's) premised on a professional diagnosis. If we are advocates for the consumer it is time for us to ensure that the consumer understands that they have a choice - work with a commodity sales channel or work with a professionally designated practitioner. Until we make this distinction clear to the public they will continue to be at risk. We have an opportunity to bring closure to this longtime dichotomy”.

Dan Zwicker


Daniel H. Zwicker, Principal
B.Sc. (Hons.) P.Eng. CFP CLU CH.F.C. CFSB
Certified Financial Planner
Chartered Life Underwriter
Chartered Financial Consultant
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Daniel H. Zwicker, CFP Blog: http://dzwicker.blogspot.com/

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COMMENT


"HOW AN INDUSTRY OUTGREW ITS REGULATORS"
December 24, 2010
From: "Jim Rogers"
To: dmullins@cogeco.ca
CC: danzwicker@rogers.com


Dennis...appreciated--and agree with--your posting earlier today on 'For Advisors Only'.
Here's my letter to the G+M which they published last Monday, following the publication of the first article.
Cheers.
(PS see Dan Zwicker's comments...which I also think are 'spot on'.)


Original Message to Globe & Mail
From: "Jim Rogers"
To: letters@globeandmail.com
Date: 18 Dec 2010


Subject: "How an Industry Outgrew its Regulators"


Having spent over 40 years as an agent working both directly for a single life insurance company and later as an independent, I concur that the 'lack of accountability' problems cited by Tara Perkins and Grant Robertson are pretty well as they have laid out.The solution is, however, simpler than waiting (hoping?) that improved regulation/legislation will solve the problem. Specifically, product manufacturers (i.e the insurance companies) should be held vicariously liable for the actions of both their MGAs and the agents who put their business through these MGAs.Were this so, the insurers would be far more careful about whom they appoint as an MGA in the first place and, in turn, MGAs would do more due diligence around the agents from whom they will accept business. Layered over these relationships would be minimum required amounts of bonding and E+O coverages--designed to protect the aggrieved policy owners from the financial consequences of proven inappropriate advice on the part of an agent.

Jim Rogers
http://www.rogersgroup.com/
From: The Globe & Mail
Dec. 17, 2019

For the entire article:

http://dzwicker.blogspot.com/2010/12/globe-and-mail-recently-published_24.html

EMPLOYEE MINDSETS: CRITICAL TO HIGH PERFORMANCE - HOW EMPLOYEE MINDSETS CAN BE ASSESSED TO IMPROVE BUSINESS PERFORMANCE

Executives instinctively know that employee attitudes and behaviours matter. However, most efforts to measure this key organizational trait have come up short. A new approach promises to change that by helping companies assess employee mindsets most critical to high performance

At a successful US-based biotech firm, plans to grow were robust and expectations were high. But in the winter of 2006, senior executives noticed a number of red flags concerning employee attitudes about the company's ability to execute its aggressive new strategy. For the second year in a row, internal survey results indicated that from middle management on down, people were worried that decision-making speed was dropping, that accountability had become too diffuse, and that more time was being spent on getting consensus than on getting results.
This trend was worrisome: Could it derail the company's growth plans?

The problem faced by the biotech firm is a common one. Employee mindsets—the attitudes, behaviors and practices that determine how an organization approaches tasks critical to the execution of its strategy—are essential to a company's ability to achieve or maintain high performance. The wrong mindsets, such as those at the biotech firm, can compromise these efforts. Many organizations use surveys to measure such facets of employee mindsets as job satisfaction, engagement and learning, but few feel they are able to gauge the impact of these mindsets in a comprehensive, meaningful way. "Blind men and the elephant" is a common phrase managers apply to the problem. Even those that have included assessments of these mindsets in their balanced scorecards learn little that they can use to boost performance.

Senior management may get some information from these efforts that seems like it logically should be linked to high performance, such as "80 percent of our employees are satisfied or very satisfied with their work." But the actual connection—much less a causal relationship—remains unclear. In the absence of a proven linkage, the task of optimizing mindsets to achieve high performance is reduced to guesswork.

Executives frustrated by this dilemma instinctively know that employees mindsets matter. But how? And what can they do to instill winning mindsets?

For more than three years, Accenture has been intensively studying the attributes of high-performance business. We found five critical mindsets that are directly linked to business performance. High performers cultivate these mindsets and translate them into organizational practices that produce superior business outcomes. Once top executives become aware of the connections between mindsets, practices and outcomes, they can begin to leverage culture for better business performance. We refer to this combination of mindsets and practices as an organization's performance anatomy.

We have now developed a comprehensive assessment—the Accenture Performance Anatomy Opportunity Inventory—that shows executives how well (or poorly) mindsets and practices are aligned in their organizations, and help them identify strategic initiatives that will leverage mindsets to create value and achieve high performance. The PAOI also guides efforts to build the next generation of leaders, align top executives around strategic priorities and use hard data to act on soft issues.

Realignment

Here's how the biotech company cited above used the tools of the Performance Anatomy Opportunity Inventory to assess multiple misalignments—to gain a better understanding of what was behind the plummeting execution scores on its internal surveys and, more important, to separate the underlying causes from surface-level symptoms so that the company could successfully implement its growth strategy.

Given the senior leadership team's plan to expand the firm's product line, many changes were on the menu—increased headcount, including the addition of new managers; reorganization; and the formalization of processes. Outstanding execution would be essential to continued market penetration and financial success, but having a lot of new employees in new roles seemed a recipe for even more confusion about decision making and accountability.

The company's Performance Anatomy Opportunity Inventory consisted of a multidimensional investigation that combined qualitative interviews; a survey, sent to everyone in the organization, to gauge the alignment of performance anatomy mindsets; and structured observation, including an organizational network analysis.
The assessment confirmed that company leaders were right to be concerned about execution. The PAOI analysis revealed that although the top leaders had demonstrated a powerful macroscopic view of the market, they were myopic about their own impact on execution inside the organization. In performance anatomy terms, the team's focus on market making and disciplined execution was out of balance, with the scales tipping heavily toward the former.

Consider how attitudes about decision making were found to be misaligned. Interviews with 54 senior and middle managers (out of a total of 80) revealed a widely held belief that the senior executive team was sending inconsistent signals about who had responsibility for making various decisions. Several senior managers complained that the executive team insisted on being kept in the loop on matters great and small, and offered numerous anecdotes to back up their claims.

Results of the assessment confirmed these disconnects between the views of senior executives and the rest of the organization. In fact, the further one went down the hierarchy, the greater the misalignment. The results suggested that top management was out of step with the rest of the organization on other indicators as well. For example, middle- and lower-level employees expressed concerns about their ability to trust senior management and to safely take risks (in the form of offering creative ideas).

Finally, an organizational network analysis—the mapping of the informal organization, which revealed how the company actually worked, including who relied on whom to make decisions, things rarely evident from a formal organizational chart—confirmed that the senior executive team was squarely in the middle of organizational decision making, creating a bottleneck to effective execution. This finding dovetailed with survey results indicating that all but the senior team saw hierarchy as a negative organizational characteristic.

The combination of investigative approaches not only unearthed a serious unraveling of the shared mindsets that had enabled this company to achieve dramatic growth in market share, it also helped management figure out what to do to realign the mindsets. Results from the Performance Anatomy Opportunity Inventory formed the foundation for a data-driven discussion among senior managers about how to address a number of critical issues: decision rights and accountabilities; reformulation of the charter of the senior executive team so that it mirrored the realities of a larger and more complex organization; and how to acculturate new and recently promoted managers so that they could achieve a level of discipline in execution reminiscent of the days when the organization was smaller and far less complex.

Though still a work in progress, the changes brought about by management's review of the results are already having a positive impact. The company's president has said that "the project more than paid for itself by just the savings generated on a handful of decisions, not to mention the impact on the organization's behavior and the preparedness for aggressive growth."

Simple, Actionable Recommendations

The Performance Anatomy Opportunity Inventory that helped this biotech firm move toward superior execution is a multistage, multidimensional tool that produces simple, actionable recommendations.
Four features make it distinctive. First, it is a reliable method for benchmarking organizational mindsets in the critical areas Accenture has identified as constituting a performance anatomy. Second, it shows how widely and deeply the mindsets are shared, from the top team to the front line. Third, where mindsets are not in sync, it identifies opportunities to improve their alignment. Finally, it helps companies set priorities and initiate projects to enhance their performance anatomy.

The PAOI gathers both quantitative and qualitative data in a six-step process. Assessing employee mindsets is too important to be left to approaches that fail to deliver meaningful results. As companies of all sizes and in all industries come to understand the importance of creating and instilling winning attitudes, behaviors and practices, they will need tools like the Performance Anatomy Opportunity Inventory to help them align key mindsets and optimize their performance anatomy.

Sidebar: Why most organizational assessments fail

Whether developed internally or purchased, many tools designed to gauge employee mindsets—their attitudes, behaviors and practices—operate at a surface level. Individual items or questions do not point toward larger constructs or "scales" that accurately reflect an organization's performance anatomy, one of the three building blocks of high-performance business. For example, "Describe the level of satisfaction you have with your work" measures only one thing (in this case, employee satisfaction)—it is not connected to broader aspects of the organization, such as whether employees see IT as a strategic asset, or if they understand company success in terms of carefully chosen measures (two of five key performance anatomy mindsets identified by Accenture).
In addition, most assessments fail to link questions to strategic and measurable objectives, such as using a specific set of metrics to determine whether a company is a top-quartile player in its industry.

Beyond problems with the surveys themselves, assessments often fail for lack of a comprehensive process. That is, they are haphazardly begun and brought to abrupt conclusion without any action being taken. One common result: Problems uncovered by the data are rationalized away—blamed on external factors beyond management control, like a downturn in the economy—or simply ignored for lack of a clear solution.

If senior management is not fully committed to the process at the outset, it may be unwilling to make changes based on the results. Such inaction only leads to employee cynicism over time. As companies have become aware of the costs of dealing with falsely raised hopes, many have simply decided to stop surveying their people.
But the biggest problem with most of these efforts is that they fail to capture the relationship between employee mindsets and business results.

A satisfied and engaged workforce might logically seem to be connected to performance, but it is difficult to prove the connection. In fact, it's just as easy to imagine how satisfaction and engagement may be undermining performance. For example, it's possible for employees to be satisfied with long-established, comfortable routines without being terribly productive.

And it's possible to be engaged—committed to the business, making a serious effort—while occupied with tasks that are not focused on achieving high performance. For instance, an engaged survey-certified manager may spend too much of his time leading marginally useful meetings rather than meeting with customers.
Another difficulty: In many surveys it's impossible to distinguish cause and effect. For example, do engaged employees lead to superior financial results, or is it the other way around? It's hard to blame executives for failing to act when the data at hand are ambiguous.

Accenture
12/04/2010

About the Authors

Robert J. Thomas is the executive director of the Accenture Institute for High Performance Business in Boston, Massachusetts. Dr. Thomas is a leading authority on leadership and transformational change. He is a frequent contributor to Outlook, and his ideas on human capital development have also appeared in Harvard Business Review, Sloan Management Review and The Wall Street Journal. His book Geeks and Geezers, which he co-wrote with Warren Bennis, was one of the best-selling business books of 2002. His new book, Crucibles of Leadership, will be published by Harvard Business School Press this fall.
Fred Harburg is a private consultant who provides guidance in the areas of leadership, strategy and coaching. He has held numerous international leadership positions in Fortune 100 companies and has consulted with many others. He is a member of the external advisory board for the Institute for Global Leadership at Tufts University and is a member of the editorial advi-sory board for Chief Learning Officer, a magazine that includes his bimonthly column on strategy.
Ana Dutra is the Chicago-based managing partner of the Accenture Organization Strategy group. Ms. Dutra has spent more than 18 years in management consulting, working with Fortune 500 clients across multiple industries and helping senior executives develop and execute growth strategies that are aligned with the operating model, culture and leadership of their companies. Recently, Ms. Dutra led Accenture's acquisition of Hagberg Consulting Group, a strategic consulting company specializing in the assessment of organizational culture and its alignment with corporate strategy.

HUMAN CAPITAL STRATEGY AS A BUSINESS DIFFERENTIATOR

As industries around the world turn their attention to a new era of growth, the importance of an enterprise’s human capital has risen dramatically. Acquiring and retaining new customers; generating new ideas; improving productivity: these challenges place new demands on the workforce and those who lead it.


Every company engages in some sort of workforce planning, of course, and has processes in place to source, develop and deploy its people. Yet the economic downturn and the speed of marketplace change have outstripped the ability of traditional talent management programs to meet business needs.


Executives must now pursue a more comprehensive and integrated human capital strategy that includes the management of talent as well as the associated leadership, culture and organization components that multiply the value of talent and create an enterprise that is better able to execute business strategy and adapt to a changing marketplace.


There is urgency here but also opportunity. Those who can effectively translate their business strategy into an actionable human capital strategy can drive a new kind of competitive advantage—one extremely difficult for others to imitate.


Linking business strategy to human capital requirements HR is the corporate function tasked with acquiring, developing and deploying the people needed for an enterprise to be successful. Yet many HR departments struggle to gain a deep enough understanding of how business goals translate into specific workforce and organization needs. What’s missing at many companies is a strong program, led from the top, to articulate the human capital dimensions of a business vision at a strategic level (see chart). Without this human capital strategy, HR can’t see at a broad enough level, and senior management can’t see at a detailed enough level.


An effective human capital strategy helps put in place the right leaders to source, develop and direct the right workforce talent, supported by the right culture, organization and operating model. Work in the human capital dimension underpins many of the company’s most important decisions about where and how to compete. It also supports the enterprise as it balances short-term decisions with longer-term imperatives. In this way, a human capital strategy supports an enterprise in meeting today’s urgent needs while also helping it become agile enough to reposition itself for ongoing market competitiveness and growth.


Creating and implementing a human capital strategy.


A program to create and implement a human capital strategy involves multiple phases of work across four primary work streams—talent, leadership, culture and organization— supported by program management and governance to help guide the entire endeavor.


Talent


The primary activity of the talent work stream is to define the workforce capabilities needed to execute the business strategy. Therefore, the first step is for executives to review the company’s current business strategy to determine not only which specific capabilities are required by the workforce but also what other impacts the business strategy may have on the workforce. Perhaps new approaches to recruiting and hiring are necessary, or the company may need to source talent in different locations.


More detailed workforce planning is then conducted, at which time a company determines the workforce supply it needs—how many people are required for each type of job, now and in the future. The next step is to analyze any potential gap between existing workforce competencies and those needed to execute the business strategy going forward.


If properly designed and executed, programs within the talent work stream of the human capital strategy can significantly contribute to a company’s ability to attain its business goals, and to attract, motivate and retain the right people.


Leadership

The leadership development aspects of an organization’s human capital strategy focus on several key questions:

• What is the specific value that is expected to be delivered by senior leaders?
• Beyond their official job titles, what are the particular outcomes they are expected to produce?
• What attributes, capabilities and behaviors are expected from future leaders?
• How can organizations use leadership development as a competitive advantage?
  
  
  

Companies then must put in place leadership development programs that are closely tied to the needs of the business strategy and the shifting marketplace.


Culture

Executives used to look upon corporate culture as a “soft and fuzzy” area over which they had little control. High-performance businesses, however, don’t see it that way. Today’s senior leaders are increasingly finding that their business strategies stand little chance of being adopted and executed if the current culture of their company impedes the ability to accommodate change and support the business vision.


This work stream of the human capital strategy identifies cultural implications of the business strategy, including whether the corporate culture is aligned with the business strategy. If the culture is aligned, executives must help reinforce those attributes that support the execution of strategy. If the culture is not aligned, then specific programs must be put in place to influence the culture and push it in the right direction.


It is possible to gain a detailed, measurable picture of a corporate culture. GE Healthcare, for example, has been focused on creating a more collaborative and customer-centric culture. The company used Accenture’s Culture Value Analysis methodology to examine six particular characteristics of more open collaboration: teamwork, trust, managing conflict, minimizing political maneuvering, eliminating siloed behavior and openly sharing information across the organization. The diagnosis identified several areas where GE Healthcare could strengthen its collaborative capabilities to take advantage of opportunities for growth.


OrganizationExecutives often overlook the fact that their company’s organization structure and operating model has a profound effect on how effectively people perform on the job. Talent dimensions such as employee sourcing, training, leadership development and culture change cannot be effective if the operating model and organization design interfere with implementation.


From a design perspective, effective reporting structures, financing, operations, budgets, rewards and so forth must be in place. Similarly, the operating model of the business must organize work in an optimal way and then help people act on strategic priorities in proper sequence.


Conclusion:

Sustaining your competitive differentiationThe nature of competition today is shifting across almost every industry. Can companies continue to innovate, and to execute strategy, at the speed required to compete in the marketplace? The answer to that question largely depends on an enterprise’s investments in its human capital assets.


Sourcing and retaining top talent in the right numbers and the right places is a key part of the equation. Equally important, however, are the leadership qualities, cultural characteristics and organization structures that enable workforce talent to help the company as a whole achieve high performance.

Accenture

12/04/2010

About the Authors

David Smith is the managing director of the Accenture Talent & Organization Performance service line.
Yaarit Silverstone is the managing director responsible for human capital and organization effectiveness offerings at Accenture.
Adrian Lajtha is Accenture's chief leadership officer.

A PROFESSIONAL FAMILY CFO

A Professional Family CFO assists with all aspects of your financial affairs:

From investing, tax consulting and estate planning to pre-retirement, post-retirement, insurance and cash flow management among other planning needs.

Most importantly, a Professional Family CFO provides guidance over your financial big picture, ensuring all aspects of advice are collaboratively integrated to meet the sophisticated financial needs of your lifestyle.

Daniel H. Zwicker, CFP
Investor Consultants
Capital Risk Management

'SCAMERICA'

It is appalling to be on the receiving end of scams which are within the law and which are perpetrated by large American billion dollar enterprises. What is unfathomable is how the judicial system in the US allows large corporations to perpetrate acts which border on 'extortion' against unsuspecting American and Canadian consumers. While these scams operate within the law the respective business models are unethical and immoral. The advice is simple: Beware and do not allow yourself to become involved unwittingly.

Dan Zwicker
10/06/2010

TO FEE OR NOT TO FEE? THAT IS THE QUESTION: THE CASE FOR FEE FOR SERVICE

Most financial advisers in Canada are paid by commissions on the products they sell.
Consumers like the current sys­tem. They don't fork out money for advice since the cost is covered by product providers.

In a survey by the Investment Funds Institute of Canada, mutual fund buyers were asked if they wanted to pay for an adviser's help through bundled fees or through a separate annual payment.

More than half (54 per cent) said they wanted the cost of advice included in their mutual fund fees. Only 37 per cent preferred to pay separately. Nine per cent didn't know.

The survey did find declining investor confidence in the advice given by mutual fimd sellers. Only 20 per cent of buyers were "very satisfied," compared to 25 per cent a couple of years ago.

The way in which advisers are paid and the quality of advice they deliver has become a contentious issue around the world.

After the 2008 financial crash, the compensation system came under ­attack for distorting the recom­mendations that consumers re­ceived.

Advisers earn higher commis­sions on stock funds than bond funds, so they have an incentive to push clients into riskier invest­ments.

Some governments, concerned about poor product choices, are moving to ban or limit commis­sions for financial advisers.
Canada is still on the sidelines.

Instead of changing the commis­sion system, our regulators want to beef up disclosure.

On Jan 1, 2011, mutual fund com­panies have to produce a new doc­ument, called Fund Facts, and make it available on their websites next year.
This project has taken 10 years and is still incomplete. Investors won't get a disclosure document before they buy a mutual fund for another few years.


Why is Canada lagging behind?
Can it resist the worldwide trend to make consumers pay directly for financial advice?

At a conference sponsored by the Financial Planning Standards Council on Oct 6, I was the moder­ator of an expert panel looking at these questions.

It's fairly obvious that product bias leads to mis-selling," said Nick Cann, chief exec­utive of the Institute of Financial Planning in the United Kingdom, where all advisers will be fee-based as of 2013.

Australia will ban commissions on the sale of investment products in July 2012. Unlike Britain, ifs not banning commissions on insurance sales.

"Commissions create actual conflicts of interest between advisers and clients in some cases and perceived conflicts in all cases;' said Deen Sanders, deputy CEO at the Financial Planning Association of Aus­tralia

Marc Lamontagne, an Ottawa-based fi­nancial adviser, stopped selling investments based on commissions in 1996.

He changed his business model to a fee­based practice.
"Everyone said I wouldn't make money.
But it turned out to be better;' said Lamon­tagne, who has written a book, To Fee or Not to Fee, on the issue.

He also trains advisers who want to make the transition.

Kevin Regan, executive vice-president of Investors Group in Winnipeg, defended
commission-based sales. "Our advisers sell in the context of a plan.
It's not just a ruse to get into the door with a client They actually mean it," he said .

Beefed-up disclosure of compensation is a better solution for Canada than to import ideas from countries that have gone through more severe crises, Regan argued.

Sanders disagreed, saying disclosure doesn't heighten awareness.
"Consumers can't engage meaningfully with documents written by lawyers. It never works. In fact, disclosure schemes_can em­bed bias even further."

About 5 per cent of advisers are fee-only in Canada, Lamontagne said. There has been little movement away from commission based advice.

Still, there was a feeling that Canadian regulators will join the campaign to make advisers more professional through limiting commission sales. In time, things will change.

Bottom line: Don't fight the trend. Industry leaders should make plans to change their compensation systems before regulators force them to do it.

Ellen Roseman
The Toronto Star
Business
moneyville.ca
10/11/2010

'DR. AMY' OFFERS BOOMERS A RETIREMENT PLANNING 'REALITY CHECK'

'Holistic' approach a shrewd strategy!

Dr. Amy D'Aprix, a Gerontologist has been hired by BMO as the new face of its retirement planning strategy to coach clients on retirement planning with a 'reality check'.

RBC's Lee Anne Davies is a PhD candidate, studying aging, health and wellness with a focus on "the economic determinants of of wel-being in retirment.

A personal note:

This puts BMO and RBC ahead of the Boomer financial retirement planning curve. Each of the lifestyle issues described by Dr.Amy including matters of health and long term care require money. Our need for capital requires a secure lifetime career. We are living a very long time - longer than ever.

Bravo!

Dan Zwicker

10/09/2010


Dr. Amy D'Aprix wants you to know that she is not a banker.
But she is an expert on both the emotional and financial costs of getting old.

The 48-year-old gerontologist says baby boomers need a swift re­ality check-on what life is rea1y like after retirement.

"We have this myth that you have sort of entered nirvana and you are forever happy', D'Aprix said. "The truth is, a lot of people struggle with this."

That's why Bank of Montreal has taken the unusual step of hiring D'Aprix as a life-transition consul­tant to coach clients on retirement planning from a "holistic" lifestyle perspective.

D'Aprix - or Dr. Amy as she's known - does not flog financial products or investment strategies.

Instead, she hosts seminars across Canada and the United States urg­ing clients to "take charge" of their retirement by visualizing their fu­tures with a healthy dose of reality.

Other banks are also taking a new look at how they deal with the enor­mous population of baby boomers - as many as one in three Canadi­ans - who are fast approaching re­tirement age. And it's no wonder: the boomer gene:ration is expected to inherit a staggering $1 trillion be­tween 2009 and 2029, according to one estimate.

No wonder the banks are looking for new ways to serve them.

Royal Bank of Canada, for one, has taken a similar approach with Lee Anne Davies, who holds a master's degree in gerontology as well as an Exec­utive MBA, as head of retirement strategies.

The banks know that money is­sues are just one set of problems that retirees face.

Health problems, including de­pression, are often a reality for many retired people. If they are not sick themselves, many end up caring for a family member who is.

Then there are tough end-of-life choices, such as funeral arrange­ments and life support.

While all these issues take a fi­nancial toll, they are not top-of­-mind for most non-retirees - a staggering 81 percent of whom have no retirement savings, according to BMO.

D'Aprix, an author and public speaker with multimedia charisma, doesn't try to present herself as a financial guru.

''I'm not a banker, no. Absolutely not a banker, believe me," D'Aprix said with a chuckle. "It is weird, isn't it - in the best way possible. It's fascinating because clients love it."

We have this myth that you ... are forever happy. The truth is, a lot of people struggle with retirement.

She may not be a banker, but ''Dr Amy" is arguably a brand of her own. She holds a PhD in social work with a specialty in gerontology. She
also has her Certified Senior Advi­sor designation.

The yonngest of five, D'Aprix grew up outside of Albany, NY, and says her passion for gerontology is root­ed in her childhood
"My parents were older parents for the time, and I had neighbours who were in their 90s and other neighbours who were in their late 80s,' she said.

During the SARS crisis, she came to Toronto as a consultant for Nor­tel Networks and began her love affair with the city. She now lives in Leslieville.

"I would definitely say it was a Canadian first for a bank to hire a gerontologist and a life transition coach to run these types of work­shops and to design an approach to retirement that, I believe, is very unique;' said Caroline Dabu, vice­president, head of retirement, fi­nancial planning strategy, BMO Fi­nancial Group.

At RBC, Lee Anne Davies has been heading up retirement client strat­egy since late 2007. She is also cur­rently a PhD candidate, studying aging, health and wellness with a focus on "the economic determi­nants of well-being in retirement".

Holistic retirement planning may sound new age but it's a shrewd strategy shift for banks, which have traditionally used a stodgy, num­bers-based approach.

Most people, though, have diffi­culty visualizing the future, Dabu said. That makes them reluctant to give, up short-term rewards for long-term gain.
An amiable personality, like a Dr. Amy or a Lee Anne Davies, can make that planning exercise seem less tedious.

Given that most baby boomers will retire over the next 20 years, there is heightened competition for those clients.

"I would say the traditional ap­proach has been looking at retire­ment though a rose-coloured view. Like, 'Gee, I am going to golf six months of the year;" Dabu said.

"Even if you can afford to golf ev­ery day, we get them to realize that maybe that's not going to be so do­able even from a fulfilment per­spective".

D'Aprix also trains BMO's staff on having retirement conversations with clients. That includes broach­ing sensitive topics such as the financial realities of aging.

BMO's strategy has already result­ed in a "significant increase" in as­sets and new clients, Dabu said, de­clining to provide specifics.

D'Aprix has held about 40 semi­nars so far this year. At least 50 more are booked for 20ll Up to 300 people attend a session.
"The financial and non-financial are hand in glove. You can't separate them," she said

In explaining her approach, D'Aprix notes retirement finances largely hinge on basics like who cli­ents plan to spend their time with.

She also asks them to assess whether they will have sufficient social support, such as help with errands and medical appointments.

"We know that if you have good social support as you age, research shows that you live longer and you live healthier both mentally and physically;' observed D'Aprix. "And you are less likely to end up in a nursing home."

Next, clients are asked to think about what they plan to do to "sus­tain meaning" in their daily lives. One exercise involves filling out a blank 30-day calendar.

Other considerations include where a person plans to live. Snow­birds, for instance, have real-estate issues, tax implications and health insurance costs.
She also asks people to develop a backup plan should they or a loved one run into health problems.

That includes a frank discussion of taboo subjects like depression, which is particularly a concern for men who leave the workforce, D'Aprix said.

Alcoholism is another key health concern. "We know that a third of seniors who drink abusively didn't start doing so until retirement," she added.

According to the Certified Gener­al Accountants Association of Can­ada, more than half of a person's lifetime health care expenses arise after 65.

People, however, also drastically underestimate the possibility that they might end up as caregivers to a sick parent, D'Aprix said.

Providing care is often over­whelming. In fact, a recent study by the Canadian Institute for Health Information found that one in six caregivers experiences "distress:'

D'Aprix knows how hard it can be.
She spent nearly a decade looking after her ailing parents before they died.
"My mother was quite disabled for almost eight years before she passed," she said. ''It has emotional, practical and financial implications
in people's lives. And people don't understand that"

Rita Trichur

Business Reporter

Toronto Star

Business & Careers

10/09/2010



COMMON BELIEFS ABOUT RETIREMENT

Experts warn these assumptions don't apply to everyone:

• I need $1 million to retire


• I can rely on my company's pen­sion plan


• CPP will be enough


• I'll need 70-80 per cent of my pre-retirement income


• I'll use 4-5 per cent of my savings each year when retired


• I need to work long past age 65

Source: Bank of Montreal

The above assumptions reflect an outdated model.

The original model did not include a 30 - 40 year retirement horizon.

The assumptions must be validated on an individual basis.

Dan Zwicker, CFP

10/09/2010

WHAT DO YOU CONSIDER IS YOUR GREATEST INVESTMENT?

Investing in yourself.

Many people think that the largest invest­ment they have is their retirement savings plan, or perhaps a house or cottage.

But the biggest investment is really you. The in­come, wages and salary you will earn over the next 10, 20 or 30 years of work­ing life can be viewed as coupons.

You and your earn­ing capacity are the bond.

Or, think-of yourself as a gold mine or oil well with
decades of remaining reserves.

The safer or more secure your job, the bigger the bond quotient.

The Toronto Star
Business
moneyville.ca
10/08/2010
by Moshe A. Milevsky
Professor at York University's Schulich School of Business

INTEGRATIVE THINKING: A CONSTRUCTIVE MINDSET

Integrative thinking is a discipline and methodology for solving complex or wicked problems. The theory was originated by Roger Martin, Dean of the Rotman School of Management, at The University of Toronto and collaboratively developed with his colleague Mihnea C. Moldoveanu, Director of the Desautels Centre for Integrative Thinking.

Definition

The Rotman School of Management defines integrative thinking as:
"...the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative resolution of the tension in the form of a new model that contains elements of the individual models, but is superior to each."[1]

The website continues:

"Integrative thinkers build models rather than choose between them. Their models include consideration of numerous variables — customers, employees, competitors, capabilities, cost structures, industry evolution, and regulatory environment — not just a subset of the above. Their models capture the complicated, multi-faceted and multidirectional causal relationships between the key variables in any problem. Integrative thinkers consider the problem as a whole, rather than breaking it down and farming out the parts. Finally, they creatively resolve tensions without making costly trade-offs, turning challenges into opportunities."
From Wikipedia
09/27/2010

HOUSING BUBBLE THREAT RESURFACES AS PRICES IN MAJOR MARKETS HIT 30 YEAR HIGH.

TORONTO - Home sales may be slowing, but prices in six of Canada's largest housing markets are in bubble territory for the first time in 30 years — and a U.S.-style correction is still not out of the question, according to a report from an Ottawa-based think tank.

The report by the Canadian Centre for Policy Alternatives, to be released Tuesday, says home prices now sit at 4.7 to 11.3 times Canadians’ annual income — much higher than historical comfort levels of between three and four times income.

"To see all of the (major) markets outside of that comfort zone is very unique and concerning," said David Macdonald, a research associate who authored the report entitled "Canada's Housing Bubble: An Accident Waiting To Happen."

Read entire article:

http://ca.news.finance.yahoo.com/print/s/31082010/2/biz-finance-housing-bubble-threat-resurfaces-prices-major-markets-hit.html

Sunny Freeman,

The Canadaian Press

August 31, 2010

WHAT IS YOUR RELATIONSHIP STRATEGY?

Linkedin, Twitter and Facebook are not a social media strategy. They are merely channels for your content and containers reflecting your presence. Your presence and content mean nothing to others unless you can add value to others.

Everyone seems to be pursuing social media strategies and many, if not all, call themselves a strategist. Most of the actions in the social space today are consumed with marketing and advertising using the same thinking with new technology. The essence of all things social is relational while the market uses all things social as institutional mediums for traditional marketing.

A relationship strategy differs from a marketing strategy in that it recognizes the long-term value of forming lasting relations, as opposed to most “Intrusion” marketing strategies. Old marketing strategies focus upon acquisition of new clients by targeting majority demographics based upon prospective target lists.

Read entire article:

http://ca.mc883.mail.yahoo.com/mc/welcome?.partner=rogers-acs&.gx=1&.tm=1283496691&.rand=9kj0ec684386d#_pg=showMessage;_ylc=X3oDMTBvZXBkczA1BF9TAzM5ODM4OTAyNwRhYwNtdkZsZE1zZw--&mid=1_507723_AOI1J9gAAD9KTIB9UwJznWYiEVc&fid=Inbox&sort=date&order=down&startMid=0&filterBy=&.rand=313171446&hash=e647a33c597cfb5339bd26dedd4ff480&.jsrand=6361787

Jay Deragon

The Relationship Economy

September 3,2010

THE OBJECTIVE IS CLIENT GRATITUDE

The purpose of all professional services marketing is client gratitude.

Of the two forms of compensation we receive - financial and gratitude, we disperse the first and we retain the second - indefinititly.

This is the case for client centric service based on a view that as a professional financial practitioner our obligation to a client is unequivocally that of a fiduciary.

Dan Zwicker
August 29, 2010

J.D.POWER RELEASES 2010 INVESTOR SATISFACTION STUDY

The new J.D. Power and Associates 2010 U.S. Full Service Investor Satisfaction Study has been released based upon 4,460 surveyed investors who utilize an investment advisor. For the second year in a row Edward Jones received top honors.

The top five consisted of:

Edward Jones

RBC

LPL

Schwab

Raymond James

Ameriprise, Fidelity, UBS, Wells Fargo and Morgan Stanley rounded out the top ten for overall satisfaction. However, based upon “investment performance” the top three were LPL, Ameriprise and Schwab.


Overall investor satisfaction with full service investment firms improved noticeably this year, as compared to 2009, according to the J.D. Power and Associates 2010 U.S. Full Service Investor Satisfaction Study released today. This looks promising, but the study also showed that as a whole there is also a growing number of investors who believe their investment firm is more driven by profits than by customers. “As a result, delivering the right experience via the advisor is paramount to ensuring high levels of customer satisfaction,” explained David Lo, director of investment services at J.D. Power.

Read entire report:

http://www.rjandmakay.com/rj-and-makay/jd-powers-releases-2010-investor-satisfaction-study.html

Posted by:

RJ & Makay

July 19, 2010

CONSUMER ENGAGEMENT AND INSIGHT AS KEYS TO GROWTH AND INNOVATION

One of the most important frontiers for innovation in the media and
entertainment industry is in how companies engage and interact with
digital consumers, and in how they harness customer insight as an
engine for growth.

Read entire article:

http://www.accenture.com/Global/Research_and_Insights/By_Industry/Media_and_Entertainment/Growth-through-Innovation-in-Media-Entertainment.htm

Accenture
Aug. 13, 2010

BIO

Dan Zwicker

Dan Zwicker has advised individual and corporate clients on wealth and risk management issues for over 30 years. During that time he has held corporate agency building leadership positions with some of Canada’s most successful life insurance companies and served clients as an independent financial consultant as well. Dan’s values based professional practice is premised on client empowerment through insightful awareness.


With considerable experience, expertise and professional discipline to draw on Dan has chosen to focus his consultancy on boomer retirement, estate and business succession planning. A strong proponent of Weigh House’s unbiased planning and oversight services, Dan engages clients one-on-one to assist them in achieving lifetime sustainability of income in meeting their retirement lifestyle objectives.


Born in Montreal, Dan studied Civil (Structural) Engineering at Queen’s University in Kingston, where he earned an Honours Bachelor of Applied Science degree. In addition to his Professional Engineers (P.Eng.) designation, Dan’s credentials include Certified Financial Planner (CFP), Certified Life Underwriter (CLU) and Chartered Financial Consultant (CH.F.C.).


With five children and six grandchildren, Dan enjoys an active family life. He is an avid student of politics, economics and professional financial practice. Other interests include new business development, marketing, ‘web 2.0’ social media, community interests and team sports.

LIFETIME SUSTAINABLE INCOME. WHEN OUR NEED BEGINS AND ENDS

The following is a generic North American profile.

Where does our need for income arise at each age?

[What is our source?]

Ages 5 - 13 - expense allowance

- [parents - part time jobs]

Ages 13 - 22 - funding post secondary education

- [summer/part time jobs]

Ages 22 - 60 - marriage - family formation

- [personal employment income]

Ages 60 - 95 - retirement income

- [savings - pension plans - inheritances]

Ages 60 - 95 - Quality of Lifestyle breakdown -

• Ages 22 - 75 - independent living
• Ages 75 - 85 - retirement home
• Ages 85 - 95 - longterm care / nursing home

At every age throughout our life we require personal and financial health to maintain our personal and social dignity.

These 2 needs are non negotiable lifetime requirements.

Achieving both is our challenge.

On a professional level identify financial advisors in whose professional practice you have confidence, compatibility and trust.

Exercise discipline in your choice.

For specific steps on choosing an advisor visit:

http://www.firstfinancialconsultinggroup.com

Click on 'proceed to site'.

Click on the 'Choose an advisor' tab at the top.

If you need any guidance contact me directly at:

T: 416-726-2427

E: danzwicker@rogers.com

I'll be pleased to help.

Dan Zwicker.

SEVEN HABITS OF HIGHLY HAPPY PEOPLE

A steady flow of new research has managed to pin down what really makes people feel good

Psychologist Adrian White from the University of Leicester looked at more than 100 studies that tracked self-reported happiness around the world. Canada ranked 10th, behind nations like Denmark, Switzerland and Austria, while the United States lagged far behind in 23rd place. If we want to move up in the ranks, it’s time to focus on things that are proven to positively impact on how we feel.

1. Focus on the present

One thing we know from positive psychology is that we may be chasing the wrong things in the quest to feel better. “We’re really bad at predicting what makes us happy,” says Denise Clegg from the University of Pennsylvania (the world’s first school to offer a master’s program in positive psychology). “We get caught up in future thinking and how things will be ideal once our conditions are met.” That could be when you lose 20 pounds, land the perfect job or can afford a real Louis Vuitton bag. “People over-estimate the ability that material goods have to make us happy. But the feeling you get from them is temporary and fleeting,” she says. The happiest among us already have this figured out. They don’t exist in a world of “if only” or “when I finally accomplish X, I will be more satisfied.”

Author and lecturer Tal Ben-Shahar cautions against the trap of living in the future. “In most cases, shortly after reaching some destination, we return to our base level of wellbeing,” he wrote in his book Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment. “Rather than allowing ourselves to remain enslaved by our pasts orfutures, we must learn to make the most of what is presently in front of us and all around us,” he says, noting that a happier life is shaped “experience by experience, moment by moment” — and not by single events. That doesn’t mean we shouldn’t have goals. According to Ben-Shahar, “The primary objective of goals is to liberate you to enjoy the here and now, the journey.” Ben-Shahar talks about “self-concordant goals,” ones that are true to who you are and don’t rely on extrinsic factors — like trying to please your parents by becoming a doctor. He suggests setting long-term goals with timelines, then planning daily and weekly activities to help you get there.

Read entire article:

http://en.chatelaine.com/english/health/article.jsp?content=20100511_103030_0015&page=1

Michele Sponagle
Chatelaine
August 2010

FINANCIAL BEHAVIOR - ACTIVE OR PASSIVE? WHEN TO BACK OFF

The situation is the boss.


Capital accumulation has high expectations in business and investments. - aggressive - out in front - leading.


Capital and lifetime income preservation has lifetime risk management objectives - balanced and passive - hire the best to manage the risk. Manage your 'retirement business' needs from behind the scenes - lower your proactive expectations from those of capital accumulation to those of capital risk management.

Our professional practice culture:

http://www.firstfinancialconsultinggroup.com

How we apply it:

http://www.weighhouse.com

WHAT IS THE VALUE OF FINANCIAL AWARENESS?

PRICELESS!

It is nothing less than lifetime financial dignity.

For a first step on how and where to select a professionally designated unbiased fee for service lifetime capital and income financial advisor visit:

How: http://www.firstfinancialconsultinggroup.com

Where: http://www.weighhouse.com

The diagnostics include a 'financial MRI' -

So that nothing falls through the cracks.

ACCESS TO PROFESSIONAL COMPETENCE - THROUGH A FINANCIAL SERVICES MRI

Can I retire?

The consumer has two issues related to securing lifetime retirement income.

1 - What does it take?

(a) It takes an understanding of the key deterrent to a successful plan.

(b) Most individuals know how to accumulate capital. Save as prudently and for as long a period of time as possible.

(c) However, what is less apparent is the prediction of whether or not our savings will be sufficient to allow us to sustain an income during the entire 2nd 30 - 40 years of our lives i.e. during retirement to age 90 - 95. 'Sustain' implies without any shortfall in any givem year.


2- Who can advise me professionally?

 In Canada the financial services industry offers professional guidance in one of 4 ways.

#1- Through financial advisors who are compensated via commissions based upon the sale of a product.

#2 - Through independent financial advisors who are compensated based upon a fee for service and/or a commission based upon the sale of a product.
#3 - Through financial advisors who are compensated by a salary provided by their employer.
#4 - Through an independent financial advisor/investor consultant who is paid a fee only for service based upon the preparation of a financial plan and investment portfolio analysis which serve as a 'financial MRI'. The sole purpose of the financial plan and the portfolio analysis is to yield an answer to the issue described in 1 (c) above. The service may include continuous financial performance monitoring.

Financial health and personal health are the flip sides of the same coin - the achievement of personal dignity through well being. Hence the use of the term 'financial MRI'.

14,000,000 boomers in Canada are at or preparing for retirement.

Less than 12,000 financial advisors in Canada are dual designated professionally to serve both the capital accumulation and the guaranteed lifetime capital and income preservation needs of the large boomer demographic numbers.
Very few financial advisors in Canada are in the unbiased fee for service only sector.

The numbers alone make access to professionally unbiased advice a daunting challenge.

In Canada the Centre for Fiduciary Excellence (CEFEX) has at this time certified the first independent financial planning investor advisory firm in Canada as a certified financial planning fiduciary.


That firm is Weigh House Investor Services Inc. in Toronto.

The news release of the certification follows below.


WEIGH HOUSE INVESTOR SERVICES FIRST IN CANADA TO HAVE ITS INVESTMENT SUPPORT SERVICES CERTIFIED
FOR IMMEDIATE RELEASE CEFEX

 TORONTO, April 19, 2010 – CEFEX, Centre for Fiduciary Excellence, LLC, has certified Weigh House Investor Services of Toronto ON for the provision of fiduciary Investment Support Services in adherence with a standard of excellence. Weigh House Investor Services (“Weigh House”) is among the first organizations globally to successfully complete this type of independent certification process.

The Prudent Practices for Investment Support Services are part of the Prudent Practices for Investment Fiduciaries series of standards published by Fiduciary360 (fi360) of Pittsburgh, PA. This global standard specifies how a firm can help investors and fiduciaries manage the overall investment management process, including the selection, monitoring and de-selection of investment managers as well as developing processes to implement investment strategies andfiduciary practices on an ongoing basis. The Practices have been substantiated by case law and the legislation of the Pension Benefits Standards Act, 1985 (Canada), the Pension Benefits Act (Ontario) and the Trustee Act (Ontario).

According to the General Manager of the Centre for Fiduciary Excellence, Carlos Panksep, “Through CEFEX’s independent assessment, the certification provides assurance to investors that Weigh House has demonstrated adherence to the industry’s best practices.”
Weigh House consults with clients on a one-time and continuous basis, in a fiduciary capacity, on preparation of the Investment Policy Statement, asset allocation recommendations, due diligence on Investment Managers, fee & compensation analysis, investment performance reports, advice on investment strategies, and education.

The annual certification process involves a detailed assessment of operational data, client files and procedures, followed by on-site interviews with key personnel. The process is based on the International Organization for Standardization audit process ISO 19011. Weigh House is registered at www.cefex.org where its certificate can also be viewed.

The Prudent Practices for Investment Support Services standard can be viewed by clicking on Weigh House’s on-line CEFEX certificate. More information on Weigh House Investor Services is available at: www.weighhouse.com.
About CEFEX:

The Centre for Fiduciary Excellence, LLC. is an independent certification organization. CEFEX works closely with industry experts to provide comprehensive assessment programs to promote fiduciary best practices. It certifies investment stewards, advisors, fiduciary advisers (PPA), managers, ASPPA recordkeepers, and support services firms. CEFEX has offices in Toronto, Canada, and Pittsburgh, PA.

THE IMPACT OF SEPARATION AND DIVORCE ON FINANCIAL INDEPENDENCE - A CASE STUDY - RESOLVED THROUGH A FINANCIAL MRI

Worry .. free once the children leave

When Tess decided to leave her husband of 25 years, she knew she would have to take on a big mortgage if she want­ed to buy out his share of their Vancouver home. She would also need to hand over a con­siderable amount of money.

At age 56, and with three children, 17, 21 and 22, she is starting over financially. Tess worries about the future and whether she will be able to support the ehildren through university. Her ex is helping with their education expenses.

"This is going to be tough and my budget is going to be very tight," she writes in an e­mail. She plans to fix up the house a bit, hold on to it until the children are out on their own in a couple of years and then sell it. As a health-care professional, she has a good salary and pension. She plans to work until she is 65. Still, she can't help but worry: Will it all work out or will she end up living on the street?

We asked Warren MacKenzie, president and chief executive officer of Weigh House Investor Services in Toronto, to look at Tess's situation. Weigh House is a fee-only financial planning firm that does not sell securities.

WHAT THE EXPERT SAYS

After an in-depth analysis, Mr. MacKenzie was able to put her mind at ease. "Tess will be able to achieve all of her financial objectives, including leaving a small inheritance to her children," he said.

Client situation

The person: Tess, 56.

The problem: How to deal with the financial shock of separating from her husband and dividing assets without disrupting her children's university education.

The plan: Take out a mortgage on the house to buy out her ex's share, provide an emergency fund, payoff her line of credit and fix the property to sell.

The payoff: Getting through a difficult spell and coming out the other end solvent, secure and able to leave a small inheritance to each of her children.

Monthly net income: $6,030.

Assets: Half share of family home $275,000; RRSP $80,000 (which goes to her husband); RESP $40,000; non-registered in­vestments $15,000. Total: $410,000.

Monthly disbursements: Mort­gage $2,770; property taxes $400; utilities $435; phone, TV $125; home insurance $140; re­pairs/maintenance $200; groceries $900; eating out $130; household supplies $100; cloth­ing $225; transit $70; car insur­ance $160; car maintenance, gas, parking $275; orthodontics $550; life insurance $120; school activi­ties, summer camp $200; music
lessons, sports, allowances $265; vacations $170; other: $895. Ta­tal: $8,130.

Shortfall: $2,100.

Liabilities: New mortgage: $325,000; new line of credit $20,000.
Total: $345,000.

At the moment, Tess is spending more than she is taking in, but her expenses will drop once. the children finish university and move out on their own - and some will drop even sooner.

The expensive orthodontic treatments will soon be finished. When the children grad­uate and move out, the cost of their clothing, school activities and other expenses will be gone and the household food bill will drop.

Tess will no longer need term life insurance when the children are established, shav­ing another $120 a month from her expenses. The new mortgage will be discharged when the house is sold, so the $2,770 in monthly payments will come to an end.

By the time she retires from her job at age 65, she should be able to get by on about $4,000 a month rather than the $8,000 she is spending now, Mr. MacKenzie said. By then, her pension income will be $44,800 a year, her Canada Pension Plan $14,028 and her Old Age Security $7,740 (all in­dexed for inflation), bringing
her total pension income to $66,568.

Tess needs $275,000 to buy out her ex's share of the house. She would also like some money to renovate. Mr. MacKenzie suggests she bor­row another $7,000 to pay off her current line of credit, and $2,000 to contribute to her RRSP. With this $2,000, she will educate herself about in­vesting. The planner also sug­gests she get another $20,000 line of credit for emergencies.

Tess's current investments are mainly in underperform­ing mutual funds with high management expense ratios. "She feels her [investment] adviser is either incompetent or does not have her best in­terests at heart."

As an educational exercise, Mr.· MacKenzie suggests she open an online brokerage ac­count and invest the $2,000 in a self·directed portfolio of ex­change-traded funds.

"We recommend she go to the MoneySense magazine website, pick a couch potato portfolio and buy three ETFs," he says. She can then monitor their performance and adjust or "rebalance" her holdings once a year, or whenever one of the holdings exceeds her desired allocation by 10 per cent or more.

Mr. MacKenzie's calculations assume that Tess will sell her house in a couple of years and invest the proceeds for an av­erage annual return of 6 per cent (and an inflation rate of 2.5 per cent), and that she will draw on this when she retires.

By Dianne Maley
Financial Facelift
Special to The Globe and Mail
July 24, 2010

IS THE GOVERNMENT SKEWING THE NUMBERS? - THE STATSCAN DILEMMA

OTTAWA — The agency silently embroiled at the centre of the census debate has long been viewed as the best of its kind in the world, but observers worry government intervention could damage the impeccable methodology and autonomy for which Statistics Canada is renowned.

“StatsCan is thought of as one of the best,” says Kevin Milligan, an associate professor of economics at the University of British Columbia, who has worked extensively with the agency’s data. “The institutional culture is one of independence. That is at the heart of why they’ve been so distressed by this turn of events, because they really felt that independence was threatened.”

Over the last month, opposition has mounted to the Conservative government’s plan to turn Canada’s mandatory long-form census into a voluntary survey — a move critics say will produce a skewed or useless national demographic record. The government says it made the change because the long form was an invasion of privacy and it was coercive to force Canadians to complete it.

On Friday, the parliamentary industry committee will meet to discuss hearings on the census issue that will likely take place next week.

“StatsCan has a world-class reputation for its methods, for the reliability of its arithmetic and the credibility of the institution and it would be a huge tragedy if that Canadian model of excellence is sacrificed on the altar of Conservative [politics],” Liberal House leader Ralph Goodale said at a Thursday news conference.

In the early 1990s, a team of statisticians from 10 OECD countries ranked international statistical agencies for The Economist’s “good statistics guide.” Statistics Canada took the top spot, with the magazine lauding the reliability of its figures, its methodology and autonomy, noting that “British and American number-crunchers lack the formal independence” enjoyed by their Canadian counterparts.

The agency participates in international statistical conferences and publishes its own top-level peer-reviewed journal, Survey Methodology, says Don McLeish, president of the Statistical Society of Canada and a professor at the University of Waterloo.

Statistics Canada has been unable to speak about the potential impacts of the changes to the census, and as a senior bureaucrat, Mr. Sheikh was not permitted by law to reveal what advice he gave the minister.

His blunt resignation statement made clear that he did not support the government’s decision and that will help shore up the agency’s reputation, Mr. McLeish says, but the planned changes to the census are still anathema to statisticians who believe in the “sanctity of the data.”

“If I’m a statistician and I develop a methodology for analyzing some data, and someone comes along and for what I believe to be political reasons or any other vested interest says that I should change my methodology, then that strikes at the heart of our discipline,” Mr. McLeish says, emphasizing he speaks for himself and not the society. “If forced to do it, that would be very demoralizing.”

In a statement released Wednesday, after Mr. Sheikh’s resignation, Industry Minister Tony Clement, who oversees the agency, said: “The government made this decision because we do not believe Canadians should be forced, under threat of fines, jail, or both, to disclose extensive private and personal information.”
The mood among agency employees was sombre on Thursday, with many saying they were shocked by Mr. Sheikh’s resignation but thought he made the right decision to step down on principle.

“Obviously, it’s a bit disheartening. It was a surprise for everyone here,” Roberto Casagrande said of the news, which came hours after the cancellation of a town-hall meeting intended to address staff concerns about the census. “It’s unfortunate the way things have transpired. Anytime government gets too involved in specific departments and some of these critical programs, and we can’t resolve them without getting to this point, it is a bit disheartening for staff here.”

“It’s very sad that a man of that quality quit his job,” Alain Despatie said. “It’s not understandable that we have a government that won’t listen to its highest civil servant in a very specific field.”

When the previous chief statistician, Ivan Fellegi, retired in 2008, assistant chief statistician Michael Wolfson — now retired himself — gave a speech that touched on the delicate balancing act of maintaining the agency’s independence.
Mr. Wolfson recalled an instance a decade earlier when he was to present a paper on policy options for Canada’s tax-transfer system at an international meeting and a deputy minister intervened with Mr. Fellegi to stop him.
After determining the paper met “reasonable standards for impartiality and objectivity,” Mr. Fellegi gave the deputy minister his answer: No.
Earlier this week, a Tory senator attacked the veracity of new statistics showing crime is on the decline.

“The data is indeed agnostic, but there are many messages carried by the data to various constituencies. They can be social messages or economic messages and most of those messages probably have a political stripe to them, but you cannot blame that on the data,” Mr. McLeish said.

Ernie Boyko, director of census operations from 1991 to 1996 and a Statistics Canada employee until 2004, says it was “absolutely shocking” to hear Clement say in an interview that some people at the agency “like to think” it’s an independent body, but in fact it reports to him.

“Every relationship we had with a government, this has always been kind of established right at the beginning in a meeting between the chief statistician and the minister, and the minister generally agreed we need to have objective information and the agency should not be seen as being under political influence,” he says of his time at the agency.

Some national statistical agencies operate autonomously, similar to the Bank of Canada, while others function more as an arm of the government, Mr. Milligan says, but the situation in this country is “ambiguous,” depending on how the Statistics Act is interpreted and who are the politicians and bureaucrats involved. One good that could come out of the census controversy and Mr. Sheikh’s resignation would be to clarify that relationship and cement the agency’s ability to do its work “independent from the political pressures of the day,” he says.
“It’s distressing to me that the minister is playing politics with the hard-earned reputation of StatsCan,” Mr. Milligan says.

Shannon Proudfoot
Postmedia News
July 22, 2010
- with files from the Ottawa Citizen