3/26/2010

ONLY HALF OF TAXPAYERS IN PRIVATE RETIREMENT PLANS: STATSCAN


A new study says just over 8.9 million employed Canadian tax filers participated in a private retirement savings plan in 2008, about half of all tax filers.

Coming as the federal and provincial governments begin looking at ways to reform the country's troubled pension system, the Statistics Canada report says the proportion of private pension investors has dropped from 54% in 1997.


The agency says there was also a decrease in the share of employed tax filers who contributed to a Registered Retirement Savings Plan during the decade.



Read the full report:

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100326_110258_1856

Filed by The Canadian Press,
03/26/10

Originally published on Advisor.ca

3/24/2010

A SOLUTION TO THE NEED FOR A SUSTAINABLE INCOME DURING A 2ND 30 - 40 YEAR RETIREMENT LIFETIME


Here is an excerpt from the Weigh House Blog.

Welcome to Weigh House.

In an investment industry which promotes investment returns to consumers who invariably find that their shortfall is not simply in products or advisors but rather in the time they need to accumulate sufficient capital to sustain their 2nd 30 – 40 years of income during retirement it is not difficult to understand the willingness of individuals to buy into returns inspite of the downside impact of the risks that go with the returns.

We are fortunate to have a rational process of delivering unbiased solutions for clients to the need for a reasonable degree of predictive certainty in dealing with a lengthy 2nd lifetime of income requirements.

I look forward to being able to get this message out through our blog virally.

All the best!

Dan

Read the entire Weigh House blog:

http://weighhouseblog.wordpress.com/

BE YOUR OWN FIDUCIARY

For those following the US financial reform efforts, the bill, unveiled esterday, does not include a requirement that brokers adhere to a fiduciary standard.

Key points in this WSJ article for me:


Brokerage-industry lobbying is widely credited with ridding Sen. Christopher Dodd’s (D., Conn.) financial-reform bill, unveiled Monday, of a clause that would have required brokers to adhere to the fiduciary standard and always put clients’ interests first. As things stand, they have a less strict duty to sell clients only what they deem appropriate.
From Canada’s Foundation for the Advancement of Investment Rights (FAIR):


The only Canadian financial professionals who are under fiduciary obligations, whereby they are required to act in … their clients’ best interests, are those registered as portfolio managers with discretionary authority over their clients’ accounts…


FAIR then goes on to say that, “case law has established that other financial advisors can in effect have such an obligation, depending on the knowledge of the client and the past pattern of dealings between client and advisor…”
That’s about as clear as mud to me. Wouldn’t it be fun to write your adviser and ask him or her straight out, “Do you have a fiduciary obligation to act in my best interests?”


Perhaps I’m cynical, but I think it’s naive for investors to expect somebody they’re not paying to always act in their best interests. When I learned about
my mother’s situation, I was angry, but not only towards the advisor. The way I see it, it’s our responsibility as investors to understand the risks that come with “free” advice.


Except, investors are paying — at least indirectly — through the product fees that go toward advisors’ commissions. Not to mention the opportunity cost. Perhaps investors are paying a lot more than they think when it comes to free advice.


Posted in clickworthy

Bruce Freedeman
Mar. 18, 2010

3/19/2010

SOCIAL MEDIA CAN HELP ADVISORS

When used effectively, social media is a valuable addition to the marketing mix of financial planners.


Due to the wide distribution and democratic nature of these social tools, it’s important for planners to understand they are already involved in the social conversations unfolding online. Word-of-mouth recommendation has existed since the dawn of language, but the social web represents an evolutionary step in communication because it empowers any individual to converse with, and also discover and learn from the experiences of others.
Stories that were once merely told and overheard at cocktail parties by a handful of friends can now be blogged, tweeted or streamed live to the Web. As such, they have the potential to instantly reach thousands of eyeballs, while being conveniently archived for later retrieval with one click on a search engine.

"Read the full article here":

http://www.advisor.ca/advisors/mypractice/growingyourbusiness/article.jsp?content=20100302_171622_4784

Neil Bearse & Betty Ann-Howard
February 01, 2010
Advisor.ca

3/18/2010

WORLD'S RICHEST MAN SPEAKS

With more than 200 businesses, Carlos Slim Helu shapes virtually every industry under the Mexican sol. He's got interests in telecom, retail, energy, tourism and banking.


Some folks in Mexico, where the average income is US$13,200 (less than 0.0000003% of Slim's US$53.5 billion fortune), resent the mogul for being the richest man in the world. Slim has another take on commanding a staggering fortune. To him, it is a billionaire's civic duty to leverage one's resources into more wealth.


"Wealth, either public or private, should be managed with efficiency, promoting through reinvestment economic growth," he told Forbes March 10, the day our most recent list of the World's Billionaires was released.


"Managing wealth means responsibility and commitment to create more wealth and, through more employment and the generation of tax revenues, boost the distribution of the fruits - that is, of income.


"Those fruits will likely multiply in the coming decade, as global capital continues to shift to emerging markets, particularly China and Latin America. Slim is bullish on his region, hypothesizing that the great influx in wealth will elevate Latin America, pulling more people out of poverty.


Slim's bold prediction for the decade: "Latin America is close to breaking the underdevelopment barrier, of around US$12,000 of income per capita. It seems to me that this should happen in the next 10 years.


"He continues: "The developing countries in Latin America have available both internal and external financial resources, better terms of trade on their exports of primary goods and competitive advantages thanks to the availability and production of commodities, tourism and a modern industrial sector.


"Not everyone is as bullish. After several decades of tepid growth, Latin America's economy is expected to expand between 3% and 4.5% in 2010.


The more optimistic economists, however, argue that the region's growth will be buttressed by a multitude of factors weighing in Latin America's favor. Unlike its more developed counterparts, the region only experienced collateral damage from the credit crunch.


"Latin America has bounced back strongly," says Jerome Booth, head of research at Ashmore Investment Management. "Latin America's banks are already taking market share from U.S. and European competitors." That's more good news for Slim, who has a 55% stake in Inbursa Bank, one of Mexico's largest financial firms.


Slim says the dichotomy between the developed and emerging worlds will be amplified in the coming years, as developed economies continue to wrestle with their "financial systems, fiscal and financial deficits and their transition to a society of advanced services in which excessive imports of goods are not compensated by other revenues and have to be financed by foreign savings.


"Slim did not say which of his holdings he believes will outperform in Latin America's emergence. But regardless of whether it's telecom or energy that drives Slim's portfolio to $60 billion and beyond, the Latin American growth story will present great opportunity and challenge for the world's richest man as he navigates a rapidly changing marketplace with more sophisticated competitors.


As Nick Chamie, the global head of emerging markets research for Royal Bank of Canada, puts it, "It's not so much how Slim affects Latin America, it's much more about recognizing that the development of Latin American nations will have a greater affect on Carlos Slim."


by Evelyn M. Rusli,
Forbes.com
Tuesday, March 16, 2010

TIME FOR AN ASSET ALLOCATION REVOLUTION


Risk is a four-letter word nobody likes, and portfolio managers are no exception.
However, the emergence of several new asset allocation methods that move away from the fixed mix strategy gives cause to see risk in a new light. These risk-focused methods can lead to better portfolio choices and thereby provide better protection during market crashes.
Markets are in constant flux, risk-focused theorists assert, so asset mixes should shift periodically to maintain the portfolio’s exposure to risk, i.e. volatility level. A risk-based approach to asset allocation is an active style of management that breaks away from the traditional buy, hold and rebalance strategy. It adapts asset mixes to evolving market conditions and rebalances them back to the portfolio’s target risk level.


"Read the full article here":

http://www.advisor.ca/advisors/investments/marketinsights/article.jsp?content=20100226_161150_8700

Advisor.ca
Rayann Huang
February 01, 2010

3/17/2010

SOCIAL CRM: THE NEW FRONTIER OF MARKETING, SALES AND SERVICE.

The emergence and increasing usage of social media and other Web 2.0 tools has dramatically altered how companies interact with their customers. For instance, buying advice, product information and technical help is increasingly being disseminated from consumers to other consumers, in some cases without involvement or oversight by the provider. Clearly, this shift presents both opportunities and risks to companies.

To derive greater value from these new communication channels, companies should adopt a “social CRM” strategy. Such a strategy will help them touch customers at many more points and much earlier in the buying process, often at lower cost than that of more traditional marketing, sales and customer service channels.

To do so, companies should embrace the social media channels being used by their customers; identify and engage with the “superusers” who supply product expertise to other customers; and harness the power of advanced analytics to provide broad insights on customer needs, wants and behaviors. Perhaps most importantly, companies must remember that social media and Web 2.0 will not work for all customer needs and segments, even though they can significantly alter the role played by more traditional contact channels.

In short, social CRM presents many opportunities to build a distinctive capability that can serve as a building block of high performance: a method to potentially connect more tightly with customers at lower cost and in a way that provides a real differentiation from competitors.

"To read the entire article please click on the link below":

http://www.accenture.com/Global/Services/By_Industry/Electronics_and_High_Tech/R_and_I/Social-CRM.htm


Accenture

March 2010

3/07/2010

"WATCH OUT FOR A TSUNAMI OF RETIREES" - WILLIAM HANLEY - FINANCIAL POST


I "tsurvived" the tsunami, watching last Saturday's events unfold on TV from the comfort of a high-and-dry couch. So, I will likely make it to my 65th birthday on Thesday, March 9, when a government computer far away in Canada will go "phhht" in cyberspace and inform the folks who make the Old Age Security payments to electronically transfer William James Hanley a pension payment for $516.96 each month beginning April 30.

Being born in 1945, I am a year ahead of the Baby Boom generation, which Statistics Can­ada defines as those born between 1946 and 1965. Next year, the first cohort of nine million Canadian Boomers will begin receiving Old Age Security, a demographic tsunami that will see about 1,200 people a day celebrating the "Big 6-5" over the next 20 years.

While last Saturday's tsunami mercifully did not live up to advance billings, it did pro­vide Hawaii's emergency authorities with a successful rehearsal of what might be done in the event of the real thing. Unfortunately, there has been no rehearsal for what might transpire when the long wave of Boomers be­gins to flood into official old age and puts un­precedented pressure on the public purse and on the private pension plans of corporations and individuals.

Fortunately, the pensions crisis has landed full square in the public conscious. It is no longer a "looming" crisis. It is here. Now. Un­fortunately, it is a massive, complex problem that will test the will power and ingenuity of people and institutions at all levels.

Evidence mounts almost daily that the re­tirements of the Boomers and those older are under threat. This week, the Ontario Munici­pal Employees Retirement System COMERS), one of the country's biggest pension funds, announced that while its assets bounced back last year after 2008's big losses, it still is run­ning a deficit on what is needed to fund obli­gations.

This scenario is being repeated at pension funds - both public and private - across Can­ada as managers grapple with chronic under­funding stemming from overly optimistic return-on-assets assumptions. Recent reality, in the form of a struggling economy and the second stock market crash in a decade, has collided with the diminishing prospects for retirements going forward.

The growing unease about pensions and re­tirement among Boomers is apparent in many surveys.

A recent poll conducted by TNS Canad­ian Facts shows that almost one in every two people over 50 say they're not confident that the country's system of pensions and retire­ment savings, including employer pensions, OAS, the CPP and RRSPs, will provide them with a comfortable retirement income. More than a third say they're "somewhat confident" and only 15% are "very" or "completely" confi­dent in the system.

No surprise there. And no surprise that al­most half of the 50-plus group surveyed by TNS want pension-system reform, including more room for seniors in tax-free savings ac­counts, pension surpluses belonging to indi­viduals 'holding plans - not employers - priority for pensioners in the event of bankruptcy and the right to make voluntary supplementary CPP contributions.

While pension debate and subsequent re­form is a high priority as Boomers approach 65, they and other generations are becoming increasingly aware that they should be the main authors of their own retirement destin­ies. Common sense also tells us that over time many people will have to make sacrifices, that paying somewhat more and getting somewhat less is certainly in prospect at all pension lev­els.

It will be interesting to see in 2020 - half­way through the great Boomer tsunami ­what hindsight will tell us about where exact­ly we were in 2010-11 on the difficult road to a more secure retirement for Canadians.

If I'm spared, I'll by then be turning 75.Meantime, though, I've got next week and a birthday party at Chuck's Cellar here in Wai­kiki to get through in one piece. More than 20 of us will assemble, including young Boomers, older Boomers, retirees, those working past 65, for drinks and dinner, for a good night out. Retirement worries will have to wait.



William Hanley
in Honolulu
Comment
Financial Post
March 6, 2010