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

DISRUPTIVE INNOVATION

Social Pearls Before Swine

The term “pearls before swine” comes from the Sermon on the Mount, a famous speech given by Christ to his disciplines. It means that people should not waste pleasant or good things on people who will not appreciate them.

In the time of Christ, pigs were regarded as unclean animals in the Jewish faith, so in a sense, the term refers to giving great things to beings which are not worthy. The fact that pearls would be essentially useless to pigs has also been pointed out, as the term illustrates that it is rather foolish to give things to people who cannot or will not use them. Pigs are unlikely to realize the value of pearls when they see them, so tossing pearls to swine would really just be a waste.

Many people use the term to talk about someone who doesn’t appreciate the value of an item or another person, as in Some people also use this term in a resentful sense, suggesting that they offered or gave someone something superb, and ended up being snubbed.

Many people who attempt to enact social change find themselves frustrated by the pearls before swine phenomenon, struggling to understand why people reject their proposals and ideas when they hold so much promise.The Promise of Social Technology

Technology is advancing faster than people and businesses can keep up. The tidal wave of advancement create new dynamics unforeseen and unknowable. Who would have thought just five years ago that a young kid from Harvard would create a global phenomena called Facebook? Who would have thought that people would engage in “distributed global conversations” representing 140 characters at the rate of millions per second. Who would have thought that businesses would need to try to control these conversations by instituting “social policies” to curb risk? The fact is and still remains that no one thought about these dynamics because the very nature of massive human interaction was not on anyone’s radar.

Now the adoption of these technologies permeates everything and touches everyone, at least those paying attention. The word “permeates” means to spread or flow throughout; pervade. When something spreads throughout it surrounds all things and begins to capture everyone’s attention. When something begins to capture the attention of the human network the draw pulls people’s emotions, intellect, spirit and the reactions create discourse and opinions that further the discourse.

Appreciation of Innovation or Wasteful Use of It?

The human reaction to disruptive innovation falls into two categories of use, useless and useful. There is a simple, important principle at the core of disruptive innovation fueled by people’s use of something innovative and free: people innovate faster than companies and entire industries change. Because of this, most organizations are not ready to respond to the influence of people’s increased expectation for improvement. The disruption is fueled by transparent communications filled with “pearls of wisdom” that show people’s expectations. The challenge for organizations then becomes one of listening and responding in real-time with innovation that exceeds people’s expectations.

Useful application of social technology by organizations is the “key” to unlocking needed innovation expected by the customer (people), internal and external. Useless application of social technology, and its related dynamics, by organizations is the age-old reaction of stinking thinking from the neck up. In this case the swine is represented by those that “fear” innovation that comes from “pearls of wisdom” offered freely by the “markets of conversations”.
People and organizations fear innovation because they try to frame it and use it with old knowledge. Thus they use social media or view it as useless. Useless means having or being of no use and not able to give service or aid. Sounds a lot like “pearls before swine”.

Jay Deragon
The Relationship Economy
July 23, 2010

THE WORLD'S HAPPIEST COUNTRIES

By and large, rich countries are happier--and that's no coincidence.In the wake of their World Cup loss, residents of the Netherlands may be feeling depressed. But there's reason to believe they won't be done in by the agony of defeat: According to a recent poll, the country is one of the happiest in the world.Championship-winning Spain, on the other hand, was swept with euphoria and national pride, but that may have been an unfamiliar feeling. The country ranks No. 17 of 21 European countries in terms of happiness.

The fact is good times probably have more to do with the size of your wallet than the size of your trophy shelf. The five happiest countries in the world--Denmark, Finland, Norway, Sweden and the Netherlands--are all clustered in the same region, and all enjoy high levels of prosperity. "The Scandinavian countries do really well," says Jim Harter, a chief scientist at Gallup, which developed the poll. "One theory why is that they have their basic needs taken care of to a higher degree than other countries. When we look at all the data, those basic needs explain the relationship between income and well-being."Canada was high up on the list as well, tied for eighth overall (with three other countries). That handily beat the United States, which was tied with Austria for the No. 14 spot.

Read Entire Article:

http://ca.finance.yahoo.com/personal-finance/article/forbes/1720/the-worlds-happiest-countries

Francesca Levy
Forbes.com

July 15, 2010

5 BAD HABITS SABOTAGING YOUR RETIREMENT PLANS

The retirement goal for most people is to have enough money to continue their previous standard of living without working. Some retirees will also increase their living expenses a notch or two by taking trips and spending more time with family and friends. If your goal is to leave the workforce, then make sure you don't have any of these bad financial habits. Left unchecked, these financial choices can quickly derail your retirement plans.

Read entire article:

http://ca.finance.yahoo.com/retirement/article/yfinance/48/5-bad-habits-sabotaging-your-retirement-plans

Ryan Guina
US News & World Report
July 15, 2010

THE GOLDEN YEARS! TOUGH STUFF? SAVING IS EASY - KEEPING IS TOUGHER - SUSTAINING INCOME FOR 30 - 40 MORE YEARS IS THE TOUGHEST

Few Boomers and GenX Canadians have been taught, coached or mentored on the last and toughest part of the equation.........it simply doesn't come up for discussion except for a few.

For a solution developed by the Best and the Brightest in the financial industry click on the link.

http://www.weighhouse.com

Read it thoroughly, then call and we'll show you how we have taken the answers that the investment industry uses for itself and delivered it into the hands of the public.

I call it a financial MRI and Xray - all in one.

Nothing missing.

Each of our lives deserves nothing less.

Dan Zwicker, CFP

RAISING THE BAR - CANADA'S NEXT GG - DAVID JOHNSTON

JOHNSTON A MAN 'WHO HAS GREAT WARMTH'

OTTAWA - Calling him a man who "represents the best of Canada," Prime Minister Stephen Harper yesterday announced legal scholar David Johnston will be Canada's next governor-general.
Mr. Johnston, 69, the bilingual president of the University of Waterloo, is expected to assume the role on Oct 1.

"My wife and I have always believed that service--whether it is to family, community, university or country -- is our highest calling," Mr. Johnston said on Parliament Hill.

"We are proud to have this opportunity to serve Canada and our fellow citizens."

Read more:

http://www.nationalpost.com/Johnston+great+warmth/3253465/story.html#ixzz0tCSQy0Gb

Tobi Cohen And Mark Kennedy

Canwest News Service

Jul. 9, 2010

Text of David Johnston's speech

Good morning

I am very honoured to have been named Canada's next governor-general by Her Majesty the Queen, upon the Prime Minister's recommendation. This large responsibility is a sign of confidence that touches me profoundly.

My wife and I have always believed that service, whether it is to family, community, university or country, is the highest calling. And so we are proud to have this opportunity to serve Canada and our fellow citizens. One of the biggest privileges assigned to the governor-general is to meet Canadians from sea to sea.

During my time at Waterloo and McGill, I've had the good fortune to witness Canadians' creativity and ingenuity, our strong ties to our communities and to the world, as well as our diversity and our vitality. The opportunity to see these values at work across the country means a great deal to me.

The office of governor-general is an important institution, and we will do everything in our power to fulfill the needs of Canadians.

As the representative of the Queen of Canada, who is our country's head of state, I pledge to be a stalwart defender of our Canadian heritage, of Canadian institutions and of the Canadian people. In particular, I look forward to meeting with the brave men and women of the Canadian Forces.
In his book about Samuel de Champlain, titled Champlain's Dream, David Fischer describes Canada's first governor with the following: "If he did only this his entire life, he proved to have a vigour and endurance of which few could have lived up to." But it didn't end there. Champlain was a dreamer, a visionary like so many others who have many dreams. Several scholars discussed the dream he had of one day discovering the route to the Orient. Others talked of his dream in terms of colonizing New France.

But all these visions were part of a larger dream that has not been studied. This war-weary soldier had a dream of humanity in peace in a world of cruelty and violence. He envisioned a new world as a place where people of different cultures could live together in amity and concord. And this became his grand design. His dream for North America.

Thank you.

National Post

Friday July 9, 2010

CHALLENGING SOCIAL DOGMA

The marketplace of conversations is filled with social dogma — “a doctrine or code of beliefs accepted as authoritative.” Social marketing, SEO, social advertising, get twitter followers, make money online etc. and the dogma proliferates our attention and steals our time while the meaning and value becomes useless.

What does it mean to challenge the social dogma? Creative thought challenges existing dogma, instead of complying with it: to reject what is and instead creates something that isn’t.
People and organizations tend to buy into the dogma: “this is how things are done,” they think — and then they do it over and over and get the same results but at higher cost. Doing the same thing over and over and expecting different results is the definition of insanity.

Social dogma needs to be challenged or the value of social media gets diminished. Here is my list of common things we are seeing in the social space that I would consider dogma:

Social products. Most companies use social media to do the same thing they have always done, push their products in our face. Even companies that are producing social products have designed them to do what has always been done. A product isn’t innovative unless it does what has not been done. Consider Apple’s products.

Social strategy. Everyone seems to be adding the term “strategy” to their online presence. Yet few seems to have any experience thinking strategically. Strategy and strategist means to think differently because the aim of a strategy is to do things differently. What is it — really — that makes you different? Facebook created an experience and an experiment in social interaction — and that’s why its rivals are desperately playing catch up. Playing catch up is missing the point: It’s not about following Facebook. It’s about challenging the dogma of your own thinking. Will your strategy produce anything different that isn’t already being used or available?

Social distribution. Social technologies are rolling out wave after wave of portals, channels, and platforms: all new distribution mechanisms. The problem is that they quickly become the same old distribution mechanisms, with a slightly different interface. Linkedin, Facebook, Twitter and whatever else you use will eventually be challenged. The preconception that content could only be distributed in walled gardens will be torn down. As the social technology moves to more of a truly open market it will challenge anything that came before it.

Social business models. Have you noticed that publishing business models has turned upside down and inside out? Have you also noticed that all business models are being effected by all things social? Governments, organizations and people are trying to adapt to the impact and dynamics of all things social. Social media are communications and one thing is certain about communications, it will change. Change is the business model. Wasting time investing in a model for today means you have to waste more time chasing tomorrows model.

Social sales and service. Now organizations are discovering how to use social to better serve the customer and enhance sales. The art of engagement has become personal, passionate, and in real-time. The sales process has inverted where the customer is now the sales person and the process. Service has where self-service is the mantra at the moment. Group buying is reducing the cost of middlemen and technology is advancing which is enabling buyers and suppliers to connect directly. Suppliers using social to sell and service will awaken to enabling the buyer to choose what they want, when they want it and do so with seamless virtual service.

As soon as you stop challenging the social dogma your thinking begins to accept the “code of beliefs as being authoritative and definitive”. The reality is that all things social are changing everything and thus nothing will remain in a constant state. To see and create change requires you to challenge your own thinking and those who believe their own dogma.

Jay Deragon

The Relationship Economy

July 9, 2010

IN THE ARENA - TEDDY ROOSEVELT

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."

Theodore Roosevelt said those words one hundred years ago at the Sorbonne in Paris in 1910.

HAS THE FINANCIAL SERVICES INDUSTRY FAILED ITS CLIENTS TOO?

Give clients more help with savings, investing decisions

It sounds like the country’s finance ministers are coming to the realization that Canada’s public pension system needs some beefing up. The financial services industry should face up to its failure to deliver an effective alternative. At the same time, it should work to bolster private savings.

Federal Finance Minister Jim Flaherty and most of his provincial counterparts are warming to the idea of a more robust Canada Pension Plan. In the months ahead, they may agree on some expansion of the CPP, to shore up basic retirement savings, without imposing onerous new costs on employers.

At the same time, the ministers have also indicated some support for new ways to boost savings, such as multi-employer pension plans, which would be delivered by the private sector.

Although creating more ways to save is surely welcome, the financial services industry shouldn’t just be waiting for governments to create new vehicles to accomplish this goal. Rather, the industry must recognize that, to some extent, the shortfall in retirement savings represents its own failure. While the design features and limitations of existing savings vehicles can be blamed for a small part of the savings deficit, the fact that there is more than $540 billion in unused RRSP contribution room suggests that the industry has fundamentally failed its clients, too.

Canadians aren’t saving enough for the future; instead, they are consuming too much and taking on too much debt. It may be that many of these “bad” financial decisions are not due to ignorance of financial fundamentals, but are actually rational consumer responses to the products and services offered by the industry. Canadians may be discouraged from saving and investing by products that are too costly, due to hefty fees or expensive guarantees that eat up a large portion of investment returns. Poorly performing products, inadequate advice, unfair dealing and a perceived lack of investor protection all encourage people to spend rather than save.

The private-sector solution to the retirement savings problem in Canada is not to wait for policy-makers to create new marketing opportunities. The industry should be looking to improve its value proposition to clients, in terms of the products it produces and the advice it provides, while also seeking to bolster confidence generally with fair dealing, honest, up-front disclosure and greater accountability.

Read original article

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=54150&cat=25&IdSection=25&PageMem=&nbNews=&IdPub=197

Investment Executive
Insights
IE Staff
June 28, 2010

LIVE TO WORK OR WORK TO LIVE? A CULTURAL DIVIDE IN WORK ETHIC - TRADITIONALISTS - BOOMERS - GEN X

Traditionalists (aka The Silent Generation)

Born between 1927 and 1945, Traditionalists (also known as the Silent Generation) are in their 60s, 70s and 80s. About 95% of the Traditionalists are retired from the workforce. Those who remain in the workforce are at or near retirement age and many work reduced hours. Traditionalists in the legal workplace are largely aging partners, managers, senior support staff and "of counsel" to law firms.

Below are a few common characteristics of Traditionalists.

Hardworking: Raised by turn-of-the-century farmers, Traditionalists brought a strong work ethic into the factories of industrialized society. Traditionalists grew up during lean times and consider work a privilege. This generation believes you earn your own way through hard work. Traditionalists are willing put in long, grueling hours to get ahead in their legal careers.

Loyal: Traditionalists are civic-minded and loyal to their country and employer. Unlike younger generations Generation Y and Generation X, many Traditionalists worked for the same employer their entire life and are less likely to change jobs to advance their careers than younger generations.

Read entire article:

http://legalcareers.about.com/od/practicetips/a/Traditionalists.htm

Sally Kane
About.com
July 2, 2010

Baby Boomers

Born between 1946 and 1964, Baby Boomers are predominately in their 40s and 50s. They are well-established in their careers and hold positions of power and authority. This generational segment constitutes a large majority of today's law firm leaders, corporate executives, senior paralegals and legal managers. In fact, nearly 70 percent of law firm partners are Baby Boomers.
Labor statistics indicate that nearly 80 million Baby Boomers will exit the workplace in the next decade. These employees are retiring at the rate of 8,000 per day or more than 300 per hour. This unprecedented loss of skilled labor in the legal profession, consisting largely of partners, executives, senior support staff, legal managers and other legal thought leaders, may dramatically impact the legal industry.

Below are several common characteristics of the Baby Boomer generation.

Work-Centric: Baby Boomers are extremely hardworking and motivated by position, perks and prestige. Baby Boomers relish long work weeks and define themselves by their professional accomplishments. Sine they sacrificed a great deal to get where they are in their career, this workaholic generation believes that Generation X and Generation Y should pay their dues and conform to a culture of overwork. Baby Boomers may criticize younger generations for a lack of work ethic and commitment to the workplace

Read entire article:

http://legalcareers.about.com/od/practicetips/a/Babyboomers.htm

Sally Kane
About.com
July 2, 2010

Generation X

Generation X encompasses the 44 to 50 million Americans born between 1965 and 1980. This generation marks the period of birth decline after the baby boom and is significantly smaller than previous and succeeding generations.

Below are a few common characteristics of Generation X.

Individualistic: Generation X came of age in an era of two-income families, rising divorce rates and a faltering economy. Women were joining the workforce in large numbers, spawning an age of “latch-key” children. As a result, Generation X is independent, resourceful and self-sufficient. In the workplace, Generation X values freedom and responsibility. Many in this generation display a casual disdain for authority and structured work hours. They dislike being micro-managed and embrace a hands-off management philosophy.

Technologically Adept: The Generation X mentality reflects a shift from a manufacturing economy to a service economy. The first generation to grow up with computers, technology is woven into their lives. As law firms and corporate legal departments integrate new technological tools, Generation X has learned and adapted.This generation is comfortable using PDAs, cellphones, e-mail, laptops, Blackberrys and other technology employed in the legal workplace.

Flexible: Many Gen Xers lived through tough economic times in the 1980s and saw their workaholic parents lose hard-earned positions. Thus, Generation X is less committed to one employer and more willing to change jobs to get ahead than previous generations. They adapt well to change and are tolerant of alternative lifestyles. Generation X is ambitious and eager to learn new skills but want to accomplish things on their own terms.


Value Work/Life Balance: Unlike previous generations, members of Generation X work to live rather than live to work. They appreciate fun in the workplace and espouse a work hard/play hard mentality. Generation X managers often incorporate humor and games into work activities.

Read entire article

http://legalcareers.about.com/od/practicetips/a/GenerationX.htm

Sally Kane
About.com
July 2, 2010

THE ART OF THE DEAL: A ROBUST RISK MANAGEMENT FRAMEWORK IS A HYBRID OF BOTH ART AND SCIENCE - THE RESULT OF INFORMATION AND INTUITION -

AN ITERATIVE PROCESS - SUCCESSIVE APPROXIMATION

At the end of June 2009, it wasn’t unusual to see most
bond investors looking pale and nervous. After all,
they had just experienced an extremely volatile year in the
market. The last six months of 2008 had produced massive
sell-offs and the first half of 2009 turned in massive rallies.
Trying to suppress their queasiness, investors mulled over
their concerns for the immediate future. Where would
returns come from for the remainder of 2009 and 2010?
And what would be the risk or cost of that return?

The whole experience of volatility also had many
investors asking more fundamental questions about their
approach to the market: “How good is the risk management
process that my portfolio is using?” or, “How good is my
portfolio manager?” and, “What type of risk management
tools do I need to use?”
These are all valid concerns, in stable periods as well as
volatile times. And the answer to all of them lies in the art
and science of fixed-income risk management.

The science of risk management is based on a set of
tenets that have proved effective over time—tenets best
followed through a combination of strong quantitative
risk management systems and a robust investment
process. Measurement techniques that are informative, and
thorough, consistent selection and divestment processes
are simply fundamental to portfolio building.

The art lies in interpreting market conditions, in reading
what the market is saying and acting on it. In this, the past
year’s volatility has been very instructive. The sell-offs of
late 2008 and the subsequent rallies of early 2009 provide
some useful lessons regarding risk management.
To understand how combining the art of interpreting
markets and the science of the selection of individual
securities can help in risk management, let’s review the
turbulent events of 2008/09. We’ll examine them through
the prism of different quantitative measurements, some of
which led to mistakes, and others to sounder decisions.

How Excess Returns Can Fool Models

The first area we are going to look at is excess returns
and how the variance in those returns in recent times led
investors astray. The measurement of excess returns looks
at the degree to which individual securities or sectors of the
bond market underperform or outperform a theoretically
riskless investment, in this case U.S. government bonds.
To take one example, in the second half of 2008, U.S.
corporate bonds underperformed U.S. government bonds
by 20%, the worst negative excess return we have ever
seen. During the first half of 2009, however, U.S. corporate
bonds outperformed U.S. government bonds by 12%. For
the 12-month period then, corporate bonds had an overall
negative excess return of about 8%, calculated simply.

Unfortunately, most corporate bond investors keyed
their risk management models to what happened before
the second half of 2008, with the result that the models
underestimated risk. Had the models been keyed to the
more tail-extreme excess returns experienced between July
2008 and June 2009, risk management would have been
much more closely aligned with what actually happened
in the marketplace. In other words, if these investors
had modified their models (the science) to allow for the
potential behaviour of the market in the first half of 2009
(the art), they might have had better results and certainly
would have enjoyed better risk estimates.

Read entire article:

http://www.investmentreview.com/files/2010/04/The-Art-of-the-Deal.pdf

Jeff Moore
Canadian Investment Review
Winter 2009

SEC WILL IMPOSE FIDUCIARY STANDARD ON BROKERS: BARNEY FRANK

US Congressman Barney Frank makes prediction moments before House passes financial-reform bill; Senate up next

The overhaul of the U.S. financial system took a big step toward becoming law Wednesday evening when the House passed reform legislation 237-192. As a result, it's also looking more likely that brokers may soon be held to the same standard of care as investment advisers.

Indeed, just before the House vote, Rep. Barney Frank, D-Mass., highlighted the fiduciary duty section of the bill — a proposal Mr. Frank championed during two weeks of House-Senate negotiations on the final legislation.

The bill empowers the Securities and Exchange Commission to impose the same fiduciary duty on broker-dealers and insurance agents currently met by investment advisers. If the regulator chooses, it can require anyone providing personalized investment advice to retail clients to act in the client's best interests and to disclose any conflicts of interest.

Read entire article:

http://www.investmentnews.com/article/20100701/FREE/100709995/-1/INDaily01

Mark Schoeff Jr
Investment News
July 1, 2010

CANADA'S GREEDIEST MAN? REALLY? BY WHOSE STANDARD? THE RULES WERE NOT WRITTEN FOR HIS UNIQUE ACHIEVEMENTS

Frank Stronach’s big payout

For much of the past decade, the annual meetings of auto parts giant Magna International followed a rhythm as familiar as it was frustrating: a handful of shareholders would stand up and express outrage at founder and chairman Frank Stronach’s hefty annual pay packages; the Austrian-born Stronach, with the squinted eyes of a gunslinger at high noon, would respond by effectively telling everyone to go to hell. In 2003, for example, Stronach bluntly told reporters “I should get more” when asked whether he deserved the $58.1 million he pocketed a year earlier.

The following year he offered his personal philosophy on why company founders should continue to receive rich pay packages even if they’re no longer occupying the job of CEO—it helps foster an entrepreneurial spirit, he explained­—but not because he felt the need to justify himself to critics. “I could say, ‘Look, if you don’t like it, sell your shares. It’s a free country.’ ”

Read entire article:

http://www2.macleans.ca/2010/06/28/canadas-greediest-man/

Chris Sorenson
MACLEANS.CA
June 28, 2010