This web site is dedicated to investment fund investor education and protection. The multi-billion fund industry plays a key role in the savings and retirement plans of millions of Canadians. Many industry practices provide beartraps for the unsuspecting investor and securities regulations have not kept up with the pace of change in the industry.
Monday, May 5, 2014
The Three Dimensions of Risk
This article on risk connects all the dots: Risk assessment , Risk Capacity and the Need for Risk. Respected Blogger Jean Lesperance does an excellent job of explaining the relationships. This is an article well worth reading. Read the full article
Thursday, May 1, 2014
Market Structures and Systemic Risks of ETF's
Crisis experience has shown that as the financial intermediation chain lengthens, it becomes complicated to assess the risks of financial products due to a lack of transparency as to how risks are managed at different levels of the intermediation chain. Exchange-traded funds, which have become popular among investors seeking exposure to a diversified portfolio of assets, share this characteristic, especially when their returns are replicated using derivative products. As the volume of such products grows, such replication strategies can lead to a build-up of systemic risks in the financial system. This article examines the operational frameworks of exchange-traded funds and identifies potential channels through which risks to financial stability can materialise. Read the full paper
IIAC Report on Seniors
The report identifies why it is important for investment dealers and advisors to remain vigilant when dealing with their senior clients. These factors include:
With few exceptions, seniors have limited ability to replenish capital losses through future income from other sources;
Extra caution needs to be exercised when dealing with seniors engaged in higher risk investments or strategies, or who deplete capital through withdrawals that exceed returns;
Unrealistic client expectations for investment income which is inconsistent with a low risk tolerance;
Senior clients’ fears and uncertainty about their future financial situation and life circumstances can be strong behavioural influences in their investment activities; and
Seniors are more susceptible to physical (e.g. hearing, vision) and cognitive (e.g. memory, context) impairments which need to be accommodated.
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