Thursday, July 24, 2014
Tuesday, July 22, 2014
This excellent paper ( 20 pages ) explains risk profiling in detail and in plain language . It is prepared by a leading firm in the business, Australia's Finametrica. A MUST read
Wednesday, July 16, 2014
This is a very interesting piece of research Read the paper
Kenmar responded to the IIROC request for Comments. Proposed Personal Financial Dealing amendments: Summary of nature and purpose of proposed
Rule We do not support the proposal due to the potential conflicts of interest and potential for abuse. Read our Submission
Monday, July 14, 2014
Study by Schulich professor reveals securities fraud still largely undetected in Canada and the U.K. | Schulich News & Events
Statistics reporting litigated cases of fraud on an exchange-by-exchange basis are not
readily available to investors. This paper introduces data from three countries with multiple
exchanges operating under different listing standards, – Canada, the United Kingdom and the
United States – to show litigated cases of fraud significantly vary by country, and the different
exchanges within the country. Comparisons are also made to Brazil, China and Germany to
assess out-of-sample inferences. The data examined suggest there are significant differences in
the nature of observed fraud across exchanges within the United States; by contrast, outside the
United States there appears to be a comparative lack of enforcement. The data also suggest
policy implications for the ways in which fraud should ideally be reported to improve investorknowledge, market transparency and market quality.. Read the study
Sunday, July 13, 2014
Investors face arbitrage issues they may not be aware of. Mutual fund dealers work under different rules than investment dealers ; banks and insurance companies have their own sets of rules . The investor protections you have varies greatly between jurisdictions . Read this ALERT to better understand the threats you face .
From a U.S. research study:
“The finance industry of 1900 was just as able as the finance industry of 2000 to produce bonds and stocks, and it was certainly doing it more cheaply. But the recent levels of trading activities are at least three times larger than at any time in previous history. Trading costs have decreased (Hasbrouck (2009)), but the costs of active fund management are large. French (2008) estimates that investors spend 0.67% of asset value trying (in vain, by definition) to beat the market.In the absence of evidence that increased trading led to either better prices or better risk sharing, we would have to conclude that the finance industry's share of GDP is about 2 percentage points higher than it needs to be and this would represent an annual misallocation of resources of about $280 billions for the U.S. alone.” Read Rethinking Finance
Risk tolerance is a key consideration when making investment decisions. Try completing this risk tolerance questionnaire from Vanguard Note that other aspects of risk assessment include " Do I need to take any risk? and your Risk Capacity , the ability to absorb losses without destroying your financial plan ( your financial health).
Saturday, July 12, 2014
This is our response to the FCAC regarding financial literacy considerations for seniors. We explain that a holistic approach is required including changing some aspects of the benefit programs. We also stress the need for more Streetproofing materials .We have to post it because the FCAC's opaqueness Policy prevents them from publicly posting Comment letters received . Read the submission here.
If this process was followed ,OBSI would be able to shut down. Compare this to the type of advice you receive. Read the paper .
Canadian investment dealers have a long way to go to reach an acceptable level of client risk assessment. This should be a priority. More importantly, dealer Rep NAAF's and processes need to be overhauled to deal with an increasingly demanding public and of course senior demographics. And on top of that we still have the Best interests issue to deal with . The industry needs to get to portfolio risk profiling and unglue itself from its exclusive focus on product risk. In other words, the prevailing regulatory system still says that if the client is "medium risk" as an overall profile then they cannot have any allocation - however small - in any product rated as more than "medium risk". So the product risk and how regulators look at portfolios have to change in tandem. And that's unlikely to happen anytime soon. That's why investor advocates keep on their tireless mission. Read the article and get a better understanding of risk.