Regulatory arbitrage impairs investor protection

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 .

How much does the Financial Services Industry add to GDP ?

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

What is my risk tolerance?

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).

ALERT :Equity Crowdfunding

Canadain regulators are about to approve Equity Crowdfunding, allowing small investors to invest in startup companies.A whole new set of considerations and risks come into play. Read our ALERT

Kenmar Associates response to FCAC Consultation on Financial Literacy for Seniors

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.

Building a robust investment advice process: Vanguard

If this process  was followed ,OBSI would be able to shut down. Compare this to the type of advice you receive. Read the paper .

Investor risk profiling :Vanguard

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.

Behavioural finance Guide : Vanguard

A must read for every retail investor. Explains how emotions can impair investment decisions.Written in plain language. Read the Guide

PriceWaterhouse Coopers Report on the Canadian advice Industry

The Report Sound Advice :INSIGHTS INTO CANADA’S FINANCIAL ADVICE INDUSTRY

A PwC study on Canadian small and medium-sized businesses  providing financial advice (  July 2014 ) was sponsored and funded by the lobbyist ADVOCIS. It comes to the same conclusion as ADVOCIS - any dramatic regulatory reforms will reduce the number of  advisors and small investors will have less access to advice. The document contains numerous references but oddly none from investor advocates FAIR, Kenmar Associates or SIPA, The core issue of best interests is not in our view dealt with .Take a read and form your own opinion Read the paper here

PriceWaterhouseCoopers Report on Cdn. Advice industry

OPEN LETTER to Regulators on Protection of Senior Investors

Article lists our recommendations for enhanced regulatory actions to protect elderly investors.Given the rapid growth of the seniors population , we are attempting to inspire a sense of urgency for regulatory reforms.Read the OPEN LETTER