By Staff | October 31, 2005 | Last updated on October 31, 2005
12 min read

(November 4, 2005) York University’s Schulich School of Business has teamed up with The Knowledge Bureau to create a pair of education programs for professionals in the tax and financial services industries.

The Tax Services Specialist Program covers Canadian income tax preparation and planning for individuals, corporations and trusts, while the Investment Services Specialist Program takes a holistic approach to investment portfolio strategies, wealth preservation, business and retirement planning and the use of trust and insurance strategies.

Both programs can be used toward Masters Certificate from Schulich Executive Education Centre and the designation as Distinguished Financial Advisor (DFA). The programs begin in May 2006.

“The Knowledge Bureau DFA programs are a good fit with our high academic standards and innovative approaches,” said Elaine Gutmacher, associate director of operations at the Schulich Executive Education Centre. “We educate leaders who understand the complete picture and the triple bottom line of economic, social and environmental impact management.”

“This is a partnership that raises the bar on continuing professional development in wealth management,” adds Knowledge Bureau president Evelyn Jacks. “Confident interpretation of the most current trends in tax, investment, retirement and estate planning is a requirement for astute advisors in order to get better results for their clients.”

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Goodale to deliver economic update

(November 4, 2005) The federal government announced today that Finance Minister Ralph Goodale will deliver an economic and fiscal update on November 14.

Goodale will appear before The House of Commons Standing Committee on Finance In Ottawa and take questions from committee members following his presentation.

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B.C. regulator bans fraudster

(November 4, 2005) The British Columbia Securities Commission has banned a B.C. woman who admitted to defrauding investors by getting them to invest $765,000 US in a non-existent company.

Dianne Oslund cannot trade securities, nor be a director or officer of any publicly-traded firm for a 15-year period.

In a settlement agreement, she admitted to defrauding investors, unregistered trading and illegally selling securities without a prospectus.

The case dates back to 2000, when Oslund and Michael Savage sold shares in Savage, a non-existent corporation, to eight investors from Alberta and the U.S.

Oslund says she received some of the $765,000, but did not return any funds to investors. The allegations against Savage have yet to be settled.

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Mackenzie proposes Keystone fund merger

(November 4, 2005) Mackenzie Financial is asking unitholders to approve a merger of the Keystone AIM Trimark Canadian Equity Fund with the Keystone Bissett Canadian Equity Fund.

The merger was proposed following a strategic review of the funds. Mackenzie says, and is part of a series of product and management initiatives undertaken by the firm over the last few years.

Details will be mailed to the fund’s untiholders in February 2006 with a special meeting scheduled for March 17.

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Bond markets to close on Remembrance Day

(November 4, 2005) The IDA is recommending that Canada’s domestic bond market be closed on November 11, Remembrance Day, but is reversing a prior suggestion for an early closure on November 10.

The IDA’s capital markets committee suggests that markets remain open for a a full trading day on November 10, since the U.S. treasury department will be conducting a 10-year note securities auction on that date — an event that would normally be expected to reflect an active Canadian market.

U.S market regulators have also withdrawn their previous recommendation for an early close on November 10.

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CIBC World Markets scales back trust weighting

(November 3, 2005) The uncertainty in Canada’s income trust market has led CIBC World Markets to recommend lowering its weighting in the sector by two percentage points.

At the same time, the investment banker is raising its equity weighting by 2%, noting that October’s decline in the TSX energy sector represents a buying opportunity for investors.

“Even with $60 per barrel oil, the TSX is a good 10-15% undervalued relative to fair cash value,” CIBC says in its latest Canadian Portfolio Strategy Outlook. “We remain heavily overweight in energy stocks.”

CIBC’s recommended portfolio assets mix now stands at 52% equities, 37% bonds, 8% trusts and 3% cash.

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Manulife reports higher Q3 profits

(November 3, 2005) Despite a nearly $200 million charge related to the effects of Hurricane Katrina, Manulife Financial posted a $746 million profit in the third quarter, up 5% from the same period last year.

Earnings per common share increased by 6% and total premiums and deposits reached a record $15.7 billion.

“The solid results reported in the third quarter reflect the benefits of our diversification and scale,” said Manulife CEO Dominic D’Alessandro. “I am particularly pleased by the sales levels achieved across our wealth management businesses and in our U.S. individual insurance operations.”

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Hurricanes no major threat to U.S. economy

(November 3, 2005) The series of hurricanes that recently hit the southern U.S. will dampen economic growth, but only in the short-term, the Conference Board of Canada says in a new report.

“Real GDP will decline in the second half of 2005 because of the severe hurricane damage and the spike in energy prices, which will cut into consumer spending,” says Kip Beckman, author of the report. “Much of the loss, however, will be made up in 2006 through the rebuilding efforts, as insurance money and government assistance is delivered to the affected region.”

The board expects the American economy to expand 3.6% this year, dropping to 3.1% in 2006, mostly due to higher energy prices. On the plus side, healthy gains in employment and investment spending will strengthen the overall U.S. economy.

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Scotia to index hedge fund performance

(November 2, 2005) Scotia Capital has announced a new performance index for hedge funds, which will be launched in 2006. The Scotia Capital Canadian Hedge Fund Performance Index will offer a monthly snapshot of the Canadian hedge fund scene.

“This kind of initiative would not have been possible five years ago,” said Colin Bugler, managing director of Scotia Capital’s prime brokerage operation. “It is only recently that the community of Canadian managers has grown to a size that makes this kind of index meaningful. People want Canadian managers on their radar screens.”

The index will start with broad industry coverage across various hedge fund strategies, but will eventually break out sub-indices based on each strategy. Scotia also plans to track relatively new managers separately, until they meet minimum track records for inclusion to the overall index.

“AIMA Canada applauds the launch by Scotia Capital of the Scotia Capital Canadian Hedge Fund Performance Index which represents an important development for the Canadian hedge fund industry,” added James McGovern, chairman of Alternative Investments Managers Association (AIMA), Canada. “The new index will boost the industry’s profile, both domestically and internationally, as well as increasing investor awareness of the tremendous potential of the Canadian hedge fund marketplace

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Acuity launches dividend fund

(November 2, 2005) Acuity Funds has launched a new dividend fund, in response to investor demand for income investments.

The fund will invest in a mix of dividend-paying common and preferred shares, with preferred shares making up no more than 20% of the portfolio. The fund can invest in both Canada and abroad. The initial annualized distribution will be 2.4%, or about 6 cents a quarter per unit.

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CNQ welcomes new dealer

(November 2, 2005) CNQ has announced National Bank Financial has joined the exchange as a participating dealer. CNQ now has 20 dealers participating directly.

The upstart stock exchange recently announced plans to offer an alternative trading platform for securities listed on the TSX.

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2006 called year of the downgrade

(November 2, 2005) Manufacturers could be in for a rough year in 2006. Although global growth will remain healthy in the year term, Export Development Canada (EDC) says it will moderate significantly through 2006.

In the EDC semi-annual Global Export Forecast, Stephen Poloz, senior vice president of corporate affairs and chief economist says “economic growth and export sales are moderating and will moderate further in 2006. Interest rates are rising and they will rise further. The dollar is at a very high level and is likely to remain high unless there is a sudden correction in oil prices.”

He says strong demand for resources has lead to a surge in prices, notably in energy and base metals. This rise has also boosted measured inflation, raising concerns about a broader acceleration in price increases. Core inflation so far has remained relatively stable outside of the energy sector. Going forward, EDC expects the Canadian dollar will drop, but remain above 80 cents US.

“This combination is a recipe for a mild dose of Dutch disease, which sees non-energy sectors being squeezed as the energy sector booms,” says Poloz. Dutch disease was first observed in the Netherlands in the 1960s when the discovery and exploitation of new natural gas fields lead to a decline in the production of manufactured goods. In this scenario, the country’s currency rises making manufactured goods less competitive, leading to a drop in non-resource exports.

“However, the good news is that this is also a recipe for productivity growth, with the strong dollar dramatically reducing the cost of purchasing new equipment and globalizing supply chains,” says Poloz.

EDC is forecasting 4.2% global economic growth in 2005 and 4.1% growth in 2006, down noticeably from 5.1% in 2004. In Canada, economic growth is forecast to remain steady at 2.8% in 2005 and 2.9% in 2006. Economic growth in the US is forecast to slow to 3.5% in 2005 and in 2006, down from 4.2% in 2004.

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GE Money offers non-prime mortgages

(November 2, 2005) GE Money Canada, the Canadian consumer lending unit of the General Electric Company launched a new business today, offering residential mortgages through brokers in Ontario.

The company says it plans to expand into other Canadian markets as well. The non-prime mortgages are directed at consumers who may find it difficult to qualify for traditional, bank mortgage loans such as those who are self-employed, new to Canada or those who have “less than perfect” credit.

The online pre-qualification tools and automated approvals approach was tested by select Ontario mortgage brokers in June. “Our testing showed that the marketplace is receptive to this business model,” says Rick Lunny, president of GE Money Mortgages. “We do not see this product as competing with Canada’s major chartered banks. In fact, we see opportunities to partner with banks to help them enhance their relationships with non-traditional customers.”

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Wellington West announces U.S. acquisition

(November 1, 2005) Wellington West Capital is expanding south of the border. This month, the Winnipeg-based wealth management boutique will acquire One Capital Management, a Woodland Hills, Calif.-based money management firm that targets primarily high-net worth families and has $450 million US in assets.

“We hadn’t planned on targeting the U.S. for another three years but this opportunity prevented itself so we changed our business plan,” said Charlie Spiring, Wellington West’s chairman and CEO.

The acquisition gives Wellington West exposure to more investments. For example, a single portfolio at One Capital can feature up to 14 asset classes, notes Patrick Bowen, One Capital’s director of global asset allocation.

And having a U.S. firm means advisors will be better able to help clients dealing with cross-border issues, Bowen adds. “We can ease the transition for them.”

The purchase price was not released. The deal is expected to close in mid-November, pending regulatory approval.

Wellington West also announced the purchase of Barlow Capital, a $100 million investment counseling firm based in Victoria. Spiring says acquiring Barlow Capital will open up a new channel to Wellington West advisors — managing discretionary accounts.

With client assets now at $6.2 billion, Wellington West hopes to grow to $30 billion within the next five years, Spiring says.

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Fed bumps rates to 4%

(November 1, 2005) In an effort to keep a lid on inflation, the U.S. Federal Reserve today raised its key overnight lending rate by a quarter point, to 4%. It was the Fed’s 12th consecutive 25-basis point increase, stretching back to June 2004.

“The cumulative rise in energy and other costs have the potential to add to inflation pressures; however, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained,” the Fed said in a statement.

The Fed added that “accommodation can be removed at a pace that likely to be measured,” suggesting further rate hikes are in the cards.

Economists believe that rates could rise to 4.5% by the time Fed chair Alan Greenspan retires in January, 2006. The Bank of Canada’s key lending rate is now at 3% with its next announcement set for December 6.

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CFA Institute introduces new GIPS certificate

(November 1, 2005) The CFA Institute has launched a new online certificate program designed to test and recognize proficiency in applying analytical techniques in investment performance evaluation.

The self study Certificate in Global Investment Performance Standards (CGIPS) program is intended for compliance officers, regulators, performance measurement software developers, investment managers and consultants, as well as Global Investment Performance Standards (GIPS) verifiers.

The two-part exam tests candidates’ knowledge of the CFA Institute’s code of ethics and standards of professional conduct, fundamentals of calculating and analyzing returns at the portfolio and total fund levels, advanced techniques of performance evaluation and knowledge of how to apply GIPS standards.

The principles exam will be offered first in both March and April 2006. Those candidates who pass that exam may take the expert level test in September and October 2006. There are no enrollment prerequisites.

The CFA Institute expects 1,000 candidates will enroll for the first exam. Once candidates have successfully completed both, they are required to become members of the CGIPS Association which oversees certification, membership and professional conduct policies.

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Charitable donations rise across Canada

(November 1, 2005) Both the number of people giving to charity and the amount they contributed rose to the highest levels ever in Canada in 2004. Canadian taxpayers claimed more than $6.9 billion in donations for the 2004 tax year, Statistics Canada reports, 6.3% higher than donations claimed in 2003.

The median donation in 2004 was $230. The highest increases occurred in the Yukon, Alberta, Northwest Territories and British Columbia. Among census metropolitan areas, tax filers in Abbotsford, British Columbia reported the highest median donation of $540. Toronto came in second with a median of $320, slightly ahead of Saskatoon at $310. Statistics Canada says it is the second year and a row that these three cities reported the highest donations.

Across the country, about 25% of all taxpayers claimed charitable donations, led by Manitoba and Ontario where almost 29% and 28% of tax filers respectively declared a donation.

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TD adds to wrap program lineup

(November 1, 2005) TD Asset Management has announced the launch of a premium series for its wrap program, offering a lower-cost investment alternative, with MERs capped at least 50 basis points lower than the existing investor series TD MAP portfolios.

“We are pleased to add the new Premium Series portfolios to the TD MAP line-up,” said Tim Pinnington, President, TD Mutual Funds. “With the introduction of a Premium Series, investors have a more cost-effective alternative to investing and managing a diversified portfolio.”

TD also announced the expansion of its F-class fund line-up, which now includes the popular TD Monthly Income Fund, TD U.S. Small Cap-Equity Fund and TD Income Advantage Portfolio.

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U.S. regulator fines two RBC units

(October 31, 2005) The National Association of Securities Dealers (NASD) has fined two U.S. divisions of RBC for charging excessive markups or markdowns in high-yield bond trades. RBC Capital Markets must pay a $2 million fine as well as $180,000 in compensation to clients. RBC Dain Rauscher was fined $1 million and will make more than $158,000 in restitution payments.

Two U.S. firms were also fined, one of which has since closed up shop. The surviving three firms involved in the investigation are required to revise their written supervisory procedures for high yield bond sales and purchases within 60 days.

NASD rules require that firms sell all securities, including corporate high yield debt, at fair prices, with markup and markdown not exceeding 5%. In 2003, RBC Capital Markets charged markups that ranged from 5.3% to 14.3% on five pairs of trades. During 2004, RBC Dain Rauscher charged markups ranging from 5.5% to 8% on six pairs of trades.

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Dreams change post retirement

(October 31, 2005) The high hopes workers have for their retirement often take a backseat to reality when they actually get there, according to a survey commissioned by Desjardins Financial Security.

Post-retirement travel ranks only third on a list of priorities with 24% saying it’s their number one dream. Health was ranked first, at 26%, and another 26% said they had no dreams at all.

“This survey tells us there is a disconnect between what workers want, plan and dream of and what retirees are telling us about their lifestyle,” says Monique Tremblay, senior vice-president of savings and segregated funds for Desjardins Financial Security. “Travel might be nice in theory. But in retirement, being in good health is much more important as it is a prerequisite to realizing any dreams.”

Seventy-eight per cent of workers surveyed expressed confidence that their retirement goals were attainable. Forty per cent of these workers claim that this success is the result of sound financial planning and another 27% credit their savings mentality.

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Sun Life teams with CI on seg funds

(October 31, 2005) Sun Life Financial has teamed up with CI Investments to launch SunWise Elite Segregated Funds, offering principal protection with a diverse lineup of funds representing a full range of asset classes, portfolio managers and investment styles.

“SunWise Elite carries on the tradition of flexibility and choice that makes SunWise one of the most popular segregated fund programs in Canada,” said Peter Anderson, CI’s president and CEO. “With 39 funds from leading mutual fund companies and three different principal protection options on all funds, investors and their advisors can develop an investment strategy and set their level of protection to create a solution tailored to their individual needs.”

The firms tout SunWise as being the only seg fund program in Canada to provide a 100% maturity and 100% death benefit guarantee option on all available funds.

The launch of this offering closes the existing SunWise contract to new investors, though existing investors may continue to contribute to their policies.

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The staff of have been covering news for financial advisors since 1998.