By Staff | December 28, 2005 | Last updated on December 28, 2005
7 min read

(December 30, 2005) Oppenheimer Holdings, a Toronto-based brokerage whose main operations are in the U.S., said it will pay US$4.4 million to settle regulatory probes into money laundering and supervisory failings with both the New York Stock Exchange and the National Association of Securities Dealers.

The probes stemmed from a period of rapid expansion of Oppenheimer & Co., its primary operating subsidiary, between September 2001 and June 2003. During that time the company acquired four firms, but Oppenheimer failed to promptly install the procedures and management from its larger businesses into the acquired firms. As a result, according to the settlement with the NYSE and the U.S. Treasury Department, the acquired firms demonstrated inadequate implementation of policies, inadequate staffing and training in its anti-money laundering area, and inadequate filing of suspicious activity reports.

According to the firm, none of the matters covered in the settlement resulted in any loss to clients. There are still some outstanding regulatory issues between Oppenheimer and the NYSE and NASD such as the mutual fund market timing matter.

More problematic, from the firms point of view, is the remaining NASD issues involving the company’s response to the industry-wide mutual fund breakpoint survey in 2003. After a review of the actual breakpoints applied for the period 2001 through 2005, Oppenheimer has returned approximately US$450,000 in breakpoint credits to customers. It has also revised and enhanced its procedures for determining applicable breakpoints.

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Higher term deposit rates seen as unfair: survey

(December 30, 2005) More than 60% of Canadians feel it is unfair for wealthier investors to receive preferential rates on their term deposits, according to a survey conducted for Coast Capital Savings Credit Union.

The survey conducted by Ipsos Reid of 1,270 Canadians 18 and older also found women and households with income of $30,000 to $60,000 are the most likely to think rate disparities as being unfair.

Canadians understanding of term deposits — an important investment vehicle during RRSP season — seems to be lacking. Only 45% of Canadians are aware that rate on term deposits is negotiable whereas 70% know they can negotiate the rate on a mortgage.

Younger Canadians are significantly less aware that they can negotiate term deposit rates with financial institutions. Only about a third of Canadians between the ages 18 to 34 said they knew these rates were negotiable versus 41% of those aged 35 to 54 and 58% of those aged 55 and above.

“It tells financial institutions we need to take a closer look at how we determine term deposit rates, beyond the current practice where someone investing $100,000 can negotiate a far better rate than someone investing $5,000,” says Lawrie Ferguson, senior vice-president of marketing for Coast Capital Savings in Surrey, B.C.

In general, many also dislike the negotiation process, although women hate it more with 61% saying they dislike the process compared to 55% for men.

“Anything financial institutions can do to make this less daunting will be of great help to consumers,” says Norm Krannitz, Coast Capital Saving’s vice-president of treasury.

Advisors can help their clients by telling them they can always ask for a better rate from a financial institution. If a client doesn’t have time to shop around, the better option might be to choose a flexible investment vehicle that can be moved if a better rate presents itself in the future. And finally, clients with several small investments are better served if they lump these investments together, since this will increase their negotiation power and their chances of getting a better rate.

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Cervus Financial Group chair resigns

(December 30, 2005) Burt Napier, the chairman of Cervus Financial Group announced his resignation on Friday.

Cervus, a financial services company dedicated to providing mortgages through select mortgage brokers, said Napier is stepping down for health reasons. Napier took a leave from his active duties with the company in October while he underwent surgery.

The company’s remaining directors will takeover his duties until a new chair is named.

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Overlord founder Marcel Tremblay dies

(December 30, 2005) Marcel Tremblay, founder of Overlord Financial and founder of Enerplus, Canada’s first income trust, died on Dec. 29, 2005.

Tremblay was the chairman, president and CEO of Overlord, in which he held a 45% stake. When Tremblay founded Enerplus its assets were initially valued at $9.1 million and sold in 2000 for $2.5 billion.

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CI appoints new managers to replace Hodson

(December 29, 2005) CI Investments says the company has appointed Epoch Investment Partners and QVGD Investors to manage a number of the company’s small cap portfolios following Peter Hodson’s departure.

Leigh Pullen and Joe Jugovic of QVGD have been named lead managers on the Signature Canadian Small Cap Corporate Class fund while Bill Priest of Epoch Investment Partners has been appointed lead manager of the $221-million CI Explorer Fund.

Along with the change, CI renamed the $64-million Signature fund, calling it the CI Can-Am Small Cap Corporate Class and modified the fund’s investment strategies to allow managers to invest up to 49% of the fund’s assets in U.S. and international small cap companies. It also changed the fund’s benchmark to a blended benchmark made up of the S&P/Citigroup Canada Extended Market Index and the S&P/Citigroup U.S. Extended Market Index (in Canadian dollars).

QVGD has also been named portfolio advisor to the small cap portion of the Select Canadian Equity Managed Corporate Class, a multi-manager, multi-style mutual fund that will be available for purchase on Jan. 3, 2006, as part of the Portfolio Select Series investment program.

Changes to the CI Explorer Fund also affect the CI Explorer Corporate Class, CI Explorer Segregated Fund and Clarica MVP Growth Fund. Other assets held in multi-manager funds that were formerly managed by Hodson are being reallocated to other managers.

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Industrial Alliance extends Clarington purchase offer

(December 29, 2005) Industrial Alliance Insurance and Financial Services announced today that it will extend its purchase offer for outstanding Clarington Corporation shares from Dec. 28 to 5 p.m. EST on Jan. 10, 2006.

The company has acquired approximately 91.85% of issued and outstanding Clarington shares. Combined with common shares already held by the company, Industrial Alliance controls more than 95% of Clarington’s outstanding common shares.

“The Clarington team will allow us to achieve two of our key objectives: to become a scale player in the investment fund sector and obtain a national platform,” says Yvon Charest, president and CEO of Industrial Alliance.

The company presented its initial offer to purchase all of Clarington’s issued and outstanding common shares back in November. The offer was amended at the beginning of December when the company set the purchase price at $15.00 per common share for each Clarington share.

Shareholders could elect to receive either the cash amount, or roughly half of an Industrial Alliance common share in exchange for each Clarington share or a combination of both.

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Poll measures Canadian’s RRSP intentions

(December 28, 2005) For many Canadians, the importance of making an RRSP contribution is on par with starting an exercise program. The RBC 15th annual RRSP poll asked survey respondents to rank six different activities to determine which they would get to sooner rather than later.

On a scale of one to 10, where one means putting it off as long as possible and 10 means getting to it as quickly as possible, 41% of survey respondents said they will most likely get around to making an RRSP contribution or starting an exercise routine in the New Year. Both activities came in second to filing a tax return or going to the doctor. Activities that came in lower on the list of priorities included starting a diet or cleaning the oven.

“Following a fitness routine ins not unlike saving for retirement,” says David Richardson, vice president of RBC Asset Management. “The key for both a fitness program and a retirement savings plan is to start now, stay disciplined and keep at it.”

Among those surveyed, 66% already have an RRSP. Of those, 74% plan to contribute or have already made contributions for the 2005 tax year.

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Consumer confidence rises in December

(December 28, 2005) A recent Decima-Investors Group survey, modeled after University of Michigan’s Index of Consumer Sentiment, found that Canadians are notably more confident than their U.S. counterparts for the first time in five years of comparable measurements.

The Decima survey of 2,018 adult Canadians included five questions that measure perceptions of current and future economic conditions. Negative sentiment dropped sharply for the month, and all five components of the survey showed improvement.

“The rebound in consumer confidence in Canada is good news, but not all that surprising,” says Debbie Ammeter, vice president of advanced financial planning at Investors Group. “Rising energy prices made a direct and negative impact on Canadians this fall. Once those prices began to retreat a little, confidence bounced back up to a more typical level. The basic elements of the Canadian economy continue to perform well and Canadians obviously see little to be concerned about in the near future.”

Overall, the index of Canadian consumer sentiment rose 9.7 points during the quarter with Manitoba, Saskatchewan and Atlantic provinces registering the largest gains, compared to an overall gain in the U.S. of 4.7 points, as published by the University of Michigan.

Consumer confidence numbers reported by the U.S. Conference Board meanwhile, show the index moved to its highest levels since those reported before Hurricane Katrina. According to reports, the consumer confidence index improved to 103.6 in December from a revised 98.3 in November. The index measured 105.5 in August, just before Katrina hit, sending energy prices soaring.

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Morningstar reviews Fidelity fund

(December 28, 2005) Morningstar Canada analyst, Brian O’Neill’s view on the Fidelity Canadian Opportunities Fund is available online today at Morningstar Canada’s website.

In his review, O’Neill discusses the fund manager’s style, diversification strategies, the fund’s holdings and returns and the manager’s outlook for the Canadian dollar.

“The fund’s skipper, Maxime Lemieux, learned the business Alan Radlo’s way, having been taken under the veteran manager’s wing straight out of university 10 years ago,” writes O’Neill. “With one of Fidelity’s young rising stars at the tiller, this small to mid-cap GARP offering is well worth watching, although we think the number of holdings could be tightened up a bit.”

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