By Staff | September 13, 2004 | Last updated on September 13, 2004
7 min read

(September 17, 2004) The Alberta Securities Commission has issued a lifetime ban against a mutual fund salesperson who falsified documents and misappropriated client funds. Stewart Showers, who was convicted in court earlier this year, was also ordered to pay $10,000 in investigation costs.

“Showers deceived mutual fund clients as to the performance of their accounts,” the ASC panel said in its decision. “He extracted money from some of his clients and reapplied much of that money to the accounts of other clients to sustain the deception.”

Showers worked for Investors Group in Calgary from 1986 until he was fired in 2001. He was convicted of fraud earlier this year and received a conditional sentence of two years and was ordered to pay more than $280,000 in restitution to Investors Group, who had repaid the client losses.

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Ottawa introduces income tax amendments

(September 17, 2004) Ottawa has released a package of draft amendments to the income tax act included in this year’s federal budget.

The changes include accelerating to 2005 the increase in the small business deduction limit to $300,000, extending the carry-forward period for business losses to 10 years and eliminating the deductibility of fines and penalties.

Conspicuously absent from the package is a proposal to limit pension funds’ investments in income trusts, which was “suspended for further consultation” following complaints from the pension industry.

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Farm advisor group appoints new sponsors

(September 17, 2004) Two advisors from CIBC Wood Gundy have been named as provincial sponsors for the Canadian Association of Farm Advisors in Alberta.

Hugh McGillivray, director and vice president of CIBC Wood Gundy, has been a financial consultant with CIBC since 1983. Todd Poland is an investment representative who has worked with McGillivray for more than five years.

The Canadian Association of Farm Advisors is a non-profit group dedicated to helping farmers by increasing the skills and knowledge of farm advisors.

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Mackenzie and Great-West Life team up on new seg funds

(September 16, 2004) Mackenzie Financial, M.R.S and Great-West Life Assurance today launched five new portfolio segregated funds, branded under the Keystone name.

The funds, available through independent insurance-licensed advisors, combine the diversification and multi-managed features of Keystone Funds with the protection that seg funds offer, the companies said in a statement today.

“Our new segregated funds meet the needs of an emerging segment of investors seeking more innovative and prudent ways to protect capital while participating in the growth potential of equity and fixed income markets,” said Mackenzie president David Feather.

The Keystone Portfolio Segregated Funds are based on the Keystone Portfolio Funds, comprised of as many as 16 funds managed by seven Canadian money managers including Mackenzie, AGF Funds, AIM, Beutel Goodman, Franklin Templeton Investments, Howson Tattersall and MFC Global.

The five new funds are the Keystone Conservative Portfolio Segregated Fund, Keystone Balanced Portfolio Segregated Fund, Keystone Balanced Growth Portfolio Segregated Fund, Keystone Growth Portfolio Segregated Fund and Keystone Maximum Growth Portfolio Segregated Fund.

The new seg funds come with two protection options, a lower cost 75% death benefit and maturity guarantee or an enhanced rider offering a 100% guarantee.

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BMO Harris makes high-profile Quebec appointment

(September 16, 2004) BMO Harris Private Banking has appointed Bernard Letendre as its regional vice-president and managing director for Quebec.

Letendre, a former senior vice-president with Standard Life, will be based in Montreal where he will lead a team of professionals providing integrated wealth management services to high net worth individuals, BMO Harris said in announcing the appointment.

“Mr. Letendre has quickly established himself as one of the province’s rising wealth management professionals,” said Terry Jenkins, executive managing director, BMO Harris Private Banking. “His background, including executive positions at Standard Life Mutual Funds and Investors Group, and his experience in the Canadian Armed Forces, will be invaluable in broadening our position in Quebec.”

“BMO Financial Group is very fortunate to have such a young and accomplished professional on board,” said Jacques Menard, president of BMO Financial Group, Quebec. “With Bernard’s highly successful track record, we can look forward to a very exciting future.”

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RBC launches two new cash flow funds of funds

(September 16, 2004) RBC Asset Management today introduced the RBC Cash Flow Portfolio and the RBC Enhanced Cash Flow Portfolio, a pair of funds of funds designed to provide investors with alternatives to other fixed income instruments.

“Interest rates are still historically low and government bonds, money market funds or short-term GICs alone may not provide sufficient cash flow to meet some investors’ requirements,” said Brenda Vince, president, RBC Asset Management.

The new portfolios will be managed by John Varao, RBC Asset Management’s vice president of Canadian equities.

The RBC Cash Flow Portfolio is aimed at investors looking for a predicable but higher level of cash flow than money market funds or GICs generally provide, RBC says. The enhanced version has a slightly more aggressive mix of RBC funds.

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Foreigners feast on Canadian bonds

(September 16, 2004) Foreign investors purchased $3.7 billion worth of Canadian bonds in July, as net new issues surged. On the stock side, non-residents picked up $640 million worth of equities in July, more than offsetting a $400 million outflow in June, Statistics Canada said in its monthly report on international securities transactions.

Canadians invested $587 million in foreign securities in July following a $1.2 billion sell-off the previous month. Most of July’s buying was in bonds, with Canadians purchasing $465 million in foreign bonds bringing the year-to-date total to $8.4 billion.

Canadians also bought $122 million in foreign equities in July, solely in U.S. stocks, following a $740 million decline in June.

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Bullion fund offered in new classes

(September 16, 2004) The Millennium Bullion Fund has introduced two new unit classes, including an F Class version and a lower fee I Class. The fund is also now available in both Canadian and U.S. denominations.

“In making the changes, The Millennium Bullion Fund is responding to requests for greater flexibility and variety in the way that investors are allowed to participate in the fund,” said Nick Barisheff, president of Bullion Management Services. “Advisors and individual investors are becoming more aware of the hedging and diversification advantages of precious metals in bullion form.”

The Millennium Bullion Fund is Canada’s only RRSP-eligible, open-end bullion fund, which, as the name implies, strictly holds bullion in its physical form. The fund has a fixed investment policy, of purchasing equal dollar amounts of gold, silver and platinum bullion. The bullion is stored on a fully allocated, segregated and insured basis.

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Tactic Series Funds launches note

(September 15, 2004) Tactic Series Funds is teaming up with Van Global Hedge Fund Advisors to offer a guaranteed hedge fund note with a maturity of October 31, 2012.

The returns of the note will be linked to the performance of a multi-manager, multi-strategy fund of funds managed by Van Global Hedge. The note is guaranteed by BNP Paribas.

“In the last few years, interest in alternative strategies has dramatically increased, especially with principal-protected products, which provide diversification and reduced risk to a traditional portfolio,” says Nick Tzaferis, Tactic Series Funds founder and managing director. “This is what people are looking for: superior risk-adjusted returns, low volatility and a 100% principal guarantee.”

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BioCapital to close labour fund

(September 15, 2004)The BioCapital Biotechnology and Healthcare Fund will be dissolved December 15, thanks to dwindling assets. No new units can be subscribed, while existing unitholders can redeem at any time, according to a message on BioCapital’s website.

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Foresters pens outsourcing deal with CGI

(September 15, 2004) Financial services organization Foresters has signed a seven-year outsourcing deal with information technology provider CGI group.

Under the terms of the agreement, valued at $108 million, CGI will manage Foresters’ data centre, help desk, desktop, voice and data services at the firm’s 60 offices across North America.

As part of the deal, about 80 CGI staffers will join Foresters next month.

“Foresters is delighted to partner with CGI on an IT outsourcing arrangement that will allow us to use technology as a strategic resource to support our business operations, while reducing our costs and improving service levels and flexibility,” said Foresters president Mike White.

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Clarington launches U.S. Dividend Fund

(September 14, 2004) Clarington Funds has announced the launch of a new U.S. Dividend Fund, which it says will be the first of its kind in Canada. The fund will be available September 15.

“The fund will be of particular interest to investors seeking U.S. dividend income and capital appreciation and who plan to invest for the medium to long term,” said Eric Frape, vice-president, product management at Clarington. “It will offer Canadian investors the opportunity to diversify their existing income producing portfolios through exposure to U.S. equities across a wide range of sectors.”

The minimum initial investment is $500, with an initial NAV of $10.00 per unit and an anticipated 6 cents monthly distribution. Distributions paid by the fund may partially consist of a return of capital with the potential to provide tax deferral until units are sold.

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Manulife to sink Maritime brand

(September 13, 2004) Manulife Financial announced late on Friday that is combining the operations of its three life insurance units, The Manufacturers Life Insurance Company, The Maritime Life Assurance Company and MFC Insurance Company Limited.

Following the change, existing policyholders of each of the three companies will be policyholders of The Manufacturers Life Insurance Company. The plan requires approval of the voting policyholders of Manulife, Maritime Life, and MFC Insurance, and by preferred shareholders of Maritime Life, who will vote at special meetings scheduled for November 24, 2004. Regulators must also approve the merger, scheduled to take effect at the end of the year.

“The strengthened market and financial position of the combined businesses, together with cost savings from the integration and simplification of business operations, are expected to benefit all policyholders,” said Bruce Gordon, senior executive vice president and general manager of Manulife Financial Corporation’s Canadian operations. Manulife acquired Maritime Life through its acquisition of Boston-based John Hancock Financial earlier this year.

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Canadians feel richer than parents

(September 13, 2004) The majority of Canadians believe they are financially better off than their parents were at the same age, according to a poll released by payroll firm ADP. Sixty-one percent of respondents held this belief, while 16% said they were worse off.

“Even though it often seems like our pay cheques are being squeezed in a vice, the ADP Payday Poll tells us that the majority of Canadians feel the vice’s grip is looser for them than it was for their parents,” said Rod Dobson, president of ADP Canada.

The trend of each successive generation improving their standard of living is seen continuing, according to the poll. Forty-one percent said they expected their children to be richer, while 24% said they expected them to be worse off.

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