By Staff | February 5, 2007 | Last updated on February 5, 2007
5 min read
Previous Brieflies this week: | MON | TUE | WED | THURS |

(February 5, 2007) RBC Financial’s latest RRSP poll finds that 61% of Canadians rate the amount of savings necessary for a comfortable retirement as an extremely important consideration in deciding when to retire. Following close behind, though, are a growing number of Canadians choosing lifestyle issues as a priority for their retirement.

Fifty-four per cent of poll respondents said healthcare requirements were an extremely important consideration, while 40% of all respondents rated planning both where they will live and what they would do in retirement as very important.

In fact, the RBC poll found that when asked how much money they need to retire “rich,” 40% of Canadians said, “It’s not about the money.”

“Our research clearly shows that Canadians no longer believe money is the only key to retirement success,” said Mike Reed, head of retirement client strategies, RBC Financial Group. “A wide range of lifestyle issues including health, home and family are crucial considerations as well. With longer life expectancies and increasing healthcare costs, it’s not surprising that healthcare requirements have surfaced as a key consideration.”

Reed highlights that this doesn’t mean financial security isn’t weighing heavily on the minds of future retirees. The poll found that, while more Canadians than ever before are planning and saving for retirement, they’re not really sure how much money they’ll need for life after work.

“Some of the ambiguity around how much money people need to retire on could be because they don’t have a clear vision of what their retirement years will look like and how they plan to live,” Reed said. “The traditional approach to retirement planning has been to start with the money aspect first and then build a life plan around it. We’ve learned from our clients that a more effective approach may be to have a clear view of what retirement looks like first, and then to create a financial plan that matches the needs of lifestyle goals and implement investment solutions to achieve this retirement vision.”

• • •

CIBC World Markets scales back energy investments

(February 5, 2007) Aggressive actions by many OECD governments to cut greenhouse gas emissions have resulted in the first decline in crude oil consumption across those nations in more than 20 years, CIBC World Markets finds in its Canadian Portfolio Strategy Outlook report.

In response to this decline and predictions of increased regulation of emissions, CIBC World Markets is scaling back its overweight in energy stocks from 4.5 percentage points to 3 percentage points. The firm does still expect that oil sands opportunities will continue to be aggressively pursued by global energy giants.

“Governments are waging a war on carbon,” says Jeff Rubin, chief economist at CIBC World Markets. “The decline in crude consumption in the OECD last year seems [to be] further evidence of policy-mandated demand-destruction aimed at reducing oil consumption in an effort to abate [greenhouse gas] emissions.”

Rubin adds that the political pressure to address global warming has resulted in greater ethanol content in gasoline and the raising of minimum fuel mileage standards, both of which have led to reduced oil usage.

Rubin expects that the next step throughout Canada and the United States will be regulations of these emissions, similar to what was recently introduced in California. This would see provinces and the remaining states implementing a carbon dioxide emissions cap while at the same time establishing an emissions trading system that allows larger polluters to buy emissions credits from smaller-polluting firms. The report states that the cap and trade system would be detrimental to utilities and oil sands producers.

“We are realigning our equity portfolio toward a more balanced sector weighting in keeping with the recent breadth of market gains,” said Rubin. “Investor disappointment at fading near-term prospects for rate cuts has been more than offset by growing confidence in the North American economy.”

That growing confidence drove the TSX to a new record level in January, which leads CIBC to believe it is well en route to a projected year-end mark of 14,250.

• • •

GGOF launches global dividend fund

(February 5, 2007) Guardian Group of Funds launched on Monday the GGOF Global Dividend Growth Fund, intended to provide investors the opportunity to invest globally with a combination of capital growth, income and risk control.

GGOF said the fund will hold a diversified portfolio of approximately 60 to 100 equity holdings. Although developed markets are favoured, the fund may invest up to 25% of its assets in emerging markets. Holdings are selected with the goal of creating a diversified portfolio that will maximize expected yield and capital growth.

GGOF chief investment officer Gavin Graham believes this offering is ideal for conservative investors.

“Conservative investors are sometimes reluctant to invest globally because of a greater perceived level of risk,” said Graham. “One option that gives investors access to the growth potential of global equities, while minimizing risk, is investing in equities that focus on strong cash flow generation and high dividend yields.”

The fund will be managed by a team at Lazard Asset Management (Canada), Inc., of New York, composed of Patrick Ryan, Kyle Waldhauer and Andrew Lacey. GGOF said Lazard currently manages $97 billion in assets, and collectively, the portfolio team has more than 40 years of industry experience. They will be supported by Lazard’s Global Research Platform.

• • •

IDA fines Simon Schillaci $15,000

(February 5, 2007) The IDA has disciplined Simon Schillaci, a branch manager with the Calgary Branch office of Union Securities Ltd.

The IDA found Mr. Schillaci failed to adequately supervise the account management activities of two client investment accounts by the registered options representative. The IDA said the clients’ accounts were subject to high-risk, equity and option trading, which was not suitable for their personal and financial circumstances, and which resulted in substantial financial loss.

In addition, the IDA said Schillaci failed to maintain adequate supervision records or establish appropriate procedures and controls for effective supervision of the Calgary office.

Schillaci has been fined $15,000 and is required to pay $10,000 in costs. He is also required to successfully complete the Effective Management Seminar and the Options Supervision Course within one year of the date of the decision or face immediate suspension of the IDA’s approval to be branch manager.

Schillaci continues to be employed as branch manager at Union Securities’ Calgary office.

• • •

(02/05/07) staff


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