OBSI SWAMPED WITH COMPLAINTS

The number of complaints against the financial services industry has soared in the past year, with a 48% increase in new cases opened by the Ombudsman for Banking Services and Investments (OBSI).


"In 2009, OBSI reviewed more complaints than ever before in its history," wrote Douglas Melville, who was appointed Ombudsman in August 2009. "The global economic crisis, coupled with sharp declines in financial markets, gave rise to record volumes of consumer inquiries and complaints."

Read entire article:

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100629_133401_2340

Steven Lamb
Advisor.ca
June 29/2010

For the full OBSI report:

http://obsi.ca/images/document/up-OBSI_Annual_Report_2009.pdf

FINANCIAL SOLVENCY IS A MOVING TARGET

The financial planning process available to forecast and monitor our net income is a daily, weekly, monthly and yearly process. It is not a one time static financial X-Ray or MRI

Given that the planning and forecasting process is an iterative discipline it seems to me that clients should be helped to understand that it is no different than our approach to banking and other investments that we track daily, weekly, monthly and yearly i.e., there should be regularly scheduled reviews identical to those held with our accounting firm. The subject of cash flow is not a static subject. It is, in fact, a moving (often volatile) target. The professional oversight of our longterm financial health (positive cash flow) is no different than the medical oversight we seek from our physicians. They both require ongoing review.

Several generations ago the conditions for retirement which exist today were not present at that time. Employees with companies which provided defined benefit retirement pensions could forecast their future lifetime pension based upon their earnings. Financial planning was no more complicated than being capable of budgeting income and expenses. The complex work of actuarially forecasting lifetime pensions was performed by highly trained professionaks employed in the financial institutions which provided and guaranteed the pensions.

That guarantee has substantially ended. Less than 25% of all Canadians are fortunate emough to have a guaranteed 'defined benefit' pension plan. The remaining 75% are on their own.

Therein lies the problem. Most individuals are neither trained nor experienced enough to quantify their longterm pension capital and income requirements.

It is, in fact, a constantly moving target. Investment planning as an iterative process includes successive approximation - through ongoing professional oversight.

It requires the same professional ongoing oversight as does our physical health. We don't visit our physician with the understanding that we will check our health out again in 10 or 15 years.

The adage "inspect what you expect" is sound advice.

Find a professional practitioner you trust and work with them - openly, directly and collaboratively.

Dan Zwicker
Weigh House Investor Services
June 29/2010

WHAT SCARES ME (AND 70 YEAR OLD RETIREES)

That Japan happens here.

The problem with low interest rates is that once you've cut them to zero, you can't cut them again. Your ammunition, your firepower, your ability to excite the market is gone. Nor can you raise rates — not if the economy doesn't gain traction.

Years of near-zero interest rates.

That was Japan’s reward for not dealing with their bubble. And it made life very difficult for the country’s retirees and savers, who saw their post-retirement fixed income dwindle to nothing. Nor did it help equity holders, with the stock market still 70% below its 1989 peak.
Japan's experience taught Asia — which went through its own financial crisis in 1998 — that sometimes the best for cure for a boom is a bust. Investors will never invest when they're waiting for the shoe to drop. Sky-high interest rates there forced bankruptcies and flushed the crap out of the system, paving the way for recovery.

Is the US doing the right thing with zero interest rates?

One thing I know for sure right now — there's got to be something seriously wrong with an economy when at zero interest rates, borrowers don't want to borrow, and lenders don't want to lend. Bank lending has continued to contract in the US in recent months.

But it's not the US that scares me. Canada has been piggybacking off US interest rate policy. An interest rate policy that may have been inappropriately low for us. So our asset prices have not adjusted downwards, just the opposite.

At least when this is all over, and US rates start to rise, the United States will have adjusted. It will be globally more competitive with a markedly lower dollar and property prices some 30-50% below peak levels. But what about Canada? When interest rates start rising, the Canadian economy may be in a world of pain. And it won’t just be the recent home-buyers who get burnt with 30-40 year mortgages, but all the retirees who’ve taken on excessive risk because they could no longer live off their GICs.
Bruce Freedman
Weigh House Investor Services
June 29, 2010

STATUS - AN 'INSIDE JOB"

Definition

Relative rank that an individual holds, with attendant rights, duties, and lifestyle, in a social hierarchy based on honour and prestige.

Status is often ascribed on the basis of sex, age, family relationships, and birth, placing one into a particular social group irrespective of ability or accomplishments.

Achieved status, on the other hand, is based on educational attainment, occupational choice, marital status, and other factors involving personal effort.
Status groups differ from social classes in being based on considerations of honour and prestige rather than purely economic position.

Relative status is a major determinant of people's behaviour toward one another, and competition for status seems to be a prime human motivator.

In my view our perception of status begins with each individual's sense of identity and personal self esteem. It is an 'inside job'. The various manifestations of social status are simply a reflection of our own self image - for better or worse.

Read more:

http://www.answers.com/topic/social-status-1

DISCIPLINE - PROFESSIONAL PRACTICE - TRUST

Definition

The term "discipline" comes from the Latin word "disciplinare," which means "to teach." Many people, however, associate the word with punishment, which falls short of the full meaning of the word. Discipline, properly practiced, uses a multifaceted approach, including models, rewards, and punishments that teach and reinforce desired behavior. Through discipline, children are able to learn self-control, self-direction, competence, and a sense of caring.

Description

The American Academy of Pediatrics suggests that an effective discipline system must contain three elements. If these three aspects are all present in a program of discipline, the result generally is improved child behavior. The elements are:
a learning environment characterized by positive, supportive parent-child relationships:


1 - a proactive strategy for systematic teaching and strengthening of desired
behaviors

2 - a reactive strategy for decreasing or eliminating undesired behaviors

Read entire description:

http://www.answers.com/discipline?gwp=11&ver=2.4.0.651&method=3

We are publishing this to reinforce the civility of purpose contained in item 2.

Those whose life work demands the rigours of professional discipline commit to a lengthy period of personal discipline devoted to acquiring the education, training, applied experience and depth of understanding necessary to apply the principle contained in item 2 above.

These individuals are rare in our society.

We refer to them as 'professional practitioners' by virtue of their commitment to the disciplined behaviour required in their chosen life's work. Because we value their professional purpose in servicing the most intimate of personal needs as our fiduciaries we feel comfortable in allowing them the opportunity to earn our trust.

Trust is the linchpin in our most intimate relationships with professionals and others. Its acquisition value and economic price are high. Its loss has an equally high personal and economic price. It requires a disciplined mind to maintain it under both satisfying and unpleasant circumstances.

Its maintenance is an 'inside job".

NIELSON & MCKINSEY: ANOTHER SOCIAL SHIFT? A SOCIAL MEDIA GAME CHANGER

The awareness of "social media" has created an explosive growth in providers offering people and businesses an array of services.
At the same time the growth in firms looking to hire “social media managers and strategist” as increased 400% in less than two years.

The current perceived value of these services and positions are low. The average pay scale for a new “social media hire” is $80,000 or less. The average pricing on outside services are low because most sell task oriented products and services, rather than strategic and knowledge based services. The value of the markets offering has diluted the “real value” and propagated a serious lack of understanding, knowledge.

The demand for using and understanding social media will continue however the value of understanding how, what, when, where, who and why just went to a new level.

The High End Knowledge Providers Just Jumped Into the Game

Nielsen and McKinsey form Joint Venture to Help Companies Use Social Media Intelligence for Superior Business Performance

The Nielsen Company (Nielsen) and McKinsey &Company (McKinsey) announced a global joint venture, NM Incite, created to help leading companies harness the power of social media intelligence to drive superior business performance. NM Incite gives companies the capabilities to better understand, value and take advantage of the rich insights made possible by social media.

The important statements within the recent press release are:

“Our venture with McKinsey will extend our ability to help clients answer one of the central questions facing CEO’s, how to unleash the promise of social media,” said David Calhoun, CEO of Nielsen.

“Our clients want to take full advantage of what is possible. NM Incite will fuse social media with the enterprise, creating new opportunities, efficiencies and competitive advantage.”

“As our clients’ needs evolve, so our firm continuously innovates in the way we work,” said Dominic Barton, Global Managing Director of McKinsey.

“Social media is an increasingly critical issue for business leaders and an area of untapped opportunity for many of our clients.”

This joint venture will equip institutions with real-time insights to help their leaders drive better results.”

“Senior executives of global companies instinctively recognize the possibilities of incorporating social media insight and capability into their organizations. They simply need help to make it a reality.”

Business leaders, the real ones, understand the 'value' of acquiring and applying new knowledge. The value of new knowledge is relevant to providing strategic advantages to an organizations market position. Real leaders pay premium prices for gaining knowledge that enables them to gain stronger market positions. Note the emphasis of value in the above quotes from the press release.

McKinsey & Company is a global management consulting firm dedicated to helping the world’s leading organizations address their strategic challenges. The Nielsen Company is a global information and media company with leading market positions in media measurement, online intelligence, mobile measurement, trade shows and business publications.

What do you get when you put the core competencies of McKinsey and Nielsen together? A combined knowledge inventory that elevates new knowledge based on strategic insights into the use of information and media, social media.

The McKinsey/Nielsen partnership is a game changer in many ways. It will elevate the conversations and raise the bar of expectations for sound strategic advice based on knowledge from all the existing suppliers. It will also produce more innovation from what McKinsey/Nielsen discover and create with their clients.

Innovation is priceless!

The social game just shifted to higher expectations for value based on strategy and not task.

Jay Deragon
The Relationship Economy
June 25/2010

SHOPPING: TRANSACTIONAL OR SOCIAL?

The essence of every shopping transaction is social. Just consider what, where, when and why we decide to make a purchase online as well as off. Every decision is driven by relational factors whether we want to believe it or not.

A recent report from FFP Global states that: “online shopping is moving from a transaction mentality to one that embodies discovery, entertainment and social bonding experience.”

The report goes on to list five key e-commerce trends for 2010:

1. Smarter Mobility:

Smartphones have continued to grow due to their wider screens and applications. Mobile phone and handheld devices will see more applications to help drive ecommerce sales.

2. Fulfillment Rules:

Retailers will begin to consider “regional fulfillment centers” due to rising fuel costs and the demand for quicker delivery times.

3. Customer Service:

Consumers will begin utilizing an ever increasing number of communication channels: i.e.: texting, accessing information, free expression, immediate feedback, etc. All of these pose a challenge that e-retailers must take seriously.

4. Relevancy is Virally Important:

E-retailers are starting to become more than suppliers of goods and services and must proactively develop a personality that market segments can accept. They must listen; actively engage in conversations with their current and potential customers and more.

5. Business Intelligence meets Business Process:

In 2010, businesses will need to commit to the information in their data banks to create marketing and sales business processes to help provide them a competitive advantage.

According to a recent Razorfish report, “65% of consumers report having had a digital experience that either positively or negatively changed their opinion about a brand.” Additionally, “97% of that group said that their digital experience influenced their decision whether or not to purchase a product or service.”

“Consumers are evolving quickly. Social Commerce is demanding that brands invite their customers to the “dinner table” and engage, listening, learning, and navigating new ways to facilitate need. Attention to detail in service and fulfillment remain cornerstone attributes for a positive “buying” experience. Give your best customers more benefits not less.”

Is Money Social?

People work long hours to earn a living. A large percent of what we earn goes to consumable products and services that sustain our lives and quality of life. Earnings are personal and enable us to sustain and enrich our lives by how and what we spend our earnings on. Part of the enrichment process comes from relational experiences that happen from transactions.

Consider what the relational experiences are from shopping:

1. Brands propagate messages aimed at getting attention to our relational attributes which identify our likes, dislikes, wants, needs and affinities.

2. When attracted we engage in examining the message and the related value and affinity of the proposed proposition.

3. Relationships are influenced by intent. If the message and subsequent experience isn’t “socially oriented” then you lose the audience because there is no enrichment.

4. If buyers don’t consider your environment and the interactions of the shopping experience enriching then they will seek other options.

5. If the value of your proposition doesn’t include enrichment to the social engagement then you lose the transactions.

Whether online or off in order to enhance your transactions you must first enhance the social experience. Money reflects social engagement and experience.

Jay Deragon
The Relationship Economy
June 25/2010

USING ETF'S FOR PORTFOLIO BUILDING

This is the first of a three-part series on how ETFs can help control costs when constructing core portfolios.

Fundamental analysis is the stuff of cocktail parties, water-cooler gossip, and 24-hour financial news networks. Based on business facts, the main allure of fundamental analysis is the intellectual satisfaction it provides: it is logical. Most professional money managers use fundamental analysis in some form of top-down or bottom-up analysis. Regardless of portfolio size, controlling costs is important, and ETFs can help.

Top-down

Starting with global, regional and local economies, this approach assesses the impact of the economy on sectors, industries and companies. ETFs lend themselves nicely to these strategies because they make country, sector and industry investing simple. For example, institutional managers can use ETFs to establish broad exposure before making specific investments and they can hedge existing exposure by shorting the relevant ETF. During the banking crisis in 2008, shorting financial stocks was prohibited, but there was no such restriction on ETFs. Institutions used ETFs to maintain liquidity in the face of uncertainty. Portfolios for individual investors can similarly benefit from diversified exposure. Just remember, sector and industry ETFs tend to be more expensive than broad-based ETFs.

Read entire article:

http://www.advisor.ca/advisors/news/etf/article.jsp?content=20100622_102728_4524

Mark Yamada
Advisor.ca
June 22, 2010

CANADA'S BOOMERS LARGELY LACK RETIREMENT PLANS - BMO

*Fewer than half surveyed have retirement income strategy

*Just 33 pct considered chance of outliving their savings

*Fewer than half had plan to pay for unexpected events

TORONTO, June 9 (Reuters) - Canada's baby boomers are generally ill prepared to pay for retirement living, with few having considered the possibility that they could outlive their savings, a study by Bank of Montreal said on Wednesday.

Read entire article:

http://www.reuters.com/article/idUSN1524415920100615

Reuters
June 9, 2010
Reporting by John McCrank
Editing by Peter Galloway

CANADIANS SAY FINANCIAL ADVICE IMPROVES WELL BEING

Those who received comprehensive advice most optimistic

* Study eliminates net worth as an influencing variable

NIAGARA FALLS Ontario, June 15 (Reuters) - Canadians who receive comprehensive financial advice rate their emotional and financial well being higher -- often significantly so -- than those who do not receive advice, according to a study released on Tuesday.

The Value of Financial Planning Study, conducted by polling firm the Strategic Council on behalf of the Financial Planners Standards Council (FPSC), asked a series of questions online to 7,383 English-speaking Canadians between August 2009 Overall, the survey's results indicate that the benefits of financial planning are much more than simply the accumulation of wealth," said Cary List, president and chief executive of FPSC, when presenting the study at the Canadian Institute of Financial Planners annual conference.

"Those individuals who receive comprehensive, integrated planning have a significantly more optimistic outlook on their emotional and financial well-being compared to those who don't."and January 2010.

Read entire article:

http://www.reuters.com/article/idUSN1524415920100615

Reuters

June 15, 2010

HOW BABY BOOMERS WILL CHANGE RETIREMENT

Part 1: Many Baby Boomers Plan to Mix Work and Play

Many baby boomers plan to keep working and earning money during their retirement years, but will alternate between periods of work and leisure, according to a survey by Merrill Lynch.

Reinventing Retirement

The New Retirement Survey builds on the conventional wisdom that many baby boomers are not interested in pursuing a traditional retirement of leisure.

"Baby boomers fundamentally will reinvent retirement,” said James P. Gorman, president of the Merrill Lynch Global Private Client Group, in a news release about the survey. “With (baby) boomers living longer and remaining engaged and employed beyond age 65, many of the traditional financial assumptions regarding retirement need to be reexamined.”

Highlights of the Baby Boomer Survey.

Created with guidance from gerontologist and author Ken Dychtwald, Ph.D., The New Retirement Survey offers a preview of the different lifestyles, workstyles and recreation activities that baby boomers envision for their future.

Here are highlights of the survey, from a news release by Merrill Lynch:

Read entire article:

http://seniorliving.about.com/od/retirement/a/newboomerretire.htm

Sharon O'Brien
About.com
06 19 2010

REOPENING PANDORA'S BOX

Regulators again touch a nerve in the debate on proprietary products

With a relatively innocuous missive, securities regulators have seemingly opened the proverbial Pandora’s box. Addressing the proliferation of proprietary products — and the added conflicts they can create — the regulators have raised some important questions about the investment industry’s evolution that have yet to be addressed.

In February, the Investment Industry Regulatory Organization of Canada published a draft notice for comment that deals with so-called “non-arm’s-length investment products.”

When a dealer sells products issued either by itself or by one of its affiliates, regulatory concerns about conflicts of interest arise. The question is whether dealers can carry out effective due diligence or assess suitability.

Read entire article:

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=53768&cat=27&IdSection=27&PageMem=&nbNews=&IdPub=196

James Langton

Investment Executive
May 31 2010

SOCIAL MEDIA BECOMES A GLOBAL FRONT PORCH

My father is a forester. At one time, his chief role in his company was to evaluate a stand of timber and negotiate with the landowner for the rights to that timber. Those kinds of deals weren’t made by men in suits in conference rooms or over the phone. They were made by men in dusty boots on the front porch over a cup of coffee. Contracts were agreed upon with a handshake before pen was ever put to paper. There was a protocol for making those deals and, if you rushed it, you lost it.


The landowner might not have all the latest facts, figures and price indexes for whatever hardwood he was trying to sell, but he wanted a fair price for his resource. To be sure that he was getting the best price and was being treated fairly, he had to know who he was dealing with. He might have known a guy who knew a guy, but, even then, he wanted to make the judgement for himself. And he made that judgement sitting on the front porch drinking a cup of coffee with the potential buyer.


I don’t have land with timber on it. To be honest, I don’t have a front porch to speak of, either. But when I’m spending money, I want to know who I’m spending it with and I don’t think I’m unusual. As a front porch for consumers and vendors alike, Social Media helps me do that. I tell people regularly to check our commercial site to see what we do; but, to see who we are, check this blog, our Facebook pages and our Tweets. You’ll see the issues that are important to us – aviation industry issues and advances, marketing and human resources articles, environmental issues and hockey. (Hey, I’m a fan and since I post many of our updates, well…..)


We can’t shake hands and or make eye contact over a blog, a tweet or a status update; however, with continued exchanges, we can get to know one another. As a customer, we can watch how vendors treat other customers. We can see the rate and the quality of interaction. As a vendor, we can see customers’ interests and viability. If either party is presenting counterfeit social currency, they won’t be able to hide it for long.


Sure, we can teleconference, video conference, read brochures and websites; however, those things tell us only what their authors want us to know. By reviewing a vendor or even a customer’s social currency, we can see how closely their actions match their words. We may not be literally looking each other in the eye, but by exploring a person or company’s social presence, we will find evidence of the each other’s ethics, activity level, responsiveness and global awareness. Social media gives us all the opportunity to either credit or discredit a company’s claims based on information we find in the company’s own social media offerings and on reviews written by their customers.


The Web of today and the Deep Web right around the corner offer fewer skeleton-hiding closets. The wide open platform gives consumers and vendors the opportunity to see each other as they are and as they’d like to be seen. We still may know a guy who knows a guy. Social Media gives us the chance to look each other in the virtual eye before we make the deal - even without dusty boots or cups of coffee.

Jay Deragon
06/182010
The Relationship Economy

UNDERSTANDING BEHAVIORAL FINANCE

The field of behavioral finance has exploded over the past few years, making it a go-to topic for education providers. While the human brain may be endowed with an amazing capacity for abstract, rational thought, it is often betrayed by our primitive emotions of fears and greed.


So how does one become a star investor?


“It’s not about spreadsheets,” said Michael Mauboussin, chief investment strategist, Legg Mason, speaking at the recent Morningstar Investment Conference. “Rather, it’s all about temperament; the ability to make good decisions under all conditions – especially fear and greed. Most of us, however, are not good at this.”

Read complete article:

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100614_095154_7344

Steven Lamb
06/14/2010
Advisor.ca