7/29/2010
FINANCIAL BEHAVIOR - ACTIVE OR PASSIVE? WHEN TO BACK OFF
The situation is the boss.
Capital accumulation has high expectations in business and investments. - aggressive - out in front - leading.
Capital and lifetime income preservation has lifetime risk management objectives - balanced and passive - hire the best to manage the risk. Manage your 'retirement business' needs from behind the scenes - lower your proactive expectations from those of capital accumulation to those of capital risk management.
Our professional practice culture:
http://www.firstfinancialconsultinggroup.com
How we apply it:
http://www.weighhouse.com
7/27/2010
WHAT IS THE VALUE OF FINANCIAL AWARENESS?
PRICELESS!
It is nothing less than lifetime financial dignity.
For a first step on how and where to select a professionally designated unbiased fee for service lifetime capital and income financial advisor visit:
How: http://www.firstfinancialconsultinggroup.com
Where: http://www.weighhouse.com
The diagnostics include a 'financial MRI' -
So that nothing falls through the cracks.
7/26/2010
ACCESS TO PROFESSIONAL COMPETENCE - THROUGH A FINANCIAL SERVICES MRI
Can I retire?
The consumer has two issues related to securing lifetime retirement income.
1 - What does it take?
(a) It takes an understanding of the key deterrent to a successful plan.
(b) Most individuals know how to accumulate capital. Save as prudently and for as long a period of time as possible.
(c) However, what is less apparent is the prediction of whether or not our savings will be sufficient to allow us to sustain an income during the entire 2nd 30 - 40 years of our lives i.e. during retirement to age 90 - 95. 'Sustain' implies without any shortfall in any givem year.
2- Who can advise me professionally?
In Canada the financial services industry offers professional guidance in one of 4 ways.
#1- Through financial advisors who are compensated via commissions based upon the sale of a product.
#2 - Through independent financial advisors who are compensated based upon a fee for service and/or a commission based upon the sale of a product.
#3 - Through financial advisors who are compensated by a salary provided by their employer.
#4 - Through an independent financial advisor/investor consultant who is paid a fee only for service based upon the preparation of a financial plan and investment portfolio analysis which serve as a 'financial MRI'. The sole purpose of the financial plan and the portfolio analysis is to yield an answer to the issue described in 1 (c) above. The service may include continuous financial performance monitoring.
Financial health and personal health are the flip sides of the same coin - the achievement of personal dignity through well being. Hence the use of the term 'financial MRI'.
14,000,000 boomers in Canada are at or preparing for retirement.
Less than 12,000 financial advisors in Canada are dual designated professionally to serve both the capital accumulation and the guaranteed lifetime capital and income preservation needs of the large boomer demographic numbers.
Very few financial advisors in Canada are in the unbiased fee for service only sector.
The numbers alone make access to professionally unbiased advice a daunting challenge.
In Canada the Centre for Fiduciary Excellence (CEFEX) has at this time certified the first independent financial planning investor advisory firm in Canada as a certified financial planning fiduciary.
That firm is Weigh House Investor Services Inc. in Toronto.
The news release of the certification follows below.
WEIGH HOUSE INVESTOR SERVICES FIRST IN CANADA TO HAVE ITS INVESTMENT SUPPORT SERVICES CERTIFIED
FOR IMMEDIATE RELEASE CEFEX
TORONTO, April 19, 2010 – CEFEX, Centre for Fiduciary Excellence, LLC, has certified Weigh House Investor Services of Toronto ON for the provision of fiduciary Investment Support Services in adherence with a standard of excellence. Weigh House Investor Services (“Weigh House”) is among the first organizations globally to successfully complete this type of independent certification process.
The Prudent Practices for Investment Support Services are part of the Prudent Practices for Investment Fiduciaries series of standards published by Fiduciary360 (fi360) of Pittsburgh, PA. This global standard specifies how a firm can help investors and fiduciaries manage the overall investment management process, including the selection, monitoring and de-selection of investment managers as well as developing processes to implement investment strategies andfiduciary practices on an ongoing basis. The Practices have been substantiated by case law and the legislation of the Pension Benefits Standards Act, 1985 (Canada), the Pension Benefits Act (Ontario) and the Trustee Act (Ontario).
According to the General Manager of the Centre for Fiduciary Excellence, Carlos Panksep, “Through CEFEX’s independent assessment, the certification provides assurance to investors that Weigh House has demonstrated adherence to the industry’s best practices.”
Weigh House consults with clients on a one-time and continuous basis, in a fiduciary capacity, on preparation of the Investment Policy Statement, asset allocation recommendations, due diligence on Investment Managers, fee & compensation analysis, investment performance reports, advice on investment strategies, and education.
The annual certification process involves a detailed assessment of operational data, client files and procedures, followed by on-site interviews with key personnel. The process is based on the International Organization for Standardization audit process ISO 19011. Weigh House is registered at www.cefex.org where its certificate can also be viewed.
The Prudent Practices for Investment Support Services standard can be viewed by clicking on Weigh House’s on-line CEFEX certificate. More information on Weigh House Investor Services is available at: www.weighhouse.com.
About CEFEX:
The Centre for Fiduciary Excellence, LLC. is an independent certification organization. CEFEX works closely with industry experts to provide comprehensive assessment programs to promote fiduciary best practices. It certifies investment stewards, advisors, fiduciary advisers (PPA), managers, ASPPA recordkeepers, and support services firms. CEFEX has offices in Toronto, Canada, and Pittsburgh, PA.
7/25/2010
THE IMPACT OF SEPARATION AND DIVORCE ON FINANCIAL INDEPENDENCE - A CASE STUDY - RESOLVED THROUGH A FINANCIAL MRI
Worry .. free once the children leave
When Tess decided to leave her husband of 25 years, she knew she would have to take on a big mortgage if she wanted to buy out his share of their Vancouver home. She would also need to hand over a considerable amount of money.
At age 56, and with three children, 17, 21 and 22, she is starting over financially. Tess worries about the future and whether she will be able to support the ehildren through university. Her ex is helping with their education expenses.
"This is going to be tough and my budget is going to be very tight," she writes in an email. She plans to fix up the house a bit, hold on to it until the children are out on their own in a couple of years and then sell it. As a health-care professional, she has a good salary and pension. She plans to work until she is 65. Still, she can't help but worry: Will it all work out or will she end up living on the street?
We asked Warren MacKenzie, president and chief executive officer of Weigh House Investor Services in Toronto, to look at Tess's situation. Weigh House is a fee-only financial planning firm that does not sell securities.
WHAT THE EXPERT SAYS
After an in-depth analysis, Mr. MacKenzie was able to put her mind at ease. "Tess will be able to achieve all of her financial objectives, including leaving a small inheritance to her children," he said.
Client situation
The person: Tess, 56.
The problem: How to deal with the financial shock of separating from her husband and dividing assets without disrupting her children's university education.
The payoff: Getting through a difficult spell and coming out the other end solvent, secure and able to leave a small inheritance to each of her children.
Monthly net income: $6,030.
Assets: Half share of family home $275,000; RRSP $80,000 (which goes to her husband); RESP $40,000; non-registered investments $15,000. Total: $410,000.
Monthly disbursements: Mortgage $2,770; property taxes $400; utilities $435; phone, TV $125; home insurance $140; repairs/maintenance $200; groceries $900; eating out $130; household supplies $100; clothing $225; transit $70; car insurance $160; car maintenance, gas, parking $275; orthodontics $550; life insurance $120; school activities, summer camp $200; music
lessons, sports, allowances $265; vacations $170; other: $895. Tatal: $8,130.
Shortfall: $2,100.
Liabilities: New mortgage: $325,000; new line of credit $20,000.
Total: $345,000.
At the moment, Tess is spending more than she is taking in, but her expenses will drop once. the children finish university and move out on their own - and some will drop even sooner.
The expensive orthodontic treatments will soon be finished. When the children graduate and move out, the cost of their clothing, school activities and other expenses will be gone and the household food bill will drop.
Tess will no longer need term life insurance when the children are established, shaving another $120 a month from her expenses. The new mortgage will be discharged when the house is sold, so the $2,770 in monthly payments will come to an end.
By the time she retires from her job at age 65, she should be able to get by on about $4,000 a month rather than the $8,000 she is spending now, Mr. MacKenzie said. By then, her pension income will be $44,800 a year, her Canada Pension Plan $14,028 and her Old Age Security $7,740 (all indexed for inflation), bringing
her total pension income to $66,568.
Tess needs $275,000 to buy out her ex's share of the house. She would also like some money to renovate. Mr. MacKenzie suggests she borrow another $7,000 to pay off her current line of credit, and $2,000 to contribute to her RRSP. With this $2,000, she will educate herself about investing. The planner also suggests she get another $20,000 line of credit for emergencies.
Tess's current investments are mainly in underperforming mutual funds with high management expense ratios. "She feels her [investment] adviser is either incompetent or does not have her best interests at heart."
As an educational exercise, Mr.· MacKenzie suggests she open an online brokerage account and invest the $2,000 in a self·directed portfolio of exchange-traded funds.
"We recommend she go to the MoneySense magazine website, pick a couch potato portfolio and buy three ETFs," he says. She can then monitor their performance and adjust or "rebalance" her holdings once a year, or whenever one of the holdings exceeds her desired allocation by 10 per cent or more.
Mr. MacKenzie's calculations assume that Tess will sell her house in a couple of years and invest the proceeds for an average annual return of 6 per cent (and an inflation rate of 2.5 per cent), and that she will draw on this when she retires.
By Dianne Maley
Financial Facelift
Special to The Globe and Mail
July 24, 2010
7/23/2010
IS THE GOVERNMENT SKEWING THE NUMBERS? - THE STATSCAN DILEMMA
OTTAWA — The agency silently embroiled at the centre of the census debate has long been viewed as the best of its kind in the world, but observers worry government intervention could damage the impeccable methodology and autonomy for which Statistics Canada is renowned.
“StatsCan is thought of as one of the best,” says Kevin Milligan, an associate professor of economics at the University of British Columbia, who has worked extensively with the agency’s data. “The institutional culture is one of independence. That is at the heart of why they’ve been so distressed by this turn of events, because they really felt that independence was threatened.”
Over the last month, opposition has mounted to the Conservative government’s plan to turn Canada’s mandatory long-form census into a voluntary survey — a move critics say will produce a skewed or useless national demographic record. The government says it made the change because the long form was an invasion of privacy and it was coercive to force Canadians to complete it.
On Friday, the parliamentary industry committee will meet to discuss hearings on the census issue that will likely take place next week.
“StatsCan has a world-class reputation for its methods, for the reliability of its arithmetic and the credibility of the institution and it would be a huge tragedy if that Canadian model of excellence is sacrificed on the altar of Conservative [politics],” Liberal House leader Ralph Goodale said at a Thursday news conference.
In the early 1990s, a team of statisticians from 10 OECD countries ranked international statistical agencies for The Economist’s “good statistics guide.” Statistics Canada took the top spot, with the magazine lauding the reliability of its figures, its methodology and autonomy, noting that “British and American number-crunchers lack the formal independence” enjoyed by their Canadian counterparts.
The agency participates in international statistical conferences and publishes its own top-level peer-reviewed journal, Survey Methodology, says Don McLeish, president of the Statistical Society of Canada and a professor at the University of Waterloo.
Statistics Canada has been unable to speak about the potential impacts of the changes to the census, and as a senior bureaucrat, Mr. Sheikh was not permitted by law to reveal what advice he gave the minister.
His blunt resignation statement made clear that he did not support the government’s decision and that will help shore up the agency’s reputation, Mr. McLeish says, but the planned changes to the census are still anathema to statisticians who believe in the “sanctity of the data.”
“If I’m a statistician and I develop a methodology for analyzing some data, and someone comes along and for what I believe to be political reasons or any other vested interest says that I should change my methodology, then that strikes at the heart of our discipline,” Mr. McLeish says, emphasizing he speaks for himself and not the society. “If forced to do it, that would be very demoralizing.”
In a statement released Wednesday, after Mr. Sheikh’s resignation, Industry Minister Tony Clement, who oversees the agency, said: “The government made this decision because we do not believe Canadians should be forced, under threat of fines, jail, or both, to disclose extensive private and personal information.”
The mood among agency employees was sombre on Thursday, with many saying they were shocked by Mr. Sheikh’s resignation but thought he made the right decision to step down on principle.
“Obviously, it’s a bit disheartening. It was a surprise for everyone here,” Roberto Casagrande said of the news, which came hours after the cancellation of a town-hall meeting intended to address staff concerns about the census. “It’s unfortunate the way things have transpired. Anytime government gets too involved in specific departments and some of these critical programs, and we can’t resolve them without getting to this point, it is a bit disheartening for staff here.”
“It’s very sad that a man of that quality quit his job,” Alain Despatie said. “It’s not understandable that we have a government that won’t listen to its highest civil servant in a very specific field.”
When the previous chief statistician, Ivan Fellegi, retired in 2008, assistant chief statistician Michael Wolfson — now retired himself — gave a speech that touched on the delicate balancing act of maintaining the agency’s independence.
Mr. Wolfson recalled an instance a decade earlier when he was to present a paper on policy options for Canada’s tax-transfer system at an international meeting and a deputy minister intervened with Mr. Fellegi to stop him.
After determining the paper met “reasonable standards for impartiality and objectivity,” Mr. Fellegi gave the deputy minister his answer: No.
Earlier this week, a Tory senator attacked the veracity of new statistics showing crime is on the decline.
“The data is indeed agnostic, but there are many messages carried by the data to various constituencies. They can be social messages or economic messages and most of those messages probably have a political stripe to them, but you cannot blame that on the data,” Mr. McLeish said.
Ernie Boyko, director of census operations from 1991 to 1996 and a Statistics Canada employee until 2004, says it was “absolutely shocking” to hear Clement say in an interview that some people at the agency “like to think” it’s an independent body, but in fact it reports to him.
“Every relationship we had with a government, this has always been kind of established right at the beginning in a meeting between the chief statistician and the minister, and the minister generally agreed we need to have objective information and the agency should not be seen as being under political influence,” he says of his time at the agency.
Some national statistical agencies operate autonomously, similar to the Bank of Canada, while others function more as an arm of the government, Mr. Milligan says, but the situation in this country is “ambiguous,” depending on how the Statistics Act is interpreted and who are the politicians and bureaucrats involved. One good that could come out of the census controversy and Mr. Sheikh’s resignation would be to clarify that relationship and cement the agency’s ability to do its work “independent from the political pressures of the day,” he says.
“It’s distressing to me that the minister is playing politics with the hard-earned reputation of StatsCan,” Mr. Milligan says.
Postmedia News
July 22, 2010
- with files from the Ottawa Citizen
DISRUPTIVE INNOVATION
Social Pearls Before Swine
The term “pearls before swine” comes from the Sermon on the Mount, a famous speech given by Christ to his disciplines. It means that people should not waste pleasant or good things on people who will not appreciate them.
In the time of Christ, pigs were regarded as unclean animals in the Jewish faith, so in a sense, the term refers to giving great things to beings which are not worthy. The fact that pearls would be essentially useless to pigs has also been pointed out, as the term illustrates that it is rather foolish to give things to people who cannot or will not use them. Pigs are unlikely to realize the value of pearls when they see them, so tossing pearls to swine would really just be a waste.
Many people use the term to talk about someone who doesn’t appreciate the value of an item or another person, as in Some people also use this term in a resentful sense, suggesting that they offered or gave someone something superb, and ended up being snubbed.
Many people who attempt to enact social change find themselves frustrated by the pearls before swine phenomenon, struggling to understand why people reject their proposals and ideas when they hold so much promise.
Now the adoption of these technologies permeates everything and touches everyone, at least those paying attention. The word “permeates” means to spread or flow throughout; pervade. When something spreads throughout it surrounds all things and begins to capture everyone’s attention. When something begins to capture the attention of the human network the draw pulls people’s emotions, intellect, spirit and the reactions create discourse and opinions that further the discourse.
Appreciation of Innovation or Wasteful Use of It?
The human reaction to disruptive innovation falls into two categories of use, useless and useful. There is a simple, important principle at the core of disruptive innovation fueled by people’s use of something innovative and free: people innovate faster than companies and entire industries change. Because of this, most organizations are not ready to respond to the influence of people’s increased expectation for improvement. The disruption is fueled by transparent communications filled with “pearls of wisdom” that show people’s expectations. The challenge for organizations then becomes one of listening and responding in real-time with innovation that exceeds people’s expectations.
Useful application of social technology by organizations is the “key” to unlocking needed innovation expected by the customer (people), internal and external. Useless application of social technology, and its related dynamics, by organizations is the age-old reaction of stinking thinking from the neck up. In this case the swine is represented by those that “fear” innovation that comes from “pearls of wisdom” offered freely by the “markets of conversations”.
People and organizations fear innovation because they try to frame it and use it with old knowledge. Thus they use social media or view it as useless. Useless means having or being of no use and not able to give service or aid. Sounds a lot like “pearls before swine”.
Jay Deragon
The Relationship Economy
July 23, 2010
7/16/2010
THE WORLD'S HAPPIEST COUNTRIES
By and large, rich countries are happier--and that's no coincidence.In the wake of their World Cup loss, residents of the Netherlands may be feeling depressed. But there's reason to believe they won't be done in by the agony of defeat: According to a recent poll, the country is one of the happiest in the world.Championship-winning Spain, on the other hand, was swept with euphoria and national pride, but that may have been an unfamiliar feeling. The country ranks No. 17 of 21 European countries in terms of happiness.
The fact is good times probably have more to do with the size of your wallet than the size of your trophy shelf. The five happiest countries in the world--Denmark, Finland, Norway, Sweden and the Netherlands--are all clustered in the same region, and all enjoy high levels of prosperity. "The Scandinavian countries do really well," says Jim Harter, a chief scientist at Gallup, which developed the poll. "One theory why is that they have their basic needs taken care of to a higher degree than other countries. When we look at all the data, those basic needs explain the relationship between income and well-being."Canada was high up on the list as well, tied for eighth overall (with three other countries). That handily beat the United States, which was tied with Austria for the No. 14 spot.
Read Entire Article:
http://ca.finance.yahoo.com/personal-finance/article/forbes/1720/the-worlds-happiest-countries
Francesca Levy
Forbes.com
July 15, 2010
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