Skip navigation

Monthly Archives: May 2011

Despite proven advantages of financial planning for retirement, the majority of Canadians don’t have a financial plan for their future, according to an HSBC survey.

 The sixth edition of the Future of Retirement study, a global survey from HSBC, revealed that those who have a financial plan in place enjoy a clear ‘planning premium’ with hard financial benefits, yet 65% percent of Canadian respondents, far more than the global figure of 50%, lack a financial plan.

Those who have planned, noted the study, have amassed nearly two-and-a-half times (245%) more capital in their retirement plans compared to non-planners. Of the seventeen countries surveyed Canada ranked 14th, with 35% of respondents reporting having a strategy in place.

“Canadians should be more aware of their long-term financial needs and implement a plan to address these needs, even if they are starting out with a limited amount of money,” said Margaret Willis, executive vice-president, retail banking and wealth management, HSBC Bank Canada. “A small investment now can provide real peace of mind and a positive outlook on retirement later in life.”

People who plan hold a much broader range of retirement and non-retirement assets than those who do not plan. They also enjoy a much more positive outlook towards later life as they stress less about coping with financial needs in retirement.

Alongside the planning benefit, the findings also show a clear advice advantage for those who seek professional financial advice. In general, advice-seekers report greater levels of financial wealth than non-advice seekers, the survey reported.

The study establishes a connection between professional financial advice and benefits of the broadest range, and the highest value, of financial assets. Indeed, the best of both worlds.

Those who have taken advice have amassed nearly two and a half times (245%) the average Canadian retirement assets and nearly nine times (864%) the non-retirement assets of those who do neither.

Read entire article:

Vikram Barhat


May 30, 2011

In moving from sales to advice a financial services professional moves from a transactional client relationship to one of a fiduciary responsibility.

The financial services consumer marketplace is decidely ahead of the industry in its need for client centric service vs the distribution industry’s current capacity to deliver unbiased product solutions.

Through the initiatives underway within the industry’s regulatory bodies the gap is closing.

 Professionals who serve their clients in a fiduciary capacilty are members of a ‘professional practice’.

 Professionals who serve their clients in a marketing/sales capacity are members of an ‘industry’.

 A professional financial advisor acts in a fiduciary role.

 Financial institutions and their distribution channels act in  ‘manufacturing’/’production’  and marketing/sales roles.

 It is this cultural dichotomy and divide in the financial services sector that must be resolved.

 We are moving toward a resolution.

Retirement at age 65 is a decades old product of corporate defined benefit pension plans which began their gradual disappearance from the corporate employment world over 20 years ago.

It was simply too costly for companies to maintain.

This decision has had a direct impact on the loyalty of employees to corporations. A ‘career’ today includes 6 or more employers over 30 – 40 years vs one employer over 40 years. This is not conducive to achieving exponential growth in an individual’s personal accumulation of retirement capital.

As individuals approach their mid 50’s the cost of funding a pension increases exponentially – hence the gradual abandonment of these plans in the private sector.

Governments have largely maintained defined benefit pension plans as a competitive long term employment (i.e. retention) strategy – and it works.

75% of private sector Canadians do not have a defined benefit pension plan.

They are on their own through the use of their own savings initiatives – with no guarantee of sufficient capital to sustain an income throughout the 2nd 30 – 40 years (of retirement).

The challenge in having to accumulate sufficient retirement capital in the current economic environment is daunting for most middle income families.

The cost of credit card and other forms of personal debt is at an all time high (148% of net income) and does not leave much room for retirement or other forms of savings.

The result is that the current boomer demographic, namely, 14,000,000 Canadians who are at a pre retirement age (47) or are just entering their retirement years (65) are faced with the potential need to remain employed for 5 – 10 years beyond age 65.

In the 1960’s one income at $15,000/year supported a family of 3 – very comfortably.

How did we get from there to here?

We all know how.

We all know what it will take to resolve.

 It is very tough ‘stuff’.

From Wikipedia, the free encyclopedia

 Integrative thinking is a discipline and methodology for solving complex or wicked problems. The theory was originated by Roger Martin, Dean of the Rotman School of Management, at The University of Toronto and collaboratively developed with his colleague Mihnea C. Moldoveanu, Director of the Desautels Centre for Integrative Thinking.


The Rotman School of Management defines integrative thinking as:

 “…the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative resolution of the tension in the form of a new model that contains elements of the individual models, but is superior to each.”

The website continues:

“Integrative thinkers build models rather than choose between them. Their models include consideration of numerous variables — customers, employees, competitors, capabilities, cost structures, industry evolution, and regulatory environment — not just a subset of the above. Their models capture the complicated, multi-faceted and multidirectional causal relationships between the key variables in any problem. Integrative thinkers consider the problem as a whole, rather than breaking it down and farming out the parts. Finally, they creatively resolve tensions without making costly trade-offs, turning challenges into opportunities.”

Margaret Franklin is hitting her stride. The same year she was appointed to head the CFA Institute’s board, she also started her own firm
MARGARET FRANKLIN’S CLIMB FROM chartered financial analyst and wealth manager to being the public face of the CFA lnstitute began 10 years ago with what she calls a “tap on the shoulder.” In early 2000, her boss at the time, Harry Marmer at Toronto-based Mercer LLC, asked Franklin to fill in for a member of the CFA’s Toronto board who was on leave. She accepted, and has never looked back. As the recently appointed chairwoman of the Virginia – based CFA Institute’s board of governors recalls:

“It was what they call ‘the beginning of a beautiful friendship’.”

Franklin’s appointment could hardly come at a more crucial time for the 54-year-old institute. With the debacle of the global financial crisis still fresh in the minds of everyone from regulators and financial industry professionals to clients, the integrity of the financial system and of those who work in it is top of mind for the still widely respected institute. It’s determined to maintain – and, if necessary, repair – that reputation in the years ahead.

The top priority in 2011 for Franklin as chairwoman will be to help the CFA Institute develop its role beyond the administration of its already widely known professional designation. Although the chartered financial analyst program will always be the institute’s “crown jewel,” says Franklin, the board wants institute members to see the organization in a broader context, particularly as a means to facilitate lifelong learning in the field. Says Franklin: “We want to see someone getting their CFA as the starting point of a relationship with the institute.”
One priority is to develop the resources on the institute’s website to make them more relevant to the day-to-day practices of CFAs worldwide, as well as more searchable.

The CFA will also focus on issues of integrity in capital markets and r~storing investor confidence in financial services professionals. The institute is considering the creation oftask forces to help highlight industry best practices, says Franklin: “Our thinking is: if not us, who? If not now, when?”

In addition, the institute’s executive team will work on its “tap on the shoulder” concept in an effort to recruit more CFA holders for expanded roles in running the institute. As it’s a big-time commitment to be on any board, Franklin says, most CFA holders don’t participate until they are asked.

Franklin says she enjoyed the work and by 2003 had become president of the institute’s Toronto chapter. She then spent six years volunteering on the institute’s board, including heading up the planning, external relations and audit and risk committees. She was elected chairwoman last September. Says Franklin: “Sometimes, you don’t know what you are capable of until you are asked.”

This year will be a further test of Franklin’s ability to shoulder new challenges. Bay Street will’be watching to see how she performs as president and CEO of Kinsale Private Wealth Inc., a private wealth-management firm aimed at high net-worth individuals that Franklin launched last April. This venture clearly carries some risks: the prospects for economic recovery remain murky, not to mention the uncertainties inherent in starting up a new venture in an intensely competitive business.

But to Franklin, it was the perfect time to launch a new venture. As she notes, a crisis can also bring opportunity. “Many people got burned in the downturn and are now yearning to have more honest conversations about their portfolios,” she says. “Launching this firm was about having more of those conversations.”

In particular, Franklin wants to focus on her own view of wise wealth management. After two decades of working in the business, Franklin says, she favours a conservative approach, especially for her clients, most of whom are successful entrepreneurs who – above all other investment goals – want to preserve their hard-earned wealth.We believe in getting returns using low volatility,” says Franklin. “While you could get ‘out of the ballpark’ returns, it’s not worth it if you had to take a lot of risk, year after year, to get there.”

Franklin began developing her views on investing and the market after the stock market crash of October 1987, ideas she developed further when she became the marketing manager for the Toronto office of Boston-based State Street Global Advisors in 1991. There, Franklin was able to apply skills she had gained in her prior career selling outdoor media advertising: a knack for translating jargon and using humour to get her message across to clients.

After four years in marketing at State Street, Franklin found herself wanting to be on the investment side of the business. She realized she was much more passionate about analysing market data than she was about packaging it. “The markets have a way of capturing the way people grapple with confidence and fear, she says. I wanted to be a part of analyzing that”. 

With a bachelor’s degree in economics and the Canadian securities course already under her belt, Franklin decided that acquiring the CFA designation would be her best door opener. After preparing for her Levell CFA exam while on maternity leave (Franklin says she was able to get by on less than three hours of sleep), she landed a position as a senior investments consultant at Mercer in early 1996. She later worked at the former Toronto office of San Francisco-based Barclays Global Investors and at Toronto-based Altamira Financial Services Ltd., a mutual fund company that is now part of National Bank of Canada. “I really enjoyed working with high net-worth clients,” Franklin says. “They have an interesting perspective on capital because most of them have built their own.”

Franklin continued in the HNW wealth management field after joining Torontobased private wealth – management firm KJ Harrison & Partners Inc. for six years.Franklin says that being a woman has made little difference to her as she has pursued her career. Rather, the competitive nature of her peers has connected with her “go for it” nature. “In this business, it’s all about whether or not you are good at what you do because your pay is based on how well you perform. It has nothing to do with your gender,” says Franklin, who was named one of Canada’s Most Powerful Women by the Women’s Executive Network in late 2010.

Still, Franklin feels a strong sense of obligation when it comes to being a role model for women who want to compete at the highest levels in business. “A woman can have a great career in finance, as well as a personal life,” says Franklin, who often makes time to play golf and other sports with her husband, architect Mark Franklin, and two teenagers on the weekends. 

Olivia Glauberzon
Investment Executive
Mid – January 2011 



Public trust in the financial services industry has been badly damaged and financial advisors must commit to higher ethical standards to earn it back, says Margaret Franklin, chairwoman of the board of governors of the CFA Institute and president and CEO of Toronto-based Kinsale Private Wealth Inc.

Investor protection should be advisors’ top priority, she told a Canadian Club audience in Toronto earlier this month: “There must be a commitment to professional excellence and ethical standards that goes beyond lip service.” Advisors should be well trained on how to deal with ethical dilemmas, she adds, and better securities enforcement practices are also necessary to rebuild public trust. Franklin calls Canada’s experience with enforcement “exceptionally poor.”

Franklin recommends an overhaul of the Royal Canadian Mounted Police’s integrated market enforcement teams, and for securities regulators to hire more staff with experience in the financial services industry. She also suggests granting the industry’s self-regulatory organizations the statutory ability to collect fines in all provinces and territories so that wrongdoers cannot avoid penalties by leaving the industry.

 “We must do everything in our power,” Franklin says, “to’ ensure that investors are better protected in the future.” 

Megan Harman

Investment Exceutive

Mid – January 2011

No one owns the client.
You may own a block of business – but you never own the client.
The notion of client ownership is the antithesis of professional practice.

The core premise in all professional practice is a relationship based upon trust.

Ownership is not a condition of trust.

Trust is earned – not purchased.

The financial services marketplace seeks to place its trust in a financial advisor.

‘Ownership’ is not a condition which fosters trust.

It is at this nexus that the conflict appears in the ownership conditions within captive agency platforms in the financial services industry and the general public’s need for trust in a professional financial advisor.

There cannot be 2 masters.

The ‘master’ is either a captive agency or a client.

The market seeks trust in its relationships.

Trust requires independence – independence is not found in captivity.

Dan Zwicker
Investor Consultant

Posted by Dan Zwicker at 5/22/2011


It is a sad fact that more often than not we learn most effectively through the occurence of traumatic events.

I use ‘effectively’ to mean simply that the object lesson is learned – permanently.

I am writing about this subject because of the field I am in and the tools we have available to mitigate the impact of trauma.

 We have the potential to experience trauma in 3 key areas of our life, namely, matters related to finance, health and personal relationships.

 In my professional work we confront death and morbidity (poor health).

 The need for our financial solutions is close to 100% within the population at large.

 The demand for our solutions is close to zero.

 It is extraordinarily difficult to encourage a healthy vibrant individual to discuss the issue of premature death or unexpected ill health…….

               ………..until a traumatic event occurs.

 At that moment we have an individual’s undivided attention.

 At that moment trauma instructs.

 It is very old and sad fact

 It speaks to the professional commitment and dedication of those individuals who confront the possibility of these circumstances prior to the occurence of a traumatic event on a daily basis in any of the classical professions and social services disciplines including the financial industry.

 Dan Zwicker

Investor Consultant


Life and health insured financial instruments are tools – two of many financial instruments – nothing more.

Second only to our health, there is only one core financial issue we each have and it is not life insured or health insured financial solutions.

Here is the issue – ‘How long during your lifetime do you expect to need an income that you are sure is fully sustainable’ (i.e., no shortfalls in any given year and no vulnerabilty to the market)? 

Sufficient capital which is readily convertible to a guaranteed flow of lifetime income for ourselves and for those to whom we are responsible is what most individuals need.

This is easier said than done.

The key word is guaranteed’.

If you have the guarantee nothing further is needed…….

If you don’t…… helps to have access to unbiased professional advice.


                                ……..that is what we do.

Dan Zwicker
Investor Consultant
Toronto, Canada

The word “Value” may likely be among the most misunderstood words in the English Language. We hear it in the news, we hear it in commercials, we hear it every academic discipline from sociology to engineering. The word Value is said to have many definitions, or it can be said to have only one. In any case, the breadth and depth of the term cannot be underestimated.

For most people, value is defined in terms of money. It is familiar to most people that money serves as a way to store and exchange some forms of value. However, for example, when we talk about the value of a bridge connecting two communities, all banks and insurance companies would calculate this to be the replacement cost of the bridge, say, 10 million dollars. But if we talk about the value that the bridge provides to the community, quite a different number arises.

For example, suppose the bridge shaves two hours off the nearest alternate route and suppose 10,000 people cross the bridge every day. The bridge would save 7.3 million hours per year for a financial value of 182 million dollars per year. If the bridge has a 50 year lifespan, this amounts to 9.2 Billion dollars, or roughly 1000 Time more than the replacement cost.

Now suppose that we factor in the value of the exchange of ideas that the community enjoys which leads to innovation, entrepreneurship, productivity, works of art, mentorship, recreation, and education of people in civil society over the course of those 50 years. Next, suppose we factor in the trust that a community builds between their members, their families and their network of friends. We can easily see that the Value of well conceived infrastructure project is immense.

The problem is that money does not articulate any of these forms of value, yet this value exists in communities. This can be demonstrated as follows:
suppose all of the money on Earth were to evaporate tomorrow. Would the bridge, community, and social ties retain their value? The answer is likely to be yes. Suppose the bridge, community, and social ties were to disappear tomorrow, would money retain it’s value? The answer is no.

The Value of  Value far exceeds the value of  Money. The next wave of  innovation will release this value into a storable and tradable form far exceeding the financial system in the capacity to create wealth.

 It’s all about the Value.

Jay Deragon
The Relationship Economy
05 20 2011