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September 24, 2018


ONN Commends OPTrust Solution

OPTrust Select, the new defined benefit solution from OPTrust, has been recommended by the Ontario Non-profit Network (ONN) as the pension plan of choice for organizations in the non-profit sector. It is the first and only ONN-recommended sector-wide pension plan for the 58,000 non-profit organizations and over one million workers in Ontario. OPTrust Select, which launched in April of this year, was designed specifically for employers and employees in the charitable, non-profit, and broader public sectors. “People in non-profit organizations work tirelessly to support and strengthen communities and they deserve to know their retirement is secure,” says Hugh O’Reilly, president and CEO of OPTrust. “We will be able to deliver secure income to thousands of workers across the non-profit sector, helping those who do good, do well in retirement.” The ONN has been working for years to support Ontario’s non-profit sector by taking a leadership role in championing decent work, including exploring pension plan options for the sector. Cathy Taylor, executive director of ONN, says, “By adopting this pension, non-profit employers will demonstrate their leadership in the decent work movement, living their values of supporting their staff as well as the people they serve.” OPTrust Select, offers a defined benefit pension at a moderate cost. Members contribute three per cent of earnings and employers match the contributions for an annual pension accrual rate of 0.6 per cent of earnings.

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Conversation Needed Now On Medical Marijuana

Employers need to have the conversation about medical marijuana now because their employees will be demanding coverage in their benefit plans, says Ben Aberant, a partner at McCarthy Tétrault. Speaking at the Retail Council of Canada’s ‘Cannabis in Retail Forum 2018’ on ‘The Legalization of Marijuana and its Impact on Benefit Plans,’ he said as there is more use and awareness of medical marijuana, employers will need to talk to their insurer or advisor about providing coverage and if not, why not. Medical marijuana does not have a DIN (drug identification number) and most benefit plans require a DIN before their group insurance will cover it. He said the DIN problem can be avoided by making it part of a health spending account, although employers may want to put a cap on the amount an employee can claim. In fact, not providing coverage could be a violation of Human Rights Codes. This has already happened with a case in Nova Scotia although a court of appeal overruled a decision that denial was discriminatory because the board said it did not reimburse for drugs with no DIN. He said, in fact, covering medical marijuana under a benefit plan could result in lower drug costs as it may be an alternative to more expensive drugs.

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Virtual Care Improves Health

Offering access to virtual healthcare services as a health benefit means companies can improve the health and wellness of their employees and save on absenteeism costs, says a survey by Wello. It found that 73 per cent of employees had to take time off work to go to the doctor’s office. When that time is added up over the course of a year, 39 per cent of all employees had to take a total of at least two to six days plus off work just for visits to their healthcare provider. The survey of Canadian employees also found that 74 per cent of employees believe better health benefits are as important or more important than a higher salary or wage. And while the use of virtual healthcare is still limited in Canada, it is increasingly popular in other jurisdictions. The survey shows that nearly nine-out-of-10 Canadian employees would like to have access to virtual healthcare services. This includes 87 per cent who would like to use virtual healthcare to obtain a prescription, 86 per cent to obtain a specialist referral, 85 per cent to answer health questions when they’re travelling, and 85 per cent for after-hours service, among other services. To meet this demand, Wello virtual healthcare, a new corporate health benefit being launched today in Ontario, provides employees and their families with virtual healthcare services that save unnecessary trips to the clinic. It already provides the service to people in Alberta, British Columbia, Saskatchewan, and Manitoba.

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Traditional Assets In ETFs Rise

Since 2006, the increase of the percentage of respondents using ETFs in traditional asset classes has been spectacular, says the ‘11th EDHEC European ETF and Smart Beta and Factor Investing Survey,’ conducted as part of the Amundi research chair at EDHEC-Risk Institute. In 2006, it says 45 per cent of respondents used ETFs to invest in equities, compared with 92 per cent in 2018. As for governments and corporate bonds, the result went from 13 per cent and six per cent in 2006 to 62 per cent and 66 per cent, respectively, in 2018. It also found satisfaction has remained at high levels especially for traditional asset classes with a significant increase in satisfaction with equity ETFs and government bonds, which now enjoy satisfaction rates of 97 per cent and 92 per cent, respectively. About two-thirds of respondents (67 per cent) used ETFs to invest in smart beta in 2018, a considerable increase compared to 49 per cent in 2014 and respondents most frequently use smart beta/factor-based exposures to harvest long-term premia (as opposed to tactical use). Despite this strong motivation, more than 80 per cent of respondents invest less than 20 per cent of their total investments in smart beta and factor investing strategies.

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OMERS Acquires Paradigm

OMERS Private Equity will acquire Paradigm Outcomes. Summit Partners, Paradigm’s existing majority owner, will continue to be a shareholder in Paradigm. Its investment in Paradigm is the latest in a series of healthcare investments that includes Premise Health, Forefront Dermatology, CBI Health Group, Great Expressions, and Accelerated Rehabilitation Centers. Based in Walnut Creek, CA, Paradigm is a market leading provider of complex and catastrophic medical management to the U.S. workers’ compensation industry. OMERS Private Equity invests on behalf of OMERS, the defined benefit pension plan for municipal employees in the province of Ontario, Canada.

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Firm Ranks In Band 1

Osler, Hoskin & Harcourt LLP’s pensions and benefits practice group has once again been ranked in Band 1 by Chambers Canada 2019. With six lawyers included in the guide this year, it has the most lawyers recognized in pensions and benefits law in Canada. Paul Litner, group chair, remains in Band 1. Partners Jana Steele, Douglas Rienzo, and Anna Zalewski also continue to be ranked. New to the list this year is Montreal, QC, partner Julien Ranger who has been recognized as ‘Up and Coming’ and Toronto, ON, senior associate Jon Marin who is an ‘Associate to Watch.’

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Two Take Senior Positions

Gillian Brown, who has been with the Ontario Teachers’ Pension Plan since 1995 in progressively senior roles, is senior managing director, capital markets. Most recently, she was managing director, insurance linked, credit, and equity products in capital markets. Stephen McLennan is senior managing director, total fund management. He was most recently head of natural resources.

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Group Benefits 101 Examined

A CPBI Pacific continuing education session will examine ‘Group Benefits 101.’ Kandrice (Kandy) Cantwell, a partner for Montridge Advisory Group Ltd., will review commonly used terms and acronyms, provide an overview of government plans in Canada, and discuss plan design basics from traditional to flex to spending accounts. It takes place October 25 in Vancouver, BC. For information, visit Benefits 101

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September 21, 2018


Sustainable Investment Gets Boost

Sustainable investment has been given a boost with the finding investors who are concerned about lower returns are in a minority, says a Schroders survey. It found “only a quarter” of people globally are concerned that investing sustainably would hinder investment outcomes. It says this is an indication that investors are increasingly convinced robust returns and a positive impact are not mutually exclusive. European investors are the least concerned with 23 per cent worried investing sustainably would harm returns. Asian investors have more concerns (29 per cent) ‒ in particular, investors in China (39 per cent), Indonesia (38 per cent) and Thailand (34 per cent). These investors identified returns as a barrier to investing sustainably. Among countries with the lowest level of concerns were Denmark (18 per cent), France (19 per cent), Belgium (19 per cent), and Germany (20 per cent). The study confirms that investing sustainably is a trend that continues to grow globally with 64 per cent of investors having increased their allocations over the past five years and nearly three-quarters saying that investing sustainably has increased in importance over the same timeframe.

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Royal Bank To Offer Bail-in Securities

The Royal Bank of Canada is getting ready to sell the country’s first bail-in eligible senior securities. Canadian lenders will be able to start issuing the new securities after September 23, when the bail-in framework is officially put in place. The bail-in regime has been in the works since 2013 when the Canadian government first said it would take steps to manage the risks of banks labeled “systemically important” by the Office of the Superintendent of Financial Institutions. Regulators worldwide have been working to prevent a repeat of the 2008 financial crisis which saw developed nations recapitalize failing lenders with taxpayer money to keep them from further harming the economy ‒ only to face a backlash from taxpayers. Canada has largely avoided that fate, but wanted to be better prepared for the contingency. The bail-in eligible securities are riskier than deposit notes because they can be converted into equity in case a bank gets into trouble. They will gradually replace deposit notes, the cheap and versatile source of funding for Canadian banks that’s become the backbone for the country’s corporate bond market.

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Compressed Work Week Could Help Productivity

Working longer hours fewer days a week could be good for business, says research from the Creative Group. Two in five advertising and marketing hiring decision makers (40 per cent) surveyed feel productivity would increase if their company instituted a compressed schedule, where employees work four 10-hour days. In addition, more than two-thirds of respondents (68 per cent) support allowing staff to attend to non-work-related tasks while on the clock in order to boost overall performance. “As professional preferences and expectations evolve, more companies are recognizing that the best work isn’t necessarily tied to traditional work hours or days and are open to the idea of a flexible workplace,” says Deborah Bottineau, district director for the Creative Group. “Offering employees greater freedom to manage their time and personal and professional obligations can help reduce stress, increase morale and productivity, and serve as an attractive perk for prospective hires.”

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Pondering What’s Next

Pondering what’s next for financial markets can be productive, says Cambridge Associates. Its report, ‘Rising from the Ashes: Key Developments Since the Global Financial Crisis’ looks at several potential new realities including quantitative tightening, unabated headwinds for banks, and a cooling of the romance between investors and passive strategies. It says next year may be when major central banks stop expanding their balance sheets in aggregate for the first time in a decade – replacing quantitative easing with quantitative tightening. Their motivation may be saving fire-power to fight the next recession. But in the process, they could actually speed its arrival, along with inflation. As well, since the pre-crisis days, profitability for banks has dropped because of new regulations, lower interest rates, and the decline of previous cash cows like investment banking and proprietary trading. For traditional investment banks, new competitors from boutiques in areas like mergers advice and from so-called shadow banks in leveraged lending and asset-based finance will continue to stymie growth and profits. Finally, during the bull market, the difficulty that active investment managers have had keeping up with indices intensified and investors have continued to migrate away from fundamental, actively managed strategies and into index funds, ETFs, and smart beta strategies. But the net flows out of active strategies seem to be slowing and that could be a sign of what’s to come. “Market volatility and a dispersion in the price of assets could rise as central banks pull back on easing the flow of money. Plus, current U.S. equity valuations suggest the potential for more moderate market returns over the next decade. Both of these scenarios could provide a more conducive environment for highly skilled active managers going forward,” says Michael Salerno, senior investment director at Cambridge Associates and co-author of the report. To respond to these dynamics, scenarios, and potential new realities, investors will be best served by seeking even greater diversification of return sources; recognizing that defending a portfolio’s value in the next recession may look different than doing so in the last one, and carefully evaluating active managers to understand how stable they will be in an age of disruption.

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Median Account Balance Zero

The median retirement account balance among working-age Americans is zero, says a research report by the National Institute on Retirement Security. Using U.S. Census Bureau data, the institute also found 57 per cent of working-age Americans ‒ more than 100 million people ‒ don’t have retirement assets in an employer-sponsored defined contribution plan, pension plan, or individual retirement account. “Retirement is in peril for most working-class Americans,” says Diane Oakley, the report’s author and NIRS executive director. The report found about 80 per cent of working Americans have less than one year’s income saved in retirement accounts. As well, even among retirement account savers, the typical worker had a balance of just $40,000.

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SSQ Offers Cannabis Coverage

In light of clinical advances demonstrating the efficacy of cannabis in the treatment or relief of certain medical conditions, SSQ Insurance will be offering a new option as of January 1, 2019, to cover medical cannabis expenses. In an effort to control group insurance costs, eligibility for the expenses incurred for the purchase of medical cannabis will be subject to certain conditions. Prior authorization will be required. It will be covered only when used to treat or relieve chronic neuropathic pain, cancer related pain, spasticity secondary to multiple sclerosis or spinal cord injury, and nausea and vomiting caused by chemotherapy when standard pharmacological treatments have not worked.

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Ivanhoé Cambridge Acquiring Callahan

Ivanhoé Cambridge will acquire Callahan Capital Properties. In 2012, Ivanhoé Cambridge entered into a strategic relationship with Callahan with the mandate of significantly expanding its U.S. office properties platform. The platform’s assets under management in the U.S. are in excess of US$10 billion. Ivanhoe Cambridge is the real estate investment subsidiary of the Caisse de Depot et Placement du Quebec.

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Köttering Leads London Office

Andreas Köttering will lead CBRE Caledon’s newly-established office in London in the UK. He will serve as a partner and head of infrastructure for Europe and be responsible for building a team in London to originate, execute, and manage private European infrastructure investments. Prior to joining the firm, he served as the co-head of infrastructure-Europe for GIC. He also previously held senior infrastructure roles with the Canada Pension Plan Investment Board, Citi, Schroders, and Siemens.

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Program Goes Beyond Basics

The CPBI Saskatchewan Region’s ‘Benefits, Beyond the Basics’ program addresses in-depth aspects, current trends, and emerging issues for group benefits plans. Topics include roles and responsibilities, claims administration, flexible benefits, funding, emerging issues, and total compensation/total rewards. It takes place December 4 and 5 in Saskatoon, SK. For information, visit Beyond Basics

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September 20, 2018


Sponsors Lack Confidence In CAP Products

Canadian plan sponsors are dissatisfied with the capital accumulation plan (CAP) products currently available and not very confident that their participants will have the income they require throughout retirement, says a survey by Schroders. Less than one quarter (22 per cent) of respondents were satisfied with the products available and just over half (53 per cent) think most Canadian retirement products will not provide enough income to last through retirement. As well, 29 per cent thought most products were not tailored to the specific needs of Canadians. “Although risk needs to be considered and adjusted when approaching retirement, it is important to remember that participants need to double their retirement savings from age 55 to 65,” says Neil Walton, head of investment solutions at Schroders. “In today’s low interest rate environment, following a typical glidepath isn’t enough. Canadians nearing retirement need products that will protect their savings while continuing to grow their income and capitalize on positive market conditions.” Earlier this year, it launched its MyRetirement target date funds designed specifically to meet the needs of Canadians saving for retirement. These funds aim to deliver a predictable income stream in retirement years by delivering better outcomes based on member needs throughout their lifetime including beyond retirement; enhance returns and reduce risk by incorporating dynamic asset allocation and explicit risk management; and provide a high level of sustainable retirement income through continued allocation to growth assets underpinned by a bond portfolio structured to deliver essential income.

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Asset Managers Confident They Can Adapt

Canadian asset managers are not immune to the evolving changes impacting the financial services sector, says a national poll by RBC Investor & Treasury Services. While increased regulation remains the top challenge, an overwhelming number of respondents also believe that proper data management can benefit their firm and 94 per cent are confident they can adapt to the changing environment. Managers selected increased regulation as their top near-term challenge, garnering 16 per cent of choices. Greater transparency requirements and enhanced protection for investors, as well as additional oversight for the asset management sector, are potential reasons behind the focus on regulation. Increased regulatory obligations have also created a heightened sense of awareness of reputational risk among managers. “With the business environment continuing to evolve, managers must ensure they remain competitive while addressing continued regulatory shifts. We believe that asset managers today are looking for more than commoditized custody services. They are looking for a true partner that understands the benefits of new technology and can successfully apply it to provide rapid access to meaningful data that helps them with their business decisions,” says David Linds, managing director and head of asset servicing Canada at RBC Investor & Treasury Services.

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Canada Attractive For U.S. PE Investors

Sustained growth in the Canadian economy and heightened competition for deal flow amongst private equity (PE) and other institutional investors continue to make Canada an attractive destination for U.S.-based PE investors, says a study commissioned by Bennett Jones. ‘Due North: U.S. Private Equity Sets Sights on Canada’ says U.S. investment firms will continue to dedicate resources to sourcing opportunities in Canada, drawn by a perception of lower valuations and the opportunity to deploy meaningful capital, all while remaining relatively close to home. It finds the top sectors for investment in Canada are consumer goods (24 per cent), industrials and chemicals (22 per cent), oil and gas (14 per cent), and technology (14 per cent). “Canada remains an attractive destination for U.S. investors, notwithstanding certain challenges facing the Canadian economy. The total value of private equity deals continues to reach new heights,” says John Mercury, vice-chair, clients and industries, at Bennett Jones.

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Benefits Cost Decision Risks Loss Of Employees

While many employers have become accustomed to selecting benefits and compensation packages based on cost alone, they risk losing their most valuable employees as a result, says Leslie Lemenager, regional president of Gallagher’s employee benefits consulting and brokerage. Its ‘2018 Human Capital Insights Report’ shares best practices on ways to strengthen the key aspects of workplace wellbeing: physical and emotional, career, financial,; and organizational. In terms of employees’ physical and emotional wellbeing, it says this drives improved business outcomes. For employers, there are many cost-conscious ways to address their teams’ physical and emotional wellbeing, but knowing which levers to pull depends on the makeup of the workforce. Conducting a cultural assessment will allow decision makers to pinpoint existing resources and determine gaps and opportunities. The workforce’s perception of job security, possibilities for career growth, and their connection to the organization’s values and mission are predictors of employee turnover. Employers that invest in their employees’ career wellbeing improve their chances to retain top-performing employees and attract new ones.

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Good, But Not Great, Returns Ahead

Relatively steady economic growth, controlled inflation, and accommodative monetary policy will combine to drive “good-but-not-great” risk asset returns and “low-but-mostly-positive” fixed income returns, says the Northern Trust capital market assumptions working group five-year capital market forecast. Mixing optimism and a temperate outlook, Northern Trust suggests that global equity returns will remain below long-term averages, but they should also be higher than current valuations suggest. On the fixed income side, the expectation is that mild growth and relatively tame inflation will keep interest rates low and yield curves flat globally. For real assets, it expects performance in line with equities that also provides additional diversification benefits. Similarly, alternative assets such as private equity and hedge funds are anticipated to continue to add some value by enhancing risk-adjusted returns. The report suggests six per cent is a reasonable prediction for one-year developed market equity returns for the foreseeable future. As well, moderate growth and lower valuations should benefit emerging market equities, which are expected to return 8.3 per cent per annum.

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Northleaf Raises New Capital

Northleaf Capital Partners has raised US$2.2 billion in new capital across its global private equity program. It now manages more than US$11 billion in private equity, private credit, and infrastructure commitments on behalf of institutional investors in Canada, Europe, and the United States.

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Edwards Joins Sionna

Simone Edwards is director, relationship management, at Sionna Investment Managers. She brings more than 20 years of experience working with institutional clients at both investment management firms and a large insurance company. She was also a consultant to both defined benefit and defined contribution clients at Aon Hewitt. Most recently, she was director, institutional business development, at Scotia Institutional Asset Management.

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Gosselin With Total Health Management Team

Virginie Gosselin is a principal consultant with Mercer Canada’s total health management team. With over 15 years of benefits consulting experience, she has expertise in the strategic development and implementation of workplace health and wellness programs.

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HRPA Pension Program Offered

In partnership with the HRPA, the Canadian Pension and Benefits Institute is offering ‘The HRPA Pension Certificate Program.’ Attendees will gain an understanding of the legal and regulatory framework that applies to pension and other retirement savings plans, learn tips on best practices in plan administration and governance, and get strategies to reduce risk and liability in plan administration. It takes place October 30 to November 1 in Toronto, ON. For information, visit Pension Certificate

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September 19, 2018


Longer Living Retirees Need Longevity Insurance

Longer living retirees need the option of pure longevity insurance, says a report by the C.D. Howe Institute. In ‘Making the Money Last: The Case for Offering Pure Longevity Insurance to Retiring Canadians,’ Don Ezra, its author, makes the case for the provision of longevity insurance and argues for governments to take the necessary steps to facilitate its offering by Canadian insurers. He says with a large swath of baby boomers recently retired or set to retire, and many of them having accumulated retirement wealth in capital accumulation plans, the time has come for governments to shift their attention to policies facilitating the efficient and economical decumulation of retirement capital. Rather than wondering whether they will outlive their assets, retirees should be able to secure a lifetime income stream that kicks in if they outlive their life expectancy. The provision of longevity insurance is an essential component for making this happen. For reasons related to individual taxation, Canadian insurers do not currently offer pure longevity insurance contracts on a stand-alone basis. Unbundling the pure longevity insurance component from these financial products would make the stand-alone contract cheaper and likely more attractive.

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Pay-for-performance Sparking Changes

Growing pressure to improve their pay-for-performance programs and ensure fair, transparent pay practices throughout the workplace is sparking changes to Canadian corporate employee compensation programs, says a survey by Willis Towers Watson. It revealed several factors that are prompting employers to make or consider changes to their programs including manager feedback (78 per cent), feedback from employees (73 per cent), cost (69 per cent), and the changing marketplace (61 per cent). Some of the changes that respondents are planning to make this year or considering over the next three years include reassessing base pay and annual incentive plans, heightened pay decision transparency, new technology, and refocused performance management. “Getting compensation right is becoming increasingly important as employers look to drive higher levels of performance, attract and retain talent, and make fair pay decisions,” says Sandra McLellan, North America business leader, rewards, at Willis Towers Watson. “Decisions around pay, however, are becoming more complex, and many employers say their base pay and short-term incentive programs are falling short of expectations. Not surprisingly, changes to these and other related programs are on the horizon.”

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ICBT Delivers Prevention

Internet-based Cognitive Behavioural Therapy (ICBT) is not a “bright, shiny new toy,” says Paula Allen, vice-president of research and integrative solutions at Morneau Shepell. Speaking on ‘Making Waves: Digital Approaches to Reducing Mental Health Disabilities’ at the ‘29th Annual Schedule 2 Employers’ Group Conference,’ she said if managed and delivered properly, it delivers prevention and return to work for employees suffering from mental health issues. Other key therapies such as medication and TMS (transcranial magnetic stimulation) can be used to treat mental health problems. However, medication only works as long as it taken. It doesn’t cure the condition, only manages the symptoms. And while TMS changes brain activity, Cognitive Behavioural Therapies (CBT) retrains the brain to respond to stressors in a more productive way. Evidence shows it changes the brain which increases the longevity of the benefit of CBT. It is used as a therapy for anxiety, pain, depression, and sleep disorders. As well, ICBT fits within the reimbursement guidelines for many benefit plans, unlike in-person programs which cost much more. However, research shows there is no difference between face-to-face and internet therapies.

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Investors Bearish On Global Growth

Although money managers continue to regard the U.S. as the most favourable region for equities for the second consecutive month, investors have become bearish on global growth, says the Bank of America Merrill Lynch’s monthly fund manager survey. This month, a net 24 per cent of the managers surveyed said they expect global growth to slow in the next year, up from a net seven per cent in August. This marks the most negative outlook on the global economy from managers since December 2011. Nearly half of survey participants ‒ 48 per cent ‒ believe the current decoupling, in which U.S. growth has been higher than most other developed economies, will end because U.S. growth will begin to slow down. Meanwhile, 24 per cent expect decoupling to continue, while 28 per cent think Asia and Europe’s growth will accelerate. The U.S. continues to be the most favoured equity region globally for the second month in a row as managers buy growth over value. Manager allocations to U.S. equities inched up two percentage points to a net 21 per cent overweight, the biggest overweight since January 2015. A possible trade war remains the biggest tail risk for managers for the fourth month in a row, with 43 per cent of respondents putting it at the top of their list of concerns. However, that concern is receding. Last month, 57 per cent of respondents considered a trade war the biggest tail risk. The top three are rounded out by a China slowdown (18 per cent) and quantitative tightening (15 per cent).

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Institutional Investors Sceptical About Quant Investing

Institutional investors are sceptical about quant investment strategies, mainly due to a perceived lack of transparency, says Cambridge Associates. More than half of the institutional investors it surveyed were still uncomfortable with quant strategies. In defence of quants, it says these strategies offered lower costs and comparable returns when compared with traditional active management strategies. Its research shows that median global equity fund fees for quant strategies were 55 basis points, which compared to 75 basis points for ‘fundamental’ human-managed investment strategies. Investors traditionally perceive quants as being subject to high trading costs and at risk of crowding into the same investment positions and crashing. However, it says quants use algorithms that can express the typical strategies used by active fund managers “very efficiently” without suffering from subconscious human biases, as they will not invest in anything that does not fall within the pre-set parameters.

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Diminished Liquidity Fuels Fixed Income Demand

Diminished liquidity in global bond markets is fueling demand for fixed income ETFs among institutional investors in Europe and the United States, says Greenwich Associates’ fixed income ETF study. ‘Institutions Turn to ETFs for Bond Market Liquidity’ shows a large majority of the institutions say they face increasing challenges in trading, liquidity, and security sourcing. The situation appears particularly tough in Europe, where 78 per cent of institutions say trading, liquidity, and security sourcing in fixed income markets has become more challenging. Sixty per cent report that it’s become more difficult to execute large bond trades over the past three years. Over two-thirds of respondents overall reported these changes are impacting their investment management processes. Due in large part to these market liquidity and trading cost issues, 60 per cent of institutions have increased their use of bond ETFs in the past three years, with allocations now averaging roughly 18 per cent of total fixed income assets. 

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Hedge Funds Drop In August

The Preqin All-Strategies hedge fund benchmark was down 0.15 per cent in August after posting positive returns in July when it was up 0.62 per cent). This takes the year-to-date and 12-month returns to 1.32 per cent and 5.7 per cent respectively. Macro strategies outperformed all other top-level strategies with gains of 0.47 per cent. Multi-strategy vehicles were down 0.32 per cent and credit strategies dropped 0.48 per cent. They were the only top-level strategies to suffer losses in August. Volatility-driven hedge funds enjoyed strong performance in August generating returns of 1.34 per cent. CTAs overcame three months of consecutive negative returns to achieve a return of 1.69 per cent in August, pushing 12-month returns to 0.73 per cent.

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McBride Joins Equitable Life

Crystal McBride is group marketing manager at Equitable Life. In her career, she has held client development positions with companies such as WE CAUS Consulting and Benefits, BCCA Employee Benefits Trust, and bClear Benefits. She also spent 14 years with PPI Financial in group benefits. 

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Mental Stress Claims Examined

‘Mental Stress Claims ‒ Effective Strategies for Progressive Employers’ will be the focus of an AGS Rehab Solutions and Hale Health and Safety Solutions session. It will examine the impact of the WSIB’s new chronic mental stress policy; complaints to the ministry of labour; legal issues related to chronic stress claims; and best practices for prevention, recognition, early intervention, coping skills, and accommodation for employees suffering from mental stress. It takes place November 6 in Mississauga, ON. For information, call 905-366-1444 or 1-888-567-1235, X 113.

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September 18, 2018


BC Strengthening FICOM

The British Columbia government intends to overhaul the Financial Institutions Commission (FICOM) to strengthen oversight of the financial services sector and better protect people’s savings. It intends to introduce enabling legislation in the spring of 2019 to update the structure of FICOM to make it an independent Crown agency. The new agency will maintain responsibility for regulation of mortgage brokers, insurance and trust companies, pensions and credit unions. It will be operationally independent, yet accountable to government, and funded by industry. The objective is to “bring B.C. in line with international standards for financial regulators.

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Tariff Face-off Likely To Continue Into New Year

As the industry comment period on $200 billion of Chinese imports ends, U.S. President Donald Trump looks likely to announce tariffs in the next few days in what Dec Mullarkey, managing director at Sun Life Investment Management, says is intended to force the Chinese to come prepared to the negotiation table. With talks already scheduled in late September between Steven Mnuchin, of the U.S. Treasury, and Chinese Vice Premium Liu He. This phase of tariffs will directly impact U.S. consumers as products such as electronics, furniture, lighting, chemicals, plastics, televisions, and toys are all impacted. Business concerns of the affected on consumer demand and political vulnerabilities ahead of the midterm elections, appear to have resonated with Trump as a tariff rate of 10 per cent now seems likely rather than the initially threatened 25 per cent. If the tariffs are implemented they would hit in November and cool the holiday shopping spirit and spark backlash at the polls. Any U.S. tariffs are certain to be met with retaliation as China had indicated a range of tariffs, of five to 25 per cent on $60 billion of U.S. goods, he says. It is expect to target LNG, civilian aircraft, lumber, agriculture. and auto parts. This tariff burden will be more draconian in the U.S. and consumers will feel the pinch at the checkout register, says Mullarkey. However, the U.S. equity market is unlikely to remain unscathed as business leaders urge that tariffs will undo the stimulus gains. “This faceoff on trade is likely to continue well into next year. President Trump wants to appear faithful to his pledge to rewrite unfair trade deals. China, under Xi Jinping, is positioning itself at an inflection point to establish global prominence in technology. Each leader is heavily invested in their mandate and unlikely to back down quickly. The first casualty from any protracted protectionism will be global growth,” he says.

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Progress Made On Risk Management

Ten years after the 2008 financial crisis, an in-house survey among members of CFA Montreal shows significant progress in terms of risk management, the addition of controls, and improved due diligence in the investment selection process. The survey also reveals that portfolio managers are demonstrating more transparency and a greater degree of accountability. “The survey results confirm that the investment industry has learned from the 2008 financial crisis,” says Frederick Chenel, president of CFA Montreal. “Over 80 per cent of respondents report significant improvements in both risk management and relationships with clients. In their opinion, increased regulations over the past 10 years has also provided a better framework for the financial and investment industry, reducing the risk of a similar event of the same magnitude occurring in the future.” For 57 per cent of respondents, investor concern about the current economic environment is relatively low and less than half of the respondents expect another financial crisis occurring by 2021. For 49 per cent of respondents, the key triggers for a new economic crisis would be political instability and uncertainty, as well as a cooling of the 10-year bull market.

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Anxiety, Depression Considered ‘Epidemic’

Over half of Canadians (53 per cent) consider anxiety and depression to be ‘epidemic’ in Canada, with that perception spiking amongst younger people, says a survey commissioned by the Canadian Mental Health Association (CMHA). Fifty-nine per cent of 18- to 34-year-olds consider anxiety and depression to be ‘epidemic’ in Canada, followed closely by addiction (56 per cent) and ahead of physical illnesses such as cancer (50 per cent), heart disease, and stroke (34 per cent), diabetes (31 per cent), and HIV/AIDS (13 per cent). The survey accompanies a national CMHA policy paper, ‘Mental Health in the Balance: Ending the Health Care Disparity in Canada,’ which calls for new legislation to address unmet mental health needs and bring mental healthcare into balance with physical healthcare. “Our universal healthcare system is a point of pride for Canadians,” says Dr. Patrick Smith, national CEO of the CMHA. “But the reality is, we don’t have a universal healthcare system, but a universal medical system that doesn’t guarantee access to some of the most basic mental health services and supports.”

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Two Have New Duties

Robert Veloso is global head of financial planning and analysis for Manulife Financial. In this role, he will lead the global financial planning process and provide objective reporting and forward-looking insights to the executive leadership team. Since joining the firm in 2010, he has held progressively senior roles in investor relations. Adrienne O’Neill is head of investor relations. She will lead the company’s global investor relations program, serve as its primary spokesperson to the investment community, oversee the preparation of investor communication materials, and provide strategic counsel to the senior management team. She joined the firm in 2007 and has held progressively senior roles in the its wealth and insurance businesses. Most recently, she was head of the private markets business office at Manulife Asset Management.

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Chitilian Joins CDPQ Infra

Harout Chitilian is executive director, corporate affairs and development, at CDPQ Infra. In this capacity, he will oversee government and community relations, internal, and external communications, as well as its brand identity. He has been a consultant for a range of information technology and telecommunications companies. CDPQ Infra is a wholly owned subsidiary of the Caisse de dépôt et placement du Québec.

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Pooling Rethought

Rethinking pooling and a benefits and employment law update will be featured at a ‘Benefits Breakfast Club’ session. Erin Crump, leader of strategic innovation at Green Shield Canada, and Faizel Alladina, senior vice-president product and underwriting, for the People Corporation will examine current insurance industry pooling practices for extended health plans, review what is and what is not working, and discuss new potential approaches to managing risk and pooling costs. Sukhvinder K. Dulay, an associate in benefits law, and Sunny Khaira, an associate in employment and labour law, for Hicks Morley, will provide insights into new/emerging legal developments for those working in employee benefits and human resources, including cannabis in the workplace. It takes place October 11 in Oakville, ON. For information, visit Rethinking Pooling

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