Industry News

Consider signing up for our Daily News Alert Email to receive relevant industry news, headlines and articles delivered directly to your inbox

Subscribe Now

September 10, 2018


Intelligent Sensors Hasten Remote Healthcare

Intelligent sensors are hastening the creation of a fully connected ecosystem, opening up the possibility of remote or home healthcare becoming a mainstream healthcare model, says Frost & Sullivan’s ‘Internet of Medical Things Enabling Hospitals of the Future’ analysis. Devices such as wearables or eSkin sensors, which aid chronic disease management, and further improvements in the size, sensitivity, selectivity, and communications capability of sensors are giving a huge boost to real-time remote monitoring. This escalating demand for remote patient monitoring, along with the introduction of advanced smartphones, mobile applications, fitness devices, and advanced hospital infrastructure, are setting the stage for establishing smart hospitals all over the world. “Sensors, artificial intelligence (AI), big data analytics, and blockchain are vital technologies for Internet of Medical Things (IoMT),” says Varun Babu, senior research analyst, TechVision. “For instance, they help with the delivery of targeted and personalized medicine while simultaneously ensuring seamless communication and high productivity within smart hospitals.” The main objective of IoMT is to eliminate unnecessary information within the medical system so that doctors can focus on diagnoses and treatment.

Share This:


Targeted Communications Improve Allocation Choices

Employers can use targeted internal communication and other tactics to help their employees understand asset allocation and empower them to make better choices, says Sibson Consulting. Left to their own devices, they may make less than ideal decisions such as adjusting their allocations at the wrong time, chasing returns, not responding to changes in their lives, and investing too much in stable value funds or company stock. Since asset allocation is so important, it recommends employers consider embarking on a two-pronged process. First, they should better understand their employees’ financial situations. Then they can apply what they learn to give their employees the data they need to make informed decisions. Specifically, employers should be looking for allocations that have inappropriate levels of risk, lack diversification, and are invested in multiple TDFs. To mitigate these problems, regular, targeted education about asset allocation and participants’ own goals can be effective. An individual retirement readiness statement is another tool employers can use, as well as one-on-one meetings, broader campaigns, and modeling software.

Share This:


Bull Market Has Longer To Run

The longest bull market rally in history has further to run – but investors may wish to start to build cash positions before next year, says Tom Elliott, deVere Group’s senior international investment strategist. Following the S&P 500 index reaching a new all-time high in late August and recording its longest ever rally (which began in March 2009), he says “Wall Street is celebrating the longest stock market rally in history. One suspects it has further to go, given that the current defining features of the U.S. economy ‒ strong growth and a cautious Fed – are an investor’s dream.” However, while the outlook for Wall Street over the coming months appears good, going into 2019 investor sentiment towards the U.S. stock market may change sharply so “cautious investors may want to start building up cash positions, and so take advantage of any sell-off.”

Share This:


Australia Abolishes Raising Retirement Age

The Australian government will abolish a plan to boost the retirement age from 67 to 70 as its prime minister, Scott Morrison, no longer sees the policy as necessary. The cabinet will ratify the pension age reversal this week, keeping the pension age at 67. The original policy was considered “probably a step too far.” Although the pension age hike was never made law, it was still an official government policy until now. Originally, the age would rise from 67 by six months every two years from 2025 until 2035 when it would hit age 70. The policy was expected to save roughly $3.6 billion in its first four years. The retirement age is currently at 65.5. It will increase to age 67 in July 2023.

Share This:


Saudi Company Enhances Access

A Saudi-based paper merchant is the first Saudi company to sign up to a technology platform designed to enhance corporate access to regional and institutional investors. The Middle East Paper Company (Mepco) in now on the Closir platform which targets listed companies in emerging markets. Joining the platform gives companies like Mepco ‒ which are looking to attract institutional investors ‒ the ability to organize meetings, roadshows, and virtual conferences. Companies in Saudi Arabia have become more attractive to investors since the country was reclassified to emerging market status by index provider MSCI.

Share This:


Millennials Not Saving For Retirement

One in four (24 per cent) of millennials in the UK are not saving into pensions, says a survey commissioned by Prudential. It also found that one in six (16 per cent) do not think they will ever be able to afford retirement. While nearly seven out of 10 (69 per cent) of under-35s are saving into pensions either through work or personal schemes, they need help and advice. Over half (53 per cent) would like employers to explain pensions and benefits and nearly a quarter (24 per cent) say they find pension rules confusing. Many of those recognize they are not saving enough with 23 per cent saying their current workplace or personal pension contribution is not high enough.

Share This:


EM Alternatives Raise More Capital

Emerging markets alternative investment funds raised 11 per cent more capital in the first half of 2018 than the first six months of 2017, says an EMPEA report. The increase in fundraising of emerging market alternative investment funds ‒ including private equity, venture capital, private credit, infrastructure, and other real assets ‒ was $31 billion in the six months ended June 30, up from $28 billion in the six months ended June 30, 2017. The increase in emerging markets alternative investment fundraising is attributed to Asia-focused funds, which raised $28 billion in the first half of 2018, up 27 per cent from the $22 billion raised in the first half of 2017. Private capital investments in emerging markets rose by 20 per cent in the first half of this year, compared to the same period in 2017. Emerging markets alternative investment vehicles invested $30 billion in the first six months of 2018, compared to $25 billion in the six months ended June 30, 2017.

Share This:


Marijuana ETF Reaches Milestone

Horizons ETFs Management (Canada) Inc.’s Marijuana Life Sciences Index ETF has reached C$1 billion in assets under management (AUM). The index offers direct exposure to an investable index of North American-listed companies with business activities in the marijuana industry. The ETF reached its $1 billion milestone in a relatively short amount of time – 16 months. It seeks to replicate, to the extent possible, the performance of the North American Marijuana Index net of expenses. It selects from a current universe of companies that have operations that may include one or more of biopharmaceuticals, medical manufacturing, distribution, bio-products, and other ancillary businesses related to the marijuana industry.

Share This:


ADP Adds Manager Insights To App

ADP has launched ‘Executive and Manager Insights’ on its mobile solutions app. Through artificial intelligence (AI) and machine learning (ML) innovation, this app provides actionable workforce insights directly to business leaders and frontline managers in real time. This allows clients to identify areas where they should investigate; freeing up time for HR teams to focus on tending to the increasing needs of an evolving workforce. As well, the data can allow managers to connect HR policies to the organization’s bottom line by pushing right-place, right-time insights to business leaders.

Share This:


Oxford Opens Food Market

Oxford Properties has opened Market & Co., a food market located within a premium shopping centre environment at the Upper Canada mall in Newmarket, ON. From authentic Neapolitan pizza to fresh oysters, it features an artisanal mix of merchants with a focus on fresh, local fare. The 40,000 square foot space brings together 20 best-in-class merchants and first-to-market eateries in the York region. Upper Canada is co-owned by Oxford and the Canada Pension Plan Investment Board. Oxford is the global real estate arm of OMERS.

Share This:


Plotkin Joins People

Judy Plotkin is vice-president, health and wellness, at the People Corporation. Most recently, she was vice-president, growth and strategy, at the ReedGroup. Her background also includes positions at Wellpoint Health and Homewood Human Solutions.

Share This:


Finstad Joins Bodhi

Dave Finstad (CFA) is a visiting researcher with Bodhi Research Group. With over 25 years of experience, he was most recently director, external relationships, at OMERS.

Share This:


Cybersecurity Key Topic At Conference

IFIC’s ‘Annual Leadership Conference’ will cover key topics such as cybersecurity, cryptocurrency and international competitiveness. In addition to an update on the regulatory issues affecting the investment fund industry, a leaders’ panel will see industry innovators discussing key industry trends, threats and opportunities. It takes place September 28 in Toronto, ON. For information, visit IFIC Leadership

Share This:


September 7, 2018


Escalating Healthcare Concerns Employers

Canadian employers place a high priority on employee productivity, engagement, and wellness, but they are also concerned about the escalating costs of group benefits and, in particular, the costs of drugs and extended healthcare, says a survey from Aon. “The key takeaway from our survey is that plan sponsors are keenly aware of the need to manage rising benefits costs, but they also put a high priority on ensuring their employees are engaged and healthy,” says Greg Durant, Canadian health and benefits chief actuary at Aon. “Those might seem like competing priorities, but our view is that employers can achieve a balance.” To do that, he says they need to take a hard look at the interaction of benefits and workforce priorities, and be willing to think outside the box. “Could wellness programs reduce overall extended health costs? Might a more personalized benefits experience help attract and retain engaged employees? There are plenty of creative strategies out there for employers to meet their workforce objectives while satisfying the bottom line,” he says.

Share This:


Medavie Celebrates 75th Year

In celebrating its 75th year of serving Canadians, Medavie has actually been around longer than Medicare, says Michael Decter, chairman of its board. Speaking at an event to celebrate its anniversary, he said while Canada has one of the best health system in world, there is still lots to be done to make it better and more sustainable. The “continuing reality” is this cannot occur unless the system innovates and this can be done by partnering with other groups like government. This partnership is the “road” to a sustainable system, he said. Bernard Lord, CEO of Medavie, said the non-profit organization was created 75 years ago to give Canadians access to care when and where they needed care and that “fundamental belief” is still in place. However, there are still challenges ahead and while he is pleased with what has been accomplished, he is still not satisfied and wants to do more for Canadians. The event was capped off with a presentation by Kim West, chairman of the Medavie Health Foundation which was created six years ago with a mission of supporting programs to deal with post-traumatic stress disorder, Type 2 Diabetes, and mental health issues in youth. On behalf of the foundation, a $75,000 donation was made to jack.org, which trains and empowers young leaders to revolutionize mental health.

Share This:


Performance Rating Systems Declining

After increasing in popularity from 2001 to 2011, performance rating systems have declined in prevalence over the past few years, with 94 per cent of organizations having a rating system in 2011 compared with 85 per cent in 2017, says a report by the Conference Board of Canada, ‘Trends in Performance Management: From Forms to Feedback’ also shows 74 per cent of surveyed organizations have a rating system in place for senior executives and executives, 83 per cent use a rating system for management employees and 81 per cent reported using ratings when evaluating non-management, non-unionized employees. In contrast, for unionized employees, rating systems were used by only 41 per cent of organizations ‒ either in formal discussions or for administrative purposes. Many organizations believe ratings serve a critical role in helping to differentiate and justify compensation increases based on performance. Over two-thirds of surveyed organizations link their performance management systems to base pay (70 per cent) and/or short-term incentive pay (70 per cent). As well, performance management is shifting towards a developmental focus. In 2016, over three-quarters (80 per cent) of organizations reported having either made changes in the last three years or are considering changes to their performance management systems and processes. The most common change was to increase the focus on coaching, ongoing feedback, and behavioural-based feedback.

Share This:


Sustainable Exposure Growing

Nearly one in three (30 per cent) institutional investors plan to increase their exposure to sustainable investments over the next 24 months, says a survey by Sustainable Ventures. It also shows that just seven per cent of sophisticated investors plan to decrease their exposure to environmentally-friendly investments over the next two years. The survey also found that 31 per cent of investors wish there were more investment opportunities in companies that are truly sustainable and would prefer to invest in those whose products and services are designed to reduce a negative impact on the environment rather than companies which don’t have this purpose but which have strong sustainable credentials. Investors planning to increase their exposure to ESG want to do more to support sustainable companies (53 per cent) in the face of growing evidence that sustainable investments outperform non-sustainable ones (38 per cent). They also want to diversify their portfolios from other asset classes.

Share This:


Quebecers Favour Private Entrepreneurs In Healthcare

With the election campaign in full swing, a Leger poll conducted for the MEI shows that Quebecers are largely in favour of having private entrepreneurs enhance the provision of healthcare, as long as this care continues to be covered by government. A majority also say they are dissatisfied with their healthcare system and believe the billions of dollars injected into it over the past 10 years have not produced good results. “Quebecers’ support for entrepreneurship within a universal healthcare system is no surprise,” says Patrick Déry, public policy analyst at the MEI. “That’s how it’s done almost everywhere in Europe, where access to healthcare is better than here. Election candidates, who are outdoing each other with all sorts of promises, should take note.”

Share This:


Investors Seek Tool For Credit Risk

The shrinking popularity of credit default swaps has left investors in search of an effective tool for managing credit exposures and risk. In fact, a study from Greenwich Associates shows that CDS, the traditional hedging product pioneered in the 1990s, have fallen behind ETFs in popularity as investors’ tool of choice for managing credit exposure. In the wake of the global financial crisis, regulators enacted sweeping reforms of the CDS market, which played a role in transmitting credit risk around the financial system with remarkable speed and incredible scale. While these reforms have reduced the level of counterparty risk, they have also had the effect of reducing liquidity and the utility of the CDS itself. The study of credit market participants shows 67 per cent said managing volatility was their top priority and ETFs were the group’s preferred tool for gaining credit exposure. A majority of investors are unsure about the prospects for a CDS revival and cite a lack of interest from the sell side, unsupportive regulations, lack of a CCP, and a lack of incentives for liquidity providers to make markets.

Share This:


Simple Technology Business Opportunity

The implementation of simple, comprehensive technology to an advisor’s practice is a clear business opportunity, says a study by Fidelity Clearing & Custody Solutions. Its research shows that financial advisors who embrace technology, also known as ‘eAdvisors,’ have more than 40 per cent higher assets under management and generate nearly 25 per cent higher compensation. In Canada, technology, back office, and administrative support are major focus areas for financial advisors who are unsatisfied with their back office support. Fidelity Clearing Canada (FCC) identifies technology as a major competitive advantage for back office support. It has launched uniFide, a fully-integrated web solution that delivers processing efficiencies, consolidated information, enhanced tools, and robust support.

Share This:


Strategy Emphasizes ESG Factors

Willis Towers Watson has worked with MSCI, a provider of indexes and portfolio construction and risk management tools and services for global investors, to develop an investment strategy emphasizing the importance of integrating environmental, social and governance (ESG) factors within the investment process. This strategy is part of its belief that the principles underlying sustainable investments (long-term strategies that integrate ESG factors and effective stewardship) form the cornerstone of a successful investment strategy and should be a key part of all investors’ approaches. The ‘Adaptive Capped ESG Universal Index’ offers a simple and differentiated way to invest in equities for many investors who are looking to manage a broad range of ESG factors within their investments rather than those focusing on a particular issue. It invests in both developed and emerging markets with a highly diversified portfolio that spreads capital and risk evenly between stocks.

Share This:


Investors Want Efforts Repudiated

Institutional investors led by Walden Asset Management and the California State Teachers’ Retirement System (CalSTRS) have written to 45 corporate executives asking them to repudiate efforts by the National Association of Manufacturers (NAM) to “discredit shareholder engagement, particularly on climate change.” Walden and CalSTRS have sent letters to executives whose companies are members of the executive committee and board of NAM. The letters are endorsed by more than 80 institutional investors, including state and city pension funds, mutual funds, investment firms, and foundations. The letters from Walden Asset and CalSTRS took issue with a May report, commissioned by NAM, called, ‘Political, Social and Environmental Shareholder Resolutions: Do They Create or Destroy Value?” They say this report and other recent NAM actions demonstrate that “NAM appears to be part of a concerted effort to curtail the ability of shareholders to file proposals linked to material business issues impacting the sustainability of the company.”

Share This:


Teachers’ Acquire Kanetix

Ontario Teachers’ Pension Plan will acquire Kanetix Ltd., a Canadian digital customer acquisition platform and marketplace that provides quote comparison search tools for insurance and financial products. Kanetix has been providing Canadians with online insurance quotes since its launch in 1999 and has built successful partnerships with Canada’s leading insurance companies.

Share This:


MacLean Moves To IIAC

Beverley MacLean is managing director, communications, for the Investment Industry Association of Canada (IIAC). Most recently, she was director, external communications and business comms leads, for the Canadian division of Manulife, a firm she joined in July of 2013 as director of media relations.

Share This:


Masom Joins Bank

Jeff Masom is global head of institutional distribution for the Royal Bank of Canada’s global asset management unit. Previously, he was senior managing director and head of U.S. sales for Legg Mason. He takes on his new duties as of September 10.

Share This:


Session Looks At ESG Engagement

‘Tapping into the Rising Demand for ESG: Engaging Clients Around Responsible Investment’ will be presented by the Responsible Investment Association (RIA). This awareness gap presents an opportunity for client-facing investment professionals to leverage RI to differentiate their business and add value to client relationships. This panel will explore various approaches to engage clients around responsible investing, including customizing the KYC and reporting ESG data. It takes place September 21 in Victoria, BC. For information, visit RI Engagement

Share This:


September 6, 2018


Canada’s Retirement Ranking Rises

Canada rose two spots to ninth among 43 countries in the ‘2018 Global Retirement Index.’ The Natixis Investment Managers report says the modest rise in Canada’s ranking is attributed to improving economic conditions and environmental factors. However, 10 years after the global financial crisis, it points to a confluence of factors – ultra-low interest rates, growing levels of public debt, aging populations, and human longevity – as indicators for the ongoing sustainability of retirement systems in Canada and around the world. “Global retirement security is facing a multi-dimensional problem as the traditional three-pillar funding model is challenged by 21st century demographics, fiscal imbalances, and monetary policies that are straining the resources of individuals, employers, and governments around the world,” says Jean Raby, CEO at Natixis. The examination of 18 factors across four broad categories ‒ finances in retirement, material wellbeing, quality of life, and health ‒ found Western Europe continues to dominate the top 10 countries in the 2018 index with Switzerland (No. 1), Iceland (No. 2), Norway (No. 3), Sweden (No. 4), Denmark (No. 8), and the Netherlands (No. 10). New Zealand (No. 5) and Australia (No. 6) maintain their positions in the top 10. Ireland entered the top 10 for the first time, climbing from 14th last year to 7th, the largest jump in both rankings and score of all countries. Canada returned to the top 10 mainly as a result of improvements in the biodiversity, air quality, and environmental factors indicators within the quality of life sub-index. It has the second-highest air quality and seventh-highest personal happiness scores in the entire index. In the material wellbeing category, Canada’s unemployment indicator improved as the country benefited from a stronger jobs market in 2017.

Share This:


Power Of Data Personalizes Total Rewards

HR professionals will need to engage the workforce of the future and they will do it by harnessing the power of data to understand employee needs to develop personalized total rewards programs, says Gordon Frost, a partner and career business leader, Canada, at Mercer. In its ‘The New People Equation: Empower Your Workforce For The Future With Total Rewards’ session, he said there are three trends currently impacting workforce. There has been an increase in workforce diversity which has never been seen before. As well, big data is providing new information and mobile platforms are changing the way individuals expect their employers to act. As a result, where total rewards once meant pay and benefits and these could keep people for the long term, that is no longer the case. The total reward strategy has evolved into an engagement contract where contributions to an organization are rewarded. And this is evolving further and the future total rewards strategy will turn into a “thrive contract” which offers employees a purpose and meaning which has impact on their employer, their community, and the world. Employers can provide this through digital platforms designed to create an emotional connection where employees feel engaged and empowered. These platforms must be a consumer grade experience with private and secure data, as well as conversational systems.

Share This:


Top Pension Fund Assets Jump

Assets under management at the world’s top 300 pension funds jumped by 15.1 per cent in 2017 to more than $18.1 trillion, driven largely by the growth of pension funds in emerging markets, says a report from Willis Towers Watson. Published by its Thinking Ahead Institute, it says last year’s growth rate was also helped by strong returns in all major asset classes which substantially outpaced the 6.1 per cent increase reported in 2016, when the top 300 pensions managed $15.7 trillion. The total proportion of assets represented by the Asia Pacific region overtook the proportion of assets represented by Europe during 2017 within the 300 funds. 

Share This:


Robust U.S. Equities Support Plan Health

A robust U.S. equity market and reduced liabilities supported an increase in the financial health of Canadian pension plans in August as the ‘Aon Median Solvency Ratio’ rose to 102.9 per cent. “Canadian pensions are still enjoying something of a Goldilocks moment,” says Calum Mackenzie, a partner and investment consulting practice director at Aon. “In an atmosphere of higher yields and steady returns in risk-seeking assets, especially in the U.S., pension solvency has once again reached a new high. Yet the question remains: How long can this moment last?” Indeed, significant divergence in returns across asset classes and geographies suggest that the days of global increases across the board might be numbered. Of surveyed plans, 57.7 per cent were more than fully funded as of September 1, up 2.4 percentage points in August. Gross pension assets returned 0.6 per cent in Canadian dollar terms. U.S. stocks (S&P 500) led all equity classes, with a 3.4 per cent return, followed by global MSCI World (1.4 per cent) equities. Bond yields declined marginally on the month, but remain higher than last quarter.

Share This:


Bond Sales To Prefund Pensions

General Motors Co. plans to use about $600 million from the proceeds of a sale of bond notes to prefund mandatory contributions to its Canadian and UK pension plans, says an 8-K filing with the Securities and Exchange Commission. The mandatory contributions are due in 2019 through 2021. As of December 31, GM’s non-U.S. unfunded pension obligation was $8.3 billion. In addition to the proceeds from the current debt offering, it expects to contribute approximately $1.2 billion to its non-U.S. pension plans in 2018.

Share This:


PII Target For Cybercriminals

The personally identifiable information (PII) that defined contribution plans safeguard is a tempting target for cybercriminals. This makes it imperative for these plans to protect themselves from breaches of their data, says the Segal Group. It warns failures could occur when sponsors exchange PII with recordkeepers or other service providers. It recommends a number of steps to protect against cybersecurity risk, including creating an information security policy and an incident-response plan; minimizing requests for and use of PII; assessing the information technology (IT) environment; and mandating the use of encryption for data-at-rest and data-in-motion. As well, plan sponsors should assess their recordkeeper’s technology and security procedures.

Share This:


Collaboration Streamlines GIPS Process

Eagle Investment Systems LLC, a BNY Mellon company which provides financial services technology, and ACA Compliance Group (ACA), a provider of risk management and technology solutions focused on regulatory compliance and performance, have collaborated to help standardize and streamline Global Investment Performance Standards (GIPS) verifications for clients. The GIPS standards, created and administered by the CFA Institute, provide a set of voluntary reporting guidelines based on the principles of full disclosure and fair representation of investment performance. By standardizing data collection and the packaging and reporting processes, Eagle and ACA are streamlining the annual verification workflows for their common clients which will result in material time savings for clients during the verification process. In addition, the solution will help asset managers stay ahead of the changes to the GIPS standards coming in 2020 and beyond.

Share This:


Greystone Acquires Alberta Power Plants

The Greystone Infrastructure Fund has acquired a 100 per cent equity interest in a 66 MW portfolio of nine operating power plants located in Alberta from a private equity fund managed by Kensington Capital Advisors Inc. The facilities produce electricity from waste-heat, waste-gas, and sales gas produced by major oil and gas exploration and production companies in the province which have entered into long-term contracts for the purchase of electricity from the facilities. With the acquisition, the fund has established a new energy infrastructure platform, WCSB Power Holdings LP.

Share This:


Noble Has New Role

Mark Noble is senior vice-president, ETF strategy, at Horizons ETF (Canada). Since April of 2013, he has been a senior vice-president and its head of sales strategy.

Share This:


Conference Focuses On Canadian Benefits

The International Foundation of Employee Benefit Plans’ ’51st Annual Canadian Employee Benefits Conference’ will feature sessions on managing medical cannabis claims responsibly, pension division on marriage breakdown, and finding missing members. It takes place November 18 to 21 in Las Vegas, NV. For information, visit Canadian Benefits

Share This:


September 5, 2018


Investing Sustainably Minor Factor

Investing sustainably remains a minor factor in the investment decision-making process despite institutional investor expectations it will grow in importance, says Schroders ‘Institutional Investor Study 2018.’ It has identified a mismatch between institutions’ perceptions of the importance of sustainability and what is still happening at the coalface of their investment process. Almost a third of investors (32 per cent) said that the sustainability focus of the investment had little to no influence on their investment decision-making, significantly less important than factors such as strategic asset allocation, fund manager track record, anticipated return, and risk tolerance. However, sustainability was a bigger focus for larger institutional investors. Investors who did place greater emphasis on sustainability tended to have a longer-term investment horizon, more investment confidence, and prioritized risk-adjusted returns. Some 32 per cent of those that had holding periods of at least five years stated that sustainability was a significant influence. This compares to 23 per cent of investors whose investment horizon was between three and five years. As well, over half (59 per cent) of investors more focused on sustainability were at least reasonably confident of meeting their expectations, compared to 37 per cent of investors who did not prioritize investing sustainably. Overall, just under three quarters of investors (74 per cent) globally stated that investing sustainably would grow in importance over the next five years, up on 67 per cent a year ago. A little under half (47 per cent) said they had increased their allocations to investing sustainably over the last five years. Corporate strategy, climate change, and accounting quality were identified as the most important issues investors should engage companies on. 

Share This:


Minor Progress Made On Financial Health

Working Canadians seem to be making some minor progress towards improving their financial health. However, while 66 per cent report being in a better financial position than a year ago, their debt levels remain high, they chronically undersave for retirement, and put themselves at severe risk in the event of economic changes, says the Canadian Payroll Association. Its 10th annual survey shows 44 per cent of working Canadians report it would be difficult to meet their financial obligations if their pay cheque was delayed by even a single week (down from the three-year average of 48 per cent). Gen Xs in their 40s report the highest level of difficulty (47 per cent). Forty per cent of working Canadians feel overwhelmed by their level of debt (up from 35 per cent last year) and more are expecting to take longer to pay down that debt with 43 per cent saying it will take more than 10 years to pay down their debt (up from 42 per cent in 2017 and 36 per cent in 2016). And 12 per cent believe they will never be debt free. However, when asked about the best way to improve their financial well-being, the number one response is higher wages (25 per cent) followed by spending less (19 per cent). And while 72 per cent concede they have only saved a quarter or less of what they feel they will need to retire (47 per cent of those 50 and older), the target retirement age (61) has not changed from 2017 and half still feel they will need at least $1 million to retire. Employers should also note that 46 per cent of employees say financial stress is impacting their workplace performance.

Share This:


Bull Market Close Creates Decisions

The record U.S. bull market for U.S. stocks has left fund managers deciding whether to sit out potential gains in favour of a more defensive portfolio in expectations it is coming to a close, says the Bank of America Merrill Lynch. The Standard & Poor’s 500 index rose this month to an all-time high in a record-long bull market for U.S. stocks. However, other assets including emerging market equities, copper, and European banks struggled in bear territory, says its report. The outperformance of stocks in the U.S. is likely more marked than usual because of the country’s robust economy and strong corporate earnings. Still, the “big call” for investors is determining how close the market is to ending its cycle and deciding whether it’s time to buy riskier assets on the expectation of strong global growth or sell them as they rally. Its survey of fund managers shows a distinct rise since January in the percentage indicating the market is “late cycle.” Around 80 per cent now view the bull market at that stage. The bull market for U.S. stocks has stretched for more than nine years, with the S&P 500 closing at a record 2,914 on August 29. The index has returned a total of almost 10 per cent this year through August 30.

Share This:


Default Options Accommodate DC Retirement Options

Asset managers in the UK are designing default funds that accommodate all three of the options available to retiring defined contribution members, says Cerulli Associates. “This is the right approach for asset managers to be taking, given the uncertainty as to which of the options future DC retirees will go for,” says André Schnurrenberger, the Europe managing director of Cerulli Associates. The ‘freedom and choice’ reforms introduced in the UK in 2015 allow DC members to choose between cash, annuity, and drawdown at retirement. Prior to this, DC pension savers were forced to buy an annuity at retirement, which meant all default funds were designed to target annuitization. The latest figures published by the UK’s regulator, the Financial Conduct Authority, show that annuities are the least popular at-retirement option Of all the DC pension pots accessed for the first time since October 2015, only 12 per cent have been used to purchase an annuity. At 30 per cent, drawdowns are more popular, but most retirees have chosen to take their retirement savings in cash.

Share This:


BoC Needs To Pay Attention To Yield Curve

Canada’s yield curve sits on the cusp of inverting for the first time in more than a decade and while the Bank Of Canada (BoC) believes there’s little cause for alarm, BlackRock Inc. says it is something the BoC needs to pay attention as banks will become increasingly reluctant to lend as Canada’s term structure turns negative. Since 1961, 10 of 15 inversions of Canada’s yield curve were followed by at least one-quarter of economic contraction within the next 24 months, says three-month and 10-year rate data from the Organisation for Economic Cooperation and Development (OECD) and Statistics Canada. It is also a clear indication the bank’s interest rate hiking cycle is near an end. Last Thursday, the gap between two-year and 30-year bonds, the shortest- and longest-dated coupon securities, stood at about 18 basis points, down from 29 basis points on August 1. The gap is about half the 35 basis point spread in similar-maturity U.S. Treasuries. OECD and Statistics Canada data shows inversions of the curve between three months and 10 years successfully predicted GDP contractions beginning in 1981, 1990, and 2008, while failing to foreshadow the 2015 slowdown.

Share This:


KGS-Alpha Acquisition Complete

BMO Financial Group has completed the acquisition of KGS-Alpha Capital Markets (KGS), a fixed income broker-dealer specializing in U.S. mortgage (MBS) and asset-backed securities (ABS) in the institutional investor market. KGS has been rebranded as BMO Capital Markets.

Share This:


Kirby Joins Eagle

Sheila Kirby is consulting lead for Eagle Investment System. Based in Toronto, ON, she has spent her 20-year career implementing investment management and fund accounting systems. She will also help clients who are considering the transition away from legacy systems.

Share This:


Program Designed For Associates

The Benefits and Private Healthcare Associate CE credit program consists of 10 monthly half day sessions, plus handouts and tip sheets. It can be taken in person or online and is for those working as advisors, plan sponsors, with insurers, pharmacy, and the pharmaceutical industry. Each session delivers 3.5 CE credits plus the BPHA designation after completion of the full program. It starts September 18 in Mississauga, ON. For information, eMail Denise Balch at denisebalch@connexhc.com, call 905 220 4260, or visit www.connexhc.com/bpha/

Share This:


September 4, 2018


Major Risks To Global Economy Identified

An OECD report highlights a number of major risks having the potential to disrupt global economic growth. The ‘2018 Business and Finance Outlook’ notes that the gradual normalization of monetary policy in an environment of growing debt will be a major test of whether the Basel III regulatory reforms have achieved their goal of ensuring safety and soundness in the financial system. Although capital rules have been strengthened, the business models of systemically important banks have changed little since before the crisis of 2008, says the report. One gauge of interdependence, the notional value of over-the-counter derivatives, was $532 trillion in the second half of 2017, only slightly below its pre-crisis peak of $586 trillion in late 2007. The report says the financial outlook will also be shaped by China’s ability to manage risks relating to high indebtedness and leverage in its banking, shadow banking, and wealth management industries. The extent of non-performing loans in China is obscured by the lack of information about which assets are sitting in off-balance sheet vehicles. These could disrupt growth beyond China if further changes to the structure of financial markets and institutions are not considered in major advanced and emerging economies, says the report.

Share This:


Impacts Of OMERS Changes Consistent

The impacts of proposed changes to the OMERS Pension Plan are generally consistent, regardless of income level and are similar for members with a normal retirement age of 65 and normal retirement age of 60. The ‘OMERS Sponsors Corporation ‘Comprehensive Plan Review’ process by its third-party experts ‒ based on age, start date, service, and income ‒ shows for long-service members, the bulk of their pension is earned under the current plan terms. For medium-service members, significant chunks of their pensions are earned under both the current and proposed plan terms while for short-service members, the bulk of their pension is earned based on the proposed plan changes. An extensive analysis of the plan by independent experts confirmed that the current plan is unsustainable (and a little outdated) given the changing pension landscape. Specifically, the cost of the plan will continue to increase over time, which makes it more expensive and less attractive for employers and members (current and future members) and it currently includes some provisions that no longer work for the vast majority of members because of changing career paths, improved life expectancies, and changes to the Canada Pension Plan. The review identified several plan options for further consideration including replacing guaranteed indexing with conditional indexing for future pensions; integrating the pension formula with the new ‘Year’s Additional Maximum Pensionable Earnings’ (YAMPE); and an updated criteria for early retirement subsidies. 

Share This:


Value Of Digital Health Significant

Despite low usage rates, the total annual value of investments by the federal and provincial governments in digital health systems to improve patients’ online access to personal health records, healthcare providers, and services is significant, says an Eckler ‘GroupNews.’ Citing a study by the Social Research and Demonstration Corporation (SRDC) for Canada Health Infoway, it shows Canadians’ the value of usage of health eServices from 2016 to 2017 grew from $119 million to $150 million for patients and $106 million to $134 million for the healthcare system. The study estimates that if usage were to increase to 50 per cent across viewing personal health records online; exchanging secure eMails or text messages with a healthcare provider; face-to-face video conferencing with a healthcare provider; and electronic requests to renew prescriptions, annual patient value would jump to $940 million, with annual healthcare system value at $720 to $769 million. Canada Health Infoway says 85 per cent of Canadian primary care doctors and 79 per cent of community specialists are using electronic medical records to record patient encounters. As well, 100 per cent of X-rays, MRIs, CTs, and similar imaging performed in hospitals are now digital and 97 per cent of lab test results are available in digital format. The benefits of eServices may be more than just costs as quicker access to providers means less time away from work and, potentially, quicker access to drugs and medicines to treat a prevailing condition. This, in turn, may result in faster recovery and return to productive employment, says Eckler.

Share This:


Pharmacare Assumption Not Credible

A key assumption of advocates for national pharmacare is that it will displace all employer drug plans. These advocates claim this would yield $8 billion of savings, says William B.P. Robson, president and CEO of the C.D. Howe Institute. However, while it is critical to the claim that national pharmacare will reduce spending, it is not credible, he says. More first-dollar tax-funded drug coverage might displace some employer plans, he says, but pharmacare will no more eliminate them than the advent of the Canada and Quebec Pension Plans in the 1960s eliminated all employer-sponsored retirement saving. Instead, employer-sponsored pensions typically changed to integrate with the Canada and Quebec plans, often resulting in more comprehensive retirement income. However, the parallel with pensions is instructive because generous employer-sponsored drug plans, like generous employer-sponsored pension plans, are predominantly in the public sector and government employees are unlikely to exchange their plans for the formularies and coverage limits that apply to people covered only by pharmacare. Canadians should be “skeptical about promises of savings from eliminating employer-paid drug coverage,” he says. Instead, pharmacare should be about extending coverage to those who do not have enough of it, not shrinking what already exists.

Share This:


Bull Market Longest Ever

Born from the depths of the country’s worst financial crisis and fueled by historically low interest rates, unprecedented government interventions, and blossoming global technology giants like Facebook and Amazon, came the longest bull market the U.S. has ever seen. On August 22, it reached 3,453 calendar days, and had gained 323 per cent gain from its low in March 2009. In ‘S&P 500 makes history, recording longest bull market run ever’ at the Benefits and Pensions Monitor website, Brent Joyce, GLC Asset Management’s chief investment strategist, outlines its history, how it got here, and what’s next.

Share This:


Confidence In Europe Increases

Investor confidence among European institutions has increased while confidence among Asian and North American investors has fallen, says the ‘State Street Investor Confidence Index’ (ICI) for August. This appears to reflect ongoing erraticism in European sentiment. “Looking at the regional breakdown [of the global ICI], the European ICI has exhibited a lot of volatility this year,” says Rajeev Bhargava, head of investor behaviour research at State Street Associates. This is being attributed to U.S. President Donald Trump’s trade policies which continue to stir up investor uncertainty and renewed worries over Italy’s debt burden.” The Global ICI turned negative. Down 7.4 points to 94.3 from July’s revised reading of 101.7, the reading below 100 suggests investors are decreasing long-term risk exposure. Similarly, among North American institutional investors, confidence declined from 103.1 to 92.5. European investors increased their exposure to risk assets, pushing the region’s ICI up 8.1 points to 99.5.

Share This:


First Year Students Seek Help

Preliminary findings from a study by Morneau Shepell and the Jed Foundation show almost half (48 per cent) of international students seeking mental health support were in their first year. The two-year study, which was launched last September, also shows more than half (57 per cent) of students inquired on evenings and weekends, when campus counselling was closed. The most common way students reached out for support was by phone (55 per cent), followed by online chat (45 per cent). Stress/depression/anxiety accounted for nearly 65 per cent of requests for support. One-third (33 per cent) of students reported never having accessed campus resources before, including campus counselling, the health centre, or the international office.

Share This:


CPPIB Invests In Australian Toll Road

The Canada Pension Plan Investment Board (CPPIB) will invest in the WestConnex toll road project in Sydney, Australia, as part of the Sydney Transport Partners consortium. The consortium was named the successful bidder for a 51 per cent ownership stake in WestConnex. CPPIB will hold a 20.5 per cent interest in the consortium’s ownership stake. WestConnex is the largest road infrastructure project currently underway in Australia. The 33-kilometre development project is being constructed in three stages and will help connect western and southwestern Sydney with the city, port, and airport. 

Share This:


Initiative Rewards Corporate Behaviour

A new global initiative has been launched to reward excellence in corporate behaviour. Created by David Klar, a sustainability expert and thought leader, ‘The Global SDG Awards’ is an international sustainability initiative designed to increase private sector engagement with the UN’s Sustainable Development Goals (SDGs) framework. The awards provide positive recognition for corporate responsibility and sustainability initiatives, programs, and business models from around the world. The deadline for corporations to submit their entry via the online application portal is October 31, 2018.

Share This:


Hensler Joins Epoch

Philipp Hensler is president and COO of Epoch Investment Partners, He has extensive experience working with clients and a broad array of asset allocators. His earlier background as a global equities investor adds valuable breadth to his perspective. Most recently, he was president and CEO of Vontobel Asset Management Inc. Prior to that, he was head of distribution for OppenheimerFunds and spent over a decade at Deutsche Asset Management/DWS where he held numerous leadership roles in the United States and Switzerland.

Share This:


Renewable Energy Risks Examined

An overview of the latest trends and issues in the renewable energy landscape in Canada and internationally will be provided at the Responsible Investment Association (RIA) ‘Investing in the Energy Transition: Risks & Opportunities in Renewable Energy’ session. Areas to be explored include the risks associated with renewable energy investments and identifying sector leaders. Speakers includeDustyn Lanz, CEO of the RIA; Colleen Giroux-Schmidt, vice-president ,corporate relations, at Innergex; Molly Ono, director of business development and client service at Impax Asset Management; Mike Thiessen, manager of sustainable research at Genus Capital Management; and Fraser Atkinson, chairman and director of the GreenPower Motor Company. It takes place September 18 in Vancouver, BC. For information, visit Renewable Energy

Share This: