Shareholder Needs No Longer Priority

Canadian institutional investors no longer want shareholder needs to be prioritized above the needs of all other stakeholders, says the ‘Edelman Trust Barometer Special Report: Institutional Investors.’ The report notes that 91 per cent of Canadian institutional investors agree that maximizing shareholder returns can no longer be the primary goal of a corporation and that business leaders must balance the needs of shareholders with those of employees, customers, suppliers, and local communities to drive long-term business success and lower the risk of multi-stakeholder activism. David Ryan, executive vice-president, corporate and financial communications, at Edelman, says, “Canadian institutional investors are looking at how companies treat every one of their key stakeholder groups to measure the attractiveness of their investment value proposals. A healthy corporate culture, strong talent retention, customer service, and community impact are looked at just as closely as financial key performance indicators. It is apparent that companies need to nurture all of their stakeholder groups equally to drive long-term success.” The research surveyed institutional investors across six countries ‒ the U.S., Canada, the UK, Germany, the Netherlands, and Japan), representing firms that collectively manage over $9 trillion in assets.

Quebec Open To Healthcare Entrepreneurship

While governments keep shovelling billions of dollars into the country’s healthcare systems, and results continue to disappoint, a strong majority of Quebecers are open to entrepreneurship in order to alleviate the lack of service, all while maintaining the universal coverage of care. Indeed, across the country, it is Quebec that is the most open to this, says a poll for the MEI. It found 75 per cent of Quebecers, Manitobans, and Saskatchewanians agree that private entrepreneurs should be allowed to provide more care, as long as the government pays for it. For the country as a whole, the level of support is 68 per cent, with only 20 per cent opposed. In Quebec, 55 per cent agree that private companies should be allowed to manage public hospitals, compared to 42 per cent nationally. As well, 63 per cent of Canadians believe that individuals should have the right to buy private health insurance if they are not treated within a reasonable time. The proportion is similar from one province to the next. They also want ‒ at 67 ‒ per cent for their employer to provide them with access to virtual consultations with a doctor.

Alternative Managers More Transient

As the world of alternative assets continues to grow and evolve, reaching $9.45 trillion in assets under management as at December 2018, fund managers have become more transient in their service provider relationships. As a result, service providers have had to adapt quickly to meet their needs, says Preqin’s ‘Service Providers in Alternative Assets Report.’ It says as the industry has become more global, regulatory demands have increased, technology has advanced, and competition has ramped up. However, dissatisfaction with the quality of service and cost have been the main reasons why private capital fund managers have chosen to change their service providers. In the past 12 months, 46 per cent and 31 per cent of fund managers have changed their accountants and fund auditors respectively. Furthermore, the survey finds that the smaller fund managers are, the more likely they are to have changed service providers.

TELUS Expands Care For Aging

TELUS Health will expand its LivingWell Companion personal emergency response service (PERS) to support more aging Canadians across the country. Through the acquisition of DirectAlert, which has more than 15 years of experience providing emergency response across Canada, it will provide safety and security for aging Canadians who want to live independently at home for longer. DirectAlert will continue providing service under the ‘DirectAlert by TELUS Health’ brand into early 2020, ensuring a smooth transition for current customers so they can continue benefiting from the same consistent, uninterrupted local emergency response. By early next year, all TELUS PERS customers will be backed by the LivingWell Companion brand nationally and will be supported by increased service capabilities including multi-lingual support and proactive alerting to empower aging Canadians to take control of their own health and live happier and healthier lives.

Data Analysis Becoming Valued Skill

Data analysis will be the most valued skill on trading desks over the next five years, says Greenwich Associates. As a result, ‘The Future of Trading: Redefining Data’ says 85 per cent of capital markets professionals plan to increase their spending on data management technology during this time. The financial services industry currently spends $1.4 billion annually on consolidated market data feeds and market participants pay another $300 million per year on alternative data. That spending appears to be going nowhere but up. About 95 per cent of capital markets professionals expect alternative data to become more valuable in the next three to five years and more than 75 per cent say the same about direct market data feeds. “Market participants now have access to tools that allow them to make sense of nearly unfathomable amounts of both structured market data and completely unstructured information,” says Kevin McPartland, head of research in Greenwich Associates’ market structure and technology group and author of the report. “Putting data to good use will require an influx of new talent to the trading floor and data analysis will be the most valuable skill on trading desks over the next five years.”

Active Creates Hidden Risks In Capacity

An argument that active management is needed to avoid capacity issues in factor investing does not hold for a number of reasons, says a Scientific Beta study. ‘Do We Need Active Management to Tackle Capacity Issues in Factor Investing? Exposing Flaws in the Analysis of Blitz and Marchesini (2019)’ shows that systematic rules allow investability to be improved with full transparency. Active management is not only unnecessary; it also creates hidden risks for investors due to a lack of transparency. Dr Noël Amenc, CEO of Scientific Beta, says, “Although the criticism in the Blitz-Marchesini paper builds on logical fallacies and is not backed by evidence, it does align with intuitive claims about the dangers of indexing. It may be convenient to rely on such intuitive arguments – they correspond to widely held beliefs – but answering questions about investability requires careful analysis of the facts. Index providers and replicators need to offer transparency and evidence to allow for factual analysis. In their due diligence, index investors need to address how the index provider achieves investability and how the passive manager adds value when replicating the index.”

Papadimitriou Joins Desjardins

Bill Papadimitriou is regional vice-president, business development, group and business insurance, Ontario, at Desjardins Insurance. With 25 years of experience in group insurance, most recently, he was director, business development, for a major insurance company.

Session Looks At Pension Law

The ‘Osgoode Certificate in Pension Law’ equips participants with what they need to navigate this often complex and liability-laden area effectively. Sessions will be held Toronto, ON, for six days between February 5 and March 11, 2020. For information, visit Pension Law Certificate

Commuted Value Interest Rate Assumptions

The interest assumptions required to calculate commuted values and marriage breakdown values for an event which occurs in any month up to and including December 2019 are now available at An Excel spreadsheet on the website contains nine worksheets:
• Commuted Values February 2011 CIA
• Marital Breakdown: CSOP 4300 ‒ January 2012
• Ontario (Bill 133) Prior Rates – Rates for Ontario Marital Breakdown with valuation date prior to January 1, 2012
• Annuity Proxy for Solvency Calculations for Non-Indexed & Fully-Indexed Pensions
• Minimum Interest on Employee Required Contributions
• HISTORICAL Marital Breakdown: CSOP 4300 ‒ May 2009 (Now Frozen)
• HISTORICAL: Commuted Values ‒ 2009 Basis (Now Frozen)
• HISTORICAL: Commuted Values ‒ 2005 Basis (Now Frozen)
• HISTORICAL: Commuted Values ‒ 1993 Basis (Now Frozen)
You can use this spreadsheet to compare the interest rates which you may have calculated and/or you can download the spreadsheet to your own computer. Another actuary has already provided a peer review of the updated rates in this spreadsheet and determined that he/she agrees with the results.