Don’t forget! November 16-22 2014 is Financial Planning Week.
Now in its sixth year, Financial Planning Week, is part of an ongoing effort by the Financial Planning Standards Council
(FPSC) and the Institut québécois de planification financière (IQPF) to raise awareness of financial planning as fundamental to the financial well-being of Canadians. Jane Rooney, Canada’s first Financial Literacy Leader, and Cary List, president and CEO of FPSC, will be taking part in events. Kimberley Ney, vice president of communications and program development at the FPSC, explains that, “Financial Planning Week is a chance to get the message out to Canadians about the value and importance of financial planning.”
To mark the occasion, the FPSC has released a report that emphasizes the role solid financial planning can play in the well-being of the average person. The study was conducted by Leger Research on behalf of the FPSC. The basic finding: money is the number one source of stress for Canadians, with almost half of Canadians “feeling embarrassed about their lack of control over finances and losing sleep as a result of financial worries.”
“Financial planning impacts more than financial health. This is about emotional well-being as well. Finance can be one of the biggest stressors in people’s lives,” says Ney. “Finances are definitely a significant factor in well-being. The ability to have an annual vacation…these are things that are important. Financial planning provides you an avenue to live the way you want with the money you have. Canadians do not need to suffer the levels of financial stress they are reporting.”
Leading up to Financial Planning Week the FPSC is also running a program, the 2020 Community Challenge, designed as a way for financial planning professionals “to increase Canadians’ awareness about the importance of financial planning and educate them on how easy it is to take the first steps in gaining control of their financial futures.”
According to a press release the program is named Vision 2020 as a way of providing a vision, “that by the year 2020, Canada will be shaped by a nation of people, organizations and a regulatory environment that have broad access to competent, ethical financial planners.”
“As far as the challenge goes…when we originally started these six years ago, there was a vision of 2020 as being a time when we would see a regulatory environment for financial responsibility,” says Ney. “The goal for the Community Challenge is to get CFPs out in the society and helping in the community. Planners will be going to rotary clubs, book clubs. We hope everyone participates.”
Get out there!
News from the week that was:
Some good news this week: A couple weeks after markets suffered triple-digit losses, the S&P 500 is now up 11.8% YTD, including dividends. So that’s good. If you’re holding U.S. stocks, the shift in the relative value of the USD and CAD has you even further ahead.
-The Canadian economy is looking peachy
So is the U.S. one: According to the New York Times
, “The government on Friday reported strong signs of improvement, estimating that employers added 214,000 jobs in October, while the official jobless rate dropped for the second month in a row to 5.8 percent…The increase puts the average monthly employment gain for the past six months at 235,000 — an indication, analysts said, that the economy’s progress after years of meager growth was on the upswing.”
An upcoming print issue of WP will have a piece discussing the seeming recovery in the U.S. economy. Pick it up.
-Let’s hope the government gets the administrative SNAFUs around the TFSA program (and it is a problem with the program if the government has to contact tens of thousands by mail) but it looks like TFSAs are going to be big again this year
-Top spot in the well-regarded Benefits Canada Top 40 Money Managers survey
is Burgundy Asset Management Ltd., with a plus-35% return over the year (Can’t resist giving a plug to the place that was the first job out of school…even if they are the competition).
-Still wondering how those big American banks managed to process such ridiculously shoddy mortgages that drove the American housing boom and bust cycle in the mid-2000s? The answer is in this story
…which only comes to light as a result of a whistle-blowing securities lawyer born in British Columbia.
If you don’t want to read the whole thing, this is all you need to know…
“…When Fleischmann and her team reviewed random samples of the loans, they found that around 40 percent of them were based on overstated incomes – an astronomically high defect rate for any pool of mortgages; Chase's normal tolerance for error was five percent. One mortgage in particular that sticks out in Fleischmann's mind involved a manicurist who claimed to have an annual income of $117,000. Fleischmann figured that even working seven days a week, this woman would have needed to work 488 days a year to make that much. "And that's with no overhead," Fleischmann says. "It wasn't possible."”
The article goes on: “But when she and others raised objections to the toxic loans, something odd started happening. The number-crunchers who had been complaining about the loans suddenly began changing their reports. The process she describes is strikingly similar to the way police obtain false confessions: The interrogator verbally abuses the target until he starts producing the desired answers. "What happened," Fleischmann says, "is the head diligence manager started yelling at his team, berating them, making them do reports over and over, keeping them late at night." Then the loans started clearing. As late as December 11th, 2006, diligence managers had marked a full 33 percent of one loan sample as "stated income unreasonable for profession," meaning that it was nearly inevitable that there would be a high number of defaults. Several high-ranking executives were copied on this report…
…Then, on December 15th, a Chase sales executive held a lengthy meeting with reps from GreenPoint and the diligence team to examine the remaining loans in the pool. When they got to the manicurist, Fleischmann remembers, one of the diligence guys finally caved under the pressure from the sales executive. "He had his hands up and just said, 'OK,' and he cleared it," says Fleischmann, adding that he was shaking his head "no" even as he was saying yes. Soon afterward, the error rate in the pool had magically dropped below 10 percent – a threshold that itself had just been doubled to clear the way for this deal…”
Some more news:
-A couple of weeks after announcing that Schwab would offer a free robo-advisor service
...the CEO of the discount brokerage made a point
of undermining that entire business effort by pointing out that “advisors will never go away” and that “you get what you pay for” when it comes to advice…
-Here is a great basic video on how markets work
. If you’re looking for something to pass along to clients who might be wondering, or asking, pass along this link…