Briefly:

(June 4, 2004) While StatsCan is reporting strong overall employment growth in May, the financial services industry is shedding middle-management positions. A global study by human resources firm DBM found that restructuring and uncertainty has steered job-seekers away from finance, even though they were most familiar with the field.

“Change and the threat of change could well be the reason such a high percentage of people choose to switch industries and job functions after losing employment in financial services,” said Barbara Collins, vice-president of business development with DBM Canada. “Regulators are exercising more influence than ever on financial services firms in many jurisdictions. Competition is intensifying and technology is permitting outsourcing of entire job functions and departments.”

She says many of the jobs lost in financial services are back-office positions made redundant by new technology. The study found 62% of respondents who lost their jobs in finance found work in a completely different industry. And it could get worse, as PricewaterhouseCoopers has predicted a new wave of restructuring in the sector worldwide in the next five years.

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CI severs ties with Webb

(June 3, 2004) CI Mutual Funds is moving the portfolio management of several funds in-house, cutting ties with well-known manager Derek Webb.

CI yesterday announced that the Synergy team, led by David Picton, will take over as portfolio advisor on the Landmark Canadian Fund, Landmark American Fund, Landmark American Sector Fund, Landmark Global Sector Fund and CI Tactonics Fund.

“As a result of these changes, which are effective immediately, Webb Capital no longer manages any portfolios for CI,” CI said in a release. CI’s contract with Webb Capital expired on May 31.

CI president Peter Anderson says the move underlines the firm’s commitment to streamline and simplify its fund lineup. “CI has made several acquisitions in recent years, leading to an expanded offering of funds and portfolio managers,” he said. “We have worked consistently to reduce duplication where there are similar mandates and investment approaches.”

Synergy and Webb both use a momentum investment approach, CI says. From now on, Synergy will manage all of CI’s portfolios that follow that style.

In addition, CI announced that Connecticut-based Altrinsic Global Advisors will take over management of Landmark Global Opportunities Fund, a hedge fund with $38 million in assets.

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Manulife names new Japan chief

(June 3, 2004) Manulife Financial has named Geoff Crickmay as president and CEO for Manulife Japan, effective July 1, 2004. Since the beginning of the year, he has been the unit’s deputy president and executive vice-president of sales and marketing.

“I am very excited about this new leadership position,” said Crickmay. “The Japanese market offers great opportunity to Manulife. We are looking forward to continuing to draw on our worldwide expertise to help grow our business in Japan.”

Crickmay is replacing Trevor Matthews, who is leaving the group to take a senior position with Standard Life in Edinburgh, Scotland.

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CI closes IQON deal

(June 3, 2004) CI Fund Management has completed a $38.5 million deal to purchase IQON Financial Management and Synera Financial Services from Sun Life.

The purchase, first announced in April, gives CI an additional 570 advisors and $4 billion in assets. CI took over Assante and Synergy last year.

CI today repeated an earlier pledge to keep both IQON and Synera independent. “We have spent the last month meeting with many IQON and Synera advisors and these discussions have reinforced the merits of our strategy of operating these companies as independent businesses,” said CI president William Holland, adding that Assante and IQON will share resources and expertise.

CI is still looking for a CEO for its new acquisition — former IQON president Todd Hynes is staying with Sun Life. Assante president Joe Canavan has said that he expects the position to be filled later this month.

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CIBC World Markets boosts cash position

(June 2, 2004) Citing the possibility of higher interest rates, CIBC World Markets said today it is boosting the cash position in its portfolios.

“Neither the equity market nor the bond market has much breathing room until the threat of rapid-fire Fed tightening recedes,” says chief economist Jeffrey Rubin. “That’s not likely to happen in the near term, as financial markets digest healthy second-quarter economic numbers from the U.S. and a temporary lift in inflation.”

As well as raising its cash position to slightly above index weight at the expense of stocks and bonds, CIBC also says it remains overweight in bonds at the expense of stocks, “given that the bond market has already paid for multiple Fed rate hikes.”

On the equity side, CIBC is maintaining its overweight position in both energy and mining stocks, pointing to increased world demand for oil and continued upward movement in gold prices.

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Aegon announces portfolio rebalancing

(June 2, 2004) Aegon Fund Management has announced changes to the underlying fund holdings of its Imaxx Top portfolios holdings, effective June 1, 2004, with the assistance of Mercer Investment Consulting.

These funds of funds are periodically rebalanced to maintain their targeted asset mix, Aegon says. The holdings include funds from AGF, AIM Trimark, CI Funds, Fidelity Investments and Mackenzie.

Aegon’s Imaxx Top portfolios are also available as segregated funds through Transamerica Life, which announced rebalancing of its Top guaranteed investment portfolios.

These portfolios invest in funds from AGF, AIC, AIM Trimark, Brandes Investment Partners, CI Funds, Fidelity Investments, Franklin Templeton Investments, Mackenzie and TD Mutual Funds.

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Scrap mandatory retirement, says C.D. Howe

(June 1, 2004) Mandatory retirement hurts the Canadian economy and discriminates against older workers, the C.D. Howe Institute says in a report urging an end to the practice.

While no governments in Canada legislate retirement at age 65, the terms of many collective bargaining agreements and employer pension plans include contractual mandatory retirement.

The looming shortage of skilled workers means that the economy would benefit from extending average working lives, says the report, authored by Simon Fraser University professor Jonathan Kesselman.

“Additional legislative or judicial bans on mandatory retirement would complement other advances in workplace practices and public policies affecting older workers to bring significant benefits to individuals, businesses and the economy,” he says.

The argument that older workers should retire to make way for younger job seekers is based on erroneous reasoning and violates human rights, Kesselman adds.

“Legislative bans have reduced unwarranted forms of discrimination [based on sex and race] and also stimulated incentives for advanced education and labour force activity by groups that have made increasing contributions to the economy. The same point could be made about age discrimination and a prospective ban on mandatory retirement.”

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Manulife Financial lands M&A specialist

(June 1, 2004) Manulife Financial has appointed corporate lawyer Jean Paul Bisnaire as the firm’s new general counsel and executive vice-president. Bisnaire, a partner at Davies Ward Phillips & Vineberg, is a mergers and acquisitions specialist with more than 25 years of experience in the world of corporate finance.

“We are delighted to have been able to attract such an outstanding individual to this critical position,” said Manulife president Dominic D’Alessandro. “We look forward to drawing upon his extensive legal and business experience as we move forward to attain our vision to be the most professional life insurance company in the world.”

The appointment, effective July 5, suggests Manulife will continue on its recent acquisition trail. Last year, the insurance giant acquired Boston-based John Hancock in a deal valued at $15 billion.

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Scotiabank posts record quarterly earnings

(June 1, 2004) Scotiabank today reported record profits of $786 million in the bank’s latest quarter, up 32% from the same period last year. Revenue topped $2.8 billion, a 9% increase from 2003.

The bank also announced a quarterly dividend increase to 30 cents per share, a 36% rise from 2003.

“This quarter we benefited from our strategy of maintaining a diversified growth platform — all three of our businesses made great contributions,” said Scotiabank president Rick Waugh. “Along with substantial gains on investment securities, there was growth in both mortgage volumes and market share in Canada, as well as in retail brokerage and investment banking. Our international operations also performed well, in particular, in Mexico and the Caribbean.”

Scotiabank is the last of the big five banks to report quarterly earnings and tops the list of terms of profit. RBC made $774 million in the latest quarter, BMO earned $602 million, CIBC was at $531 million and TD, $511 million.

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Pension costs cut into wage hikes

(May 31, 2004) The cost of funding pensions and benefits is driving many Canadian companies to reduce spending on other forms of employee compensation, notably wage increases, according to Morneau Sobeco.

In the consulting firm’s latest “60 Second Survey,” 95% of respondents said the cost of pensions was of medium to high concern, with 42% saying they planned on cutting back on other compensation costs.

“This result shows that more Canadian organizations are embracing a total compensation approach, meaning that higher than average increases in one part of the compensation package may have to be accompanied by lower increases in the other parts,” says Fred Vettese, chief actuary at Morneau Sobeco in Toronto. “The main other element of compensation, of course, is cash compensation. The rise in pension and benefits costs means that future increases in cash compensation will have to be curbed.”

Slightly more respondents, at 43%, said they would switch from defined benefit to defined contribution pension plans to contain costs instead. The remaining 15% of respondents said they would take neither approach and just pass their rising costs onto customers.

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Farm advisory group lands sponsor

(May 31, 2004) The Canadian Association of Farm Advisors (CAFA) has announced the group has a new national sponsor, Farm Credit Canada.

The non-profit CAFA works to improve the skills and knowledge of professionals from several disciplines who find themselves facing unique challenges when dealing with their farm clients.

The group, which has existed for two years, encourages a multi-disciplinary approach which brings a team of experts together to help farmers manage their businesses better.

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Regulators upgrade national registration database

(May 31, 2004) The Canadian Securities Administrators today released an upgraded version of the national registration database (NRD). The CSA has added new functionality to the database, allowing previously disclosed information to be corrected, the IDA said in a member notice issued today.

New courses and registration categories have also been added to the NRD.

The IDA is asking member firms to correct or update any inaccurate information on an individual’s permanent record.

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(05/31/04)