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(August 28, 2007) The Canadian Home Income Plan (CHIP) faces new competition in the reverse mortgage market that it has long dominated. Seniors Money International has announced it will enter the Canadian market with the stated goal of becoming “the preferred provider in conservative and flexible retirement funding.”

“The entry of Seniors Money into Canada underscores the growing significance of Canadians 60 years and older, and their desire to maintain financial independence,” said Nick DiRenzo, president and CEO of Seniors Money Canada. The new entrant started out in New Zealand, but has expanded operations into Australia, Ireland, Spain, and South Africa.

DiRenzo says reverse mortgages are gaining global acceptance, as the growing number of retirees skews demographics in the developed world.

Seniors Money Canada will initially offer its reverse mortgage product in Southwestern Ontario, focusing on the seniors’ market in Toronto, Windsor, London, Kitchener, Hamilton, and St. Catharines. The company plans to go nationwide in 2008.

Seniors Money will lend on a scale of up to 15% of the home’s value for someone at age 60 and up to 45% at age 90. The variable rate is 7.5% and is guaranteed to never go above bank prime plus 2.0%.

The loan also comes without any penalty clauses and a guarantee that the homeowner or their estate can never owe more than the value of the house regardless of house price deflation or how long the residents live.

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Fund suspends redemptions

(August 28, 2007) Global Diversified Investment Grade Income Trust (DIGIT) has announced the suspension of its annual and quarterly redemptions, scheduled for August 31, citing liquidity issues in the asset-backed commercial paper market.

The problem is traced to the fund’s counterparty in swap arrangements, MMAI-I Trust, which is currently unable to roll over its maturing commercial paper. These swaps make up the majority of assets held by Global DIGIT.

“The co-trustees are closely monitoring the situation to protect the interests of the unitholders of Global DIGIT and will review their decision when further developments permit the resumption of redemptions of, or distributions on, the units,” the fund company said in a press release.

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Discount broker slashes fees

(August 28, 2007) One of the biggest competitors for full-service brokers has cut its sales commissions once again. TD Waterhouse Discount Brokerage has announced that “active investors” will pay just $7.00 per trade on all Canadian and U.S. equities.

The online brokerage defines an “active investor” as one placing at least 150 trades per quarter — which averages out to almost 2.5 trades per day that the markets are open.

“Competitive pricing, combined with superior platforms and exceptional tools and service, helps ensure that our clients feel confident and well-positioned to take control of their investments,” said John See, president, TD Waterhouse Discount Brokerage.

Clients with household assets of at least $100,000 don’t need to flip stocks nearly as frequently to get a discount — they will get a flat rate of $9.99 per trade if they execute 30 trades per quarter. The flat rate commission applies to an unlimited number of shares.

Trades for Canadian or U.S. options will be subject to the same flat rates plus $1.25 per contract. The new rate structure comes into effect September 4, 2007.

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AGF says no exposure to ABCP

(August 28, 2007) AGF Funds has announced that none of its money market mutual funds have any exposure to non–bank-sponsored asset-backed commercial paper.

AGF Management Ltd. also announced that none of its subsidiaries, including AGF Trust, hold investments in the ABCP which has recently faced liquidity issues, nor does AGF Trust rely on ABCP for its own funding.

“AGF Trust has multiple sources of funding and primarily funds loans by selling Guaranteed Investment Certificates with Canada Deposit Insurance Corporation insurance,” says Mario Causarano, president, AGF Trust Company. “We intend to use existing sources of funding as we continue to grow our loan assets while maintaining disciplined loan underwriting and credit risk management processes.”

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Titan Funds hires RBC Dexia

(August 28, 2007) Titan Funds Inc. has hired RBC Dexia as custodian, and to provide fund valuation and investor recordkeeping.

Launched on July 13, 2007, Titan Funds distributes a suite of six structured, “optimally-balanced” portfolios exclusively through the Partners in Planning Financial Services Ltd.

“Our decision to work with RBC Dexia was based on their strong corporate reputation as well as their successful track record of supporting the launches and subsequent growth of start-up funds,” said Kam Kwong, president, Titan Funds.

(08/28/07)