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(January 23, 2007) The Canadian Association of Income Trust Investors charges that the federal Conservative government has created an unfair double-standard for Canadian retirees, where public sector employees are allowed to benefit from tax advantages denied to the majority of Canadians.

The group said the Conservatives have implemented a subtle yet profound change to their tax policy where pension funds can replicate the ongoing tax-free economics (at the trust level) of income trusts by holding private trusts in their private equity portfolios.

The government already draws $9 billion in taxes from $52 billion in retirement income making it the second largest source of personal taxation after employment and income tax, CAITI charges.

The group says this is unfair since only 30% of Canadians are members of defined benefit pension plans, while 70% are not. CAITI points out that those who do have pension plans include our elected representatives in Ottawa and the 280,000 members of the public civil service in Ottawa whose pension assets are managed by the Public Sector Pension Investment Board.

The public sector pension plan, has not taken much of a hit, according to CAITI and with its recent $3.4 billion purchase of Telesat from BCE, it has acquired the private financial equivalent of an income trust fund.

“Telesat will be the financial equivalent of an income trust and will be held in the pension plan’s growing private equity portfolio,” CAITI wrote in their release. “How can something that is being denied the average Canadian, on the basis of its presumed negative effect on Ottawa’s tax base be allowed to persist for the benefit of those in our public civil service and others so advantaged?”

In their release, CAITI also urged the NDP to join the other federal opposition parties in their support of public hearings on income trust taxation.

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Study finds Canadians happy with their bank

(January 23, 2007) Across the country, most Canadians are very satisfied with their primary financial institutions, a Secor Consulting poll finds.

Polling 1,000 Canadians, the survey found that an overwhelming 95% are satisfied — with 62% “very satisfied” — with their primary bank or credit union. The results also show that 53% would be “very likely” to recommend their institution to a friend or family member.

Secor suggests that the multi-channel approach the banks implemented over the past years may be driving such high satisfaction and referral scores. More than 70% of respondents said they are using three or more banking channels such as ATMs, internet, in-branch and telephone.

Despite increased choice of banking channels, the poll found those most satisfied with their bank were the ones who still engaged in face to face service.

Petrina Dolby, Secor Consulting partner, said this seems to accurately support the branch model branches. Bank branches in Canada are “being transformed to better suit micro demographics, in contrast to the majority of other countries who are still undergoing branch rationalization,” she said.

The survey results also indicate that Canadians over the age of 55 were much more likely to recommend their financial institutions than were younger Canadians. Also, those with lower incomes were more satisfied with their bank or credit union than more affluent households.

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PriceMetrix partners with Pershing

(January 23, 2007) Pershing LLC, a subsidiary of The Bank of New York, has formed a business alliance with PriceMetrix, a provider of services that help retail brokerage firms evaluate their businesses and identify growth opportunities.

The deal will enable PriceMetrix to provide solutions to Pershing’s introducing broker-dealer customers. Among other services, Pershing’s customers will have access to specialized reports from PriceMetrix to analyze sales and market intelligence data and can use of a variety of value-added productivity tools such as online calculators and best practice case studies.

Jim Crowley, managing director at Pershing, said, “It is essential for introducing broker-dealer firms to identify ways in which they can help representatives maximize productivity. Pershing is committed to working closely with these firms to effectively incorporate best-of-breed products, services and technology solutions, so they can continue to grow and succeed in the future.”

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Investor confidence down slightly in January

(January 23, 2007) The results of the State Street Investor Confidence Index for January 2007 found that global investor confidence has dropped by 3 points.

The index, released by State Street Global Markets, shows investor confidence 88.0 points in December, to 85.0 points in January.

Regionally, the confidence of North American institutional investors fell slightly from 98.2 to 96.1. The index also found that confidence of European investors decreased from 97.0 to 92.0, while Asian investor confidence fell from 90.1 to 86.8.

The results of the global index are measured on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors. The index is based on a financial theory that assigns precise meaning to changes in investor risk appetite, or their willingness to allocate their portfolios to equities. The more of their portfolio that investors are willing to devote to equities, the greater their risk appetite or confidence.

“Globally, investor confidence has settled into a somewhat narrower range, comfortably above the levels seen at the start of 2006, but below the levels of 2004 and 2005,” said Harvard University’s Ken Froot, one of the index’s creators.

Froot said a downturn in confidence could be due to perceptions that growth will ease in 2007 as the effects of the US housing slowdown, Japanese monetary tightening and European fiscal restraint are felt.

“The confidence of both European and Asian institutional investors had reached all-time highs toward the end of 2006, so some pullback there is perhaps not surprising,” said Paul O’Connell, State Street Associates director. He added that it was the first time since 2005 that all three regional indices declined.

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Dealer group names new board of directors

(January 23, 2007) The Federation of Mutual Fund Dealers has announced its new board of directors for 2007.

Andy Mitchell, president and COO of Worldsource, will take the helm as chair of the board. Scott Sinclair, CEO of MRS Inc. is the new director of industry operations, Susan Monk, from PEAK Financial has been named director of regulatory affairs and Tony Mahabir, CEO of Canfin Financial, is the new treasurer.

“We are excited to have this team in place,” said Sandra Kegie, executive director of FMFD. “Their diverse backgrounds complement each other and strengthen our organization’s overall mandate.”

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