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(February 27, 2007) Scotia Economics has released a study highlighting RRSP trends, pointing out that while there has been a strong investor preference for real estate , the trend is rebalancing toward more traditional financial investment returns.

The report, entitled Diversification, The Retirement Plan of Canadians, said that more Canadian investors are moving away from real estate and into financial investments due to changing economic factors, such as the cooling off of Canada’s hot housing market.

Aron Gampel, Scotiabank’s chief economist, still doesn’t think this change is enough, and said that more Canadians need to be investing in RRSPs.

“Although Canadians have been increasingly diversifying their wealth-generating investments, primarily in real estate, they should consider the advantages provided by RRSPs to maximize the growth and performance of their retirement savings,” Gampel said. “Annual contributions have not kept pace with allowable limits, so a significant unused gap has developed.”

The study finds, however, that it’s not a lack of money causing this. Lagging RRSP contributions may reflect Canadians’ shifting investment priorities

“For many Canadians, paying down debt has taken a higher priority. For others, lifestyle changes may be at play. For example, the rapid pace of technological change in consumer electronics may be contributing to a ‘spend now, save later’ momentum,” Gampel said.

Gampel does note, though, that this trend may be waning and, as the housing market cools off, Canadians are returning to financial investments. “The changing performance of real estate assets versus financial investments will likely continue to have an impact on how we decide to allocate our savings in the months ahead, though non-financial assets are likely to remain a big part of the diversification plan of Canadians for the foreseeable future,” he said.

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IDA immediately suspends Graydon Elliott

(February 27, 2007) The Investment Dealers Association is suspending the membership of Graydon Elliott Capital Corporation.

An IDA hearing panel has ordered that Graydon Elliott immediately cease dealing with the public and that authorized IDA staff take any action to facilitate the orderly transfer of client accounts from Graydon to Pension Financial Services.

The IDA has not released the reasons for Graydon Elliott’s suspension.

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Scotia Capital settles with RS

(February 27, 2007) A hearing panel in Toronto on Monday announced a settlement agreement between Market Regulation Services and Scotia Capital Inc.

Scotia Capital has agreed to pay the RS $571,167, plus $67,000 in expenses to account for profits that were improperly attained by two of its employees in 2005.

RS said that in April 2005, David Berry, then head of preferred trading at Scotia Capital, and his assistant, Marc McQuillen, operated outside of the normal syndication practices for new issues for which Scotia was a member of an underwriting syndicate.

Berry and McQuillen solicited client buy orders during the distribution period at the distribution price. Then, on or about the first day of trading, they conducted off-market trades in the newly listed shares by selling them to clients, largely from a short position, from their inventory account. These short positions were subsequently covered in the market, usually at a profit, RS explained.

RS highlights that the incident was not Scotia Capital’s fault but that they did have an obligation to return the profits made by Berry and McQuillen.

“We are pleased that Scotia Capital recognized in this settlement that, even though supervision was not an issue, it would not be appropriate to retain profits generated by the wrongdoing of its employees,” said Maureen Jensen, RS vice-president of market regulation for the eastern region.

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Haywood Securities hires resource experts

(February 27, 2007) Haywood Securities Inc. has appointed Kevin Campbell and Dr. Nicole Adshead-Bell to its investment banking team. Campbell and Adshead-Bell will work out of Haywood’s Vancouver office.

“We are extremely happy and fortunate to have Kevin and Nicole join our banking team,” said Rob Blanchard, president of Haywood Securities. “They bring a combination of energy, equity capital markets experience as well as resource sector technical knowledge, and will make valuable additions to our very capable pool of investment banking professionals and to Haywood as a whole. We view these arrivals as a sign that the future for Haywood as a leader in the resource sector is bright.”

Campbell has worked in a variety of roles in the financial industry for nearly a decade, most recently as vice-president of investment banking at a major brokerage, where he gained extensive experience in equity financings and advisory assignments for base, precious metals and uranium companies.

Haywood said that Adshead-Bell has a PhD in geology, specializing in structural economic geology. She was most recently a mining and research analyst covering uranium and non-producing base metals companies at a major brokerage. Prior to that, she worked at Sun Valley Gold LLC as a buy-side mining analyst responsible for a portfolio of precious metals exploration and mining companies.

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(02/27/07)