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(June 23, 2006)The national net worth of Canada continued to climb through the first quarter of 2006, hitting a total of $4.6 trillion, according to StatsCan. The average Canadian is now worth $141,000, thanks to soaring real estate values.

Net worth benefited not only from increasing non-financial asset values, but also from decreasing foreign indebtedness. The growth rate of national net worth actually slowed, though, to 1.4% from an average rate of 1.7% over the past 10 quarters.

The personal savings rate improved, from an annualized rate of 1.2% in 2005 to 1.9% in the first quarter of 2006. But in terms of debt, Canadian households owe $1.08 for every dollar they earn.

Corporations, on the other hand, increased their debt levels, to about 59 cents per dollar of equity. Government net debt edged lower thanks to another fiscal surplus in Q1 at the federal level. Net debt to GDP declined to 47.2%, the lowest rate in 20 years.

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MFDA issues clarification on conflict of interest rule

(June 23, 2006) The MFDA has issued a reminder to members and approved persons on how to manage conflicts of interest. A rule on the issue was recently amended to clarify the role of approved persons in bringing conflicts to the attention of the member firm.

The rule requires written disclosure to clients to identify conflicts, and also obliges the member to “address the conflict by the exercise of responsible business judgment, influenced only by the best interests of the client.”

The MFDA acknowledges that some conflicts may not be material, but requires written disclosure be provided in all cases where there is a reasonable likelihood that a client would consider the conflict important when entering into a proposed transaction.

The MFDA notice points out that reporting of some conflicts may not be required by provincial securities legislation, but that disclosure may still prove to be “responsible business judgment.”

Fund dealers are also reminded they must manage conflicts of interest arising from outside business activities, including compensation arrangements with outside entities.

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Glass ceiling appears firmly in place

(June 23, 2006) Despite some progress, Canada’s financial industry remains mostly a boys’ club, according to the third annual study by Women in Capital Markets.

The study found men outnumbered women 4-to-1 in all jobs, excluding support staff. Women’s representation at the professional level only increased from 20% in 2000 to 23% percent in 2005, despite an overall population drop. There has been almost no proportional change at the most senior levels.

“Leaders in the financial community now recognize the challenges women face in building their careers in the capital markets. However, they are still struggling with how to address the issue,” said Jacqueline Szeto, president, Women in Capital Markets.

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But is it RSP-eligible?

(June 23, 2006) There’s a new way for investors to hedge their exposure to America’s blue chip stocks, as at least one online wagering site is accepting bets on whether the Dow Jones Industrial Average will sink to 10,000 points.

The site is offering 5-to-1 odds on bets that the index will decline to that level by September 15 of this year. The Dow opened this morning at 11,019.11, so it would have to decline about 9.25% by mid-September. And no, this “investment” is not RSP eligible.

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