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(December 7, 2006) Canadians have been getting richer over the past few years, according to the latest data from StatsCan, but they are also taking on far more debt than in the past.

The survey of financial security covered the period from 1999 to 2005, finding that median net worth rose 23.2% over that period, to $148,400 per family unit. Total assets, including equity, fixed income and real estate investments, totaled $5.6 trillion, 1.4 times higher than 1999.

But total debt climbed faster, reaching $760 billion, or 1.5 times the debt carried in 1999. Three quarters of that amount was held as mortgages, while 9% was in the form of lines of credit. Credit card debt accounted for 3.4%, or about $26 billion.

Over the six year period the survey covered, median debt-loads rose 38%, to $44,500, accounting for about 13.52% of assets. Younger families, where the primary breadwinner was under the age of 35, carried a higher debt burden, of about 39.40% of assets.

The largest contribution to soaring net worth came from the housing market, with principal residences accounting for one-third of total assets. The value of pension plans ranked second, making up 18.5% of assets.

Many Canadians were not helped by pension savings, however, with 29% of family units having no pension assets whatsoever. This shortfall was greatest among single person households, with 45.2% having no pension, compared to 21.5% of multi-person households.

The majority of those with no private pension assets also reported lower employment income. Among multi-person family units earning less than $30,000, 64% had no pension. Those families with no private pension assets also tended to be younger, StatsCan pointed out, with 57.9% having a primary breadwinner under the age of 45.

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Trusts not a drag on growth: PwC study

(December 7, 2006) Concerns over the ability of income trusts to grow and invest their undistributed revenues may be unwarranted, according to a new report from PricewaterhouseCoopers.

Having reviewed more than 250 income trusts, the accounting firm says these companies have made “an important contribution to the economy, investing their capital and growing their businesses at impressive rates.”

The study found that over the past five years, trusts increased their sales, net income and capital expenditures, despite the fact they were distributing a large portion of their cash to investors.

As a group, trusts increased sales by more than 600% over the past five years, and directed more than $20 billion into their capital spending programs in both 2004 and 2005.

“These facts represent an important contribution to the debate over income trusts — a debate that has been lacking factual context,” said Ross Sinclair, national leader of the PwC IPO and income trust services group. “Contrary to opinions expressed elsewhere, trusts are continuing to reinvest in productivity-enhancing projects and technologies. They raised cash for capital expenditures and new acquisitions.”

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Desjardins rebrands subsidiaries

(December 7, 2006) Desjardins Financial is undertaking an exercise in brand consolidation, changing the names of its subsidiaries, including the Laurentian Financial Services and Performa divisions.

The firm will change the name of its 20 LFS Laurentian Financial Services centres to Desjardins Financial Security Independent Network. Mutual fund dealer Optifund Investments and the recently acquired Performa will also be renamed, as Desjardins Financial Security Investments Inc.

“The new names will help strengthen the reputation of the Desjardins brand and will allow the Company to consolidate its position as one of the major providers of financial products in Canada,” says Denis Berthiaume senior vice-president individual insurance at Desjardins Financial Security and president of Desjardins Financial Security Investments Inc.

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Rogers Financial selects new systems

(December 7, 2006) Vancouver-based Rogers Group Financial has announced it is adopting the PlanPlus Web Advisor as its personal financial planning system.

“Our review of available financial planning tools identified PlanPlus Web Advisor for its flexibility to provide a powerful combination of standard planning functions over a wide range of potential scenarios, while allowing the knowledge and experience of our advisors to guide customized client solutions,” said Brett Simpson, financial advisor and president of Rogers Group Financial.

PlanPlus wealth management and financial planning solutions are used worldwide by banks, stock brokers/investment firms, insurance, credit union, mutual fund and financial planning firms.

“Rogers Group Financial has been recognized as a leader, not just in BC but nationwide, as a financial planning and services firm of the highest caliber,” said Shawn Brayman, president of PlanPlus Inc. “We are excited to be working with their team and expect their feedback will help to keep PlanPlus Web Advisor at the forefront of planning solutions in the marketplace today.”

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(12/07/06)