Briefly:

(June 24, 2005) Soaring energy and mineral prices have been a boon to the Prairie provinces, particularly Alberta, the IDA says in a new report.

“Oil and gas revenues allowed [Alberta] to become essentially debt free this year,” the brokerage industry association says. “With strong finances, Alberta will have considerable fiscal flexibility in the future to move far ahead of all other provinces in terms of corporate competitiveness. Oil and gas investment figures prominently in the province’s inventory of major projects and will lead business capital spending in the second half of this decade.”

The resource boom has also helped to kickstart Saskatchewan’s economy, the IDA says, noting the province received a credit rating upgrade this year. “Saskatchewan possesses significant natural resources — particularly oil, gas and potash — that are attracting fresh capital spending and contributing to an optimistic outlook for the province.”

And although Manitoba’s resource base is comparatively modest, it has enjoyed a steadier growth path, the IDA says, avoiding the volatility that more resource dependent economies experience. “Manitoba does possess significant hydroelectric power potential which will help stimulate economic activity as construction proceeds. Corporate tax reductions are scheduled over the next two years and will help make Manitoba a more attractive place in which to invest.”

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National net worth up 2%

(June 24, 2005) Canada’s national net worth rose 2.3% in the first quarter of the year, to $4.3 trillion, or $134,000 per capital.

Statistics Canada credits the increase to stronger growth in national wealth as well as reduction in net foreign debt.

Q1 also saw the personal savings rate decline to -0.6%, the first negative savings rate by households in decades, the agency notes. Still, household net worth continued to advance in the quarter, by 1.5%, thanks mostly to gains in the market value of residential real estate and equities.

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Canadians unprepared for critical illness: survey

(June 24, 2005) Half of Canadians do not know how they would handle their finances if they were to suffer a critical illness, a new poll suggests. The Ipsos-Reid survey, commissioned by Sun Life Financial and its Clarica advisors, reveals that 49% have no plan to cover the loss of income and various other costs associated with living through such illnesses as cancer or a heart attack.

Although a quarter of those surveyed believe they have insurance coverage that would provide coverage in the event of a critical illness, insurance marketing and research association LIMRA reports that less than 1% of Canadians actually have this type of coverage.

“The survey results indicate that a large number of Canadians are not adequately prepared for the costs associated with living through a critical illness,” said Diana Deverall-Ross, vice-president of individual health insurance with Sun Life Assurance Company of Canada.

She noted that Canadians whose plans include drawing on savings could end up eroding their retirement savings — savings which may be difficult, if not impossible, to rebuild. Including the cost for rehabilitation services, travel to a treatment centre and loss of income during recuperation, Sun Life estimates the cost of living through a critical illness to be well over $100,000.

Deverall-Ross suggests that Canadians seek help from a financial advisor to evaluate their particular situation, to identify vulnerabilities and take steps to address areas of concern. (Filed by Adam Freill, Canadian Healthcare Manager)

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Class action suit against Manulife called off

(June 24, 2005) A class action suit against Manulife related to its role in the Portus debacle has been discontinued, the insurer says.

Lawyers involved in the case asked for the class action to be dismissed after concluding that an offer by Manulife to reimburse Portus investors referred by Manulife advisors was “fair and reasonable”.

In granting the motion, the judge described Manulife’s corporate behaviour as “exemplary.”

Clients who qualify for Manulife’s offer have until July 15 to choose from three options: a principal-protected note, guaranteed investments, or cash, in exchange for their principal investment in Portus.

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Mackenzie to close RSP funds in July

(June 23, 2005) Mackenzie Financial says it will windup the RSP versions of four of its foreign funds on July 8, assuming Ottawa’s proposal to eliminate the foreign property rule becomes law by that date.

In a statement today, Mackenzie said it expects to receive relief from regulators to waive the requirement to notify investors 60 days prior to the funds’ termination.

“The relief is an important step in ensuring RSP fund investors don’t have to wait on lengthy administration to take advantage of the resulting fee reductions,” said David Feather, president of Mackenzie Financial Services.

RSP fund investors will receive the equivalent value of their investment in the corresponding underlying mutual funds: Mackenzie Cundill Value Fund, Mackenzie Ivy Foreign Equity Fund, Mackenzie Ivy Global Balanced and Mackenzie Select Managers Fund.

Feather says the expected elimination of the foreign content rule will provide Canadian investors with more investment options for registered plans.

“It’s an opportune time for investors to talk to their financial advisors about the amount of foreign content in their portfolios,” he notes. “Canadian equities and the Canadian dollar have had a good run over the last several years or so. For some investors, it may make sense to assess whether the foreign exposure of their portfolios is now below desired levels.”

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Montreal exchange asks for power to investigate former traders

(June 23, 2005) The Bourse de Montreal is seeking comment on a proposal to investigate complaints against traders for as long as three years after they leave the industry.

The request relates to a recent case involve a former trader. “It appears that the [Bourse] disciplinary committee does not have jurisdiction when former approved persons refuse to cooperate with an investigation while these persons are no longer approved.”

The amendment would allow the Bourse to retain its jurisdiction over former approved persons for a period of 36 months from the date of termination of their approval. “This is in the best industry of the industry and the public,” the Bourse says, noting that the IDA has a five-year limit for investigating former brokers.

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Life insurance group hands out awards to Manulife, Equitable Life

(June 23, 2005) The Life Insurance Institute (LIIC) of Canada has presented Manulife Financial and Equitable Life of Canada with the 2005 LIIC corporate awards for best practices in learning and development.

The awards were handed out Thursday at the institute’s annual conference in Toronto.

“Both of our winners this year have developed exceptional programs that meet important educational needs,” says LLIC executive director Debbie Cole-Gauer. “Manulife and Equitable appreciate the significance of providing education for employees and advisors. It is apparent these organizations recognize what is needed to enhance the understanding of our business and to sharpen staff leadership skills.”

Manulife won in the large company category for its “Independent Advisor Channel Training Services Distribution” program launched in January 2004. The web-based program allows advisors and their staff to access training and education programs, learn about new products, software and technology, update their sales and marketing skills, and stay on top of the trends in financial services, LIIC says.

Equitable received the award for the second year running in the small size company category for its Leading and Coaching (Management and Leadership Development) program, a series of modules designed to help management gain knowledge and develop skills.

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Coalition to focus on executive compensation

(June 23, 2005) The Canadian Coalition for Good Governance has opted to narrow in on several key issues this year, most notably executive compensation.

“Our members feel that executive compensation is the biggest issue today,” says the coalition’s managing director, David Beatty. “To that end, we have developed a set of tools to help directors be more effective at determining compensation.”

Those tools will be introduced in a new paper focusing on compensation, to help link pay and performance, he adds.

The coalition also plans to tackle majority voting systems for shareholders and increased director education.

“As in any endeavour, education is the key to success, and a better educated director is a more effective director,” says coalition chair Michael Wilson. “We have seen interest in formal education for directors growing, with more than 250 already graduated from programs across Canada, and another 250 currently studying or registered right now.”

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Russell cuts ties with Guardian Capital

(June 23, 2005) Russell Investment Group has removed Guardian Capital, one of the managers of the Russell Canadian Equity Fund and Sovereign Canadian Equity Pool.

The Russell Canadian Equity Fund is a multi-manager fund available to institutional investors, while the Sovereign Canadian Equity Pool is one of seven multi-manager pools in Russell’s Sovereign Investment Program, designed for high net worth individuals.

“With the addition of managers Connor, Clark & Lunn and Picton Mahoney Asset Management (both hired last year), Guardian’s small cap mandate no longer fills a structural role in the funds,” Russell said in a statement. “Maintaining Guardian in the manager line-up would cause the funds’ small cap bias to increase beyond desired levels.”

The change was effective June 20.

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Fidelity closes RSP funds

(June 22, 2005) Fidelity Investment is winding down all 17 of its RSP or clone funds effective June 24.

After Ottawa proposed eliminating the foreign property rule in February, Fidelity said it would eliminate its RSP funds once the accompanying legislation was in place.

“We believe we are the first in the country to fully implement the elimination of RSP funds,” said Fidelity spokesperson Kim Flood.

“Fidelity is moving as quickly as possible to eliminate these funds and provide investors with the benefits of more convenient and cost effective foreign investing that is made possible by the new government policy,” the fund company said today in a statement.

“While RSP funds enabled investors to invest above the limit, there were additional costs associated with the structure,” Fidelity said. “Now, with the removal of the limit, they can invest money directly in foreign funds without the additional costs. As a result, it is now cheaper for investors to diversify their registered portfolios across the world’s markets.”

Fidelity says investors are not required to take any action as a result of the change as unitholders in Fidelity RSP funds will simply receive units of equal value in the corresponding Fidelity foreign fund.

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ASC appoints new chair

(June 22, 2005) The Alberta Securities Commission has appointed Calgary lawyer William Rice to a five-year term as chair.

Rice, who joins the regulator next month, was a managing partner at Bennett Jones LLP, the largest law firm in Western Canada. He specialized in mergers and acquisitions, project finance, securities, and corporate governance.

“Mr. Rice comes to the ASC with over 25 years experience dealing with securities law and considerable experience dealing with regulated agencies,” said Alberta Finance Minister Shirley McClellan. “He has a strong professional background and is well suited to lead the ASC. I look forward to working with him.”

“The ASC is a solid organization, respected nationally, with strong professional staff at all levels. I intend to build on its existing strengths and from the transitional issues which have been confronted in recent months,” said Rice. “Alberta hosts the second largest capital market in the country and I look forward to working with businesses and investors, in a new capacity, to increase confidence in this marketplace.”

Rice will replace interim chair, Peter Valentine, who was appointed while the search for a permanent chair continued. Rice comes to the ASC at a challenging time: there have been unproven allegations of unprofessional behaviour among staff and a number of senior executives have recently departed.

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Industrial Alliance to merge funds

(June 22, 2004) Industrial Alliance plans to terminate nine mutual funds, merging them with others that have similar mandates. The mergers involve the Montreal-based firm’s IA and R series of funds.

For instance, the IA Canadian Money Market Fund will be merged into the R Money Market Fund and the IA Canadian Bond Fund will be folded into the R Bond Fund.

Industrial is also changing the management, trustee, registrar and custodian of its funds so that all fall under a common platform.

“This reorganization represents a watershed in our ongoing efforts to establish a broad and integrated offering of leading investment options,” said David Scandiffio, president of IAFM. “With these changes, our clients will be able to choose from a number of compelling investment options across our complete line-up of individual funds and portfolios that feature full exchangeability and integrated support from our in-house team.”

The changes will take effect in August, pending unitholder approval.

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Employer pension plan assets close to $700 billion

(June 22, 2005) The value of trusteed or employer pension plans rose 3.7% in the fourth quarter of last year to $688 billion, Statistics Canada says. It’s the seventh consecutive increase for such plans since hitting a low of $532 billion in the first quarter of 2003,

Fund revenues were $30.4 billion and expenditures stood at $24.9 billion, for a net cash flow of $5.5 billion during the quarter.

“Expenditures were abnormally high, partially because of a cash withdrawal to transfer money from an existing plan to a much smaller plan, both belonging to the same employer,” the agency said. “As well, accounting practices within the industry typically result in larger than normal expenditures in the fourth quarter of each year.”

For the first time since 1994, employer and employee contributions in 2004 ($30.3 billion) exceeded benefits paid out ($29.8 billion.)

About 5.5 million Canadian workers belong to employer pension plans.

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RBC Insurance relaunches website

(June 22, 2005) RBC Insurance has upgraded its sales resource centre for insurance representatives.

The newly redesigned site, accessible through the RBC Insurance website, provides more efficient and user-friendly access to valuable life and health insurance sales, marketing and product information designed to help distributors better meet their clients’ insurance needs, RBC said in a release.

“RBC Insurance is committed to being easy to do business with and working with representatives to provide a superior client experience,” said RBC Insurance vice-president Neil Paton. “Our enhanced sales resource centre focuses on providing increased options for better meeting the needs of distributors and their clients.”

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Ameritrade to purchase TD Waterhouse U.S.A.

(June 22, 2005) Ameritrade and TD Bank have agreed to a deal under which Ameritrade will acquire TD’s U.S. brokerage business, TD Waterhouse U.S.A. The new firm will be known as TD Ameritrade.

Under the terms of the agreement, TD Bank will receive about 32% ownership in TD Ameritrade; Ameritrade shareholders will receive a special cash dividend of $6.00 per share, subject to closing; and TD Bank will acquire Ameritrade’s Canadian brokerage operations for $60 million US.

Joe Moglia, current CEO of Ameritrade, will head the combined firm. “This opportunity accelerates our long-term investor strategy with access to branches and advice, while maintaining an industry leading pre-tax margin,” he said in a statement. “We expect that it will create significant value for shareholders by generating substantial cost synergies and deliver a more diverse revenue mix by shifting to an asset-gathering model.”

“This transaction is a strategic and natural one for TD Bank Financial Group, as it provides immediate value to shareholders, reaffirms our commitment to the on-line brokerage business and extends our opportunities for further growth in the U.S.,” added TD CEO Ed Clark.

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CIFPs pre-releases best practices manual

(June 21, 2005) The Canadian Institute for Financial Planners (CIFPs) has used its national convention to unveil a new best practices guide. The 400-page Financial Planners Practice Guide is aimed at keeping members in compliance with standards set out by the Financial Planners Standards Council (FPSC).

“We’ve tried with this initial version to cover all the material that today’s financial planner needs to be competent, comprehensive and compliant,” says Jason Laidler, CFP, at Investors Group in Queensville, Ontario, and chair of the committee that drew up the manual.

The guide includes worksheets, checklists and template letters ranging from client engagement to estate planning. The living benefits chapter even includes definitions for “do not resuscitate” instructions and various level of care.

“I want my client to be making as informed a decision as possible,” says Laidler. “This glossary of terminology in the living will itself says exactly what it means to be put onto a respirator, for example. It’s very thorough.”

The guide was drawn up by a committee of 10 CIFPs members, with the assistance of four staff members, and took about nine months to compile.

Conference attendees received a copy of the manual on CD-ROM in advance of the launch of the guide, which will be available for free, exclusively to CIFPs members through the organization’s website (www.cifps.ca). Users can print a hard copy for their desk, or simply use it online.

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Westwind adds to executive team

(June 21, 2005) Investment banking firm Westwind Partners has hired three new executives. Dennis Logan and Derrick Reimer will work out of the firm’s Toronto office, while Pierre-Yves Terrisse will be based in Montreal.

Logan has been in the investment banking industry for 12 years while Reimer has nine years of trading experience. Terrisse has more than 10 years experience as a financial analyst.

In addition, Westwind has named Kent Jespersen, chair of Calgary-based La Jolla Resources, to the firm’s advisory board.

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IDA reprimands Assante advisor

(June 21, 2005) The IDA has reprimanded Bruce Taylor, a registered representative with Assante Capital Management in Toronto, for failing to disclose his involvement in an outside business activity.

Between October 2002 and February 2003, Taylor was an officer and director of Tone Resources Limited, information he did not share with the IDA or Assante.

Taylor also advised and facilitated the participation of clients in a private placement of shares, an off-book transaction, also without the knowledge of Assante.

In addition, Taylor breached an undertaking given to Assante that he would not trade in nor provide advice on shares in Tone Resources.

Taylor was publicly reprimanded by the IDA and ordered to pay $7,000 in costs. As a result of an internal investigation at Assante, Taylor agreed to make a $50,000 payment to the firm, to be donated to charity. He was also suspended by Assante from December 2003 to March 2004 and required to re-write the Conduct and Practices Handbook examination.

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Winnipeg advisor receives CIFP award

(June 20, 2005) The Canadian Institute of Financial Planners has recognized Peter Bialkoski of Winnipeg for achieving top marks in CIFP’s six course education program.

The John Bern Hill Memorial Award of Excellence is named after the founding member of CIFPs, who practiced in New Westminster, B.C. Since the inception of the Award of Excellence program in 2002, this is the first year that the award was presented in John Beran Hill’s name.

On top of a plaque and cash award, Bialkoski was presented with Beran Hill’s CFP pin, given by Beran Hill’s widow, Vera Hill, although she noted that Bialkoski was not yet entitled to wear the pin. He plans to sit the six-hour CFP exam in November.

Bialkoski is currently a supervisor with PPW Chartered Accountants. He graduated the CIFP program with the highest composite grade for the 2004 academic year. In 2002 he earned his CGA, graduating as the top student nationally.

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Scotia introduces life-cycle fund family

(June 20, 2005) Scotia Securities has launched a new series of eight life-cycle fund-of-funds, branded as Scotia Vision.

The funds, with target dates ranging from 2010 to 2030, are each available in an aggressive and conservative format.

“The asset allocation strategy of each Scotia Vision Fund will automatically become more conservative over time to provide greater stability as a fund approaches its target date,” Scotia says.

Each of the funds will invest mostly in a portfolio of Scotia mutual funds, diversified by asset class, investment style, geography, market capitalization and portfolio advisor.

“The funds are well suited to the long-term investor who has a defined financial goal and certain time horizon in which to achieve that goal,” explains Scotia Securities president Karen Fisher. “The strategy of the Scotia Vision funds is straightforward — an asset allocation strategy should change over the life of a portfolio in order to keep you on track to reaching your financial goals.”

Scotia also launched the new Diversified Monthly Income Fund, intended to provide investors with regular monthly income and some capital appreciation by investing primarily in a diversified portfolio of income-generating securities.

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Arrow announces new fund-of-funds product

(June 20, 2005) Arrow Hedge Partners is adding to its fund-of-funds lineup, launching the Arrow Enhanced Income Fund.

Arrow says the new product provides high net worth sophisticated investors and institutional investors with access to a broadly diversified portfolio of hedge funds diversified by manager, investment style, and regional focus.

The fund uses 10 single hedge fund managers and five different investment styles, focused around hedged credit and fixed income strategies.

“The mission of Arrow Hedge Partners is to provide sophisticated individual and institutional investors in Canada with access to high quality single manager hedge funds and multi-manager funds that provide superior absolute performance with lower levels of risk,” says Arrow managing director and portfolio manager Mark Purdy.

Arrow’s fund-of-funds family also includes the Arrow Global Equity Long/Short Fund and the Arrow Multi-Strategy Fund.

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RBC hires Wall Street veterans

(June 20, 2005) Two industry veterans are joining RBC Capital Markets’ investment banking group.

Kevin Davies joins RBC Capital Markets as managing director in Healthcare Investment Banking and Chris Mulligan becomes managing director and co-head of the Media, Communications & Entertainment Investment Banking group.

Most recently, Davies was managing director for Life Sciences Investment Banking at Wells Fargo Securities and gained experience in healthcare and life sciences investment banking at Lehman Brothers, Morgan Stanley Dean Witter, and Robertson Stephens.

Mulligan has worked in investment banking at Wit Soundview and Salomon Smith Barney. He spent the past year establishing a New York office for Headwaters Merchant Bank, leading coverage of the media and consumer sectors.

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New bond guides aimed at investors

(June 20, 2005) The IDA has published two new guides on bond investing on its website. The 12-page “Introduction to Bonds,” includes basic bond definitions, explains how fixed income products fit in an investment portfolio and how to invest in bonds and gives examples of types of bonds available.

The 26-page “Question & Answer Guide to Bond Investing” is more in-depth, providing information on bond features, pricing, the yield curve, money market instruments, alternative ways to invest in bonds and the risks of bond investing.

“There are a variety of types of bonds to choose from and some may serve a useful purpose in your portfolio,” the guide says. “Discuss with your financial advisor which bond is best suited for your investment objective and tolerance risk for risk.”

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Investors Group closes clone funds

(June 20, 2005) Investors Group is closing the RSP version of six of its global funds in preparation for the removal of foreign content restrictions, as proposed in this year’s federal budget.

The clones were closed to new business as of Friday, June 17, with the exception of pre-authorized contribution arrangements.

The funds affected are the Investors U.S. Large Cap Value RSP fund, Investors Global Science & Technology RSP fund, Investors Global RSP fund, Investors European Equity RSP fund, Investors Japanese Equity RSP fund and the IG AGF U.S. Growth RSP fund.

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