CCIR sights improved disclosure for segregated funds

The Canadian Council of Insurance Regulators (CCIR) published its Strategic Plan 2017-2020 on June 27 (link). The new plan outlines the priorities and initiatives of the CCIR for the next three years. However, consumer protection issues related to the sale of segregated funds—originally identified as a priority in 2014—remains a key objective for the CCIR for the foreseeable future.

The CCIR has engaged in a review to assess the regulatory framework of segregated funds to identify whether changes were necessary, particularly in light of recent regulatory reforms affecting similar investment products.

In May of 2016, the CCIR’s Segregated Funds Working Group published an issues paper for public consultation. With an emphasis on treating the customer fairly, the paper sought feedback on the potential for gaps in the current regulatory framework and the information required to ensure that customers receive helpful and meaningful disclosures.

Since the closing of the consultations on the issues paper, the CCIR has analyzed the input it has received and continued to work with key stakeholders on critical issues related to the segregated funds initiative. In the fall, the CCIR intends to publish a position paper outlining its recommendations and expectations.  The recommendations will refer to issues such as the delivery of the Fund Facts document for subsequent transactions, risk classification methodology, oversight of sales, needs-based analysis, updating of client records and know-your-product due diligence requirements.

The CCIR will also publish a prototype disclosure document, identifying minimum required information on performance as well as on fees and charges. The prototype disclosure document is expected to be released in winter 2018, following consumer opinion testing.

“Ensuring that customers have the information needed to understand not only how their segregated funds are performing, but also their full costs is of the utmost importance to us.” Anatol Monid, Chair of the Segregated Funds Working Group said.

The CCIR’s work in this area is expected to result in significant changes in the regulation of segregated funds; changes that are intended to ensure customers better understand the costs and performance of their segregated fund investments.

Further information on the segregated funds initiative is available on the CCIR’s website (

About the CCIR:

The Canadian Council of Insurance Regulators is a national association of insurance regulators that traces its roots back to 1914. The mandate of the CCIR is to enhance insurance supervision and regulation to serve the public interest and to foster increased cooperative supervision and information sharing among regulatory authorities.

SOURCE Canadian Council of Insurance Regulators (CCIR) 

For further information: Media Contact: Malon Edwards (For English media ‐ Toronto), 416-590-7536; Sylvain Théberge (For Francophone media ‐ Montréal), 514-940‐2176, 1-877-525‐0337, extension 2341

5 steps you can take to help your aging parents manage their finances

5 steps you can take to help your aging parents manage their finances

Source: Marc Sherman and Jason Heath | FP

Here are five proactive steps you can take to help your parents manage their finances as they age:

  1. Consolidate accounts – If your parents have multiple bank and investment accounts, try to reduce the number of accounts and institutions. They will likely benefit from lower fees and a more integrated approach.
  1. Review statements – If they’re comfortable sharing their financial details, your parents might be able to set you up to receive copies of their statements. If their advisers are aware that you are looking over their shoulder, it adds an additional level of oversight. You can also look for signs of financial abuse, such as large transactions.
  1. Prepare a financial data organizer – Summarize accounts and advisers, details of any life insurance policies, if they have safety deposit boxes and where to find important legal documents and account passwords.
  1. Hire a financial planner – It could be helpful for your parents to know if they are likely to outlive their money. Conversely, it could be helpful for you to know if they may need some level of financial support. Strategically, a financial planner may be able to identify investment, tax or estate strategies to help preserve your parents’ wealth.
  1. Review their estate plan – It is important to ensure that wills, powers of attorney, personal directives, and similar documents are up-to-date before it is too late. Even if they are in good standing, it is also important to walk through what would actually happen with assets on death, based on beneficiary designations and joint ownership, as not all assets may pass through the estate and be addressed by a will. Proactive measures can also be taken to reduce income tax and probate fees that could be into the tens of thousands for even a modest estate.

Remember that just because someone is losing or has lost mental acuity, it does not mean that they cannot make or contribute to financial decisions. Even someone who has dementia can still express their wishes. So be sure to balance the risks of no oversight with the mistake of overstepping boundaries that are hard to establish when it comes to children getting involved in their parents’ finances.

What to know when shopping for financial advice in a sea of titles and credentials

By David Hodges


TORONTO _ Choosing a financial adviser is a big decision, yet few investors realize that in most provinces there’s a lack of specific, harmonized regulation of professionals who provide that type of service.

An expert panel set up by the Ontario government has made several recommendations to deal with major concerns, including the myriad of confusing titles and credentials and the lack of an explicit obligation to act in a client’s best interest.

However, that hasn’t stopped investors from increasingly relying on financial advisory services.

A 2016 study by the Canadian Securities Administrators found that 56 per cent of respondents were working with an adviser, up from 43 per cent a decade earlier.

For those considering working with an adviser, experts recommend taking these steps before making a choice:

Check registration

Marian Passmore, director of policy for investor advocacy group FAIR Canada, says securities regulators will only register firms and individuals if they are properly qualified. So check an adviser’s registrations.

“A lot of people don’t do that,” Passmore says. “If they had done so, they may have not lost their money.”

A good place to start, says Passmore, is the CSA’s site, which allows you to search for any licensed investment adviser. Keep in mind, however, that insurance and financial planners won’t be on that site unless they’re also licensed investment advisers.

The CSA website also allows you to see if your licensed adviser has ever been disciplined for misconduct.


Ask about products and services offered

Not all advisers offer the same products and services and not all have the same expertise, so it’s important for consumers to understand the differences.

For instance, most investment advisers are licensed by either the Mutual Fund Dealers Association or the Investment Industry Regulatory Organization of Canada. But while most MFDA-licensed advisers deal only in mutual funds, IIROC advisers can also offer other products including stocks and exchange-traded funds.

In the case of financial planning services whether that’s to reduce taxes, save for a big purchase or to retire in comfort there are dozens of designations and investors will likely have a hard time distinguishing between them.

“IIROC has over 30 credentials that people have but that doesn’t really tell you how difficult or onerous those credentials are,” says Passmore.

The certified planner certification is a reputable designation for those who want a combination of sound investment advice and financial planning know-how, says Ken Kivenko, an investor advocate who is also chairman of the Small Investor Protection Association’s advisory committee.

“They can go beyond the straight investing phase,” Kivenko says. “They do holistic plans.”


Assess the cost of advice

Because advisers can be paid by salary, commission, a flat fee or a combination of methods, it’s important to make sure you understand how your adviser is paid, how much their services will cost, and how this may affect the advice you’re given.

For instance, many advisers are paid a commission for every product they sell, which may influence an adviser to recommend one investment over another, according to the CSA.

But keeping fees and other investment-related costs low has been proven to be one of the best and easiest ways to help your savings grow.

A fund with low fees, such as indexed mutual funds and exchange-traded funds, has an automatic head start over higher-cost rivals for returns and compounded over years the advantage can grow even more powerful.

The Top 10 Tips For Spring Cleaning Your Finances

Excerpted article was written, by

Wade Stayzer is Meridian’s Vice President, Sales & Service

Taking time this spring to get your house and finances in order will benefit you and your family in the long run. Following are 10 tips for spring cleaning your finances.

1. Take Stock. Now’s the time to take a long hard look at your where your money resides, and what it’s doing for you. Ask yourselves the following questions and make sure you’re able to find the answers: What do I have? Where are my investments? What investments are making money for me and my family, and what ones are not? How are my funds dispersed? At the end of the day, you want to make sure that you’re getting the most “bang” for your buck so make sure to find out all of the details regarding your money so that you can determine if there needs to be any changes made.

2. Review Your Budget. Do you have a budget and if so, do you stick to it every week? If the answer is “no,” you’re not alone. If the answer is “yes,” it’s always good to prioritize the time required to find out where your money is going to every month. How family dollars are being spent is a key part of getting your finances in order.

3. Credit Where Credit is Due. Do you know what’s on your credit report? Did you know that one incorrect or negative item can make a considerable difference in how much money a bank could lend you, or whether you get a preferred rate on a loan or credit card? Order your credit report and get down to business — is everything correct? Are there mistakes? Are outstanding items still appearing, e.g. bankruptcy, etc.? Find out what’s said about you financially and make sure that there are no costly mistakes listed.

4. Commit to Saving More. It may seem difficult to do but taking stock of the amount of money being saved per year then committing to saving just a little bit more will make the world of difference to your finances of the future. Double check the amount of money in your emergency fund and/or savings account and commit to increasing it by a small percentage per year. An incidental amount that won’t be missed in the short term can make a considerable difference towards your long-term retirement funds.

5. Automate. If you haven’t already, get online and automate your monthly payments, wherever possible. Doing so will saves you the worry about paying your bills on time and will allows you to keep track of your debits and credits easily.

6. Pay it Down. Make a plan to reduce or eliminate your debt altogether for the coming year. This will need to be done by taking a long hard look at how money is spent and coming up with a plan for how you can effectively pay off money owed while still saving. Though it may seem counter-intuitive at first, it is possible, and will ultimately result in your having more disposable income to reinvest.

7. Better Safe Than Sorry. Do you have a place for your important documents? Outside of your home, are there backup documents elsewhere, such as in a safety deposit box or digital backups in a Cloud-based account? If not, it’s important to do so right away as we can never be sure of when a situation may occur where important information is, unfortunately, lost or destroyed. Having a back up plan doesn’t have to be complicated. Options for doing so include giving copies of important information to a trusted friend or family member to store in another location, or providing copies to your lawyer.

8. It Will Be Done. They say that there is nothing certain in life but death and taxes, and this is found to be no more true than when a loved on dies. As part of your financial spring cleaning, make sure to get your will in order so that there are no surprises or disputes in the event of an untimely death. Details regarding your kids’ guardianship, allocations of funds and related items should be clearly outlined in this important document.

9. Review Your Contracts. Take this time to review your supplier and vendor contracts such as your phone/TV and internet service providers. Take this time to review your contracts and ask your suppliers for a better rate or package.

10. Insure and Ensure Your Future. Do you understand all of the details of your insurance policy? How much are you paying, and what will you or your loved ones receive, in the event that insurance funds are required? Take this time of the year to review all policies, including Life Insurance, Home and Auto Insurance to confirm that you have the best policy and rates that suit your particular family situation.

Source: The Huffington Post

Be wary of saving in an RRSP at the expense of debt, financial experts say

Be wary of saving in an RRSP at the expense of debt, financial experts say

By Linda Nguyen


TORONTO _ When Patrick French was about 18 years old, he got a hot tip about a gold mining stock.

The problem was he was a student with no money, but he still wanted to cash in on the “can’t miss” opportunity for his RRSP.

So, he took out a $4,000 loan.

“I broke some fundamental rules for what was promised to be a brilliant idea,” said French, director of retirement and financial planning at investment firm Edward Jones.

“Within 12 months, the stock was effectively worthless. It was one of those things where at the time, it was a very expensive lesson invaluable really.”

Not only did French lose his investment, he lost his RRSP contribution room. He also now had more debt.

Today, French tells clients more often than not, it’s a bad idea to incur debt, or ignore debt, to invest in an RRSP.

“You have to believe that you can consistently earn a higher rate of return than you can by paying down the debt,” he said.

“That’s why regardless of your age, paying down your debt is always a good financial strategy.”

As the March 1 deadline looms for RRSP contributions this year, many Canadians will be thinking about how much they want or are able to contribute to their retirement savings.

French says there’s bad debt and good debt.

An example of bad debt is credit card debt, which often carries an interest rate of 20 per cent. Mortgage debt, on the other hand, could be considered good debt, if interest rates continue to stay at current historic lows.

As a general rule, it’s a good idea to tackle bad debt first because any tax savings you may receive from an RRSP contribution will likely not exceed the interest costs a credit card company charges.

Financial adviser Sara Zollo believes in a slightly different school of thought. She encourages her clients not to neglect their retirement savings just because they have debt.

“One of the biggest mistakes you can do is ignore your savings and just pay down the debt,” said Zollo, who works at Sun Life Financial Canada.

“It is a good idea to do a combination of both and to look at each individual situation and decide what ratio goes to debt repayment and what ratio goes to savings.”

Even putting aside as little as $20 a month is enough to help kick-start an RRSP.

“I can’t tell you how many times clients are surprised with how much money they have put away by the end of the year,” she said.

Zollo says putting money away in an RRSP may also be advantageous for those in a high income tax bracket because it creates a deduction on the amount of taxes that are owed.

“If you can minimize taxes paid down today, you have more money today,” she said. “With the refund, you can put that towards your debt, and then you’ve done both saved in your RRSP and paid down some of your debt.”

But like with any major financial decision, Zollo says it’s best to consult with a professional first.

“A written annual financial plan can look at budgeting, tax planning, retirement planning, kid’s education planning, protecting your savings and proper insurance,” she said.

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