Solutions, Self Defense and Best Practices

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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Dec 13, 2012 8:19 pm

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Petition to The Quebec National Assembly:

Modifications to the Financial Services Compensation Fund of l'Autorité des marchés financiers (AMF) (Quebec provincial securities commission)

Petition text

CONSIDERING THAT Canada ranked fourth in a 2009 Price Waterhouse global economic crime survey and that a large number of fraud cases, especially Ponzi schemes occurred in Quebec;

CONSIDERING the financial loss to victims, many of whom lost their entire life savings for retirement resulting in a decrease in buying power and reliance on the Old Age Security supplement;

CONSIDERING the emotional, psychological and physical impact on the victims and their families;

CONSIDERING the lack of resources, budget and expertise available to police to investigate financial fraud and prosecute the perpetrators;

CONSIDERING the inability of the AMF to protect investors by ensuring that a registered broker is licensed to sell a specific financial product;

CONSIDERING THAT the AMF, police and regulators do not share information in order to prevent, detect and prosecute white collar crimes;

CONSIDERING the limitations of the Financial Services Compensation Fund, which provides coverage only for mutual funds and insurance products;

We, the undersigned, request that the AMF make victim compensation a priority, and that the Financial Services Compensation Fund also cover losses arising from fraud or insolvency related to a financial product sold by a registered member of the AMF, regardless of the type of product.




https://www.assnat.qc.ca/en/exprimez-vo ... index.html


quebec, petition, amf
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Re: Solutions, Self Defense and Best Practices

Postby admin » Sat Dec 01, 2012 6:22 am

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Fiduciary duty is nice but that will take a considerable time to introduce. What can be done in the interim?

Here's my Top 10:

Require dealers to provide personalized rates of return for each client account

Require dealers to prepare an IPS (Investment policy statement) for all accounts greater than say $50,000

Improve the NAAF (New Account Application Form) form , standardize it across the industry and clarify relationship disclosure and importance of form on KYC (Know Your Client) ( and liability) AND ensure KYC is signed off by client upon origination and when updated or revised

Require dealers to document how they determine client risk tolerance and match to recommendations and risk capacity

Hold dealers accountable for all regulatory fines imposed on employees and agents ie make dealers responsible for payment

Sanction and fine dealers for utilizing misleading sales and marketing materials

Sanction and fine dealers for deficient complaint handling processes

Implement enhanced control and compliance policies and procedures for dealing with the elderly, new immigrants and the infirm

Prohibit any registrant from using any title that implies an advisory role unless the person meets minimum qualifications and the dealer provides personalized rates of return , discloses dollars and cents fees and states the limitations and nature of product recommendations

Empower OBSI to make its recommendations binding on dealers (see related topic on OBSI (Banking Ombudsman) http://www.investoradvocates.ca/viewtopic.php?f=1&t=178

PLUS maybe

Redirect some financial literacy resources to assist investors to better deal with Bay Street ie "Baystreet proofing"

Allow Canadian dealers to sell US mutual funds that are under US regulatory authority

Introduce Point of Sale disclosure for mutual funds and similar products

Put index linked GIC's , PPN's, Seg funds and the like under provincial securities Acts

Make Engagement letters mandatory for all registrants who hold themselves out as advisers

Thoughts?

Ken k

http://www.canadianfundwatch.com

===========================

reply #1

Great list Ken

What would be really helpful is if statements required not only a personalized rate of return - but also a comparison to the proper composite benchmark.

Warren MacKenzie

Weigh House Investor Services

======================

reply #2

Include comparison of Personal R of R to advisor's client average, firm's average and industry average subject to audit.

Dan B

====================

Reply #3

3093150-182706-industrial-espionage-concept-with-masked-businessman.jpg

Ken, how about a pre-emptive move to inform the public to determine IF the person they are dealing with is a salesperson or a licensed advisor?

Alternatively, inform the public to ASK for a written fiduciary duty as a matter of best practices (and tell them why it important). Then perhaps a public "pull" might cause it to happen before the industry pushes it in on the "12th".

Is this (and your list) something of a "public interest project" that could be undertaken sooner than waiting for the powers that be?

Vulnerable people are being hurt pretty badly out there for every year that this thing gets talked about.

Thanks for the discussion.
Larry

==============
Reply #4

Larry...that makes sense...or even make it more proactive by requiring all "advisors" to state state in writing at the start of the client relationship and annually thereafter, whether the interaction is on a fiduciary relationship or not...this would make the "fiduciary" relationship status information an advisor "push" rather than a client "pull", much more effective since clients are mostly clueless about the topic or assume that "advisor" already acts in the client's best interest.
Regards...Peter

=================

Reply #6

I agree that more paperwork would be counterproductive. However, what might work is a upfront statement by a person selling financial products as to whether or not—he is an “advisor” or considers himself to be “an advisor”. If his business cards etc.—read ‘Licensed to sell insurance’ or ‘licensed to buy and sell bonds and shares’ then O.k. from there it is buyer beware. What should be illegal (in my view) is for mutual fund salesperson, insurance salespersons, stock brokers beind designated by their employers as being an ‘advisor’. similarly, individuals should be forced to tell potential clients

i) exactly what it is that they do (i.e.” I buy and sells stocks and bonds and I charge to you a commission’)
ii) it should be clear at the start of any new client relationship—how the broker, mutual fund guy whatever—is compensated

i) and ii) above should be covered by an industry wide statement which is brief, readable and enforceable. It definitelt should not be written by lawyers employed by the firms involved
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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed Nov 28, 2012 9:38 am

Mr. K, what should I look for in an adviser? I've gone through 3 with bad results Rene Lebeouf , Montreal
Response: As investor advocates we recommend the following:
 Understands there are 3 risks- risk tolerance, risk needed to meet objectives and risk capacity
 Understands seniors issues e.g de-accumulation [ as applicable]
 Is current on basic income tax issues or has access to such expertise within the dealer.
 Client statements are meaningful [ and accessible online]
 Investors are told their personal rate of return per account for various time periods.
 The dealer must be a member of OBSI
 Has documented approach to risk mitigation
 Fees decrease with asset size or fee-only
 Can run simulations e.g Monte Carlo
 Signs a Letter of Engagement
 Prepares an Investment Policy Statement
 Is willing to act as a fiduciary.
 Is a professional like a CA , MBA or CFA . [ strong analytical skills]
 Works for a registered dealer with a good reputation and comprehensive tools/databases

Thanks to http://www.canadianfundwatch.com for the above list
From their December 1, 2012 "Observer". Get on their mailing list for a regular update of everything happening in the world of "best investment Practices".......... and a few things in the world of worst.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed Nov 21, 2012 8:30 pm

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50 Unfortunate Truths About Investing

Found on Motley Fool. Funny, but so true....
_____________________________

Sorry, but ...
1. Saying "I'll be greedy when others are fearful" is much easier than actually doing it.

2. The gulf between a great company and a great investment can be extraordinary.

3. Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It's just what they do.

4. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.

5. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."

6. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance. Which ones? I don't know, but I bet a few are famous.

7. On that note, some investors who we call "legendary" have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn't indicative of big returns.

8. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know nothing about.

9. The more comfortable an investment feels, the more likely you are to be slaughtered.

10. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.

11. Not a single person in the world knows what the market will do in the short run. End of story.

12. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn't -- his are much bigger.

13. You don't understand a big bank's balance sheet. The people running the place and their accountants don't, either.

14. There will be seven to 10 recessions over the next 50 years. Don't act surprised when they come.

15. Thirty years ago, there was one hour of market TV per day. Today there's upwards of 18 hours. What changed isn't the volume of news, but the volume of drivel.

16. Warren Buffett's best returns were achieved when markets were much less competitive. It's doubtful anyone will ever match his 50-year record.

17. Most of what is taught about investing in school is theoretical nonsense. There are very few rich professors.

18. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).

19. Related: Trust no one who is on CNBC more than twice a week.

20. The market doesn't care how much you paid for a stock. Or your house. Or what you think is a "fair" price.

21. The majority of market news is not only useless, but also harmful to your financial health.

21. The majority of market news is not only useless, but also harmful to your financial health.

22. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don't even try.

23. How much experience a money manager has doesn't tell you much. You can underperform the market for an entire career. And many have.

24. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.

25. Professional investing is one of the hardest careers to succeed at, but it has low barriers to entry and requires no credentials. That creates legions of "experts" who have no idea what they are doing. People forget this because it doesn't apply to many other fields.

26. Most IPOs (initial public offerings) will burn you. People with more information than you have want to sell. Think about that.

27. When someone mentions charts, moving averages, head-and-shoulders patterns, or resistance levels, walk away.

28. The phrase "double-dip recession" was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of "financial collapse" in 2006 and 2007. It did come.

29. The real interest rate on 20-year Treasuries is negative, and investors are plowing money into them. Fear can be a much stronger force than arithmetic.

30. The book Where Are the Customers' Yachts? was written in 1940, and most still haven't figured out that financial advisors don't have their best interest at heart.

31. The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful.

32. The best investors in the world have more of an edge in psychology than in finance.

33. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

34. For most, finding ways to save more money is more important than finding great investments.

35. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.

36. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as "returning money to shareholders."

37. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are high.

38. Twenty years from now the S&P 500 (INDEX: ^GSPC ) will look nothing like it does today. Companies die and new ones emerge.

39. Twelve years ago General Motors (NYSE: GM ) was on top of the world and Apple (Nasdaq: AAPL ) was laughed at. A similar shift will occur over the next decade, but no one knows to what companies.

40. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement.

41. For many, a house is a large liability masquerading as a safe asset.

42. The president has much less influence over the economy than people think.

43. However much money you think you'll need for retirement, double it. Now you're closer to reality.

44. The next recession is never like the last one.

45. Remember what Buffett says about progress: "First come the innovators, then come the imitators, then come the idiots."

46. And what Mark Twain says about truth: "A lie can travel halfway around the world while truth is putting on its shoes."

47. And what Marty Whitman says about information: "Rarely do more than three or four variables really count. Everything else is noise."

48. The bigger a merger is, the higher the odds it will be a flop. CEOs love empire-building by overpaying for companies.

49. Investments that offer little upside and big downside outnumber those with the opposite characteristics at least 10-to-1.

50. The most boring companies -- toothpaste, food, bolts -- can make some of the best long-term investments. The most innovative, some of the worst.

http://www.fool.com/foolwatch/foolwatch ... snv0000001
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Re: Solutions, Self Defense and Best Practices

Postby admin » Mon Oct 29, 2012 4:26 pm

Similar thoughts for here in Canada.......

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Bair: 5 Steps to Fix Wall Street
By Barry Ritholtz - October 29th, 2012, 12:00PM
I like this short list of fixes from Sheila Bair:

1. Break up the “too big to fail” banks
Giant institutions and untested “living wills” is make financial system unstable. When the Fed is artificially keeping lending rates at near zero, that’s a flaw.

Solution: Make ‘em smaller

2. Publicly commit to end bailouts
“Market must punish the boneheads.” We should learn from post-2008 bailouts is we should never allow ourselves to be in that position again. Wall Street cannot have an indefinite option to “put” its losses to the Treasury and to taxpayers.

Solution: Make penalties for asking for and getting bailouts egregious — wipe out shareholders, fire management.

3. Cap leverage at large financial institutions
“Bank capital levels maybe isn’t a mainstream issue, but it should be;” Limit banks’ abilities to take on risk via leverage or derivatives or whatever the latest “idiotic new innovation” Wall Street becomes infatuated with.

Solution: Go back to firm 10 to 1 leverage rules.

4. End speculation in the credit derivatives market
If arsonists can’t buy fire insurance on someone else’s house, why allow speculation using credit derivatives? Credit default swaps with no vested interested are the same thing.

Solution: Require CDS buyers to demonstrate a specific interest. Even better regulate CDS as insurance products.

5. End the revolving door between regulators and banks
Separating regulators from the regulated is crucial. Ending regulatory capture is key.

Solution: Require longer periods of time between industry and regulator service.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Fri Oct 26, 2012 2:38 pm

Best proposed "solution" to investment advisor misrepresentation and it's myriad of forms allowable today:

"What about recommending a two standard approach?

If you call yourself a 'salesperson' then there is no fiduciary responsibility.

If you hold yourself out as an advisor or similar term, you are accepting of the fiduciary responsibility.

Terms like 'registered representative' are industry insider terms and should not be used to address the public."

Mike

(mike wins)
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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Oct 25, 2012 8:06 pm

(prediction from a cynic.......the well intentioned proposals mentioned herein, will be implemented in Canada on the 12th..................of never. With billions of dollars each month transferred from the hands of the unsuspecting, and the trusting, over to the hands of the cunning and the clever, those cunning and clever folk will talk this one into eternity. Just saying.....)

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CANADIAN SECURITIES ADMINISTRATORS
CONSULTATION PAPER 33-403:
THE STANDARD OF CONDUCT FOR ADVISERS AND DEALERS: EXPLORING THE APPROPRIATENESS OF INTRODUCING
A STATUTORY BEST INTEREST DUTY WHEN ADVICE IS PROVIDED TO RETAIL CLIENTS
1) Introduction
2) Background
October 25, 2012
Administering the Canadian Securities Regulatory System

link to entire document here: http://www.osc.gov.on.ca/documents/en/Securities-Category3/csa_20121025_33-403_fiduciary-duty.pdf

and for when they remove it like they removed the FAIR DEALING MODEL PROPOSALS of the past decade (similar client protective proposals which were also put into effect on the 12th of never) it is saved here: https://docs.google.com/document/d/1Cv1p3v1W6xD0Xlm6tCC3XUMG9WxRca2d73WMrEx-wFg/edit
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Re: Solutions, Self Defense and Best Practices

Postby admin » Thu Oct 18, 2012 8:53 am

A bit to the side of those who who use the high moral ground of "trusted" financial institutions, political power, and regulatory authority, to do immoral things to others for money........but close enough to connect another dot in my mind. Enjoy.

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In April of 2009, the governor of the Bank of Canada, Mark Carney, announced that the bank would be holding its benchmark interest rate steady for the next 15 months. Around the world, the reaction was instantaneous and universal: “Ah. I guess that means the Bank of Canada will be holding interest rates steady for the next 15 months.”

When the governor says he will do something, that is, people believe him. That credibility is partly personal, partly institutional. It is a reputation that has been earned over many years, under both Carney and his predecessors: A Bank of Canada governor does not make promises he will not keep, or say things he knows to be untrue. More than an expectation, it is almost a definition.

Contrast that with his counterparts in politics, even in the highest office. Were the prime minister — any prime minister, at least of recent times — to announce the time of day, most people would disbelieve it. That, too, is a matter of reputation. Prime Ministers have told such whoppers of late — have gone to such escalating efforts to convince the public that this time they really meant it, only to betray them yet again — that their position has been greatly weakened.

They have institutional power. They do not have the broader power that comes with credibility, of being able to shape events not directly, but indirectly, through the expectations and actions of the public. The governor can assume the public’s trust, and plan policy accordingly. A prime minister, having squandered the public’s trust, cannot.

Of course, a Bank of Canada governor — like other independent office-holders, the Auditor General, the Parliamentary Budget Officer, the Privacy Commissioner, and so on — does not have to campaign for election, or worry that he will be bumped aside by a more unscrupulous rival. Integrity of that kind, a politician might say, is a luxury he cannot afford.

And of course he would be right. Politics is about packs; the more ruthless, more disciplined, more pack-like of the parties mauls the others into submission. It prizes loyalty, not before all other virtues, but to their exclusion. We hunt together, the aspiring politician is told. Stick with the pack. And so each learns to scrape and smear, to manipulate and deceive, to promise one and threaten another, exactly as he is told.

That is how institutional power is won. Everyone understands that. What is interesting is what happens when power collides with principle: when the pack confronts, not another pack, but a determined individual of conscience. Nothing has prepared the pack for this. Faced with someone they cannot frighten, and who does not want anything from them, they are bewildered. All of their normal tactics and approaches are suddenly useless. All of their power turns to dust.

We are seeing this just now with regard to the Parliamentary Budget Officer. Various ministers of the government have been sent out to smear him, first claiming he was incompetent, then, when his numbers were borne out, that he was exceeding his authority. Through it all the PBO has kept digging, kept issuing his reports, kept demanding to see the data to which he is entitled under the law. And slowly, grudgingly, the government has been forced to yield.

But this is hardly the first time we have seen this play. When Auditor General Sheila Fraser’s report on the sponsorship scandal came out in 2004, accusing Liberal Party officials and friendly bureaucrats of conspiring to break “every rule in the book,” there were furtive attempts to go after her as well. Whisper campaigns were put about to the effect that she was out of control, that she was embarked on a “witch hunt.” We recall how that turned out. Whatever institutional power the government might have possessed, Fraser’s reputational power demolished it. It wasn’t even a fair fight.

The current government fared no better in its efforts to smear its own appointee as Auditor General, Michael Ferguson, after his report exposing mismanagement and fraudulent bookkeeping in the F-35 program. Even as the government was pretending to accept his findings the former parliamentary secretary to the Defence Minister, Laurie Hawn, was circulating a letter accusing the Auditor General of misunderstanding such basic terms as “acquisition,” of being unable to get basic facts right, even of being “disingenuous.” But the public knew whom to believe.

To be sure, part of the power of an auditor general or parliamentary budget officer, like that of a Bank of Canada governor, is institutional: they have certain powers and immunities that make it difficult for governments to intimidate or resist them. But much of it depends on the conduct of the individual in that office, and of its previous occupants — the reputation for independence and integrity they accumulate over the years.

And part of it is cultural. As cynical as we may be about our politicians, there is something ingrained in Canadians that honours the individual who will not “be reasonable,” will not “go along,” will not accept that “this is how it has always been done.” That isn’t true everywhere, but it is here. When the call to conscience comes, it finds an echo. But the reason we know what it sounds like is because we have had examples — because of those individuals in our past who have been willing to stand up, alone if necessary, against the power of the pack. I have in mind one such in particular.

http://fullcomment.nationalpost.com/201 ... ven-close/

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Re: Solutions, Self Defense and Best Practices

Postby admin » Tue Oct 16, 2012 9:09 am

I am fairly certain that I have not given anyone "advice" on specific investments to buy, for quite a number of years, finding it far more important to talk about "right and wrong' types of investing processes, and not focus on the smaller picture........having said that I have to say that I believe the following CO-OP organization to be part of the "right" way for un-informed investors to learn as much (or more) than your average mutual fund salesperson. It was begun by a former investment rep who saw a better way to treat the public, and he went ahead and did it. The result is a shareholder owed co-op, like Mountain Equipment Co-op, for example, where for as little as $75 you can become a member and start down the road to becoming as proficient an investor as you could ever hope for. No sales pitch, no product sales, no corporate bull. This is a great solution for Canadians.

Screen Shot 2012-10-16 at 10.00.27 AM.png


http://investors-aid.coop/general/about-us.html

Investors-Aid Co-operative of Canada is a national web-based co-operative and Canada’s only national consumer organization for investors and savers.

Investors-Aid is a consumer co-operative run by members for members and provides current consumer information, investor education, advisories, services (financial planning, dispute support, group plan consultation, pension consultation) and special advisory services that can significantly reduce costs using best products and practices.

We believe investing and saving should be safe, simple, and low cost.

We are independent and objective and sell NO investments, management services, referrals, or paid advertising.

Profit-sharing

Co-op profits are directed back to members by keeping membership, service, and subscription fees as low as possible.

Co-operatives in Canada

Investors-Aid is just one of thousands of co-operatives and credit unions working in Canada.

Like all co-operatives, we are an organization run by our members and guided by 7 principles:

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training, and information

6. Co-operation among co-operatives

7. Concern for community

Who we are

Board

Garth Rustand, BA (AppSc), CIM, FCSI. Executive Director

Founder of the Investors-Aid Co-operative with over 20 years experience in the investment industry. He has a BA(AppSc) from SFU, the Canadian Investment Manager's Designation (CIM); and is a Fellow of the Canadian Securities Institute (FCSI).



Gerald Yung, MBA, CFA, Director

President & Portfolio Manager of Claremont Advisors Ltd. Over 18 years experience in the investment industry first as a research analyst and then as a portfolio manager specializing in emerging markets.



Steve Middleton, C.Tech. Director

25 years engineering experience, most recently in construction supervision and management, Steve brings an analytical approach to investments and a keen interest in technology.



Tony Dobson, M Ed, Director

A retired teacher with 23 years experience and Masters of Education. He continues to work with a software company providing educational services and products for educational institutions.



Advisory Board

Debby Wetmore MBA CA, consultant Saltspring Island, B.C.

Dave Malcolm BCIT instructor (retired) School of Business, Burnaby, B.C.

Derek Moran BA, CFP, fee-only Financial Planner /Smarter Financial Planning, Kelowna, B.C.

Richard Vetter BA, CFP, CLU Financial/Insurance Planner, WealthSmart Financial Group

Michele Tao CA/CPA Claremont Advisors, Victoria, B.C.

Katharine Lamoureux, Bookkeeper

Michelle Somerville, Researcher

Accountant: Laven & Co. CGAs

Legal: Richard Bridge LLB

Supporting Groups who put on our courses and use our publications:

BC Institute of Technology
Capilano College
Vancouver School Board
Burnaby School Board
Certified General Accountants of B.C.
BDO Dunwoody Chartered Accountants
Institute of Chartered Accountants of Alberta

We would also like acknowledge the kind support of the BC Co-operative Association.

FAQs


Who owns the Co-op?
The coop is owned by all of is members. Members also direct the broader activities of the Co-op by voting on key issues.


Why can’t I get all this information from my advisor?
Because of their compensation system, advisors and the firms they work for tend to recommend high cost products and strategies. Information on the best, low cost solutions for consumers is usually unavailable.


What is the quickest way to find out about all the Co-op products and services?
Take the website tour and then do the Investor Report Card Questionnaire.


Can I get help with investment & administrative questions?
Yes. Go to the Member to Member blog under contact to ask those questions.


Can the Co-op help me in a dispute with an investment firm?
Yes and we can direct you to other individuals or organizations who can.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Sat Oct 13, 2012 5:03 am

Wow. It is 5:00 am and I am putting this up here, just realizing that this topic (and this post) is the rare 2% of the time when I get to suggest something positive, something pro-active, instead of the 98% of my time and effort spent spotting and educating about the problem (crying WOLF!)

It is either early and my blood sugar is out of whack or this is truly a positive step I share this morning, you decide.

From the helpful Canadian finance and investment blog THE CANADIAN COUCH POTATO comes this article about low fee index funds coming along at fees well under one half of one percent annual costs. I way wow again.

This is as a result of competition, a more informed consumer, Vanguard funds coming into Canada, and a number of things, coming together to create the perfect conditions to benefit Canadian investors. While I in no way purport to give investment advice (whatever the zombie-lawyer-regulators define that as today......) or suggest one investment over any other, I do purport to spot and talk about safe and sound (or bullshit) investment concepts, and this is one-o-the-prior.

Here is what I posted on my facebook page today:

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Price War!.......beginning to appear......Wallmart-style price rollbacks getting underway in investment fees!! (Thanks Couch Potato)
In a hallelujah (just try spelling that at 5:00 am) moment for this man, I see BMO (Bank of Montreal) moving towards taking the commission middleman out of the mutual fund game. (dropping two-full-percent off fund costs mathematically DOUBLES ones future value over 35 years....) This is either an historic moment for the average Canadian investor or I am having hallucinations.
http://canadiancouchpotato.com/2012/10/ ... ep-falling
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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed Oct 03, 2012 9:37 am

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It's no wonder over 90 percent of individual investors pursue an investing strategy that has historically underperformed a globally diversified portfolio of low management fee stock and bond index funds. You are inundated with misinformation generated by the financial media, and sponsored by the securities industry. They have a vested interest in leading you astray. The consequences have been devastating.

Assuming the asset allocation is appropriate for you, most investors would be better off putting all their assets in the Vanguard Target Retirement Fund appropriate for them. I prefer Vanguard's Target Retirement Funds because the underlying funds are all index funds and the expense ratio of the funds is very low at 0.18 percent, compared to the average expense ratio of 0.49 percent for similar funds, according to Vanguard's website. These funds automatically adjust their asset mix over time to become more conservative. Once you purchase the fund, there is no maintenance. Just leave it alone. Since inception in October, 2003 to September 30, 2012, the Vanguard 2025 Fund (VTTVX) returned 5.79 percent before taxes and 5.26 percent after taxes on distributions. At present, it has 71 percent of its portfolio invested in stocks and the balance in bonds.

Note that Vanguard reports its returns both pre-tax and after-tax. Most actively managed funds (where the fund manager attempts to beat a designated benchmark) engage in significantly more trading than index funds, generating higher taxes for their investors. Higher taxes reduce your after-tax returns. As the saying goes, it's not what you make, it's what you keep that matters. If you hold an actively managed fund, ask your broker or adviser to provide you with after-tax returns of that fund.

It's unfortunate that most investors succumb to the sales pitch of brokers and advisers who tell them they can "beat the markets." If your broker falls into this category (and almost all of them do), ask her to describe her methodology. If it is based on past performance, is she able to predict tomorrow's news? Since tomorrow's news is what will affect stock and bond prices, why does looking backward have any predictive value?

If there was a reliable way to "beat the market," you can be sure it would be uncovered by the millions of investors and thousands of academics focused on the market every day. It would also be published in a peer-review journal. I have yet to find any credible evidence of investment expertise permitting anyone to consistently "beat the market."

I issue the same challenge to brokers every day. Tell me your methodology for beating the market. Demonstrate that it works. I will check it out and will publish the results. I am still waiting for takers.

While I am waiting, you don't have to engage in market beating behavior that historically has rewarded your broker and punished your returns. You have many options for breaking the cycle of below market returns. One of the easiest ones is to consider whether Target Retirement Funds are appropriate for you.

Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of The Smartest Investment Book You'll Ever Read, The Smartest 401(k) Book You'll Ever Read, The Smartest Retirement Book You'll Ever Read, and The Smartest Portfolio You'll Ever Own. His new book is The Smartest Money Book You'll Ever Read.

http://www.huffingtonpost.com/dan-solin ... f=business
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Re: Solutions, Self Defense and Best Practices

Postby admin » Sun Sep 30, 2012 8:59 pm

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Canadian oligopoly of financial institutions failing on ten out of ten of these G20 "principles on consumer protection in the field of financial services". (But we do have the strongest banks in the world:)

Organisation for Economic Co-operation and Development, 2 rue André-Pascal, 75775 Paris cedex 16, France www.oecd.org
G20 HIGH-LEVEL PRINCIPLES ON FINANCIAL CONSUMER PROTECTION
October 2011
The high-level principles were developed as a response to the G20 Finance Ministers and Central Bank Governors call in February 2011 for the OECD, the FSB and other relevant international organisations to develop common principles on consumer protection in the field of financial services by their 14-15 October meeting.

They were developed by the Task Force on Financial Consumer Protection of the OECD Committee on Financial Markets (CMF), in close co-operation with the FSB and its Consultative Group, other international organisations and standard setter bodies and consumer and industry associations. The Task Force is open to all G20 and FSB members. It held several rounds of consultations, including a public one, on different versions of the draft principles. A final version of the draft principles was discussed and endorsed by the Task Force on 14 September and transmitted to the CMF and the FSB.

The Final High-level Principles on Financial Consumer Protection were endorsed by the G20 Finance Ministers and Central Bank Governors at their meeting on 14-15 October 2011.
For further information please contact Mr. André Laboul, Head of the Financial Affairs Division, OECD [Tel: +33 1 45 24 91 27; Fax: + 33 1 44 30 61 38; E-mail: andre.laboul@oecd.org] or Mr. Michael Chapman, Senior Policy Expert, Financial Affairs Division, OECD [Tel: +33 1 45 24 79 43; Fax: + 33 1 44 30 61 38; E-mail: michael.chapman@oecd.org].

2
At the occasion of their 19-20 February 2011 meeting in Paris, the G20 Finance Ministers and Central Bank Governors called on the OECD, the Financial Stability Board (FSB) and other relevant international organisations to develop common principles on consumer protection in the field of financial services by the time of their fall meeting in October 2011.1 As requested and agreed by the G20 French Presidency and the FSB, the development of these Principles was being led by the OECD.
The high-level principles are designed to assist G20 countries and other interested economies to enhance financial consumer protection. The principles complement and do not substitute any existing international principles and/or guidelines. In particular they do not address sectoral issues dealt with by standard setter bodies such as BCBS, IAIS and IOSCO. These (non binding) principles will be applicable across all financial services sectors.
The OECD coordinating work on the principles was mainly channelled through the Task Force on Financial Consumer Protection of the Committee on Financial Markets which is open to all G20 and FSB members, and other relevant international organisations and standard setter bodies. Inputs on financial education issues were provided through the OECD International Network on Financial Education (INFE) which comprises representatives from institutions from 90 economies, including all G20 countries.
The Task Force held three physical meetings in April, June and September. But several rounds of written consultations have also been organised on different versions of the draft principles.
These consultations have included not only the members of the Task Force but also the members of a FSB consultative group, four OECD Committees, relevant international organisations, standard setter bodies and networks and consumer and industry associations.
A sixth version of the draft principles was circulated for public consultation until 31 August 2011. The consultation allowed numerous major stakeholders (governments, consumer and industry associations, trade unions and other relevant individual institutions) to provide further comments.
A seventh version was discussed by the Task Force on 14 September when final amendments by the Task Force were approved and confirmed through a written process. A final ninth version of the draft Principles was submitted to the Committee on Financial Markets (CMF) and the Financial Stability Board (FSB).
This document reflects the Final High-level Principles on Financial Consumer Protection which were endorsed by the G20 Finance Ministers and Central Bank Governors at their meeting on 14-15 October 2011.
1 This complements the G20 leaders call at the November 2010 Seoul Summit. The G20 leaders asked the FSB to work in collaboration with the OECD and other international organisations to explore, and report back at the next summit, options for advancing financial consumer protection through informed choices that include disclosure; transparency and education; protection from fraud, abuse and errors; along with recourse and advocacy. This report will concentrate on aspects linked to consumer credit and focus largely (but not necessarily exclusively) on related financial stability issues.
3
FRAMEWORK
Consumer confidence and trust in a well-functioning market for financial services promotes financial stability, growth, efficiency and innovation over the long term. Traditional regulatory and supervisory frameworks adopted by oversight bodies contribute to the protection of consumers which is often and increasingly recognised as a major objective of these bodies together with financial stability. However, and while it already exists in several jurisdictions, additional and/or strengthened dedicated and proportionate policy action to enhance financial consumer protection is also considered necessary to address recent and more structural developments.
This renewed policy and regulatory focus on financial consumer protection results inter alia from the increased transfer of opportunities and risks to individuals and households in various segments of financial services, as well as the increased complexity of financial products and rapid technological change, all coming at a time when basic access to financial products and the level of financial literacy remain low in a number of jurisdictions. Rapid financial market development and innovation, unregulated or inadequately regulated and/or supervised financial services providers, and misaligned incentives for financial services providers can increase the risk that consumers face fraud, abuse and misconduct. In particular, low-income and less experienced consumers often face particular challenges in the market place.
In light of these issues, financial consumer protection should be reinforced and integrated with other financial inclusion and financial education policies. This contributes to strengthening financial stability. It consumer responsibilities. This calls for legal recognition of financial consumer protection, oversight bodies with necessary authority and resources to carry out their mission, fair treatment, proper disclosure, improved financial education, responsible business conduct by financial services providers and authorised agents, objective and adequate advice, protection of assets and data including from fraud and abuse, competitive frameworks, adequate complaints handling and redress mechanisms and policies which address, when relevant, sectoral and international specificities, technological developments and special needs of vulnerable groups. This approach complements and builds upon financial regulation and supervision and financial governance.
In order to ensure effective and proportionate financial consumer protection regimes, it is important that all stakeholders participate in the policy making process.
The principles are addressed to G20 members and other interested economies and are designed to assist the efforts to enhance financial consumer protection. They are voluntary principles, designed to complement, not substitute for, existing international financial principles or guidelines. In particular, they do not address sector specific issues dealt with by the relevant international organisations and the financial standard setters (such as BCBS, IAIS and IOSCO). Different kinds of transactions present different risk profiles. The principles may need to be adapted to specific national and sectoral contexts and should be reviewed periodically by relevant international bodies.2 All G20 members and other interested economies should assess their national frameworks for financial consumer protection in the light of these principles and promote international co-operation to support the strengthening of financial consumer protection in line with, and building upon, the principles.
2 This could, in particular, include voluntary peer reviews by OECD, FSB, World Bank and standard setting bodies such as BCBS, IAIS and IOSCO.
4
PRINCIPLES 1. Legal, Regulatory and Supervisory Framework
Financial consumer protection should be an integral part of the legal, regulatory and supervisory framework, and should reflect the diversity of national circumstances and global market and regulatory developments within the financial sector.
Regulation should reflect and be proportionate to the characteristics, type, and variety of the financial products and consumers, their rights and responsibilities and be responsive to new products, designs, technologies and delivery mechanisms.3 Strong and effective legal and judicial or supervisory mechanisms should exist to protect consumers from and sanction against financial frauds, abuses and errors.
Financial services providers and authorised agents4 should be appropriately regulated and/or supervised, with account taken of relevant service and sector specific approaches.
Relevant non-governmental stakeholders including industry and consumer organisations, professional bodies and research communities should be consulted when policies related to financial consumer protection and education are developed. Access of relevant stakeholders and in particular consumer organisations to such processes should be facilitated and enhanced.
2. Role of Oversight Bodies
There should be oversight bodies (dedicated or not) explicitly responsible for financial consumer protection, with the necessary authority to fulfil their mandates. They require clear and objectively defined responsibilities and appropriate governance; operational independence; accountability for their activities; adequate powers; resources and capabilities; defined and transparent enforcement framework and clear and consistent regulatory processes. Oversight bodies should observe high professional standards, including appropriate standards of confidentiality of consumer and proprietary information and the avoidance of conflicts of interest.
Co-operation with other financial services oversight authorities and between authorities or departments in charge of sectoral issues should be promoted. A level playing field across financial services should be encouraged as appropriate. International co-operation between oversight bodies should also be encouraged, while specific attention should be considered for consumer protection issues arising from international transactions and cross-border marketing and sales.
3. Equitable and Fair Treatment of Consumers
All financial consumers should be treated equitably, honestly and fairly at all stages of their relationship with financial service providers. Treating consumers fairly should be an integral part of the good governance and corporate culture of all financial services providers and authorised agents. Special attention should be dedicated to the needs of vulnerable groups.
3 Where relevant, appropriate mechanisms should be developed to address new delivery channels for financial services, including through mobile, electronic and branchless distribution of financial services, while preserving their potential benefits for consumers.
4 Authorised agents are understood to mean third parties acting for the financial services provider or in an independent capacity. They include any agents (tied and independent agents) brokers, advisors and intermediaries, etc.
5
4. Disclosure and Transparency
Financial services providers and authorised agents should provide consumers with key information that informs the consumer of the fundamental benefits, risks and terms of the product. They should also provide information on conflicts of interest associated with the authorised agent through which the product is sold.5
In particular, information should be provided on material aspects of the financial product. Appropriate information should be provided at all stages of the relationship with the customer. All financial promotional material should be accurate, honest, understandable and not misleading. Standardised pre- contractual disclosure practices (e.g. forms) should be adopted where applicable and possible to allow comparisons between products and services of the same nature. Specific disclosure mechanisms, including possible warnings, should be developed to provide information commensurate with complex and risky products and services. Where possible consumer research should be conducted to help determine and improve the effectiveness of disclosure requirements.
The provision of advice should be as objective as possible and should in general be based on the , capabilities and experience.
Consumers should be made aware of the importance of providing financial services providers with relevant, accurate and available information.
5. Financial Education and Awareness
Financial education and awareness should be promoted by all relevant stakeholders and clear information on consumer protection, rights and responsibilities should be easily accessible by consumers. Appropriate mechanisms should be developed to help existing and future consumers develop the knowledge, skills and confidence to appropriately understand risks, including financial risks and opportunities, make informed choices, know where to go for assistance, and take effective action to improve their own financial well-being.
The provision of broad based financial education and information to deepen consumer financial knowledge and capability should be promoted, especially for vulnerable groups.
Taking into account national circumstances, financial education and awareness should be encouraged as part of a wider financial consumer protection and education strategy, be delivered through diverse and appropriate channels, and should begin at an early age and be accessible for all life stages. Specific programmes and approaches related to financial education should be targeted for vulnerable groups of financial consumers.
All relevant stakeholders should be encouraged to implement the international principles and guidelines on financial education developed by the OECD International Network on Financial Education (INFE). Further national and international comparable information on financial education and awareness should be compiled by national institutions and relevant international organisations in order to assess and enhance the effectiveness of approaches to financial education.
5 Financial services providers and authorised agents should provide clear, concise, accurate, reliable, comparable, easily accessible, and timely written and oral information on the financial products and services being offered, particularly on key features of the products and (where relevant) on possible alternative services or products, including simpler ones, they provide. In principle, information should include prices, costs, penalties, surrender charges, risks and termination modalities.
6
6. Responsible Business Conduct of Financial Services Providers and Authorised Agents
Financial services providers and authorised agents should have as an objective, to work in the best interest of their customers and be responsible for upholding financial consumer protection. Financial services providers should also be responsible and accountable for the actions of their authorised agents.
Depending on the nature of the transaction and based on information primarily provided by customers financial services providers should assess the related financial capabilities, situation and needs of their customers before agreeing to provide them with a product, advice or service. Staff (especially those who interact directly with customers) should be properly trained and qualified. Where the potential for conflicts of interest arise, financial services providers and authorised agents should endeavour to avoid such conflicts. When such conflicts cannot be avoided, financial services providers and authorised agents should ensure proper disclosure, have in place internal mechanisms to manage such conflicts, or decline to provide the product, advice or service.
The remuneration structure for staff of both financial services providers and authorised agents should be designed to encourage responsible business conduct, fair treatment of consumers and to avoid conflicts of interest. The remuneration structure should be disclosed to customers where appropriate, such as when potential conflicts of interest cannot be managed or avoided.
7. Protection of Consumer Assets against Fraud and Misuse
Relevant information, control and protection mechanisms should appropriately and with a high degree of certainty protect and other similar financial assets, including against fraud, misappropriation or other misuses.
8. Protection of Consumer Data and Privacy
Consumerand personal information should be protected through appropriate control and protection mechanisms. These mechanisms should define the purposes for which the data may be collected, processed, held, used and disclosed (especially to third parties). The mechanisms should also acknowledge the rights of consumers to be informed about data-sharing, to access data and to obtain the prompt correction and/or deletion of inaccurate, or unlawfully collected or processed data.
9. Complaints Handling and Redress
Jurisdictions should ensure that consumers have access to adequate complaints handling and redress mechanisms that are accessible, affordable, independent, fair, accountable, timely and efficient. Such mechanisms should not impose unreasonable cost, delays or burdens on consumers. In accordance with the above, financial services providers and authorised agents should have in place mechanisms for complaint handling and redress. Recourse to an independent redress process should be available to address complaints that are not efficiently resolved via the financial services providers and authorised agents internal dispute resolution mechanisms. At a minimum, aggregate information with respect to complaints and their resolutions should be made public.
10. Competition
Nationally and internationally competitive markets should be promoted in order to provide consumers with greater choice amongst financial services and create competitive pressure on providers to offer competitive products, enhance innovation and maintain high service quality. Consumers should be able to search, compare and, where appropriate, switch between products and providers easily and at reasonable and disclosed costs.
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Re: Solutions, Self Defense and Best Practices

Postby admin » Wed Sep 26, 2012 5:06 pm

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http://www.youtube.com/user/investoradv ... ature=mhee


1. Albertans require investment regulation and protective rules which do not act against the public. The Alberta Securities Commission has acted contrary to the public interest and has allowed investment sellers to repeatedly breach securities laws that exist to protect Albertans. Victims of systemic regulatory misconduct deserve their money back through Alberta Finance and Enterprise, the legislated department responsible for the conduct of the Securities Commission, if recompense is not found in the investments themselves.

2. The public requires an investor protection agent which solely protects the interests of the public. The Alberta Securities Commission does not. Albertans deserve public protection not designed to allow mandate dilution, or corruption through financial (or other considerations) connections to the industry, political appointments, or cronyism.  

3. Albertans expect the Criminal Code of Canada to be the guiding principles by which regulators, prosecutors and police protect investment and financial markets. “Self Regulation” and self-policing of investment fraud and misconduct is not serving the public. It is allowing corruption and self serving behaviors to grow.

4. Albertans deserve a full public inquiry, under the Provincial Inquiries Act, into systemic failures, connections, corruption and actions known to be contrary to the public interest, and the resulting damage to Albertan’s from negligence, gross negligence, misfeasance, or conscious wrongdoing at the Securities Commission.

September 26th, 2012 Larry Elford http://www.investoradvocates.ca
See public presentations in support of the issues behind this statement at http://www.youtube.com/user/investoradv ... ature=mhee
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Re: Solutions, Self Defense and Best Practices

Postby admin » Sun Sep 16, 2012 5:34 pm

sales abuse flowchart.jpg
click to enlarge image, click twice to zoom in

It is common for Canadians to be promised investment “advice” by persons who do not carry the qualifications and fiduciary requirements of an “advisor”.......The self-regulatory status of the industry allows this to occur. It also allows individuals to be highly “incentivized” to harm the financial interests of customers, in the name of increased fees and commissions to the industry.


InvestorAdvocates.ca hosts a professional forum, with 42 topics specific to protecting investments from abuse, misconduct, or malpractice by so-called professionals. Get your money back, if you have been a victim of professional misconduct or malpractice. Protect yourself if you have not. If any of these six steps are missing, we do not believe you are in a professional financial relationship. We in fact believe you could be in one where it is “allowed” to harm you.

Keywords: Abuse, flowchart, advisor, steps

To learn more about how to protect yourself visit video presentations at http://www.youtube.com/user/investoradv ... ature=mhee

Search your "advisor" license and registration at Canadian Securities Administrators http://www.securities-administrators.ca/nrs/nrsearch.aspx?id=850
or your local securities commission. CSA can show historical license categories, which would display "salesperson" as the license your "advisor" held prior to 2009, if in business then. After 2009, the typical retail salesperson in Canada had their license changed to "dealing representative", and they are required by securities law and industry rules to disclose this to you. They do not, just like they chose never to disclose the "salesperson" license prior to 2009.

changeup from salesperson to dealing rep
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Re: Solutions, Self Defense and Best Practices

Postby admin » Tue Aug 21, 2012 8:25 pm

Screen Shot 2012-08-21 at 9.24.42 PM.png
http://osgoode.yorku.ca/osgmedia.nsf/0/DF99C84D4E5B8D6085257646007593DB/$FILE/V6(1)%20CondonPuri.pdf

Some very good details in this academic study. Financial firms, investment advisors, commissions, etc., etc.

For example "Consideration should also be given to replacing the current salesperson mentality, which is often underscored by the commission system of compensation noted above, with one that encourages increased professionalism and independent advice. Currently, certain classes of salespeople can sell securities with very little formal education and after completing courses which can take only a few months. There is also no formal period of apprenticeship, which can offer benefits of mentorship and role modelling of good behaviour and practices."
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