tag:blogger.com,1999:blog-54338396366448744392024-03-14T06:14:01.039+00:00Canadian Financial DIYDo-it-yourself analysis and assessments of investing, ETFs, portfolio and asset allocation, taxes, insurance, retirement, annuities and related book reviews for Canada and the UK.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.comBlogger738125tag:blogger.com,1999:blog-5433839636644874439.post-62722139016170798852021-09-07T03:28:00.001+00:002021-09-07T03:32:11.152+00:00GICs and Savings Accounts - Which Best Combat Inflation?<p>Guaranteed Investment Certificates (GICs) and Savings accounts at banks offer a person in Canada the safest possible place to invest money. Both are backed 100% against any loss up to $100,000 by the <a href="https://www.cdic.ca/">Canada Deposit Insurance Corporation</a>, an arm of the federal government. That's as safe as it gets.</p><p>Safety against outright loss isn't enough for the investor. There is inflation to consider. Annual inflation - targeted by official Bank of Canada policy at 2% - eats away the purchasing power of our cash unless the interest rate on the GICs and savings accounts exceed inflation. If inflation is 2% and your interest received is 0.5%, you've lost 1.5% in real purchasing power.</p><p>Unfortunately, the tale told by the numbers is discouraging. The chart below traces the deteriorating trend over time. <a href="https://www.bankofcanada.ca/rates/banking-and-financial-statistics/posted-interest-rates-offered-by-chartered-banks/">Data is from the Bank of Canada</a>. Inflation is the CPI (Consumer Price Index) All Items, shown by the red line.<br /></p><p> <img alt="" height="209" src="data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAA80AAAE+CAYAAAC3L/JrAAAgAElEQVR4nOzdf3RT550nfp3dTsp+O83Q2S1L52w6TLc0fDtpDjuTfOtxMjM+cWjd0FKTpROHSQeHmWpMJ2E8KTQuaaqWNFAgwaYt8dDUcXAgpo2pE2SEbGIUHEcEexwLN0KrCOEfwZUhMrZrvJLtmPf3j4uu7tW9V7r6Lcvv1znPOYklXT33SsZ663mez2MAEREREREREakyZLsDRERERERERLmKoZmIiIiIiIhIA0MzERERERERkQaGZiIiIiIiIiINDM1EREREREREGhiaiYiIiIiIiDQwNBMRERERERFpYGgmIiIiIiIi0sDQTERERERERKSBoZmIiIiIiIhIA0MzERERERERkQaGZiIiIiIiIiINDM1EREREREREGhiaiYiIiIiIiDQwNBMRZZqnBoUGAwzSVlgDj/Q+FiMMBgOMlsgHW2CM9diUUHkegxGK7iR6dGO6+p1APwwGGJQXel7w1BSisCaxq5ju1yDdx0/m3AFE+R2L9bDw70Sh0YhCnceI7G+u/A4QEVFsDM1ERBnkqSkUPmzLPux7UFNogMFQCPHHKh/odT82WTeeOzKQCGEhhc+TbTe+vDAajfP0vIQvNnI1NKdXcucuHCKB0Bx6z1g0/l/7yZLvLxERZQ1DMxFRpmiEUcGN8Bv69B35gf7Gh3P1x94YFU5RANIOUzeeZ56OykYSvoQwwhL12uYyhuaMh2ZLxBcsDM1ERAsCQzMRUYbECimemkIYazzC7REf6IVRXu3p0R6LJXzcG49NbFr1jfCuM0xJp6rKpopHhovwSYanphfWwHPj+QprPPJjqTx/5O2WmsKI54vnnOVfAGi9NqHRfaEpzyfW7cr7SINTxBcl0vOMdW0UU/xvnG8c10FvaNbuf/Tn03Uean3Seo3DHVI/91h9VV6AiNAcvZ+q7/WI0BztPpH9Vbv+sd4req4hERGlHkMzEVFGxDlKK/tAH8dIsmLkK74QLH3uWI9RfuiXhkD18w2N7hojApU8vCgfG/mlgRguVIKLrnOODEya0+HDQVgcmdZ5e7jfypFJIQzpC83a1yZi9DLO66AnNEftf4zn038e0ufSeI2VPVOM3Ea/1qonpxqao/Yzykiznt+HaGuadb1XYlxDIiJKD4ZmIqJMiHcKsFpo1vPh2GJMTcEuxQhixCiqxrRUaXBUhshwiFAEqohgJAsUqs8leVwC56wcuY+8xmrXXBp8Yt0Ozdc8HLZ1hmbNaxPxfHFeh5ihOVb/a6I/X0pfY+XR47zWqh1UD83R+qkVmmti/T7ECM163yvR+kZERGnD0ExElAkaH4oV0zlDH8gTDc2SqaCpG4CSVtJWCyDhUTDZdNkoRZMUgUozOGoHH/E+8Z5z1NdCo+8ax4j6fDGmqBstOkOz5u3qwVHvdYgZuGL1vyb686X0NVYeXeULg2jXWuv8VEJzlH7qW9Os9vsQIzQn/V4hIqJ0YmgmIsqI2MFXFhxkH+jjnWId+aE9VQE6dFzJmsyIoCwfXZZ/0Jd+wI8/UClHND2y9a76zzly3WhkU596rDhI7oXmOK9D0qFZ+t5Ueb7Uv8ayR+dcaI7++8DQTEQ0nzE0ExFlROzgqx2adRQCuxEEleFAbS1ktG7GCIOhD/c16pXA1df9KkNDekcho51ztPXhktconaFZfG3TEZpVzifmSHCi/Y/+fDkx0hytQnYqQ7Mx1u9DgqFZ93uFiIjSiaGZiChTYmxxEy00R18THSOQ694WB4g1Ii6GANUP+fKRaNlzR+yFHE+gin+9a5Rz1vUaGGC0qF2HWIXOIs4loTXN0vNKNjRHuQ7QEbgSWSec4BT8nFrTnHBojvb7kKI1zQzNRERZwdBMRJRBoVCmubY5YgslZTVnrem40rAt//AeNTio0aqeLd1nOrR+VtLB8LRntQrS8uPFFajEY2hUVo7jnGON2EvDsOIYEc8T6/bw8ylDlmzKurQ/smsfZ2iO87VPpnq2QUjFUZ8vpa+xsme6q2drLolIZWiuifX7kHj1bOGYDM1ERNnE0ExElHHSwloG1aCpOSKq2PNV+aFZuWY3MtjpGXVW62NE+IqssK0RYGVhW/xRfIFK/JnkuWoU03uj9FVy7WJVMJeGl/Tu0wwo1gSHwnpc05rD7x9d10HtekY0aR+j9T/a86X6Nda+rqndpznhQmAxfh8i+5vIPs0MzURE2cHQTES0wHhqClNYWTt7LMYoo4iUF/gaExFRLmBoJiJaUDyoKYxjqnYuUBsd1z1iTvMCX2MiIsphDM1ERAuJxRhzenIuimfaMc1PfI2JiChXMTQTERERERERaWBoJiIiIiIiItLA0ExERERERESkgaGZiIiIiIiISANDMxEREREREZEGhmYiIiIiIiIiDQzNRERERERERBoYmomIiIiIiIg0MDQTERERERERaWBoJiIiIiIiItLA0ExERERERESkgaGZiIiIiIiISANDMxEREREREZEGhmYiIiIiIiIiDQzNRERERERERBoYmomIiIiIiIg0MDQTERERERERaWBoJiIiIiIiItLA0ExERERERESkgaGZiIiIiIiISANDMxEREREREZEGhmYiIiIiIiIiDQzNRERERERERBoYmomIiIiIiIg0MDQTERERERERaWBoJiIiIiIiItLA0ExERERERESkgaE5Fk8NCg1GWMI/QE2hAQaD0AprPFnsHBEREREREaUTQ3NUFhgNBhgkodliNMBQWAMPcCNQF4K5mYiIiIiIKD8xNGvw1BQKI8lGo2Sk2QIjQzIREREREdGCwdCswWOxSEaTb4RmxVRtIiIiIiIiymcMzbFIg7LFCENhDSw3RqENBgOMTNBERERERER5i6E5lsjQLC3+ZTHCoDJd++LFi7Db7bJms9nw5ptvKn7OxsbGxsbGxsbGxsa2UJrD4ch0oksaQ3MsKiPN4YwsVNKOHG1WC80WiwWtra1Zf5OysbGxsbGxsbGxsbFlq5nN5ozGuVRgaI4l6ppm9dCs5tSpU/PyWxUiIiIiIqJUYWjORxFB2WKMnJ6trzAYQzMRERERES10DM35SGN0Od5CYAzNRERERES00DE0kyaGZiIiIiIiWugYmkkTQzMRERERES10DM2kiaGZiIiIiIgWOoZm0sTQTERERERECx1DM2liaCYiIiIiooWOoZk0MTQTEREREdFCx9BMmhiaiYiIiIhooWNoJk3pCs2Tk66UH5OIiIiIiCgdGJpJU6pD8+SkC+3ty2A2G+Dx7EzZcYmIiIiIiNKFoZk0pTI0+/02WK2LYTYbYDYbcPz4IgSDvpQcm4iIiIiIKF0YmklTqkLzwEAtjh9fJAbmUPN6q1PQSyIiIiIiovRhaM5HnhoUGoyw6P25hlSEZqezUhaUtz57O442fwRmswFtbUuTOjYREREREVG6MTTnHQuMBgMMKuHYYlT/uZZkQvPcXADd3aWywLzue1+GYdUOVO7+C/FnPl9zQscnIiIiIiLKBIbmPOKpKYTBYECh0agcUbYYYSgszMhIczDow+nTK8VgfLT5I/ibfymDYdUOrKyow2fWPyre1vHmF+M+PhERERERUaYwNOcRj8UCD6AyDduDmkIjLBmYnj0x0Qtr66fFUHykaRFu/eYmLF67F9VHuwAApaYmPPP8LeJ9JiZ643oOIiIiIiKiTGFozkcR4dhTU4jCGk/a1zQPvd+E147dJIbhfS98Ckvu34ryPS3wjV4T79d7YQQF//yQeL+ed/5B/7kRERERERFlEENzPpKFYwuMhTUaI9BhFy9ehN1ulzWLxYJTp07B7XbHbIdffVS2fvlHP/8c/vzh3Xip5S3V+9/7nRfRcOTjMJsNeO3YTTh/Xv1+bGxsbGxsbGxsbGxs2WzHjh3LZJpLCYbmWCTh2GI0wGhR/jzS7373O9XQbLPZor6BTp3pxVO1RbLA/OhPCvCdnx2L+rhX289izdbV4mPe7PyXrP8ysLGxsbGxsbGxsbGxRTaONOcjMRyHKmkrm1HHHO1o07MD07PYfaQNPznwP2WB+bs//QfZVOxoHvzxL8Xtp5qP/VfMzQXiOUsiIiIiIqK0Y2jOR2nep/lElxd/9cgO1DZ8UgzLv3n1D2B589/j6mbvhRE8uqtAPMbA4KG4Hk9ERERERJRuDM35KE2h2Td6DaWmJtz6zU040rQovKXUa3+MD/z/oe+gH04A0++L//tk3b+Lx2k69jmdPSMiIiIiIsoMhmbSJA3NOxvtWLx2L/7mX8rEKdVmswGtr9+Gqal+7YN8OAFMtAK+7YDnPuC3y4R2uRqAEMSfeu5W8Xi6wzcREREREVEGMDSTplOnTqHhNRtWbDwAw6od2GD6W9n65bNnSzAzMyZ/0OwVYPwYMPwE8F5xOCRHtndvBa4HAQBPv/jD8L7Or/1t5k+UiIiIiIhIA0MzadqwvQGGVTtw01e2Y+uzt8sCc19fhXCn6feBq6/EDsmh5r47/N9XXwEgjDa/8PInbqyN/giGRrxZPGsiIiIiIqIwhmbStLf+VXzsqz/AM8/fIoZlm/UPcMX9LeDSFnkA1moXy4Sp2L9/QxhZDjjlt93w7EubxOf4+ctlUXpFRERERESUOQzNpOn1138Bi/m/o++Nj2P47U8i6PjT6AH53VuBgQ1CSL52RvvA0rXNs1cAAL/z+8W10i/96uP4nd+fkXMkIiIiIiKKhqGZNPXY/jx6SD5/OzBoBD6oA6be0X/gD+rCx7jynPjj5xrvF0eb9zT8axrOiIiIiIiIKD4MzaTp9KmX5CHZdScw9CgwekiYZp2o2SvCqPRvlwnroG/ov/SOGJp/Vv8n8I1eS8FZEBERERERJY6hmTSdOnUKw73/jOujLwPBC6k9+KAxHMYlo9Qv/PouMTj/6IVnUvucREREREREcWJoJk3SfZpTbqI1HJqHnxB//H8uNIuh+Qc/+3OONhMRERERUVYxNJOmtIbm60FhundobfSNPZsBoOnY58TgXPWLQ+l5fiIiIiIiIh0YmknTqVOn4D7eBEyOp+cJfNvDo83jx8Qfu997VgzNm3b8NUebiYiIiIgoaxia85GnBoUGIyyy/zfAcKMZLdEeHNZ57ChmS/8MKL8D8PSlvp/SPZsHNog/npsL4DXzx2E2G3CkaREe+/fjqX9uIiIiIiIiHRia844FRoMBBjE0C/8vBmWLEQZDIWo8sY80+q0i4J6bhVayBDjVlPruquzZDADn+jaLo833V30NvRdGUv/cREREREREMTA05xFPTSEMBgMKjcbwSLPFCENhDcIZ2YOaQn2jzZ3HjmJq41+Fg/M9NwPVlcB0IHWdvvKc6p7NwaBPDM37XvgUSk1pCOxEREREREQxMDTnEY/FIoTjyOnZMhEjz1GcOnUK57rPCkFZGpwfKQZGUzTyO3slHJolezYDwNtnvy4G54J/foijzURERERElHEMzfkoSmj21BRGjDxrk1XPPtUkTNEOBed1ywHHm6np78AG1T2b/X6bGJqf2Pd5jjYTEREREVHGMTTnI43QLEzfVg/TDocDVqtV1lpaWmC1WmG322G323Hu6CEE//dy2ahz/zNbxdsTbe91PyuG5t+9s0l223HLcjE4/4+/+zcc/E1b0s/HxsbGxsbGxsbGxsamt7W0tGQixaUUQ3MsKqFZCMzaBcD8fj8uXrwoa62trThz5gz8fr/YRgcvYvrxdbLgPP34OowOXpTdL5426v8drju/APx2Geacf4lR/+/E286f/5kYmr/11F2473svJ/w8bGxsbGxsbGxsbGxs8TaONOejiNAcbYQ5Gtn07Egv7pCvcy6/Axh0J97n4SfCU7QnWsUfz80F0Nq6FGazAUebP4KPffUHXNtMREREREQZw9Ccj6Sh2VODQp1bTEWKGpoBYU3zmltSsy3V1Dvh0DxolN3kclWJo81rtq7m2mYiIiIiIsoYhuZ8JAnNFqMBBoOy6a2eHTU0A4BvUKimLR113l+V2LZU7xULofndW2V7NgeDPhw/vghmswF1L38ChlU7ONpMREREREQZwdBMmnSFZkAIyKnYlkq6Z/MHdbKbenrKZNtPcbSZiIiIiIgygaGZNOkOzSHWQ8ltSyXds9lzn+ymiYleMTTvqP0MDKt2oPmtJNZQExERERER6cDQTJriDs0A4OkD1t8mH3Vu2q//8dI9mwNO2U2nT68Ug/Nn1j+KlRV16scgIiIiIiJKEYZm0pRQaAaAyXHgyfXy4PzUw8LPYxk/Fg7Nvu2ym4aHG8XQ/O0dX+RoMxERERERpR1DM2lKODSHJLIt1fUgcP52ITS77hT+/4a5uQDa2sLbT32i9HscbSYiIiIiorRiaCZNSYdmAOg6Kd+Was0tsbelurRFdc9mAPB4dsq2n+JoMxERERERpRNDM2lKSWgGhG2pjHfJR52PRRkhvnZGc89m6fZTDUc+jpu+sp2jzURERERElDYMzaQpZaEZUG5LtW559Pu77w7v2fzhhOwmh6Nctv3UfBlttjkGYXMMYmejnftMzwNzcwFcvnwCQ0P1mJx0Zbs7RERERJQlDM2kKaWhOeSph8PBuTPKm+9ydXi0efSQ7Cbp9lPPPH8LDKt2ZH20eWwyAJtjEM1vuWFq6EBVnQ1FWw6jaMthGFbtUG1FWw7jRJc3q/2msJmZMfh8zXA6K2WV2kOtrW0penrK4PVWY2KiN9vdJSIiIqIMYWgmTWkJzc6ucGh+cr32/abfD4dm71rFzXZ7kWz7qXSPNruG/LA5BlHfeg6mhg6U72lB0ZbDWLHxgGYo1ttWVtTNi5HyfDM11Y/h4Ub09VXAZluhCMmxmtW6GN3dpfB4duLq1TPZPh0iIiIiShOGZtKUltAMyNc3j0aZpnyxLBycgxdkN/l8zWJ42frs7UkH13S2lRV1KNpyGJW1J2Fq6ECtuUd1BHplRR0abU6Ni0EhgelZcaq7qaEDpoYOcVS/ZNsR7Gy048z5S4rHTU66MDRUD4ejHO3ty2KGYru9CG63CQMDtejpKRMrt2u148cX4ezZErjdJvj9tsxfGCIiIiJKC4bmfOSpQaHBCEv4B6gpNMBgMMAg+3l0aQvNTfvDofl5k/b9rr4SDs0juxQ3h0LMq6/9AT5R+r2sBOLFa/eKYS0U4EKBLjA9G/Uy2ByDquF52UP7Ud96LrlrPI9pTXUv2HwwrtdmxYZKfPen/4CDR4vRYvlkSgLv1FR/QsH78uUTmJsLZOwaEhEREVHqMDTnHQuMEeHYYjTAYLQo/juWtIXmyXGgZEm4INi0Rpi4HhQKgYX2bI7g9VaL4WR3/XpxtDEdrWKfFaaGDtS3noPNMQjXkD9ll8PmGETJtiMLJjyHRoobbU6YGjpQsc+Koi2HsbKiLqkvMD6z/lGs+96X8cS+z+NI06KoYbbl+M14++zXk55aHe8U787OAjidlfD5mhmiiYiIiOYJhuY84qkphMFgQKHRKBlptsBoKESNR7xTxCi0trSFZgDYtUlfQTDpns2/f0N208zMmLj9VFvb0nkfQnovjKDU1KQIg0sf2Ifqo10xR65z3dhkAKaGDixeuzehULz0gX0o2nIYpaYmmBo6UH20CzbHIOzvnkdPT1nUsNpw5ON4Yt/nsWbranENvGHVDhRsPoiqOhtOdHlTcn2DQR+Ghxs1i4lFBuj5/p4lIiIiWggYmvOIx2KBB5AHY0VIjgjRUaQ1NEsLgj1+v/b9pHs2Dz2qPIyzUgwhQ0P16elrhuVbePaNXkNl7UksWr07aihe9tB+FG05jPI9LeLa71ij+levnlGdJh2qdN3TtxcN1ldRvqdFV9G2gs0HUVl7Es1vuTE2mXyglVbk7uwsUPTT661O+jmIiIiIKL0YmvPRfAjNgLwgmG9Q+35R9myWbj91+vTK9PU1C3ovjKB8T4vqOmpTQ0dKQl06aYXlxWv3orL2JBptTtgcg+gfGU/o+B7PTkVQHhqqx9RUf9Q+NdqcqNhn1RWiV1bUiQXcUtF+9NLrqG58Gq8duylvZkgQERER5TuG5nyUQGh+5513YLVaZa2lpQVWqxV2uz0tzVvzhBiaL/3wnzTv937Pd8TRZm/3dsXtra3hEbwTJ/4cHR3Pp63P2WhHLaew+rv1ikD3h1/bjX/c8TLaTnVkvY+R/V277SBu+spP0tLfzk6z7DU3mw1obS3AW2+1xX0sc+sb+MkLx/DADxqw/Js/zVgBuW89dZfY99dffyDrrxkbGxsbGxsbG5t2Y2jORwmE5t///ve4ePGirLW2tuLtt9+G3+9PSxv1DeP6lz8J3HMz5u7/nxj1Daveb2zkP8TQPOv+muL2ixdfQ0vLR2UhqqurHCMj3rT1PRvtHVc/HvzxUUUA++h9u1BRbcb5C+/nZP+WfKMa3z3QCu+g+usbT/N4fgWrdUm4oFfLR3Hu3JMpOwfv4DAarP+Bf/25BXd8O7nCZNHaJ0q/h6PNH4HZbMCxYzfB5zuf9fcXGxsbGxsbGxubemNozkeyoJyjhcBCqiv1FQTzrtXcsxkQpmlHrhkNTdfNFcGgD05nJez2InR3l2Jy0pXQcbSmPS9avVvc+srmiDLdPcVcQ37VaeSpXIM9NxeAy1Ule31tthVJVb7OJlNDB9Z978viubxy/BvZ7hIRERERaWBozkcRwTjntpyS8vTpKwg2eigcmi9rF08aGqoX92+WVilONKCmQigshyp9S/cGTibU6ymwVbTlMEwNHSmrDi2VqYJlU1P9ii9EHI5yzMyMpeT42fKjl15Hw5GPi+f0kvXX2e4SEREREalgaM5HqlOyDTBE7N8cS0ZCMyAvCDboVr/PhxPhPZvdd0c93MzMGPr6KhSVil2uqowGLa2wHNmSDYCh8Kxnn+PQFkvJVIfWCsvp2Fd6eLgRVuvilH3RkGsazN8Tz+2JfZ9H9dGubHeJiIiIiCIwNJOmjIXmY3Xh0Ly/Svt+Q4+GR5uvxZ6We/XqGdUp28PDjSnsvNLUVD8cjnJFOLZaF8PprMTUVL8i1KdqqvHYZADNb7lRVWdDweaDuqpDV+yzotHmhG/0WtRj2xyDKNpyOCNheW4uoLiGp0+vzOqMgXRpbrlVPMe/+KdymBo6st0lIiIiIpJgaCZNGQvN0wGgZIkQmtctF/5fze/fCIfmS1t0H97rrZaNVprNBpw9W5LyABYtLLvdJsVoss/XrBhF9Xh2prRPgelZnOjy6g7RKzYeQPmeFtS3nhO3gtIKyysr6tBoc6a0v4CwPt1mWyG7hk5nZd5uzeTzNYvnue+FT8GwageDMxEREVEOYWgmTRkLzYC8INipJu37ue4M79l8Paj78MGgTxFojx9fBJerKukwFm9YjuxX5Gj42bMlaZ1GbnMMwtTQoRqEI9vitXtVw3LzWxrT6JM0MFArm85utS7G5csn0vJcucRuLxLP+W/+pYzBmYiIiCiHMDSTpoyGZmlBsMdWa99vZFd4tPnqK3E/jd9vU4xitrcvSyiYTUz0oru7VBGW29qWwuutjiuMR1aGbmtbCr/fFnefEhEK0SXbjkQtKlaw+WDawvLMzJjiWnZ2FiAY9KXl+XLNxESveN4NRz6Om76yncGZiIiIKEcwNJOmjIZmQF9BsOCFcGi+WJbwU3k8O1WnbOsJaakMy1J+v01R+dvlirLGO03OnL+EnY12lGw7gsVr96LU1JTWLayuXj2jOG+325S258tV0vfU/VVfE7+sKN/Tku2uERERES1oDM2kKeOhWW9BMOmezdPvJ/x0waBPEX5D64rVgq9WWG5vX4aBgdqUrLmdmRnD2bMlC2bE1e02Kb54mK97LycrGPSFp6YfvxlLv/EkgzMRERFRDmBoJk0ZD816C4Lp3LNZr8uXTyimbNtsK8Qp236/TbbmVBqW07X9kddbrVjb6/M1p+W5siEY9CmuaXd36bzfezlZTmdl+AucUw/LpsszOBMRERFlB0Mzacp4aAb0FQSLY89mvebmAnC7TYo9lSPDdOhnmdgrWK2KdF9fxbyvIq1WNdzrTf7Lj3wQDPrEa3P8+CKcePttBmciIiKiLGNoJk1ZCc3SgmCPFGvfb9AY157Nek1N9SumR0v3Cc70aG8+7Vc8PNyI06dXKr6AmJjozXbXcorXWy0bfT/R5VUE58D0bLa7SURERLRgMDSTpqyEZkBeEMzTp36fidaE9mzWy+drFotTZSMsRxoeblSMzmZitDsVhobq0d6+TPElhMNRPu9HzdNhbi4gK4w2MdGLE11e2fZfJduOMDgTERERZQhDM2nKWmi2HopdEOx6MLxn8/nb49qzWa+5uUBOjYJOTroUezr39JTl7DpgrbDc3V2aU9c1Fw0N1YvXy24vAgD0XhhhcCYiIiLKAobmhcBTg0KDAQaDAQZDIWo8+h6WtdA8HQDW3CKE5jW3aBcE820PjzaPH8tsH7Nkbi6g2NO5vX1ZzlScnpsLwOutVmwhxbAcP+lU9tBMBwZnbb7RazA1dODM+UvZ7goRERHlGYbmvGeB0WCA0SL8n6emEAaDERYdj8xaaAaEEebQaLP1kPp9As5waB7YkNHuZdvlyydkwTTaVlmZEC0sOxzl8zssB5xZeVqfr1m2jj2EwVkpMD2LFRsPiNekvvVctrtEREREeYShOd95alAoC8kWGHWONmc1NOstCOa5LxycZ69krn85IBj0qRYt6+wsgMtVBZ+vOe1Tt2dmxuDx7NQMy1NT/Wl9/rS68pww9T9UpX1kFxC8kNEuSPcFl1YYjwzORVsOY2xy4a4P39loF68FgzMRERGlGkNz3vOgpjA80gyLEYbCGuiZoZ3V0AwIYTlWQbAP6sKh+cpzme1fjvB4diq2yoqstu10VqY0RM/MjMHtNsmKk4VGvOd9WL52BnivOPy+imye+4S9wjPwJc3ERK94bdvalspmEkQG55UVdQsyOPtGr8mqizM4ExERUaoxNC8IQnA2GAy6AzOQA6FZT1FI7wkAACAASURBVEGw2SvhPZvfK05LQbD5YHLSBbfbBLu9SDM8S7d56uurwPBwI4JBX1zPEwz6NMOy01kZ9/FyyuwVoRK7NCC/eytwsSz8Hotsg0ZhPX0a33c9PWXidfZ4dspu6x8Zx7KH9suCs2/0Wtr6kotKTU3i+ZsaOmBq6GBwJiIiopRiaM57wprmwhvzsbXWNDscDlitVllraWmB1WqF3W7PSnu74w3M3vcp4J6bMXvfp/B2xxuq9xvtXSeGmP97rhDvnv1l1vqcK+306Z+jvX0TWlsLYDbfFDVEWyx/ipMn1+LUqSfw5ptHVY/X2WnG668/oHKsm/D66w+gs9Oc9XNOpvV3P4nZvs/LAvGY4+vofbsJdrsdXWdeh6drJyYc96mG59m+z+NK74a0vPc6O82S636T4loftZzCp74RHnH+w6/txqZdR7J+TTPRfvLCMfG8P/WNvXijoxN2ux3/uONlWXB+Yr/6+5qNjY2NjY2NTU9jaM53Otc0T01N4eLFi7LW2tqKt99+G36/P2st8GylONp8rfGnqvcZ/50N13/7OVmICXqMuHrFndW+51Lr77fi3Lkn0dlZjBMn/ihqiD558tM4e/ZBnD//M/T3W9HTU4GWlo/K7nPixB/B4fguRka8WT+3ZNr472yYdX9N9t6Zc/4lJi+9rPmYqyN9mBp4Bh+6ilQD9JyrEP+3/4cYG/mPlPWzp6dCss1YheL2d1z9+PT6n8mC4vINz8F6xpn1a5yuNuy7LDvnX73eK7v9uwdaZdfjuwdas95nNjY2NjY2tvnZGJrz3XwtBBYiLQhmvEv7ftPvCxW0pQHm/O0Ldp1zLBMTvfB6q9HdXaqYah2tWa2L4XabcnZvaN0+nACGn1CG3pFdwm16BZzCcUJ7hqdp/XMw6BOLrR0/vki1GnlgehZVdTbF+t7yPS15udZZOg271NSkep9ac4/sWpgaOjLcSyIiIsoHDM15T1jPHGt6tpqcCM2AvoJgIROtygDjuQ+YeiczfZ2nJiZ6MTBQi56eMtVK2G1tS+H1Vs//sAwAV19Rvke8a5OvjD3RCgw9mrb1z15vtWzPay2uIT9Kth2RhcXFa/ei1tyT6JnlHNeQX/xyYNHq3VHXcde3nmNwJiIioqQwNC8EnhoUGm4UAtM5ygzkUGiWFgSrrox9/+tBYcQwMrxc2hLfKOICNjnpwsBALdxuEwYGarO2/3NKBZxCOJa+J1x3CiE6lT6cEI55sUw9PJ+/XXgvTr8f12Hn5gKyLzSuXj0T9f6NNieWPrBPFhgLNh9E74WRZM4uJ0i/FNjZaI95fwZnIiIiSgZDM2nKmdA8HQDW3CKE5pIlwv/rEbygDC7nbxemy9LC8eGE8CVKZHgdfiL9X6JMvy8sEVDbwsp9d9yjzj5fs2wrsVjGJgOoqrMptmKqrD05b6dsN9qc4nms2HgAgelZXY9jcCYiIqJEMTSTppwJzYCw5VRotPlYXXyPHT+mPh034ExPXyl3aL322Ziur7b++YM438sATp9eKQZnn69Z12N6L4ygYPNBWWhc+sA+NNrm1+9AYHpWNnpucwzG9fjI4Fyxz5qmnhIREVE+YWgmTTkVmvUWBNPy4QTg264c7fNt55TtfBS8oF4YLoGQmnLSvcVdd8Y92nz58gkxNLe3L4tr6nx96znFlO2iLYfhGvLHexZZUVl7Uux32dOvJnSME11eWbG08j0tKe4lERER5RuGZtKUU6EZiK8gmJZMrWul7Ii2nj3JCtYpNWgM9238WNwP7+4uFYOz11sd12PHJgOo2GeVBedFq3ejqs6me6pzNvReGNFd/CsWBmciIiKKB0Mzacq50HyqKb6CYNGMHhJGHqXB6mJZ8hWUKXt+/4awTlj6mr5XnJuV0wNOeXX3OE1M9MoqmydSqO3M+UuqU7ZPdHnjPlYmSPtafbQr6eMxOBMREZFeDM2kKedC83QAWLc8XBBscjy540XbqzfBbYEoSy5Xz789uqXTxyda4354X1+FGJydzsS/RKo+2oXFa/fKwnPJtiPoH0ny9yuFpGuRV1akboo9gzMRERHpwdBMmnIuNAPygmBN+1NzzKl3hNG+yCnbCQQZyoIrzyn3Q86lqdhaJlrlfY5TMOjD8eOLYDYbcPz4IgSDvoS74hu9hvI9LYop2zsb7Vmfsj02GZCtwz5z/pLq/Xy+Zpw+vRIuV1Vcxz/R5ZV9aVD29KtZP2ciIiLKLQsgNHtQU3hjj2KjJfzTmkLZ/8sfIt3XWPlYbRYYC2ugcxvknJeToXnQnVxBsGg+qFNO2R7YIIxiprolsI6VVFx9Rf56zbcvOqRf1iRQzd3prBRHmx2O8qS7Y3MMYsXGA7LwvGLjAc2gmgnS9ddaI8HSLxASuRa9F0Zkwblk2xEGZyIiIhLlf2i2GG8EXg9qCgtR4wEAC4wGIzRjsKcGhbLwa4HREHpsFIrHzW85GZoB4LHV4eDsTH5to8zsFWDoUeWU7XQ071quoU7G79+QF/yaj8Xcxo+F+z/0aNwPn5sLoK1tqRgWJyZ6U9KtnY12xZTtWnNPSo4dj94LI+LzL167V7P4V09PmXgNGJyJiIgo1RZkaLYYDSiMloBVwq/FaIB0sNlTUxgxCi0Z0Q491mKMc6Q6t+RsaJYWBNu1KT3Pce2MUEQqE+F5ZBe3vYrX1DvywJzr65e1XA+G921+99aEppV7vdViUOzuLk1Z13yj11BqapIF58rakyk7vh4rK+pihnbpFlxW62LZiPPZsyVxFUljcCYiIiI1+R+aI6dn6xkNjjXSLLtdMmot/XnEMSJD93yQs6E51QXBMm3qHfVtrzhlW5/gBfk0et/2bPcoOR/UJXUuc3MBtLcvE4Oiy1WFmZmxlHWv+miXLDiXmpoyEiRrzT0xi3/NzQVgs60Qz93na8blyydgtS5mcCYiIqKUWQChWS4UXi3GiFFhKZU1zYqRadl9bgRqaVCWjjJrHSNjJF8cxNGPnA3NQHoKgmWa1hpqTtnWNv2+fFupS1uy3aPkXQ+G3wfv3ppQ5Xafr1k2NdlqXQyXqyqp4mBSzW+5ZVWmV1bUJbVPciy+0Wuy4Np7YUT1fm63SXWUfWKiN6ng7BryY9lD+2XBeWwy/m29iIiIKD8srNAcCrWScKs6AqwYSY5Yz2wxwiCuiZbcHhmac2Ro2WKUfDngqUGhnvXZyPHQnM6CYJk0e0UIftLg/O6t3PZKzYcT8inzAxvy5xr5tofP64PEtlRyOitlU5NDVbWdzsqUhOfeCyOyKtbLHtqvGWaTJa3kXbHPqnqfqal+WfXwqal+2e3JBuf+kXFZcF5ZUcfgTEREtEAtoNAsKQQWV2i+8f/SwmHSQGwxqo80y8KpMNKbnQyts4iZipwOzUB6C4JlmtoaavfdQrErEsKxdEq75778CcyA8OVJaI22686Ezy0Y9KU1PPePjMvWGS9euxfNb7mTOmYkm2NQPP7SB/ZpBtXu7lLx/Nxuk+p9GJyJiIgoFRZOaI4Y+Y05PVulEJhBNvocWidthNEQCsQ3fp5LhcAiA38ccj40SwuCPfVwtnuTGleeU5+yPR/2HU6X60HhGoSux3vF+Vk4TTrjIMlK4FrhOVRVOnJUNh6B6VlFgbDqo6n50iowPSsL5fWt51TvJ52ObrOtiBqEI4NzZ2dBXGu+GZyJiIho4YTmhcpihKGwBhZJtW+9+T3nQ3NkQbDR9EwVzbjZK8CgUTll+8pz+TW6qpc0TLrvFtY156OAUz6SngIzM2Nwu02y0Jiq8FxZe1IWnLWmUcdDWnSsYPNB1ftEbrN1+fKJmMednHTJiqWdPr0y6eCczjXdRERElFsYmvPdjdFusfiXdDq5hN1uh9lsnnft4pYHxNHmd3/07az3J5Xt7ZO7MPnOF2XhefKdL+Ltk7uy3rdMNU/nt8Rznzn3/+J0a23W+5TO5ju7Rjzf7vanU3jsIzCbH4TZ/DFEhmezuRhmc2LX9ds7XpQF57/81s9wpOnVhI7VcKQZN33lJ+Kx9r3wa437rpP0vSCO56iD2bxE8tjP3Lgu+vv3mfXVYv+W3L8HdS//JuvvGTY2NjY2NrbMtPmGoTkeN0aawxlZ//rqnB9pBuQFwcrvyHZvUu96ELhcLd+T+LfLgKFH83/K9pXn5CPtU+9ku0fpd+2MfFp+is3MjMHrrZaN1EqrT09M9MZ9zBNdXlml65UVdegfiX8bOOmUb639oCcnXbLiX/Gu0Z6a6k9qxHlsMiCbPr7sof0JnSsRERHNLwzN+U6xpjnPQjMgLwj2SHH+TNOWmn5fvq73t8uEtc9Xnst2z9Lj6ivyc11IBdE894XPO+BMy1PMzQVSGp57L4zIpi8vfWBfXJW1T3R5ZY/V2hfZbi8S++nx7IyrjyEMzkRERBQvhuYFwGKMnJ6trzDYvAnNjjeFNc2h4LzmFqBz/r2xdZloFaorSwOl5778GoX9/RvykfUki2LlnEE38OIO4X2rZqI1fO6DxrR2ZW4ugIGBWlmIlFaa9vttuo/lG72Ggs0HxTC5aPVuNNpih/7A9CxWbDwgPk7rMcPDjbKgG08V7EhqwTme9d0MzkRERAsLQ/OCIIwu510hMKlBtzA9OxSc77kZqK4UioXlm+tBYR9ntSnbV18RpvgGL2S7l4mZekd+Xvkykj45DlgPCTMhQu/PaMXrQl+MvHtrxqbhDw3Vq4Znu71I98hzYHoWZU+/KlvnvLPRHvUxpoYO8b5FWw6r3iey+Fc8YV7LzMwYTp9eKR6zvX1ZUsF58dq9adu3Oh+NTQbgGvJnuxtERES6MDSTpnkVmgEhIFdXyoOz8S4hUOej4AXgYpk8OEc2153CfQaNwtroK88JoframWz3XinglG+35due7R4lz9kF7Noknwkhbfur1B/3QV3WroNaeD5+fJGuKtUhVXU2WXAu39OiOuW6f2Qci1bvFkemtUKU01kp9qWnpyzRU1NIRXAu2nKYwTkOgelZWeX1lRV1qDX3sBo5ERHlNIZm0jTvQnNIp1mYoi0d0bMeynav0mf8mHLKdjzNu1YI1iO7hGA90SqE6kwWGpt+X9hOKtSnS1sy99ypNjoCvLwXWH+belB+/P5wiNYabb4elI82Z2Ffap+vWRYo4w3O9a3nxEAcGkWO3N9YWvyrqs6mepyJiV6xD1br4riLf8WSbHAOTM+iZNsRBmcdXEN+2eh8ZCs1NaHR5tRc005ERJQtDM2kad6GZgDwDcqnwt5zM/DUw8I02Xx0PSgE3fFjQvD1bReCsLSoVKLNc59wvInW9IS3DyeA94rlVaPn437Up5qE95haUF5/m7CO2Tco3Hd/VezR5pFd4WvyQV3mziOCw1GecHC2OQZllbVXbDwgrv1tfsutq/hXZ2eB+Pxeb3VKzikSg3P61beek70XFq3eLVsDL22L1+5F+Z4W2ByD2e42ERERAIZmimJeh+aQ503K8OLsynavMu/DCSFU//4NIVSP7BJCdazp3bFCdLKj0deD8mDvXZt4YHa8KbRMrmP3DQrvsXXL1cPyUw8DXSrbJ42OxB5tnr0SXt/tujOrXyQkE5xdQ35ZZe3Fa/fC5hjE0gf2iT9rfkt9CcXAQK2sWFc6zcyMyQJ6e/syTE66dD9eLTif6PKmscfzw9hkAOV7WmSheMXGA+JUfN/oNVQf7ZIVg5O2ZQ/tR1WdjeufiYgoqxiaSVNehGZACFLSUFOyRJg+S3Khtc6Xq4U2sEEIsbFC9HvFwPATwih3PCH6elC+jdZ7xYmNZDveFNauS8NqyRJhK7KnHhZGeE81pS5QTweURb2krfwO4Fhd7K3P9Iw2+7aHr89odpcYuFxVsuA8PNyo+7GRa3+lrWTbEdXHBIM+WfGvq1fTvw5/bi6As2dLZNPB49l+KzI4L1q9e0EH5zPnLynCcMU+q+asAteQH5W1J2VfqEgb1z8TEVG2MDSTprwJzYAwLfvx+5VrS/NxT+dUux4URqhDo9N6Q/TVV4S1yloubQk/xn139PuqGR3Rng4dra25RQjUuzYJgbrTrL39k5SzSyg0J10vLw3puzbFN4tBz2hzwCkf4c8yt9skKxA2NFSv+7GB6VnFiOOi1bs1t2rq66sQn8fhKE/RGcSWiuAsXau9UIPzzka7bE374rV7NWcUqDnR5UX5nhbZMbj+mYiIsoWhmTTlVWgOeXmvvJLxuuXq02cputCItJ4Q7b5bCMjSEC0dQT1/e3xbZE0HhLAbWZH68fuFnz+5XgjF8YZpaaCurhSO1XVSGDWO3M4s1B4pFkadE10rr2e0edAYvlYTrYk9TwolE5wBIUyFgo+poUP1PlevnhGP39a2NOXFv2JRC87xTNUGIPuCYCEFZ9/oNdlou2HVDhRsPpjw6HBgehb1recUx+T6ZyIiyiSGZtKUl6EZEEYDI0PQ86Zs92p+iydESyt9v3ursDezXp1mZVXq8ju0v/gYHRFGkY/VCSH48fu1p1XHE6yrK1OzlZl0tHndcvXp49LR5oup224pGckG594LI1FDjrQo18BAbZK9TUxkcG5vX4aZmbG4jhEZnBttzjT1Njec6PIqplZrfTGSCL3rn7VmLxARESWKoZk05W1oBoSRwV2blKOGPo5WpMTUO8Ke0AMbwsWsItu7twrTvvUYdCun16+5RZg5kOg6Zd+gEKib9guB+rHVyrXRkSPZp5oSe65opKPNTfvV7yMtlhbIjeDl8exMKjhr8XqrM1b8K5bI4Hz2bEncx4ickl7fei7l/Qx9CVF9tAuNNqdia69MiNybe+kD+3Dm/KW0PV+09c+LVu+GqaGDU7eJiChlGJpJU16H5hDrIfk03zW3pCcYLXSRIdp9tzBdO5bJcWUF9FBV6nSuRx90C4H65b1CS+eXKYNu+XIBtS8BJlrDoXnQmL6+xGloqF4WnD2enUkdLxj0wWpdLB4vnrXE6TIzMwabbYXYJ6ezMu5jJBucz5y/BJtjEDsb7TA1dKBk2xEUbTks28JJbc1vJopm9Y+MK7aOKjU1ZTS4a61/XvrAvrwf3SciosxgaCZNCyI0A0JoiRxh3LUps1sXkdKxOuVWTsa79BXtmm+eXB/faHOyW32lUGRwdrtNCR+rp6csqXCaLlNT/bIwn8iUca3gHJiehc0xCJtjEKaGDpgaOlC05bBmtfFEWsHmg6g+2pXyacuNNqdi7+Vac09KnyMegelZmBo6FOG5aMth7ptNRERJYWheSDw1KDQYYdF59wUTmgEhIEunyYbWyqZi3ep8EFr7qzZVed1yYWT3WF1mroezS7nueM0t2mEyH3j6Yo82f1AXDs2+7ZnvYxSpCM5+v01W/Cve9cPpdvnyCdmWW4lsgWVq6EhZEA6NpBZtOYyyp1+FqaEDteYeVNaelO2LHdlWbDwAU0NHUiFSrRK6dO/lbPONXpNVMA+1ytqTWZm6TkRE8x9D8wJiMRpgYGiOruukfEuhdO73m2mT40LfrYeSK4q1brkwMtq0Xwh7qTI6olxnfs/NQtGtRKtTzyexRpuvB8NF1N69NadGm4HkgvPcXEBW/CtV66NTTbreuq1tKaam+uM+RjzBecXGAyjachgV+6wwNXSgvvUcbI5BXSPGriE/TA0dWFlRp3n8ZQ/tR2XtybjWHvdeGIlr72Utk5Mu+P02RfN6q+F2m3Q1u71I0Xp6ysRp/TbHoOL8F6/di+qjcWwNR0REBIbmhcNihKGwkCPNeoyO6AuTie73m26ON4Vw/+IOIew/tlq5PZPecPzYavV9iSOvQyhEx7NPcch0QFg3HPk8jxSnNpTnOj2jzVeeC482f1CX+T7GMDzciOPHF4nB0uXS2EYrgrSoWGdnQZp7mRyHo1xWqGxuLv4v0KqPdmHZQ/uxsqIORVsOo7L2JEwNHWh+yw2bYzDl65D7R8ZRfbQr6pTvpQ/sQ8U+a9S9lKuPdiW19zIgjNhLi6ulo1mti2XblFUf7VKs/15ZUcdtqoiISDeG5gXBg5pCIyycnh2fl/emdr9fPYHS2SWEXml7ea9wDGkL7UUsbbHCrd7gr9ZPT58Qip9cH/t5SpYIo9gv7419zl0nldt/rVu+cIuxxRptnr0SrkbuulMYfc4xly+fkAVnh6M86v2DQZ94/+PHF+VE8a9o5uYC6OwsEM+vu7s0212Ki2/0Gupbz6lOX5aG4bKnX0WjzYnA9CzGJgNJ7b08NxfA0FC9rKBaultkpfOxyQAq9llVC6alu1gaERHNfwzNC4CnphCFNR6uaU5G5H6/sbYn0jOCm8hjE2mRU8xTMSI+6BauxVMPK4t1qbXHVgvPHXpe36ByC6mSJUKl7IUwFVuLntFm3/acHm0G4gvO3d2lOVn8K5pg0If29mUpqxqeLYHpWTTanCh7+tWolbgT3Xs5GPTB5aqSFVGTjtKrTbkeHm5Unbat1iJH+efmArLXRW2af++FEcWIO7eoIiKiWBia854FxsIaeICoobmrqwtms5ktgWY7eAD22t1w/cCIi1segH9DAaZKP5O5UHzPzbj6938B/4YCDG/6MtzbytHzzDbYa3fjePPRjF0Dx66tGHrkq7rOfe5L/032/1c2/jVsBw9k/bXMheb71j3idXn3R99W3N5mOSyG5omeu7PeX6127NgPYTbfhHBQKta4T+j2T8Bszsz7NTVtX8T5PZEDfUquPbHvML7y2AF8onS3anj+ROluPPP8r3Rem2KojwIXwGzekcbz2CF5ro/BbG5Qvd/WZ19SnOcnSnfjiX2H09Kv2oYmbH32Jaz73vP4wsM/xce+uksYsf/nn2PfC7/O+mvPxsbGxha7zTcMzXGwGA0whlIyR5ozz9klTEF+cYcwBVo6jfqRYvn06sfvV07DPlannK6dzv2JU8U3KBQc27VJOf1a2tbfJlwfCpOONpffoX6fQWN4tHmiNbP9i0O0EefIUcHh4cYs9jQxw8ONYv/nw9TyeJw5f0lWibt8T0vMytPDw42yqevSa9PXV5FQ4bRE9PVViM8dOU1bKtoWVclUAu+9MIL61nOorD2Joi2HFcdXa0VbDnONNRFRDmNozmsWGA0GGFSaUUdyZmimlBkdEdYpV1cKQbD8DmHN83ysQp4J0rXNnSr/SAec4dDsXZv5/sVhYqJXNj23p6cMc3MBuN0mXcEm17lcVeJ5tLcvy+pWWT5fM9xuE/x+m6wQVjrNzIzB662WfQEivR5eb3XGr4meadpS/SPjCW9RZXMMotbcg4p9VhRsPhhXZfTIKuQMz0REuYuheSHhSDPR/CAdbTbepX6fi2Xh4BxwZrZ/cYoMznZ7kaz41+SkK9tdTIp0XbbdXpRQRe1kTE66NEd47fYi9PVVwOutht9vS1mAnZrqR19fhep65c7OgqzPHJDu+221LtY1ym1zDCqC7OK1e1Fr7kFgehY2xyCqj3ahfE9L1K28ItvKijqU72nBzkY7bI5B2drp5rfcqscq2Hww7srkRESUPgzNCwlDM9H8EWu0eaI1HJoHjZnvX5wig3Oo6d2WKpfNzQVklaH7+ioy9rwuV5VsCrzeLZns9iK4XFUYGKhVLaqlxe+3yb4kkLaenjJcvXomzWetn3QWgN1epPtxaltU6W0Fmw+iYp8V1Ue74hoxbn7Lrbol2MqKOoZnIqIcwNBMmhiaibKo0xx7tNlzXzg4T7+f2f4lIDI4t7UtzfiobLpMTfXLzs3rrU7r8/n9NsUWTp2dBeIU7e7uUpw+vTKuMN3evgx2exHcbhOGhurFABzaMkrteFbrYrhcVRlbrxyPyC8zBgZqdT/WN3pNdYuqyKnUlbUnUWvuwZnzl1LSZ5tjUDU8r9h4APWt51LyHEREFD+GZtLE0EyUZdJtzdRGm6++Eg7Nvu2Z718CJiZ60d6+DFbrYvj9tmx3J6X8fpts2nk6zm9mZgwOR7kiuEYL6RMTvRgeboTbbcLZsyUp2S+5vX0ZBgZqc/5Lj6tXz8imq8cb7nsvjKDU1ISiLYdRVWdDo82J3gvpL8Zocwwq9sY2rNqBZQ/tZ3gmIsoChmbSxNBMlGWxRpuvBwHXnUJofvdWYPZK5vtIMl5vddxrafUaHm5EW9tSWXg9e7Yk4aJffr8NQ0P1cLtNsNuLFMdWa3Z7EXy+5pSdUyYkOk07F4RCu1p4rj7axb2l08Q15IfNMQhTQ4dYBb1inzVlMwqIaP5haCZNDM1EOSDWaPMHdeHR5ivPZb5/pCDd8shmW5F08a1g0IezZ0tk4bWtbWlawuvcXAB+vw0DA7VwOithtxfBbi+Cw1E+bwu2JTNNO1f0XhhB2dOvKsLz0gf2MTwnqH9kXCzuVlVnQ9GWw6oVzdW+sDA1dKB/ZDzbp0BEGcTQTJoYmolygJ7R5ndvFUKz607h/ymr5uYCsNuLxJDW3V2a8LE8np2KQl99fRVZ3dpqPpqY6M2Liu39I+Mo39OiGp53NtpjbpG10PhGr4nbgpkaOlCy7Uhclc/1FH6rNffwuhMtAAzNpImhmShHxBpt9m0PjzYPbAA+nMh4F0luZmZMtldwvFXCr149o9hGymZbkVPVqecb6d7gnZ0F2e5OUkLhedHq3YotsiprT8LU0AFTQwcabU7YHIOwOQbzampxaPq0zTGIE11e8XxNDR3iGvREQvCyh/aLBd5MDR2wOQbFNeyNNqfqaL9h1Q4sWr0bZU+/mr+Vzn2DgLMr270gyiqGZtLE0EyUI6SjzY+tVt4+eyU82hwacb7GcJVt0tFNs9mga+/i0DZSkfstu92mnC+6levm5gKyCuAez87sdWY6ADjeTPowvtFrqKw9qQjPevePLtpyGEVbDqPU1CQLnie6vGIodQ35U3DC2v0PPY/NMYidjXaxD+V7WsT+JRqC1drSB/aJa5R/fOhVWDpfxtt9v4HHsxNutwl9fRXisgTp7+/p0ysxNdWPsckAas09KNh8UPP4FfusGSkYl3aT48D+fphS8AAAIABJREFUKqBkifD35/H7gdE8OC+iBDA0kyaGZqIcIh1t9vQpb596J1wULNRGdmW+nyTj8zXLwm+0keLLl08oinF1dhbM26nEUQ26hdCY4Q/gWZ2mPegGmvYLwSP0u7z+NsB6KOlDJxOe87F99pvfxzd//H1s3b8TB155GMdtm3Hy9N+JYTjRqvFtbUsxMdErXvf+kXGYGjqw7KH9qv1YsfEAdjba4Ru9lvRrnFHTAeDFHcCaW8Lv1VBbc0tK3rNE8w1DM2liaCbKIdLR5ifXq9/nwwlg0CgPzt61rKqdZdJpwe3tyxTVroNBH3p6yhTbSA0N1Wenw+nUdVIeGkOtZIkwi+Kx1UB1pfCB/cUdQrB2vClMD02RjE7T7jopnM/625TnLG3rbxMC9XTyswmko7daU5eLthzWDHq52EKjw6EmPafmt9xo7z6F1o7H0fr6bUlvpxa5JMJuL5IttTh+fBEuXz6huO42xyDK97Rg8dq9qudQsu0I6lvP5X7RtmN1wLrlyqAc+R7mqDMtMAzNpImhmSjHxBptDhk9JJ+uff52YKI1c/0khe7uUllQC021Hhqqh9W6WPZBvaenLOFtpHLSdEAYmSq/I3pw1NtC4XrXpoTC9dxcQLZePKXTtH2DQuh4cn14Sqtae6RY6H/kz9ctT1l4jkdgelZzmnTZ06/KAmsqW9nTr8oCsLQPsYprTUz0wumsjHvf8ePHF8mqwrvdJrjdJly+fAJ+v002khwyMzOmqGCvVYU9MD2LRptTdaswwyph/XP5nhac6PKm5LVLmU6zMhiXLAGeNwnTtKcDyvfsuuXCF0NECwBDM2liaCbKMXpGm0OCF4D3iuWjzsNPsLp2lkSup+3uLlVME21rW6o6gjVvjY4IgTZy1CpUCf7FHcJo1WOr5V8IpaIZ7xKO++IOIYRGBOrJSVfqpmk7u4R1n9G+FFhzixA4TjUJASTENxg9PE9yWyOpy5dPoK+vIuqe4nZ7EVyuKrjdJni91fD7bfD7bSmpOO9wlMueK1aBP9/oNdSaezQrdofWPze/5c7eCLTjTeFLnMj3YHWl+khy10nl7/SuTXyvUt5jaF4IPDUoNBhguNGMFn0PY2gmykHSD+bRRpsBISBf2iIPzp77hEBNGTc11a/5Yd/lqsqfbaQ8fepBMPRlT6wCWKH1zo43wyPJ1ZXhEeZoI7h62iPFwOP3w/OrL4eLPJ26TX+htdERYeT8qYfV13xKg/vzJn1Vh7XC85pbhPNfoIFkbi4An68ZDke5YkaGdOS4p6cMw8ONGSmW5/HsVMwM0fO8riE/KmtPYukD+zSnoZdsO4Lqo11pLb4WPpE+9aUST66PPWNjcpyjzrTgMDTnPQuM0qBsMcJgKESNJ/YjGZqJclDTfv2jzSHjx4Qp2qHg/O6twNVX0ttPUuX32xQVefNmG6lOsxBqIz+ElywRQm8K1yUDED64h8L1sTohXO6vEvoQaw3xjdb5i/8svhbuJz4qBOon1wvHsh4Sjj05LgSMF3dEHxEvWSI89lhd4uc6OiKvVrwAw/PMzBiGhurR01Om2KNcuubf4SiHz9esfSDp+yPUOs3hL2JC7XlT+AsZaVP7suXG6zo0VC/rm91eFNeXXie6vFHXPxtWCdtfVdaeTP00bt+g8IVP5Pk9tjr+baU46kyJmA4Is26eXC+8Z9bfFp4ZFPp3NwcxNOc7ixGGwhqEM7IHNYX6RpsZmoly0HRA/iEl1miz+Lj3haJg0lHnoUfzZ0/nl/cKQcN4l/DFQg4XqPH5mmG3F2V3y6NUmRwXQqJaSF23XHhdsvkB2tklfLCXjlZLfn8m1/0hjjffGLFsNmCi7GPxjVqvv004rtr+6cmIFp6fN6X3/R0Kmy/uED7Uhl7bNbeEA+X+KvnU9yQroQeDPgwM1CrWDUtbe/sy9NkfhP/sT8Ov6Ys7hAD42Gr1KcapbutvE4Oz32+TjX7bbCswNdUf97mfOX8JVXU2zSncoXXQpaYm1Jp70D+S4O+T1nvKeFdyI8ST4+HwI71O3NeZInWdFL5U0TtbSBqmTzVFfU8FpmfR/JYbFfus4myO0L7r0uKB9a3nxLoJ8WJoXnAiRp6jYGgmylGJjDaHjOySB2f33cJ2VfPZizvU/+A+tloIdDkcoOct36DwAVxterLxrvmxJc2NkUfvkdXhkf/6j2DuSzE+yD22WvgdHHSnv4+jI0JIjrzOJUuE65/se3t0JBxAH79fff15vE2tEvrLexXhenLSBa+3WrbWX1G9+ld/COdP/yT+LzNS0R4pDp+H9EshSXCemOiVVdaO3JIqXv0j46g196DU1BR1+7AVGw/oH4XW2j5q/W1CEEkV6yHlczxvynhRO8oxg27h3yqtf1vK74j/353yO4DH78fYfhNOPrMHlY+mrjp/VZ0NpoYO1Jp7xHAdqjfA0LzAeGoKI0aetTE0E+WoREebQ37/hnxP53dvBa48l56+pptWYI5sT64XPtRx2mBynF3qUzvvuVn4+TwdXZIWZXOff0IId6eawiOZakW8MmlyXD34xBOeEw3I65bHNeU9Wrv88P8D5/abYDv4nzSD8um6/wz3Ex/F5Lo/TC7ohkaoIlvklG09U0Enx+VT8yXBORj0yYK/1pZUiTjR5UVl7Ums2HhA8wP/4rV7Ufb0q6hvPafcD7ppv/J1vlFkbnx0TFatXG2LMlNDB6rqbIpAoVbt3OYYFN5jkeuky++Yt/8uiJr2y2dZWA/F/3cXwNhkQKxOX76nRbyulbUn0fyWO2bF+HnDNyh8UaZVHHHdcuE6Sr94nA6El9o8b1LMCtLTeos/i+biO/CTr6zBd43bUr5vffFm9Yr5uYyhOUGemkIYDEaoDTLb7XaYzWY2NrZ50t790bfFPxS+b90T9+PbLIdxpfs+2ajzle770GY5jPbD9XDs2oqhR74K/4YCOHZtzfr5qrW+pytlfzAdu7ai7chLePdH38ZE2Rc0/7D6vnUPep7ZhuPNR7N+DvOlOXZtxdW//wvFtZz5ylJc3PIA2g/XZ72PybU6mM03QQg+N8Fs3pfG52qA2fxtmM0PwmzeALN5h+7HWpt+Bfe2csx8ZanitRh65Kvi69B+uB7dNSa4t5XDv6EAwa99WteHzuDXPo0rG/8a7m3lePtnP0bbkZdU+2Gv3Q177W44dm2Fe1s53NvKcWXjX8O/oQCT61ZIjvdxDFQuQnfNR8Rp8KoVr2s/Au93FmGqVD0o+zcUwL+hAMObviw+39s/+zHstbthO3ggI+8Ra9OvZP+uTJV+RvK+P4KWlr+MOK9vp/T5617+Db6940X85bd+FvWD/WfWV+Nfyyow/CX5az52zyfxw+L7sHiVKe37apff+yDG7vmk7Pnr//dX8Q/bavHg93+JB7//S2wwvYAdtUewo/YI6l7+TUZew3hbzzPbMFX6mai/M/4NBRioXIu+pyvR+Ytq8bH7Xvg1tj77Eh78/i/xhYd/ik+U6gtw/+PvnsVXHjuArc++hIYjzVm/BvH8fjh2bYV/Q4HqdZr70n/D0CNfxds/+3Fcxz18+Nf4edWTeHb9Bvz8S/fCVvwFxXsr2mtjO3gADUeaxffaP22vx4Pf/yW+/t1f4AsP/xRfePin+NhXd+l6bb7+3V9kOroljaE5AUJg1lcALIQjzUQ5TDraXLIk8WmaV54Dfvu5cHg+82eA8Y+Vf4B2bcqtaXbWQ/L+HatT3sc3KIwQaH3bXbJEGEVM5RTFfBIaLVD7tn/9bXm3JdLAQC2k61NTWYlZz1Tkzs4COJ2VGB5ujL02dnJcfRTxnpujV/SOfA0fv18Yfe06mbJlDFevnoHLVRX1XI+/9p/QXb8UA8/ehmDVvQnvuZ1xkSPOa26RjTjGuyVVoqTrN5c9tF/8UF9w7yPoLf6s4rWuLi7G0lXb0h6WZVNeV23DmeIVsn64iv8MK+79juZjFq3eLRt9la5BPXP+Ulqupaquk0ltg3emeAXqi+9C5b1rUbSqIup1ijUauuyh/Sjf04L61nOZqaoer06z8HdUa53yk+uFv7FxfH7ovTCCnY12FGw+qD3DYpUJ331kO974weOY2PNvwsi01r99+6t0/a2S7ldfa+5RzLSo3N2QxIXKDobmOEUbYY6GoZkox0nXNu+P48OZp08ImU89LHzo3vjHwOlPy9c6VytHsvD4/bkRkiID84s7Yj9m0C3cTytAh/bRTXVBJ2eXfKqvdG/iF3dkZl1svE41qW9Fc8/NwvTXPP6SQTpNO9nAMzHRC5erCjbbCs3wGK21tS1Fd3cpPJ6d8Ptt6k8yHdAOz5EBOVQVPFQRPEVmZsYwPNyInp4yzW2hxEJefRXzfy/yGME50S2pkuEa8qPziccwfe9/lb3ujcVfxJ3rfiR+6A+1sqdfVUzDlq7hDLXeC8ovUnovjMjus7PRLjuO9HkKNh9E1b1rELgn/EVs4J4/RtW9a5IK5AWbD6Joy2GU72mBqaEDOxvtivWnCXF2qVdOf+phwCcE9xO/PAjz1n/DiW98Gd1f+rzuIO388q144xvFOLl1M9483Ij/4x0Wn/bM+UvY2WhHybYjMUP00gf2oezpV1Fr7lF9fTLC2SXUK9AKqca74qonolbES+vcY+5rPjku/I2KXE6ybrn6l+txMJu5pjm/eWpQGOcIcwhDM1GO0zva7OkTPlg/uV77j9zqPwIO/ok8OL+7CnA0yx9jvCu7I0CJBOZIocIkWms01y0XPhBEW+sYGg2zHgqHYbWiQXpa+R3ZD9CDbmEdmVb4msfrleMxNdUv20oo3u3ALl8+gb6+CllxqMh29mwJBgZq4ffbMDRUD6ezEp2dBbqCtOZodCg8G+9Ka0AOmZjohcezM2a/z54tgddbjclJV8r7kFWT4/JwFRGck92SKi5q64gfvz+hNbdpM+hWVDef2Hg3jr9iUYTtaNtwpautuPc7aC5WfqFqK/4CVt5bGTvE3/sIKu79BmqL/xanV90e37/9j62Wz7R4cQfef+Z76HziMXy/8ml8dc1mFK2qEFvk9PrFa/ei1NSEnY321I7Ge/qUa/9f3KH99239bcLfkIi/Y6F13KFWfbRLfM0r9llRtOVwzC9Idjba4/+CYDoQ3lUj8ovfBP+WMTTnOYvRAINB2Vg9myhPqI02O7uEPxaP3x97a4d1y4UP2E37hT+SV18RCoOFgvP52wHPs8rqsdn4QJaKwBzJ0xe9smeoCFKKCiHp+hDVtD8zX0xMB4RrqrVVT6gvC6z6+NBQve5p2nNzAQwPN8LhKNccZT1+fBF6esowNFQfMzj5/TZ4PDvR3V0aNXjHNRqdAnNzAfh8zejrq0Bb29Ko/XE4yjE83Jj20dWsmw7Iw2pEcE7VllRRRe6TXLJE+Lc/V0WGmFAhO5UQ4xu9pihOVmpqQtGWw7Ip6clOIa8vVk7D7i3+bMxp1YZVQhXzUlMTTA0dONHllW8H5ukT/n193iT8/dC7zVICzXfPn8BW/AXYir+A06tuR+/X7xCb98G70P/3d4vNt25lyp43UPIpdG96AM8/8wvZDINoo8WxWtTCdokYHVEvXlldGfffNoZm0sTQTDQPRI42x/rDvP424Q/IsTrtkc3gBcAjLxIG118B1f9L/gExmb0943WqKfWBOZLjTeEPabLb7kiD9vMm9f1sR0eE10BtKmCohfacTnWAjja1rmSJMOqxAEaVo5HuFxw5TTsY9GFoqB7d3aWy0URps1oXpyQ8BoM++HzNcLmqZFPHc6l1dhbA49mZ1FZL85ZacJbMUEn1llSy533epPy3fT783g661dcLr1sed5V66RrU0DRxaVVqrfbVf/slXikrVUxn933lz/D9b23VfFxl7UlxGnvC5x5aqhNtDW6Ot8biL6Ls3m+mbqT/xhZqCV9XPRxvKt93a24R/sbqxNBMmhiaieYJ6WhzZCu/Q/ggYj0UX/i6HgSGn5AH598uA97+HPDkJ4Ev/5EQsDKxH2/XSfmXAc+bMvOcuzbJP9SEtrMJTX19cYfwAUjvtjVaQgXLohWeSXbP6clx4fFaa7ofKRZey1wq9pZFwaBPNko4PNwIr7c6anBta1uakTW7V6+ewcBALRyO8oTXSyfTrNbF4sh5MOhL67nOC5HBuWSJ7AvFlG9JpTLVGU89nBv1JvRSC/1q/+alej90rT2rU7DeNV6Tky4MDNTC7TbB52tGcERlOrS0Fkao7a+Sb6v22GpMb1SvWK3WQiPSWq2x+Iv4YfF9qq383gdjVl+X7nlctOWwbL17qKibuEVZmq6r11sNt9sEt9uEnp4y2O1F4fbacth/8VHYaz8Sbi98XOe/fw+mpc/pxNCcIQzNRPPE5Hh46rDxLuGP6qmm1EyrDTiBQaMyPL/1aeBHS4TwnI5R35DIwLxrU/qeKxfEE6D1fEjuOqld2VRtr0wSSadpazWbbQWczsqsjrLOzIzh8uUTcLtN8g+HKW4uV1Xca7wXjBjBeWZmTDZ7wWw2YGAggT1frYfkgS9TX1ymS6hoU+QXlJFt/W3C7JhkZjepFcxbc4swZTwDXxaGQnJPT5nmEof29mXo6SmD11udsuUWkYXborXI4nBaLbJoXFLF15IUKkTocJRHXTqSmsbQTBoYmolINP0+cGmLenje89+BZ/8p9R88FlpgjhSr4vc9Nwuj3tZD8gA9OiJ8ENRag/34/XldATuVIoOO2WzA6dMr4fHszL/iVpSc6YDw+6gRnIEktqSaHBf+/ZP+HhvvSvsXXjMzYxgYqNW1vj7R1ta2FHZ7EdxuE4bP/hgTL/5z9C8NS5aE/93T88WwWiXlkiXCSHcaR+f1hGQ9La6t6BYIPdvaxdvEUed/vwn2Vz8Le+ffKL44NJsrs33qcWNozhCGZiJS0ArPXX8KHP4rYOL91DzPQg/MkfQGaOmH9siRmpf3LriiXsmamRlDd3epWAWaH1opJmm4VQnOkVtStbcvg8tVpf3ecnYpf+/3V6V1dHRy0oW+vgrNNfuZaJ22/4WeY/8f3P/+Bfj/cTGCX/u4+r9txruEABxZnFJrr+Vdm9Ly7+DUVD+Ghup1jXi2ty+Dw1GOoaF6+P02uN0mnD1bEnXLNumXDJko/pdLpqb6MTBQG7WOROjahJaO+P02+P02ff9mn2pSzkJYf5vid5drmkkTQzMRaZq9Avi2A79dLg/P//EZ4MJW4fZEMTBHF2vLLOkH9l2bMluwjYiUwTliCnXkllShdvZsCYaHG8N3fHmv/N/CNBdgHB5uVJ1dERrxTMe0/3hGsa2vfRT2uo/B9YOPYuiR//L/t3d2sZob5R1/JYSK+gGoFy03RfSi0AtacVMpMpWK0iJa+sXXRZRKLVKFlVRCTaVIVEIISito1CpxkUr6QRTa0lJEBFKiNYdF+xGyPVk2bDicbBQtZje7G5JN4GTJbnK0Wbb06YVfv8cfM+OxPWOPz/v7SSMl76zn/D2eZ8Z/z3gsl/7op5qvnNxxq3qDxY/c7HRmvmyS286hbJLbTNyLLz4hFy7cK9vbt1jPpO632ejybv1tdbu5+TY3GxG++EL+8KX+KtOH3rNqN5hm0IJpBoBWrn9f5Dt/IfKt2szzY2/MTXVX85xtVwetj9zsR/d+ofhkVtlAx2+1f+cZAPxQX05dM86XLj0sJ0/epJ4x2/g52f7XX5QX3/fT1b0MPMyQ/uhHP5Qs+6TSnGxsvFa2t2/x/irCj398VXZ2jsiZM3fJ9vYtsrn5tk6z3A/e8wo5+fevlNMf/gnZ+eOfrKaP3yA7J+9ezTwOSbYmuZjxPHfu7sEmtqibrrPR9YcTxcZYRbp48cuVc5v6dZPi2+9tXwk4dOgNsr19i1y8+GU/n7U7f7r53fPlcv6N+77g/u95BtM8EphmALDmB4+L3PMr+TLt+tLt792eL+tuI9uubgbzofewm3MXsm029QIIiRbjLJLvrn3u3N3andCP/csr5MLn3+fcIFy+/C3Z2nq/0pweOfLLcu7c3a3fFffN7u6Tq03uHnnkXZPsFm+TyiZ5DPPZZza6azpw4FVeNxYsJ9Ny9gMHXiWPPPIuJw8gOnHia43VXC///utnd0+CaR4JTDMAdOLaVZGP/GG+MVhX84xhBoD9iIVxFhGRa1fl0mf/VLbueKUc+LLaPGxtvX/wDuZPP/15OXbsBqVBOXnyJu+fTHPBzs4ROXfubnn88ds6z0q7SBsbr10ZualnaEWas9E+N24bIz344FvC2K3/2tXKKxIXP3DjtHp6gGkeCUwzAPTirttEfvc1+Sep/uf1TfN8Pha5clTkpYfzdPo/Rf789SLxz+bpzreLvPDgXj7JPr383amvPgDU+ewnzMa59u3lH/3Oz8iFf7hBjj34a0pTUcwE234n++WXL0qWfVI5o3fw4OvMG5HNhPKstK905sxdk35eri+FqS6nLPtk5dzq3zP2NYOtSgcPvk62tt4vTz/9+TC//f78syJ33CoH//s/plbSGUzzSGCaAaA3/3VnfgP4jqV5/uabmuaZ5CedepPI2ZtEnr1D5IX7829tA8C01I1z8X171beX779ndVixk7XuXVbT7PClSw83PnNVpGPHbpALF+71814owD6EjcDWgkySaCGLxUIWi1hSy6MwzQAwiMP37W3q9Y7XiPzzb4g8EU1vKtc1nb0p35zt0hdFdh+dunUArB9141yaXZYbX51/WsqwL4Fpd+tDh96w+n74hQv3Kpdgu1riDbCOYJrXgDReyCJOG//dBqYZAAaz9VB1FiV+q8iT/yRy5mMid78xf//5734+30Tsqb8Vee4u0pB04YMi3/lNeyN95t0iT39Y5Af35Mu7AcAvdeNcpLtus97HYXf3SXniib9s/R5w3VAHufQVYCZgmvc9qcSLSJJs+b9ZIpHlbDOmGQCccP50dRfKm9/c/EQSn0dyz0sP52b4e7eLZO+0N9LZO/Njvv/pvIz/e3nqMwHYX5SN8x/8gsix/jfjzz33Fe2nqxrffQaA3mCa9zsNk1wz0QYwzQDgjOefzc1xfXYFwzwuu4+KPP+5fHb57E3TLxnfD+nMu/O6NKULH5x+FcI6p3N/0n6NuqzQKKdiD4G29L3bq5q+eavIwfeKnPsbJ+f4v8/8tTz/xHvlqZNvkece+y259tSHp6/3dUjFKp0uScfVx7uVc+mL05//GqXNr9052lDtCkxzFzDNABAK167mn5LCMIfF1cfzm6+LH89v7k+xaRuJRCKRSOV0+qFbpx6tO7OYWsCssDTNJ06ckAceeKCS7r///sZvJBKJNDSd+qs/k3O3vVs27vvC5FpI6nRk4zNy8vDHJDv2Adl55O0kQ/rx9i9NfjNHGp5e3vrV3m1gau0kEsl/wjTvdwKbad7Z2ZEDBw44LVPEj9azZ8/KxsaG0zJFRDY2NuTs2bNOy0SryIEDB2RnZ8dpmVtbW3L48GGnZYqgdU5aNzc3ZXNz02mZIn7ejVp3rUGPL9e/X1lWefmZr8rxQ4nz73Q/+tCn5bvf/pzTMn1pPXHkU/JM9iWnZT6TfUlOHPlUM2/ge/lOxsJrT9lpDbBev/vtz8mjD33audbjhxK5/MxX56318le7L/VdLtl/cfv35IeP/vbeEv6LH+9WzqUvzr5eN792p/MyT33jM3LqG59xXu6hr/zbsD5gAjDNnQhrI7Cgb2pqYETnpXXdzR1aMc3rrnVO4wta5zW+rLvWOfXZaJ2X1rmMLyJsBLYWhPTJqTndKMxpQEPrvAYJtM5H65wG33XXOqfxBa3zGl/WXeuc+my0zkvrXMYXEUzzmpBKvFjIYrGQheUss8i8Bl9MM1rnNEigdT5a5zT4rrvWOY0vaJ3X+LLuWufUZ6N1XlrnMr6IYJrBwNGjR2cz+B4+fFhOnTrltMzz5897GdAOHjzofEDzpXVjY0POnz/vtMyzZ8/KwYMHnZYp4meQOHXq1KwGtKNHjzotUyTXeuXKFadlzknr8ePHZzP4bm5uyvHjx52XOxetV65c8TK++BgLfWn1MRb6GrfnNBb60OprLPQxbs9pLPSpdZ3HQl9afYwvcxq3fYNpHond3V25fv2683JdB7KvMn2Vi1a0+ijz+vXrsru767xctM5H65z6bLTOp2/xVS5a0bruWuc0vqDVX3v1CaYZAAAAAAAAQAOmGQAAAAAAAEADphkAAAAAAABAA6YZAAAAAAAAQAOmOVSyRKLyJ62yRKLiU1dRIlnj3xafwYokyVS/L8Tyk9LTaNWVFaTWTJJor16jxkkEpLWtvqfWWskr12uAbaCcF3ps1fNUZQWpNfDY0rYBD7GlbWOmONHleY4tl1p9x5bTei2XGXi9+o4tb20glNgqHztSbLnUGWRcabS2/R6U1hDjSqM1xLgacn4TgGkOkuJb0EVDyf+/CMYsiWSxall5XvG/WRItj6v+LmnsyTS50FoqLfYZIG60pnHp5jlLJAq2Xtvreyqtqrw0Xij/Ozyt4caWOq+QGVZsadtAgLHV1gbcx5a+jZniRJfnN7ZcavUdW27rtZLvPLY8tAFvseWvDYQSW+Vjy3r8xZZLnWHGlVprKSeguNJpDTGu1FpDjKsh5zcNmObAyBvyQqI43ntC1HiylUpcBKYuL4mVMzgu250zrYXINJZFFHl5suhOa02zB5xpTVvqOySt9Xr18ISZ2CK2ZhNbqa6NmeJEl+c5tlxq1ZYVoNZKmR5iy2cbcI1LrW192SRaNX2Hz9hyqTPIuNLVabnMUOLK8vq7xqXWEOOq5/lNCaY5MLI0LT2xsmnstc6v0QjLxzi+sXeqNZMkUg2YgWkdIXjd1att2xhR65QG35XWhqYAYqu1fQQUW9ZtwD3u6tV/bFVZtrEkzNhypnWE2HKr1W9sOdM6Qmw50xpibEmfcTkgnbqypowro9bA4kqndXQzN6Rew4yr4ceMC6Y5VBpPZOvLKjRr/zVBkCWRvwBxoDX8rUcWAAAR+klEQVRLonwJ5KjvXfbQuuxo0uW/He991r5toL1tjKtVkzdmJzlUa1ovLoTY0ueFF1uavDjE2DLljRRbUmpjgT6QcqY105TlR+pgraPF1lCtyYixNVRr6UFwMLFVPWAS0zxIp64s9zKdaA0urnRax7wfHKo1/yHcuOp5zNhgmkPF8AJ/lKSlJ0b5TV3lnbtaJ+PvXVZXWlOJK++EBKw1jaubPXh7n9WBVou2Mb5WTd5kprmH1rRcVCixpcsLMbY0eXGIsaXLGy+2KmUHbpoHa800ZXlguNbxYmuw1mS82HJSr6HFVvWg0U3zYJ26sjwwXGuAcaXTOuL9oJN6DTiuep3fBGCaQ6V1aY3dzUfeED03toFao8YN6og39h21jvE+qzOtY84w2WrV5c1Ja4ixpckLMrZ0eSHGli5vpPbaaGMBm2YnWkeKLRdax4otJ/U6Umzt2/ZaPXBU0+xEp64sx7jQmsYBxpVGq/d3xV1qHfUBTzetvc9vAjDNoWLqLCwDwfssmBOte1vN19PoN8s29doY0Ce6se+ldSIjapVX0+bT4A3WGmBsKfMCjS1dnmYp2Ty0+rpZruswxYkuz39sudM68kxYb63jxJazeh0htvxpDSG2KgdbteOwdIYYVyqt+nvCaduqSqvq34QQV7Zaw4irQec3AZjmUDF0zNXt1/MgbSy5yBLx87kWD1q1ZYWpNY3ry3HGMHd9tFrU9+ha9XmjfWJgqNYgY8uUpyorTK3hxZYuz3NsGdpYcJ+ccqnVd2w5rtdquY7bqoc24C22nGoNM7aqx+/p8RZbLnUGGldKrTa/B6Q1xLhSaw0wroae3wRgmkOl3lks351QvsBfefKdN8D8+3YTzTB11GosK0it1Y/Zj7NZUU+tbfU9hVZtXvkpcyBtQJEXbGyZ8lRlBak1wNjS5XmMLXMbM8WJLs9fbLnU6ju23NfrEg+x5V6rv9hyrjXI2Cpr8x9bLnWGG1dNrVa/B6U1xLjSaA0srgaf3wRgmgEAAAAAAAA0YJoBAAAAAAAANGCaAQAAAAAAADRgmgEAAAAAAAA0YJoBAAAAAAAANGCaXWDaoS703aP7aC3vJjvmjsx9tNa/qanaVTgErZU63UuR68p1Xae+6nOI1hB2ju6jNfS40u4cHWBcFXljxZULrW3HONOo2um1vANsPU5MeeIvtlxq9R1bLrX6ji1XWseILV/1GkxslY8NPbY0moKMLY3WIGNLoTXY2FJorZfl854wADDNgym2RS9/87P2LbTKNz/3GmfzO2n1sgLUWv+umrdvqTqq1zQe4ftuLttA8c981KsLnaZjptWq1xReXDXyAo4rZV6gcdXaLoOuV9+xVY3pvC5Knyjs9Y1iX7HlUKv32HJcr15jy0cbKJcVar2GGVvlY/Wf4wojtpSaAo0tpdbi+MBiS6u1kh1yvY51TxgGmOYB5EZiIVEc1z4iXzfCy07FkKcsK1CtVXS/h6G18uF5D/ip11qHFpLO1LZdBKCVuPKmlbjyoNV3bKWx8pvYcVr7OxV9+jyvseVYa63woOvVa2x5q1cPseVSq3W/O6ZWfQyFF1u2msKu1/Biy6ZeQ4mtHmPdPgTTPIAsTfNGV240xgZUNMwia6/hKssKVGul3CRyvhzDndZMkshv8Pqo16DrdIQOsrNWk2kOLa4s6y+INqDNCzCuLOrVR5061TrCA6kqy5uxJMzYcqm1jK924Ear/9hyp3WvFP91OlBriLEl+hgKLrYsNQURW1qtAcaWVusewcSWTiumGTrTeNJZX9aqeV9g8ncvB2hdvcMw1ruXfbTmwRut3s8IWWs1z9vqFid1ajpmCq0WmoKJqxatQcWVLi/EuLJry15XjTmp15Fiqyi/7UGYzQ3RCDf2TrSOEVuDtY4YW4O1rkrxH1uDtQYYW9UD1DEUSmy1aQoptrRaA4wtrdbVj+HEllbruLE1NZhmFxheio+StNTo88ZVWfuv7HzGurkfqFVE/L0j6EBr/X0bSSUOVauunBB1ao+ZSquFpmDq1UKrSCBxpclLQowrmzzPMzYutI4UW814Dtc0O9Uq4jW2BmtNx4stZ/U6lrEbqjW02KoeNIlpdqpVJIzY0mkd8X7QWb2GFFsmXWPdEwYAptkFxoYd1g2IU63G39HaR6v3TRT2Y53a5IUSV9Z5M6nX1mMG4kjrKJuTzKRe85skk+kJZ8xyrtX4O1r7aPUdW/u2XqsHjm6anWs1HYPWXlqDiq0WrdJ2zD4B0+wCUwNqPOkK2DR31Wr8Ha19tPreYMl5nfpsr7ZabfJCiSvrvADaqnVe+Fq9x1VHPVZ5HtqsesWQaebQYlbRU2x50ar6d2gdpNVnbHmr1yBiy0JPMLFlqymE9rp/tIYVW2atVnn7AEyzCwyddnXL9vz9hHCWZ/fQWl9+kyUSjfKN1n2utZQ37nuXXXWajplKq4WmYOJKkxdkW90HWvNCxlkuNlir59hqLE/cY9DnhnzElkutvtvrumrNC/T8eo4rrWHGVvX4kUyzS62BttfZa81/CC621FpHvCcMAEyzC+qNvfxhcu0GWpqNCMaeEeuhtXjR3/jxc7T2aAMjLGtxodN0zFRa2zSFFFeavCDb6j7QOtpyMRdaPcZWGi9K12wvlfcwUF9PU57ivAPU6rO9rrNWn7HlXGuQsbVkRNPsWmuY7XX+WsOMLY3Wse4JAwDTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wxQJ0skWixkUaQokWxqTZJKXNa0WEiULFVliUSLWNLyP6+fQ5yqCm3+u1WqlRcsqcSLSJIOFyiNFddVWw/dylaiuj5OySSJdO00bzfR4JOYAbo233Ztba9PGjfbQ3GsqQzv13+ueOrTKv+eel+xrL9GX+C6nkzXadJrkveTjWbTW9Oy3+3SJpXFjFAnmj5w9HGBmISZg2kGqJPG/QY/XywHvKqkkhmqD0RpXDO9y8FddU6aQSyNWx4WBDP4dTXNmn+vOx+VUQoStTnOkiiQhz6eMbX5tmub2rTl5Q13HKtNgI1pDiZmAsBnn1Yqaz4P/0ZgZZxUDyMc1VPbddpHpjmN6+2vrU1OiPIcJ3ygSl8IMwXTDFAjjUOamcsHYqUe5c14PhCqbww6mMW2QS2YQa+jae58vpobrRCp37Dqrvm+o6XNa03x8tomFm1ZZ3wxzT3w26dlSZTPosUx9V1mWadJElXr3lm7tLhO+8Y0d3z4OjXGB4cT6A21ngBawDQDVMgkidqNRvMp8/JmLU6luuywNjCkcXM5V5ZIFMUSRz1nAcr/pusgaGMiG5rj0vmV68pw3lo0x5Ru8BpLycp64lhvmitL0grztHce1UkCC9PcuE417Y0yNKasrkt1M6mtf3Pb3GuXKmPisF2GRFubb7u2FqZ5L7ZrD9WsTbNuyb/qmpR11a5HfRloh7YRDJ77tCxN85UVhr9j7r9FtLEy5zhZ1UcmSaTpawx9k7IvLmNznYq/VarHvcug659Kv8eJoU9tuU7l1SLl82i0E5txzGJWWddWVDPxlfrX1HUl/pO9ccmmD9DGQtn86857eU+UxLX6FHV7aZx76XdTXzjHvgzWDkwzBMcPX7wqR7bOj5aq5INIFHUdhApzVX2aXV0eW3sSX1keqpnNTOP25bX1G8wuy3FNy7NLDwDUmlXnrzpv7R/XH1N//251Q1bVk88qqa6RSrfB3Ng8ia8sKVVpz2+cV38zSySKEslMs2Y6Xav/r81otF7f5ZK7qF7/jtulisdPiGw9NE66WIrbtjppu7atJs5wDQbNNOuuSf0d9eXNbOVvRpJkXdvGHru7T8rOzpFR0uXL32rWu88+TVVGa175Wuiui6M42X1U5KWHx0nXnlKfc/kVpEpfo+ubVH1xDevrWn/oUxh5fSzUH5iaTbPmOmXquKqW1WUcq72TX2kAZg2VMWJRN822495C4tSyD2h9KGw675qxL8aYJFG3l179Zf++DGBMMM0QHEe2zsvi7Z8YLVVoLPlLJbZZtms7GFRY5qWGZbSKwWO1kVVlBnWIae6yQUhZs+FJv/G8LY6pX4fyDEXl/GyXyWl0t9RD8ym5bplhXn4c781WZcUyyMZMjoUu3Y2sDaYNq9rqraGpwxP/m98scuOrx0mfLcWtlWk2XNs206xsc6XVB31Ns/aa1JeR6v6/R9tYcvr0R+WBBxajpM3Nt7XUp+M+bVVNpuuq6b+Vx+lipWecnP51kcfeME567i5NfZRWVLWNXfXzMz2EsjLNirKs+2vT6h3dtdbFVbF3R9Tj2qv+hso8N8spr2jIkqj6GkGnca9DH9B5tU35vJv1lpvqSHOMQZPxes/kNShYazDNEBxPPvuCfPTfvz5aMlMyQ7VBsTH4rQxSm/Ey3CDWsbkZqN9gDlmeXZlN7aC57by1f9vSyJSXrdmY5sZNRstS3K5LRnXa0+XssuqmtIsuxcyJcll5m87Kbw7bpYr7/jE3s2OkrYf2/m7v5dk2+YodclXLLXubZtU1sTXNIp3bxpKdnSNy+vRHR0kXLtzbob4d9Gmav5Ml1T5c2X+vjjP1SwPj5Af35GZ2jPTSw/p6zxKJym24R99UqdPyjKnlNanGhqY/7WOalcuALcxfn3GscX6GtlL8Xh4jyudoPe517APalmenpvNWvAteLKXuqsnYX/brywDGBNMMYKRtRq5YWmYxa6WcxW676TJsmqM8XvfE1rRJS+1vl2cqbTXbmM7GqXV4WDDKTHNX06z+92lcNs9tx3Wszy7vDdqeX692GRItbb7tneVOy3jLv5fqyMlM8yqjg2kun+5Em/p0xnOftvozbe1X0X+bjpt7nCjOK41L8TG0b7K5TkbTbNMvW5hm3XXSzDQ3Z3otrqU21sr6VBqKw0tjhGl8aJ1pttTVNp50WZUhbTPNBk02DxlN5wEwMZhmgDKqHYgNS85WNx2193+Uy/5qZedLEi1uupZPrKs3mcUMWPP45nu+hu/4agav1SenjJqbf0N53lo6LJHULFf2/k6z9t+0XWfdN2c1upTnVeitb5bSwzT7aJcBYWzzA2aaVRtGlfNWN9zWptkmZixNc/3GfE43mj77tMrfMNdHs//eK7txXeYeJ8YVKM0+qH2/BdWfaLlO2rLMsdB4pznV9Jdl3avTqM401/fNML3T3PZgq97+Vu8CazWU61axEVmnca9DH2CY2c3r1nTemnfB60vDK+1Fo0nXF/YZ5wAmANMMUKO65Kyl414N4pUfNbtLV5d6Rklq/8kb1TLRxkYuTV3qTUoqJ2ucNSh26WxoTvf0qHc/LT9Vb3tHWrdc2DSTUOhJ7HfPNq0E6GyaDdpXM1imc2keV253+XlVTbj1UsG2a+q0XQaErs33Ns0t7zOu/p6laRbbmOkw0zzrHWc99Wmr4i3ar7L/FjFdl9nGiaY+KobTps+0miXUXCdjWab+dPl7abNFbX+pu07FZledds82x1T1XfyysdRpKP8NhVG2HPcqX42w3j27vvy6231Lo94a5TYfCujHdUVfOOu+DNYFTDPAEPosS143skRiRkAACA3675mheTVh7bDdoMwF1DlAAaYZYADVb3uCiiyJeWoMAMFB/z031tTATbp8eU3rHEABphmgD5V3wQAAYDbQf8+U9TVw1dfGxly+vL51DlAH0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoAHTDAAAAAAAAKAB0wwAAAAAAACgAdMMAAAAAAAAoOH/AX3iha1R8b0uAAAAAElFTkSuQmCC" width="640" /></p><p>Back in 1981, all was wonderful. Savings accounts, 5-year and 1-year GICs issued by the major Canadian banks all paid interest rates comfortably in excess of inflation. </p><p>Suddenly, in 1994 savings account rates dropped substantially to derisory amounts, well below inflation, and they have never risen within shouting distance since. </p><p>1-year GICs held out till 2002, when they more or less matched inflation till 2009. Ever since 2010, they have paid appreciably less than inflation.</p><p>5-year GICs have resisted the best, staying consistently above inflation till 2010. It has been a cat-and-mouse close call since then. <b>The 5-year GIC is really the only option left that more or less provides both rock-solid safety and reasonable inflation protection</b>.One way to invest is to build a ladder of 5-year GICs. Every year, when there is cash to invest, buy only a 5-year GIC. Discount brokers offer a selection of GICs that pay higher interest than the major bank GICs while benefiting from the essential CDIC guarantee. The downside is that your money is locked-in for five years, though there are cashable versions ... but then you get a lower rate and pay a big interest rate penalty if you do cash early, which negates the whole advantage of the five year rate. After five years, the oldest GIC will mature and it can then be spent, such as a retired investor like me might do, or re-invested for the next five years.<br /></p><p><br /></p>CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-31932605285549219252018-05-08T09:15:00.000+00:002018-05-08T09:15:44.090+00:00Vulnerable Investors / Elder Abuse report proposes Walrus Should Help the OystersFAIR and the Canadian Centre for Elder Law should have taken the advice of the eldest oyster in the <a href="http://aliceinwonderland.wikia.com/wiki/The_Walrus_and_the_Carpenter_(poem)">Walrus and the Carpenter poem</a> from Lewis Carroll's timeless classic book Alice In Wonderland. Instead of listening to elders however, they have adopted the role of busybodies delivering investors further into the hands of the main perpetrators of elder abuse, the financial "advisor" industry.<br />
<br />
Why is their <a href="https://faircanada.ca/whats-new/fair-canada-ccel-issue-joint-report-vulnerable-investors/">report on Vulnerable Investors</a> so problematic? What could be bad about asking securities regulators to force the investment industry to prevent abuse of "vulnerable" investors?<br />
<br />
#1 <b>Absence of <a href="http://www.thecanadianencyclopedia.ca/en/article/law-of-fiduciary-obligation/">fiduciary duty</a> by financial advisors</b> - For the vast majority of investors (the exception being the minority who have turned over discretionary trading power to Portfolio Managers), financial advisors do not have to put the interests of investors only and strictly above their own interests. Almost all financial advisors are in effect salespeople who only have to abide by the weak suitability standard. Why would we want to trust them to suddenly begin acting for the best interest of investors who in addition happen to be vulnerable? It's a bit like being worried about foxes (untrustworthy family members or false friends) abusing the chickens and asking the wolves (financial advisors) to do the protecting. Is it not the case that there are far more instances of investors being hard done by the investment industry than by family members abusing their Power of Attorney (who do have a fiduciary duty)?<br />
<br />
#2 <b>Can of worms definitions for "vulnerable", "exploitation", "diminished capacity", "undue influence" and "abuse"</b> - Beauty is in the eye of the beholder, goes the expression and what these terms will mean in practice will depend on the interest and intent of those taking action, in this case investment firms. Regardless of whether this motivation is well-meaning or not, instituting powers recommended in the report will launch a whole new legal cottage industry of interpreting those terms. First the lawyers create a problem, then they solve it.<br />
<br />
Take the word vulnerable, for instance. It isn't being pedantic to say that everyone truly is vulnerable at all times regarding investments. Despite my years of financial blogging, my formal education in finance, my considerable (my wife probably would say excessive) interest in investing and my decades of experience self-managing my own portfolio, I am keenly aware of holes in my knowledge and weaknesses in my character that have the potential to cause me considerable financial harm. Others in my family, intelligent people and quite competent in their occupation, are consciously completely ignorant of the most fundamental aspects of investing. They are highly vulnerable to financial foxes and wolves.<br />
<br />
Investing is complicated enough already. Why then make it even more so by adding a whole new domain of legal considerations, nominally well-intentioned though they may be? The clearest kinds of abuse such as stealing or fraud are already covered by laws that apply to everybody, vulnerable or not. The financial industry is already free to report suspected cases to police. The police are also more likely neutral than the conflicted broker industry. It is disingenuous to say that the police are poorly-equipped or under-resourced to deal with abuse cases and that therefore there should be a big additional resourcing effort in the investment industry. Keep it simple - put the resources and the task on the police who people know are supposed to stop or catch the bad guys.<br />
<br />
#3 <b>Nefariously under-mining individual responsibility and expanding the culture of victimhood</b> - The whole philosophy of labelling elders as weak, fragile people that the nanny state must step in to protect insidiously undermines the message that every adult must take prime responsibility for his or her life. That includes planning ahead for potential incapacity e.g. i) by re-structuring investments to be <a href="http://howtoinvestonline.blogspot.co.uk/2014/06/the-reluctant-investors-lifelong.html">ultra simple</a> or by setting up automatic annuities for income in place of investments, and ii) by putting in place powers of attorney in the hands of individuals who are both competent and trustworthy. It means cultivating family and friend relationships so that someone is actually willing to take on a job that is often onerous and time-consuming (sometimes the real elder abuse is the elder doing the abuse of younger people making unreasonable difficult demands - one of my relatives comes to mind, someone who refused for over fifteen years to accept sound financial advice, spent all of her liquid investments to fund her chosen lifestyle and then went to the bank for a loan - really! in terms of her best financial interests this was clearly abusive for a woman over 90 - and then refused to grant power of attorney to anyone while still mentally competent but now is incompetent, complicating things for my sister who is trying to help her, while being accused of stealing things by my aunt!).<br />
<br />
A person must take time out from planning the next holiday or researching the best car to buy to think of the future. Understanding that if you do not plan ahead bad things are likely to happen. In that regard, several of the case studies of abuse in the report display elements of people failing to mind their future when they were of sound mind and had the chance. Other examples smack of people being stupid and wasting their money .... but everyone has the right to spend their money wastefully, no? Who is to say whether it is wasteful, anyway?<br />
<br />
Being now officially a senior, allow me to repeat, the eldest oyster's comment (sourced on the <a href="http://aliceinwonderland.wikia.com/wiki/The_Walrus_and_the_Carpenter_(poem)">Alice in Wonderland wiki</a>),<br />
<blockquote class="tr_bq">
<i>"The eldest Oyster winked his eye,</i><br />
<i>And shook his heavy head--</i><br />
<i>Meaning to say he did not choose</i><br />
<i>To leave the oyster-bed."</i></blockquote>
CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-47775244200531646432018-04-13T15:50:00.000+00:002018-04-13T15:54:39.613+00:00IIROC - Shafting Self-Directed Investors by Fixing What Ain't Broke at Discount BrokersGrrr! IIROC, please leave us alone! With friends like you, self-directed investors don't need enemies. Despite receiving many <a href="http://www.iiroc.ca/SitePages/Comments-Received.aspx?linkid=1161">objections and warnings from both investors and discount brokers</a> (such a convergence of views sure doesn't happen often!) against measures that will make the discount broker business more complicated and costly to the detriment of investors, the regulator IIROC is ploughing ahead with a <a href="http://www.iiroc.ca/Documents/2018/54DF3AA0-06D8-48FD-8E93-CE469BE1C650_en.pdf">revised Guidance</a>. <br />
<br />
What kind of bad things for investors are likely?<br />
<ul>
<li>disappearance and future restriction of many useful useful tools like model portfolios under the pretext that this is making recommendations aka providing advice, which the discount brokers are not allowed to provide; I would dearly like to see a (good) risk assessment module attached to the model portfolio selection tools but this probably won't happen now</li>
<li>rising fees or commissions charged to investors as the brokers are obliged to provide more complicated vetting procedures to ensure investors are only allowed to open "appropriate" accounts</li>
</ul>
As I said in <a href="http://www.iiroc.ca/Documents/2017/1e13378c-b5e7-4f48-8c19-fce21995697f_en.pdf">my own comments to IIROC</a> over a year ago, the history of the discount brokers over the two decades during which I have been an active investor with a bunch of them (BMO InvestorLine, TD Direct Investing, Questrade, RBC Direct Investing) has been pleasingly positive - low trading and administration costs, broad and steadily expanding product availability and services, responsive people when when a few administrative issues arose, impressive and widening range of useful tools, reports and educational material. In all those years I have been a client, the worst negatives have been the too-high rates charged for foreign exchange conversions to invest to or from US markets; the not-great pricing, and inventory at some brokers, of bonds; the restricted choice resulting in the not-best-in-market rates on high interest savings accounts for idle cash and; for those who unlike me bought certain classes of mutual funds, the embedded fees for advice collected by the brokers despite not providing any advice.<br />
<br />
Overall, the discount broker business has been a shining bright spot for individual investors unlike too many other sectors of retail financial services where high costs and abusive business practices have severely gouged into the savings and investments of ordinary Canadians.<br />
<br />
The treatment of investors by discount brokers (termed Order Entry Only / OEO by IIROC) is not broken. It is very suspicious to say the least that IIROC has steadfastly refused to release its own research of 2013 (yes, they have taken that long to look at this) and 2015 into the investor experience with discount brokers. Where's the abuse, where's the damage to investors? So why try to fix them? One wonders what is going here - bureaucratic empire-building within IIROC with un-necessary make-work regulation based on a theoretical issue that is not one in practice? a put-up by costlier advice-based services to cut out a very competitive channel and drive investors back to the fold? I don't know but the purported investor-protection motivation doesn't wash.<br />
<br />
The nub of the issue is simple: due to the transparent fundamental relationship established at the outset that discount brokers do NOT provide advice (which is manifestly clear in the term Order Entry Only), anything that they provide is to be considered marketing or sales promotion. Some of it is junk but much of it is useful and we are all free to take or leave what we want. The notion of IIROC trying to protect me when there is not a problem is patently ridiculous and worse, likely harmful to me as it pressures discount brokers to restrict future services and to charge me more. I'm just fine, so get lost, IIROC!CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com1tag:blogger.com,1999:blog-5433839636644874439.post-36895594883234967512017-02-26T15:18:00.000+00:002017-02-26T15:19:32.019+00:00Book Review: The Essential Retirement Guide by Frederick Vettese<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwhyPqnMo3uv4p9hHGXV0QKOwOe-prTNSQunVY5wLRuh3FiHvxeQTL06hpcnkGYhF4CwpzhA1yp-yQQLtrlU_aOWU5zjTHd3C2e2CxnyUWRqNl5x8eORlZJViRVAYeASIyDNR-N3-RhDg/s1600/Screenshot+from+2017-02-26+15-13-59.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwhyPqnMo3uv4p9hHGXV0QKOwOe-prTNSQunVY5wLRuh3FiHvxeQTL06hpcnkGYhF4CwpzhA1yp-yQQLtrlU_aOWU5zjTHd3C2e2CxnyUWRqNl5x8eORlZJViRVAYeASIyDNR-N3-RhDg/s320/Screenshot+from+2017-02-26+15-13-59.png" width="213" /></a></div>
<br />
This book (available <a href="https://www.amazon.ca/Essential-Retirement-Guide-Contrarians-Perspective/dp/1119111129/ref=cm_cr_arp_d_product_top?ie=UTF8">here on Amazon</a>) makes a valuable contribution to the individual investor's bookshelf. It has some unique content on some extremely important topics like the frequency of health problems and their potential costs during retirement. It also provides a lot of common sense on the issues of how and how much to save for retirement, including the old bugbear rule of thumb on what percentage of working age income one should aim to replace in retirement.<br />
<br />
The "Contrarian Perspective" in the book's subtitle is not explicitly stated but I would presume arises from key points that depart from the mainstream of advice, namely:<br />
<ul>
<li>the <b>70% income replacement target is far too high for most people</b>, especially the middle income earners who are constantly being hectored to save more to stave off retirement disaster; author Vettese makes a pretty good case too, showing with examples how major portions of pre-retirement expenses usually go away, such as mortgage payments, child raising expenses and retirement saving itself; instead he says, reasonable targets that maintain lifestyle are often closer to 50%; he usefully provides enough detail to allow readers to figure in variations for their own circumstances.</li>
<li><b>retiree spending declines with age</b>, and at an accelerating pace, after age 70 or so, such that maintaining an inflation-adjusted constant real return overdoes the need; furthermore, he cites sources explaining that this decline is due to falling interest and capability to spend; thus, he believes that inflation at the government's 2% target rate is not as serious an issue as commonly stated.</li>
<li><b>buying an annuity</b>, which only a tiny minority of retirees actually do, <b>is a wise move</b> to counter the risk of out-living your money if you do not have a defined benefit pension plan, which fewer and fewer people do.</li>
</ul>
The above is good stuff that has been said elsewhere, but <b>the best content in this book is</b> a topic of huge worry to retirees that I have never before seen treated in any kind of depth - <b>the material on retirement health patterns and the costs thereof</b>. It's a top of mind topic for all retirees but how significant is it in fact? I have been trying with great difficulty for some time to dig out hard facts about this and I can say that <span style="background-color: #b6d7a8;"><b>the book is worth buying just for the 40 pages devoted to health</b></span>. The key health issues are addressed:<br />
<ul>
<li>How long will you live and how much of that will you likely be healthy?</li>
<li>What are the most threatening health problems or diseases during retirement and how likely is it you will need to go into Long Term Care (LTC)?</li>
<li>What is the cost of LTC and what are the odds for average years in LTC and worst case?</li>
<li>Is it worth buying LTC insurance and might you be ineligible anyway? (which I discovered is my situation so I don't even need to fuss about LTC insurance)</li>
</ul>
Ironically, given the fact that Vettese is an actuary, <b>the weak part of the book is the treatment of investing leading to and during retirement</b>. Probably this is the result of the book's aim to address both Canadian and US audiences. There is mention of, but no in-depth discussion of types of accounts like RRSPs, TFSAs or the appropriate types of investments for each account and how this should change after retirement except the sound, but general, advice to buy annuities. Chapter 17 confusingly misconstrues the 4% withdrawal rule, ignoring the original formulation by William Bengen as a constant real (inflation-adjusted) annual withdrawal based on the portfolio value at retirement. Vettese instead states it as 4% of the remaining annual balance. The effect of Vettese's version of the rule is of course that you will never run out of money. Mathematically, taking any percentage less than 100% out of a portfolio will always leave something though at higher percentages the remainder gets awfully small. Even at lower percentages like 4, 5, 6% you will face quite significant reductions in spending in larger down market years, which goes against the objective to maintain lifestyle spending.<br />
<br />
There is also no discussion of the dangers of poor investment returns early in retirement, termed sequence of returns risk. This is a critical risk (see <a href="http://howtoinvestonline.blogspot.co.uk/2014/05/why-retirees-need-to-be-more-concerned.html">this simplified example</a> of how much sequence of returns can influence outcomes), one that finance professor and pensions expert Moshe Milevsky has found (in his book <a href="https://www.amazon.ca/Are-You-Stock-Bond-Financial-ebook/dp/B009EC7K0S/ref=sr_1_1?ie=UTF8&qid=1488120959&sr=8-1&keywords=milevsky+stock+or+bond"><i>Are You a Stock or a Bond?</i></a>) to be more important than inflation or longevity as a threat to successfully living off a portfolio during retirement.<br />
<br />
<b>Bottom line</b>: This book is not the complete answer but it is well worth buying. Four out of five stars.<br />
<ul>
</ul>
CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-10134874323510895032017-01-16T11:38:00.002+00:002017-01-28T12:39:46.945+00:00Suitability of Investments: Why it's so complicated but doesn't need to beThere is much on-going controversy in the financial advice industry amongst regulators, so-called and real advisors and their firms and consumer advocates about the current suitability standard for recommending investments versus a possible best interests standard.<br />
<br />
There are three main issues:<br />
<div>
1) suitability definitions (e.g. <a href="http://www.iiroc.ca/Rulebook/MemberRules/Rule01300_en.pdf">IIROC Rules</a> or <a href="http://www.osc.gov.on.ca/documents/en/Dealers/ro_20131204_kyc-suitability-obligations.pdf">Ontario Securities Commission requirements</a>) for investment industry salespeople are meant to stop abusive practices. Most often this involves putting clients into highly risky, high cost securities. This issue accounts for 99% of the whole suitability vs best interests debate.</div>
<div>
</div>
<div>
2)
suitability for someone like me, a reasonably informed self-directed
investor (who thereby has no ethical conflicts), equates to the best
interest standard. The only thing that's suitable for me is what's best for me. ... But <b>it still leaves a very wide possible variation
of investments</b>. I could probably ask three highly experienced,
completely ethical true financial advisers to tell me what investments
to make and I could probably get three very different answers. This
reality shows up in the definitions - beyond the words
about Know Your Client and Know Your Product, <b>the regulatory definition </b><b> of suitability is still either circular where the
word suitable itself is repeated, or it says something vague like "must apply
sound professional judgement"</b>. That's because there is no single correct best answer even when you take into account risk tolerance and risk capacity, short and long term objectives, complete financial circumstances, including taxes and so on. The world, and life, is too uncertain to be sure you have what will turn out to be the best answer. I can say that things get even more
complicated in retirement when additional factors become as or more
important than the investment portfolio, such as future inflation,
unknown longevity, other products like annuities, unknown health, mental
decline, account choice for holdings and withdrawals (TFSA, RRSP, RLIF, regular), CPP and OAS changes by the government. If you don't believe me, peruse the <a href="https://retirementresearcher.com/">writings of Wade Pfau</a> whose research seems not to (yet?) have uncovered, after probing many suggested approaches, a right answer on how to organize the investment side alone. For example, see <a href="https://www.mcleanam.com/3-ways-incorporate-bonds-retirement-strategy/?utm_source=hs_email&utm_medium=email&utm_content=41514620&_hsenc=p2ANqtz-8asn7qn5trxV9yBHhU8s7g8Y_Gxkb-d09115ICkd7lwmq1kzD2KuQPQLO972f_C3QMhQS3wrEOChXOEmXzs26rVULoEg&_hsmi=41513888">this discussion</a> of three ways to incorporate bonds in a retirement portfolio about which he notes "<span style="background-color: white; color: #676767; font-family: "Open Sans"; font-size: 15px;"><i>Scholars and practitioners have numerous disagreements about the best way to incorporate bonds into a real-world retirement income plan.</i>"</span></div>
<div>
</div>
<div>
3) <b>suitability can and should also apply at
the portfolio level</b>, not just individual securities, funds or ETFs.
Asset allocation is a powerful risk mitigation tool that works at the
portfolio level. Thus, robo services that propose and actually implement
collections of ETFs with rebalancing rules should not have to apply a
suitability judgment against individual ETFs - a more volatile
emerging markets ETF as a minor portfolio component with USA equity and a
bond fund can reduce overall volatility and that would make it ok even for a conservative investor. On its own, it would probably not be ok however.</div>
<div>
<br /></div>
<div>
When all is said and done, I believe, for example, that <b>a low fee balanced equity - fixed income fund</b> (such as <a href="http://www.theglobeandmail.com/globe-investor/investment-ideas/simplicity-of-the-one-minute-portfolio-is-delivering-great-returns/article33621992/">Larry Macdonald's One Minute Portfolio</a> or our similar <a href="http://howtoinvestonline.blogspot.co.uk/2014/06/the-reluctant-investors-lifelong.html">Reluctant Investor's Lifelong Portfolio</a>) <b>is suitable
for everyone and anyone, of whatever age or financial circumstances</b>. Why? simply because it is not unsuitable. The
anti-definition is best >> What is suitable? = Anything that is
clearly not unsuitable. </div>
<div>
<br /></div>
<div>
<b>Eliminating the Unsuitable</b> by avoiding dangers<br />
In practical terms, a default automatic suitability pass could consist of individual securities, mutual funds, ETFs or portfolios with all of:</div>
<div>
<ul>
<li>no leverage </li>
<li>no use of derivatives </li>
<li>low fees, for example under 0.75% MER</li>
<li>diversification, such as individual mutual funds or ETFs with holdings of 50 or more individual securities</li>
<li>avoid over-concentration by holding less than 10% of total portfolio value in individual securities, which also must be listed in the TSX Composite index, or S&P 500</li>
<li>fixed income (individual) with ratings of investment grade or funds with no less than 70% investment grade holdings</li>
<li>portfolios (such as robo advisors provide) of equity combined with fixed income where each of the two is limited to 30% to 70% of the total value</li>
<li>minimum liquidity characteristics, an exact number for which I cannot suggest but would be based on trading volumes in a public market</li>
</ul>
It's quite possible that other securities could pass the suitability test - indeed one of my favourite and highly suitable funds is BMO's Low Volatility Canadian Equity ETF with only 46 holdings. Such alternatives would need to have more justification as to why they are suitable e.g. low volatility is very beneficial for a retired investor to reduce sequence of returns risk (a large market drop early in retirement combined with portfolio withdrawal causing an irretrievable reduction in the portfolio) while retaining the equity exposure. <br />
<ul>
</ul>
</div>
<div>
Such a restrictive approach to suitability as the above makes investing simpler and allows the focus to shift to the other elements of financial management for individuals, which is where it should be.</div>
CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com3tag:blogger.com,1999:blog-5433839636644874439.post-35693916535722295382016-10-26T17:22:00.000+00:002016-10-26T17:22:33.230+00:00Work for your passion or for money? Recommended reading: "<i><a href="http://qz.com/819233/do-what-you-love-is-bad-advice-work-for-money-not-for-passion/">Don't do what you love for a career - do what makes you money</a></i>" by Catherine Baab-Muguira.<br />
<br />
It's a timely rebuttal to the rose-coloured glasses view that you should follow your passion and only work at something that you love. Baab-Muguira is right with respect to 99% of the population. No job is perfect and no job is without considerable hassles. Very often one discovers that the "passion" fades. Circumstances can and do change. Let's face it, humans are built to be adaptable. Almost all of us are not so gifted at anything that our legacy to the world and our happiness is uniquely tied to one job, occupation or career.<br />
<br />
My wife is a perfect example of what can happen when you start a job for money. While in secondary school she wanted to study languages and possibly be a translator. The family situation did not permit this and she was obliged to go into something practical, which would help support the family (this being the bygone era when kids were expected to contribute financially as soon as they could work). That undesired, unsought occupation was teaching. Guess what, by determination and hard work (e.g. taking extra courses necessary for advancement while having two children) she got really good at her job. So much so that she rose to become principal of a primary school. She also learned to love the job. So much so that she worked on for a year and half beyond the age at which she could retire with full pension. And the languages since she retired? Nope, she has not gone and done it. She's more interested in our grand-children.<br />
<br />
Retirement is no uninterrupted orgy of selfish passionate pursuits either. The phase of not being able to do whatever the heck you like never arrives, not even in retirement. You can do more of what you want to do and less of what others want you to do with financial independence, but as long as there are other people around, starting with family, and extending to whatever groups you belong to, the mix of good and bad, success and disappointments, is always there to contend with.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-50643321315020018502016-05-21T00:45:00.002+00:002016-05-21T00:45:30.570+00:00Fraser Institute Trying to Damn the CPP with Faint PraiseThe Canada Pension Plan will generate only a 2.1% real rate of return for Canadian workers starting out today, concludes <a href="https://www.fraserinstitute.org/sites/default/files/rates-of-return-for-the-canada-pension-plan.pdf"><i>Rates of Return for the Canada Pension Plan</i></a> (May 2016) by Jason Clemens and Joel Emes of the Fraser Institute. Therefore, we Canadians seem to be invited to further conclude (given the Fraser Institute's past attacks on the idea of expanding the CPP), that's a very poor investment and therefore a good reason for Canadians not to support expansion of the CPP.<br />
<br />
Telling half the story truthfully is a sly way to debate an issue. Clemens and Emes appear to have crunched the numbers properly. Here's what they forgot or neglected to say.<br />
<br />
<b>2.1% compared to what?</b> - For CPP to be judged as poor, it needs to be compared against a realistic alternative that covers both the savings phase and the retirement phase of life, such as an RRSP and a life annuity. I <a href="http://canadianfinancialdiy.blogspot.co.uk/2015/05/canada-pension-plan-vs-rrsp-which-is.html">calculated and posted such a review</a> in 2015 and found that the relative attractiveness of the CPP varied enormously according to whether the person is a man or woman, single or married, and self-employed or an employee. Married women employees benefit most from the CPP, enjoying the equivalent of a prospective lifetime guaranteed real return of 5.1%, while single self-employed men would get only about 1.1% return. The biggest difference arises from the fact that employers pay half the contribution on behalf of employees while self-employed pay the full shot.<br />
<br /><b>Managing investments yourself vs Total auto-pilot of CPP</b> - It's easy to say you can beat 1.1% or even 2.1% real return investing money in an RRSP yourself without breaking a sweat but consider:<br />
<ul>
<li>Will you with absolute regularity for 39 years without fail save out of your income to accumulate investment funds like the CPP imposes automatically, or will you like most people find a more pressing use for your pay, especially early on in life, and only start to save seriously when the reality of retirement stares you in the face? Starting to invest late means needing to achieve much higher returns since you miss out on the power of long term compounding.</li>
<li>Will you then invest wisely, maintaining a sensible strategy of diversified low cost funds, or instead like most individual investors, buy return-sapping high-cost funds that are offered by salespeople disguised as advisors, or chase returns and hot ideas that only occasionally pay off? Will you properly compare the riskiness of your portfolio, probably containing a lot of riskier equities, to the lowest risk triple A guarantee of the Government of Canada? To be comparable risk, you would need to invest in Government of Canada bonds, which <a href="http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/">currently yield a nominal max of 2% (on long term bonds)</a>, or about 0.3% after <a href="http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/cpis01a-eng.htm">the latest 1.7% inflation</a>. And how much is your time and effort worth to do all this in comparison the fully automatic zero effort required by you for the CPP?</li>
</ul>
<b>CPP extras that are difficult to price but very valuable</b> - As my above-linked post mentioned, CPP also has bundled into it disability benefits, survivor children's benefits, survivor spouse benefits, a death benefit.<br />
<br />
<b>True inflation protection</b> - Only the CPP offers true inflation protection, i.e. CPI-linked increases. The best fudge available in the annuity market are annuities that ratchet up by a pre-set amount you choose, like 1.0, 1.5 or 2.0%. You have to guess at what future inflation will be. Guess too high and you over-pay un-necessarily, or guess too low and you still lose to inflation. Either way the uncertainty about inflation is not removed and your retirement annuity income does not keep in step with inflation, drifting further and further apart as years roll on and the differences compound.<br />
<br />
<b>Hilarious irrelevant comparisons</b> - The Clemens/Emes report also details some laughable calculations about how people who started receiving CPP back in the 60s and 70s have been getting phenomenally high returns, mainly because they did not contribute long but get full benefits. As if that should make present-day contributors jealous and angry to not want to pay any more - i.e. not support an expanded CPP because they would be handing even more money to retired rich so and so's. Well, we should first note that anyone retiring at 65 in 1969 on CPP launch would now be 112. They're all dead. The ranks are pretty thin at the older higher return end. There's <a href="https://en.wikipedia.org/wiki/List_of_Canadian_supercentenarians">only one living 111 year old Canadian and one of 110</a>. Besides, what happened is done, We must look forward. And, individuals can do much worse or better than the average - die soon after after retirement and get a tiny of your money back, live long beyond the average life expectancy and your rate of return rises to very high amounts. If the report authors are inferring inter-generational inequity needs to be fixed, then the payouts to past retirees needs to be reduced. It is not by stopping CPP expansion.<br />
<br />
Most proposals for CPP expansion are that higher benefits come only when they have been earned through higher contributions. That would be fair. You get back for what you put in and you are not paying extra for someone else already a recipient to receive more.<br />
<br />
When the full context is given and the whole story told, the CPP sure looks a lot more reasonable than a single low return number seems to imply.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com5tag:blogger.com,1999:blog-5433839636644874439.post-3470558856533301472016-04-30T15:49:00.000+00:002016-05-01T11:06:36.862+00:00Canadian Securities Administrators Ignore Rule #1 about RulesWhat's rule #1? A rule is not a rule unless it's enforced. Any two year old knows that if the parents say to do or not do something, unless there is a sanction that is actually applied, you can behave as you want. And that's what kids do. The rule doesn't actually exist in any practical sense. <br />
<br />
The CSA is exactly in that situation as the "parent", supposedly regulating financial firms and their employees dealing with the public, getting them to behave honestly and responsibly towards the public. The Small Investor Protection Association recently released a shocking and dispiriting report <b><i><a href="http://sipa.ca/library/SIPAsubmissions/500%20SIPA%20REPORT%20Unpaid%20Fines%20A%20National%20Disgrace%20-%20April%202016.pdf">Unpaid Fines: a National Disgrace</a></i></b>, which details the almost non-existent collection of fines imposed on financial miscreants in recent years. As the report says, this abysmal performance undermines the whole system of regulation. Investors will lose confidence. The financial industry will not feel deterred against misdeeds.<br />
<br />
Such utter neglect of the CSA's mandate is especially annoying in the light of its recent excellent <a href="http://www.investmentexecutive.com/-/csa-proposes-best-interest-standard?utm_source=newsletter&utm_medium=nl&utm_content=investmentexecutive&utm_campaign=INT-EN-saturday">proposal to institute a best interest standard</a> (as opposed to the weak suitability standard now in force) for financial advice on the investment industry. That proposal, even if implemented, won't have much real beneficial effect unless enforcement takes place. It's high time for the CSA to start doing its job properly. Just ask any parent.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-4259654164926181552016-04-07T14:23:00.001+00:002016-04-07T14:23:56.220+00:00Visitors to Canada Beware - You might need a "not-a-visa" eTAFormerly, Brits, like my wife, travelling to Canada for a visit needed only their passport and no visa. That has changed, as from March 15, 2016 (with an interim grace period till the fall of this year) she and other foreign nationals, except US citizens, will need an <a href="http://www.cic.gc.ca/english/visit/eta-facts-en.asp">Electronic Travel Authorization</a> to enter Canada by air. The eTA is not formally a visa but it sure feels like one to my wife, since after the grace period, without it you don't get to board the plane.<br />
<br />
Some key things facts I discovered digging through the website and phoning a Canadian consulate:<br />
<ul>
<li>you can apply in advance, even before you make a booking or plan a trip</li>
<li>the eTA is good for five years, but ...</li>
<li>if you need to renew your passport before then, you need to buy ($7 now) a new eTA because the eTA is linked to your passport number</li>
<li>the eTA is stored in the Canadian government's vast databases so that you do not need any piece of paper to prove you bought one (of course, it's gonna be your problem if you say you bought one and may even have the printout but for some reason the database says no, you don't)</li>
<li>it supposedly takes "minutes" to apply online and receive an email confirmation i.e. make sure you know where your airport internet access is or your phone has access just in case</li>
</ul>
Welcome to the new world of travel to Canada! CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-37674271874578340492016-03-26T16:43:00.002+00:002016-03-26T16:43:57.476+00:00Yikes! Federal Budget Revives Support for Toxic Labour-Sponsored FundsIt was a shock to see the recent Canadian <a href="http://www.investmentexecutive.com/-/liberals-reintroduce-lsvcc-tax-credit?utm_source=newsletter&utm_medium=nl&utm_content=investmentexecutive&utm_campaign=INT-EN-saturday">Federal Budget measure to restore the 15% tax credit</a> to encourage retail investors to buy into a proven loser investment vehicle, Labour-Sponsored Venture Capital Corporation funds. I, like almost every other investor in these toxic funds, lost a lot of money in their first incarnation during the tech boom years. The pleasure of a one-time tax credit is sooner or later replaced by the grinding regret of declining asset value and often extreme difficulty in redeeming the investment to limit losses.<br />
<br />
I said it four years ago when I slammed labour unions in <a href="http://canadianfinancialdiy.blogspot.co.uk/2012/06/labour-sponsored-rip-off.html"><i>Labour-Sponsored Rip-off</i></a> for aiding and abetting such LSVCCs, and I'll say it again: <b>stay away, don't consider for a second investing your money in them</b>.<br />
<br />
Look at the track record of one such surviving company, Covington, whose latest <a href="http://www.covingtonfunds.com/sites/default/files/fund-reports/MRFP%20Fund%20II%202015_annual_web.pdf">annual report</a> tells a sorry numbers tale:<br />
<div style="text-align: center;">
(click on image to enlarge)</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVaSwjH4IWuNo9sygLmDwBrMNvKZCUGfFJ8Dwp1YNiqaaWtg5l6R6oJlXJCSQjwMAEYLnjviM4RNSxg4w2SxMIU1aiDzZlr2WMXER1xTRViA3q7_oImlmI6umapdwpwknSl7aYOFLm2cY/s1600/Covington.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="139" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVaSwjH4IWuNo9sygLmDwBrMNvKZCUGfFJ8Dwp1YNiqaaWtg5l6R6oJlXJCSQjwMAEYLnjviM4RNSxg4w2SxMIU1aiDzZlr2WMXER1xTRViA3q7_oImlmI6umapdwpwknSl7aYOFLm2cY/s320/Covington.png" width="320" /></a></div>
Note how the benchmark average, the Retail Venture Capital Index that measures all Ontario-based LSVCCs, has a <span style="color: red;">negative compound 10-year return</span> (which understates the poor performance since it no doubt excludes all the worst loser funds that have disappeared along the way).<br /><br />
Even people in the investment industry mince no words about LSVCCs, viz the Investment Executive article linked-to at the top, where
Ian Russell, president and CEO of the Investment Industry Association of Canada is quoted:
"<i>All our research shows these funds are ineffective in raising capital
for successful small businesses, so that's a disappointment,</i>" Russell
says. "<i>The labour-sponsored venture capital funds were a disaster in the
past.</i>" They did no good for investors or small business. What is the government thinking, anyhow?CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com2tag:blogger.com,1999:blog-5433839636644874439.post-61301428153923982192016-01-26T17:43:00.000+00:002016-01-29T12:42:35.831+00:00BMO's SmartFolio Robo Investing Service Offers Convenience but Needs ImprovementBMO's SmartFolio was officially launched Monday January 18th. Thus, one of Canada's major banks has finally entered the automated ETF portfolio investing space but its offering, while slick and convenient, needs improvements on costs, portfolio construction, client assessment and account types offered. SmartFolio appears to be a "good-enough" offering trading on the solidity and trustworthiness of BMO's name, instead of being the leading edge product, in order to prevent customer leakage to competitors like Wealthsimple, National Bank, Canadian ShareOwner and others..<br />
<br />
<b><u>Costs</u></b><br />
<span style="color: orange;">Higher Account Fees</span> - The account management fees are a bit higher than competitors like Wealthsimple and WealthBar as the <a href="http://www.ctvnews.ca/business/bmo-is-first-of-canada-s-big-banks-in-robo-adviser-business-with-smartfolio-1.2741263">wire story on the new service</a> says. The 0.1% or so extra may not seem like much but it adds up over the years. For instance, a $100,000 lump sum invested at 5.0% vs 5.1% results in a difference of about $8,000 more ($346k vs $338k) for the higher return after 25 years. But the key question for BMO (and all the robo services), is what do you get for fees of 0.7% on the first $100k invested, scaling down to 0.4% on the assets over $500k (see BMO's <a href="https://www.bmosmartfolio.com/smartfolio/public/docs/Relationship-Disclosure-SF-Oct-28-2015_E.pdf">disclosure document here</a>)? Is it really worth the money given the inexorable reduction in net investor return from fees?<br />
<br />
<span style="color: orange;">Not using Lowest MER ETFs</span> - Another bit of extra drag on net investor returns will come from the embedded fees of the ETFs within the portfolios. First, instead of using the broad array of ETFs available in Canada, BMO has stuck to its own ETFs, which in some cases charge higher MERs than equivalent alternatives.<br />
<br />
<b><u>Portfolio Construction</u></b><br />
<b><span style="color: orange;">Forgetting the KISS (Keep It Simple Stupid) principle</span></b> - Second, the portfolios include multiple (up to five) different bond ETFs that put together more or less amount to the broad bond market. Why bother with several when there is likely, in total, to be little or no difference with a single broad market bond ETF? Is this just a marketing ploy to make investors think some sophisticated strategy is going on? The Income portfolio (30% equity, 70% fixed income) has on the fixed income side Canadian Mid Provincial Bonds (MER 0.25%), Short Corporate Bonds (0.12%), Mid Corporate Bonds (0.30%), Long Federal Bonds (0.2%) and USA Mid Corporate Bonds hedged to CAD (0.25%). The weighted MER will exceed 0.2%. This is more than BMO's own broad bond ETF (symbol ZAG) with its 0.2% MER. Worse, SmartFolio could have opted for <a href="https://www.vanguardcanada.ca/individual/mvc/detail/etf/overview?portId=9552##overview">Vanguard Canada's broad bond ETF</a> (symbol: VAB) with a 0.14% MER or the even cheaper iShares offering named in the conclusion below. There goes another constant 0.1% drag on returns for the investor.<br />
<br />
<b>An oddball Fixed Income holding</b> - Finally, why include the USA Mid Corp Bond ETF (symbol <a href="http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=93926">ZMU</a>) at all? It is the largest chunk of all the fixed income side in the portfolios. The inefficiency of the CAD hedging operation introduces a significant return drag on top of the higher MER that appears to total about 0.5% per year based on the gap between the index return and fund's NAV return. The reasoning for its inclusion no doubt is higher yield than equivalent credit risk Canadian bonds.<br />
<br />
However, the credit quality is much poorer; despite being 100% investment grade, is nowhere near the quality of VAB. ZMU has about half its bonds in the lowest investment grade of BBB and only 2% in the highest AAA group while VAB is the opposite - 48% in AAA and only 8% in BBB. In my view the role of bonds in a portfolio is safety and stability. The active management by BMO in picking ZMU is not appropriate, especially when one of the SmartFolio portfolios is named "Capital Preservation".<br />
<br />
<b>No real return bond holding</b> - I would suspect, or hope, that it's because the portfolios are meant to be good-enough for any type of account (non-reg, TFSA, RRSP etc) that one of the best diversifiers - real return bonds - is not included in any portfolio, not even the capital preservation account where such bonds' inflation matching properties would be extremely valuable. The problem is with taxable accounts since the inflation ratcheting of the principal is subject to annual taxation, despite not being received till many years later at maturity.<br />
<br />
<b><span style="color: orange;">No tailoring of ETFs to account type</span></b> - The real return bond issue is a symptom of the good-enough approach. There's no tailoring to factors related to account taxation. As I documented in detail on <a href="http://howtoinvestonline.blogspot.com/">HowToInvestOnline</a> in <i><a href="http://howtoinvestonline.blogspot.co.uk/2011/11/etf-asset-allocation-across-rrsp-tfsa.html">ETF Asset Allocation across RRSP, TFSA and Taxable Accounts</a></i>, foreign witholding taxes significantly reduce returns for certain ETFs depending on which account holds them. The ideal robo-advisor should tailor overall portfolios across account types and advise clients with this tax maximization knowledge embedded in it.<br />
<br />
<b><span style="color: orange;">No Real Estate at all</span></b> - None of the portfolios includes any real estate REIT ETF. That's a standard part of any but the most basic portfolio.<br />
<br />
<b><span style="color: #38761d;">Low Volatility Equity a plus</span></b> - On the plus side, BMO has chosen to depart from using only cap-weighted equity index funds by using its Low Volatility ETFs for part of the Canadian (symbol <a href="http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=86812">ZLB</a>) and the US holdings (symbol <a href="http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=93924">ZLU</a>). As I have <a href="http://howtoinvestonline.blogspot.co.uk/2012/01/low-volatility-equity-etfs-promising.html">related on HowToInvestOnline</a>, the research says the low volatility strategy works.<br />
<br />
<b><span style="color: orange;">Why use specialized ETFs?</span></b> - But why put in the equity portfolios a couple of specialized ETFs - the USA High Quality Index (symbol <a href="http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=29173">ZUQ</a>) and the Developed market Global Infrastructure fund (symbol <a href="http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=72053">ZGI</a>)? Basic good-for-anyone portfolios should use broad asset class ETFs, not specialized ones. The specialized ETFs also have higher MERs.<br />
<br />
<b>No Emerging Market equity in most of the portfolios</b> - Only the two most equity-laden portfolios (70% equity and 90% equity) include any Emerging Market at all.<br />
<br />
<b><span style="color: #38761d;">Low volatility equity funds make up a substantial proportion of of the equity holdings</span></b> - Hooray! The inclusion of BMO's low volatility Canadian (symbol ZLB) and US (Symbol ZLU) as mainstream holdings is a positive differentiator compared to other rob-advisors who use only cap-weighted funds<br />
<br />
<u><b>Account Types Offered</b></u><br />
<span style="color: red;">Insufficient range of account types</span> - SmartFolio doesn't (yet?) offer the full range of account types. Notably and critically absent are RESPs and all the post-retirement types like LIFs, RRIFs, LRIFs. This factor makes SmartFolio an impossibility for me. SmartFolio is for younger non-retired people only whose goals do not include education investing for kids.<br />
<br />
<b><u>Client Assessment</u></b><br />
<b>Too little account choice advice</b> - The start-up questionnaire provides no input to suggesting what type of account the investor should choose. It's only use is risk assessment to select one of the five model portfolios. The next step is to choose which type of account to create - TFSA, RRSP, Spousal RRSP or Taxable. The screen capture image below is the only guidance provided. The online chat person accessed through a click button can only give general advice and can provide no guidance on tax choices.<br />
<div style="text-align: center;">
<i>(click on image to enlarge)</i></div>
<div style="text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9_-yQQ2BQE3sWx9bj_cCdFstQ1J2U7WE28lP5ILXEldY_yJGPsYU5zovKiEIjGs6kD-BSFT3RL8nYDLp-SYrRxxTWFyfPIgI41QrcNR-lnfoG49lo_ozw7GoP97FR-bI6-QEbm_BWEpU/s1600/Screenshot+from+2016-01-21+16%253A22%253A13.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="256" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9_-yQQ2BQE3sWx9bj_cCdFstQ1J2U7WE28lP5ILXEldY_yJGPsYU5zovKiEIjGs6kD-BSFT3RL8nYDLp-SYrRxxTWFyfPIgI41QrcNR-lnfoG49lo_ozw7GoP97FR-bI6-QEbm_BWEpU/s320/Screenshot+from+2016-01-21+16%253A22%253A13.png" width="320" /></a></div>
<br />
<br />
<b>Skimpy know your client "risk assessment" questionnaire</b> - BMO is very much like every other Canadian robo-advisor in asking new investors to answer a cursory - in BMO's case, 10-question - risk questionnaire, the results of which slot the investor into one of five model portfolios. Why does BMO, with all the resources at its disposal, not find the wherewithal to apply industry best practices for tailoring a portfolio to an investor, as exemplified in questionnaires such as <a href="https://www.ifa.com/survey/">IFA's here</a> (25 questions) or <a href="http://www.myrisktolerance.com/yourriskprofile">FinaMetrica's here</a> (25 questions), or even a blended combination that takes account of all three of the investor risk dimensions - <a href="http://howtoinvestonline.blogspot.co.uk/2013/11/risk-tolerance-why-and-how-to-measure.html">risk tolerance</a>, <a href="http://howtoinvestonline.blogspot.co.uk/2013/11/risk-capacity-what-is-your-capacity-and.html">risk capacity</a> and <a href="http://howtoinvestonline.blogspot.co.uk/2013/12/risk-need-figuring-out-how-much-risk.html">risk need</a>? At the end of such questionnaires, the range of recommended portfolios is much wider than BMO's minimalist five. (It's ironically hilarious to contrast this there-are-only-five-types-of-investor outcome with the Ontario Securities Commission's new video earnestly informing us that they have just discovered that <i><a href="https://www.youtube.com/watch?v=harczv3l98E&feature=youtu.be&list=PL8Hd3ungHGD6AgM_sv5ZCDujuITFqSwMv">Every. Person. Matters.</a></i>)<br />
<br />
<b>Bottom Line</b>: I'm not trying to pick on BMO, because all the Canadian robo advisors appear to have similar offerings, but considering the extra robo fees / costs and the feeble amount of personal situation tailoring carried out, the robo solution is just not worth it. Investors would be better off in a self-directed account in the two-fund <b><i><a href="http://howtoinvestonline.blogspot.co.uk/2014/06/the-reluctant-investors-lifelong.html">Lifelong Portfolio</a></i></b>, which puts half the invested money in each of a broad market equity ETF, like the <a href="http://ca.ishares.com/product_info/fund/overview/XIC.htm?fundSearch=true&qt=XIC" style="background-color: white; color: #888888; font-family: inherit; line-height: 18.48px; text-decoration: none;">iShares S&P/TSX Capped Composite Index ETF</a><span style="background-color: white; color: #222222; font-family: inherit; line-height: 18.48px;"> </span><span style="background-color: white; color: #222222; font-family: inherit; line-height: 18.48px;">(TSX symbol XIC, MER 0.06%) and a broad bond fund like the </span><a href="http://ca.ishares.com/product_info/fund/overview/CAB.htm" style="background-color: white; color: #888888; font-family: inherit; line-height: 18.48px; text-decoration: none;">iShares Core High Quality Canadian Bond Index ETF</a><span style="background-color: white; color: #222222; font-family: inherit; line-height: 18.48px;"> </span><span style="background-color: white; color: #222222; font-family: inherit; line-height: 18.48px;">(symbol: XQB, MER 0.13%). </span>CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com2tag:blogger.com,1999:blog-5433839636644874439.post-58834153981262101022016-01-02T11:34:00.000+00:002016-01-02T11:34:02.836+00:00Risk and Complexity of Securities and Funds - a Promising ProposalHow does one know how risky an investment is, whether it's a stock or bond, a mutual fund or an ETF? How complicated and hard is it to understand or predict what the investment's return might depend on? For the retail investor, the basic answer is that you're on your own, having to wade through the security's Prospectus, which for Canadian securities can be found in <a href="http://www.sedar.com/">SEDAR</a>. Trying to compare several alternative possibilities that way is such a nightmarishly time-consuming task that most people likely don't even bother. It's one reason that as my investing years have accumulated, I am more and more oriented to the simplest possible investment structure.<br />
<br />
The provincial regulatory authorities under the umbrella of the Canadian Securities Administrators have tried - ineffectually - to help by mandating fund risk rating, the latest revision and supposed improvement exercise of which is currently underway (see <a href="https://www.osc.gov.on.ca/en/SecuritiesLaw_ni_20151210_81-102_mutual-fund-risk-classification-methodology.htm">Ontario Securities Commission website here</a>). But it relies only on one risk dimension - price volatility - which isn't nearly broad enough to capture real investment risk as I wrote in my last post referring to Howard Marks' fantastic <a href="https://www.oaktreecapital.com/docs/default-source/memos/2015-06-08-risk-revisited-again.pdf?sfvrsn=2">discussion of risk</a>.<br />
<br />
Along comes six researchers from Singapore Management University with a promising proposal in <b><i>A Risk and Complexity Rating Framework for Investment
Products</i></b>, an <a href="http://skbi.smu.edu.sg/sites/default/files/skbife/A_Risk_and_Complexity_Rating_Framework_for_Investment_Products_July_2014_final.pdf">earlier free version being available here</a> and a $15USD December 2015 version on the <a href="http://www.cfapubs.org/doi/abs/10.2469/faj.v71.n6.2?journalCode=faj">CFA website here</a>. Their scheme has been built to work across more or less the whole swath of investing products and asset classes and it looks reasonably workable. In effect, it seems to condense the Prospectus into a rating.<br />
<br />
Most important, it seems to capture a much broader characterization of risk and product complexity. Risk, for instance, includes ratings for six items - price volatility, liquidity, credit, duration / cash flow, leverage and diversification. That's a pretty good start, though I would be interested to see them add foreign currency risk and what might be called manager risk, which would assign a higher rating for actively managed funds over index funds, to reflect the fact that most active managers under-perform. As well, some way of including unexpected inflation risk would be very useful, though I cannot think of an easy way to put it in terms of their scheme method.<br />
<br />
The rating of complexity is an intriguing proposal and something I like. If a financial product is too complex for me to understand, how can I know how it should fit into my portfolio? It is also likely to disappoint in some way, either by jumping up and biting at the worst possible time, or simply by excessive fee leakage. As the authors point out, "More complex structured
products, generally with higher margins ...". Anything more complex than perhaps 3 on their 5 point complexity scale probably should not be available to the average retail investor. It is worth noting the authors' remark that institutional investors, who would likely have the expertise to understand complex products, generally avoid them and stick to basic products. Probably it's because they do understand the products that they avoid them.<br />
<br />
The final reality the researchers recognize and try to incorporate is that the behaviour of securities in a crisis such as 2008 can change, notably that correlations of asset types can converge, that liquidity and leverage can have exaggerated effects.<br />
<br />
The results of their calibration testing using 100 different funds ended up classifying some of the money market and bond funds with a higher risk rating - at 4 - than a few of the equity funds - at 3 out of 5. That's an intriguing and useful result, a counter to the too simplistic notion that bonds are "safer" than equities. It sure would be interesting to see our Canadian regulators test the paper's method on Canadian funds and securities. I could foresee a regulatory website where any security's official risk and complexity rating could be found and compared to other user-selected securities.<br />
<br />
Thanks to the indefatigible Ken Kivenko, a member of the <a href="https://www.osc.gov.on.ca/en/Investors_iap-panel-members.htm">OSC Investor Advisory Panel</a>, for bringing this fascinating paper to my attention. Go for this one, Ken! According to the paper, no other country has such an investment product rating scheme yet. Maybe Canada could be first in an investor protection move for once?CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-52400590397442689802015-12-19T17:44:00.002+00:002015-12-19T17:44:43.698+00:00Understanding Investment Risk - Read Howard Marks' post and reread it over and overHoward Marks of Oaktree Capital has written the best explanation of investing risk I have ever come across in one of his Memos - <a href="https://www.oaktreecapital.com/docs/default-source/memos/2015-06-08-risk-revisited-again.pdf?sfvrsn=2"><i><b>Risk Revisited Again</b></i></a> (the title revealing that he has refined and revised and expanded his exposition over many years and much hard reflection with much hard experience to inform him). The point of view is very practical as opposed to the academic theoretical approach and the writing is very readable for the DIY investor. That means he looks at risk in all its many facets and subtle but important nuances (24 different kinds of risk!), as opposed to the single volatility measure academics and regulators so love.<br />
<br />
I sure wish regulators like the CSA and the OSC would come to grips with this stuff instead of lazily opting for the misleadingly simplistic <a href="https://www.osc.gov.on.ca/en/SecuritiesLaw_ni_20151210_81-102_mutual-fund-risk-classification-methodology.htm">use of price volatility for classifying the riskiness of mutual funds</a>.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-71487211305332164752015-12-08T23:01:00.000+00:002015-12-08T23:01:53.283+00:00TFSA Contribution Limit PetitionKeep the annual TFSA contribution limit at $10,000 per year. That's the goal of the <a href="https://petitions.parl.gc.ca/en/Petition/Details?Petition=e-3">online petition on the official Parliament of Canada website</a>. The Liberal government has announced the intention to reduce it back to where it was before the previous Conservative government increased the limit earlier this year. There is no good reason to do that. For those in lower income groups the TFSA is a better retirement savings vehicle than the RRSP and the TFSA is a simpler more flexible tax-free savings account in general. I don't see the government proposing to reduce RRSP contribution limits. I encourage readers to sign the petition like I already have done because it's the sensible thing to do to protect the TFSA (as I have <a href="http://canadianfinancialdiy.blogspot.co.uk/2014/12/tfsas-creating-gis-crisis-and-welfare.html">previously written in dissecting the type of wrong-headed arguments criticizing the TFSA</a> that misled the Liberals into proposing the contribution cutback).CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com5tag:blogger.com,1999:blog-5433839636644874439.post-31570021683533978942015-08-14T18:53:00.000+00:002015-08-14T18:53:10.302+00:00SIPA's Can't-Lose Investment ContestUnlike so many investment schemes out there in the real world, here's a chance to make real money with no risk of loss. How? - Create a video and enter the <a href="http://www.sipa.ca/contest/contest.html">contest being sponsored by the Smaill Investor Protection Association</a>. The $3000 first prize is not too shabby! Kudos to SIPA for the initiative as one well produced video that garners scads of hits will be worth a thousand submissions to regulatory bodies or occupy May Street demonstrations.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-33220430365548272012015-05-24T16:07:00.000+00:002015-05-26T08:05:28.171+00:00No Hype, The Straight Goods on Investing Your Money, 3rd edition, by Gail BebeeShort, simple, straightforward and sensible. That's No Hype in a nutshell. As an entry level book specifically for Canadians, it covers all the key financial products, services, principles and issues. There's not a huge difference with previous edition (see <a href="http://canadianfinancialdiy.blogspot.co.uk/2011/11/book-review-no-hype-second-edition-by.html">my review of the 2nd edition</a>), the changes have mostly been updates of data and available investments, which is important since Bebee provides a number of useful model portfolios with specific suggested ETF, mutual fund and stock holdings. Updating is a never-ending and always imperfect task since the instant the writing and editing is done, things begin to go out of date and indeed that is already evident in a few minor spots (e.g. Shoppers Drug Mart got bought out and is no longer traded, the website address of the Financial Planners Standards Council is wrong) but the trade-off of greater specificity of the book vs correct vagueness is well worth it.<br />
<br />
All in all, still the unique basic go-to book for investing basics in a Canadian context. Still a very high rating of 4.5 out of 5.<br />
<br />
It is available for purchase from Bebee's website - <a href="http://www.gailbebee.com/">http://www.gailbebee.com/</a> <br />
<br />
<i>Disclosure</i>: Author Gail Bebee provided me with a free copy for reviewCanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-15651319489418151922015-05-23T23:44:00.001+00:002015-05-23T23:44:32.811+00:00CFP Financial Planning Ethics Commitment or Not?The Financial Planning Standards Council of Canada lays out the expected ethics of the best-known and most-common certification for financial planners in Canada, the Certified Financial Planner (CFP).<br />
<br />
The FPSC's <a href="http://www.fpsc.ca/docs/default-source/FPSC/canadian-financial-planning-definitions-standards-amp-competencies.pdf">Definitions Standards and Competencies pdf</a> lays out a laudable and crystal clear commitment to the public:<br />
"<i>Principle 1: client first
A financial planner shall always place
the client’s interests first</i>"<br />
<br />
But hold on, wait a minute, don't hold them to it, "<i>Each principle of the Code presents the
expected behaviours of financial planners. The
Code is designed to guide professionals in their
practice <span style="color: red;">but does not undertake to define the
standards of professional conduct of financial
planners for the purposes of civil liability</span>.</i>" [red highlight mine] Such prevarication does the supposed profession more harm than good. The only good thing is that the statement is out in the open whereas a lot of the other self-styled financial planners / advisors obfuscate, and try to have the public believe the client's best interest drives the advice but in fact it is not even a hoped-for aim.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com1tag:blogger.com,1999:blog-5433839636644874439.post-66325518306004533272015-05-19T22:39:00.000+00:002015-05-19T22:39:40.901+00:00Financial Industry Culture of Illegal and Unethical Behaviour Getting Worse not Better<i><a href="http://www.secwhistlebloweradvocate.com/LiteratureRetrieve.aspx?ID=224757">The Street, The Bull and The Crisis</a></i>, a new survey of people working in financial services in the USA and the UK tells us the mind-numbing news that instead of getting better following the financial crisis, the attitude that doing illegal or unethical things is the way to success is getting worse. Reading through the stats in the report it is apparent that the bad attitude is endemic, it's the culture of the industry.<br />
<br />
It's more than a bit worrying that the same type of behaviour that almost brought down the world's financial system is still rife. As authors Ann Tenbrunsel and Jordan Thomas warn, "<i>Allowing the status quo to persist is an open invitation to the next, perhaps more devastating, financial crisis</i>".<br />
<br />
I cannot stop the miscreants from destroying the financial system, other than lobbying politicians and regulators to knock heads, but I can try to keep my personal money as far away as possible from such people (defined in the report as those with titles such as "account executives, financial / investment / wealth advisors, financial analysts, investment bankers, branch/operations management, and portfolio managers").by DIY investing in the simplest possible financial products with the least incentive or opportunity for rip-off, like GICs, low-cost passive ETFs, direct investments in selected company stocks or bonds. It's also a reason I like the CPP - the investment arm, the CPPIB, seems to have a governance structure more likely to curb illegal and unethical employees.<br />
<br />
Thanks to Ken Kivenko, a member of the <a href="https://www.osc.gov.on.ca/en/Investors_iap-panel-members.htm">Ontario Securities Commission Investor Advisory Panel</a>, for the heads up on this report.<br />
<br />
<br />CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-46093341447940736062015-05-18T13:58:00.000+00:002015-05-18T13:58:23.020+00:00Canada Pension Plan vs RRSP - Which is the better investment?Not that we have any choice, since there is no way to opt out of the Canada Pension Plan, but suppose we could. Would it be better to invest in an RRSP? What kind of return would we need to achieve to beat the CPP? <br />
<br />
<b>Assumptions</b><br />
<i>CPP</i>: A 65 year old receiving maximum CPP of $1065 fully CPI inflation-indexed income per month for life would need to pay in for 39 years <a href="http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cnt-chrt-pf-eng.html">$2479.95 per year</a> (in current 2015 dollars) if an employee, or double that ($4959.90) if self-employed and having to pay the employer portion as well. See RetireHappy blogger Jim Yih's <a href="http://retirehappy.ca/how-much-will-you-get-from-canada/">explanation of how to get maximum CPP here</a>.<br />
<br />
<i>RRSP</i>: The same $2479.95 (or $4959.90) is invested in an RRSP. At age 65, the person buys a $1065 per month lifetime annuity indexed (increased) annually by 2%, which is our best guess future rate of inflation based on the fact that 2% is the target policy rate of the Bank of Canada. Like CPP, the life annuity stops when the recipient, or the spouse as well in joint life annuity, dies. The prices we obtained from <a href="http://www.cannex.com/">Cannex.com</a> were for annuities with no guaranteed payment period. Buying an annuity that pays, either to you or to your estate, for a guaranteed 5, 10, 15, 20 or 25 years, will pay less than one with no guaranteed period. Compare the reductions in payouts for guarantees that rise with age and guarantee period at the <a href="http://www.globeinvestor.com/servlet/Page/document/v5/data/rates?order=d&pageType=annuity&sort=I65&survey_type=SL&page=0&guarantee_term=10&sex=M&fund_type=R&province_of_residence=ON">Globe and Mail's annuity rate page</a>.<br />
<br />
<i>Single vs Married</i>: The required RRSP return answer differs according to whether the investor is single, since the CPP has an automatic provision that a surviving spouse will get at least 60% of the contributor's CPP income level. But if the surviving spouse also contributed, he/she will get only as much of the dead person's 60% as will take him/her to the maximum of $1065. An annuity doesn't work that way. There's no cap and if a person is already receiving an annuity, it is not reduced or capped by a joint life annuity from the dead person. Instead of trying to directly figure out the comparative value of a single vs married person situation, I've just calculated both a single life annuity and a joint life with 60% continuation to the survivor spouse.<br />
<br />
<i>Men vs Women</i>: Men and women pay into the CPP at the same contribution rate and get the same monthly income payment too. But women live longer than men so they collect longer on average. Annuities bought with RRSP (or RRIF) funds recognize the differing life expectancies and so women have to pay more than men. This is NOT the case with annuities bought with LIF, LIRA, RPP, LRIF locked-in funds since the feds and most provinces long ago changed the law to mandate unisex pricing - a blend of men and women rates - see <a href="http://www.transamerica.ca/en/Resources/Documents/IP929.pdf">TransAmerica's table on page 5 of this pdf. </a><br />
<br />
The question is what compound return must the RRSP or the locked in RRSPs attain during the 39 years of savings and investment? <br />
<br />
<b>Results</b> - The results table below shows the return an investment portfolio would need in order to match the CPP's $1065 monthly income. Note that the table shows real returns since the required contributions are also indexed annually i.e. the maximum annual pensionable earnings figure, against which the 4.95% contribution rate is applied, rises each year by the amount of inflation, so each year the contribution stays the same in constant real dollars.<br />
<div style="text-align: center;">
<i>(click image to enlarge)</i></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXgcW87AGhfBXL_ZHrnY8ZYCtlOrNkEV5Rhkf85YIqkPJlXDWzizseZu5dcmOkwR1W9gZjKXM8P_ZB27UJcfgo1Oo9g06irCiwl3Y7Gc3Yfmj5gyRle7kJAsjwAn-Tcm6HkUmz3GxuJYw/s1600/CPP-vs-AnnuityRRSP.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXgcW87AGhfBXL_ZHrnY8ZYCtlOrNkEV5Rhkf85YIqkPJlXDWzizseZu5dcmOkwR1W9gZjKXM8P_ZB27UJcfgo1Oo9g06irCiwl3Y7Gc3Yfmj5gyRle7kJAsjwAn-Tcm6HkUmz3GxuJYw/s320/CPP-vs-AnnuityRRSP.png" width="320" /></a></div>
<br />
<br />
<b>Who gets the most out of the CPP i.e. who would have had to get the highest investment return from their own RRSP portfolio to beat CPP?</b><br />
1) <b><span style="color: #38761d;">Employees</span></b> - because they contribute only 4.95% of their salary, while the employer pays the other obligatory 4.95% on their behalf.<br />
2) <b><span style="color: #38761d;">Married people</span></b> - since their spouse automatically continues to receive payment of 60% of the deceased's CPP whether the spouse has worked or not; in fact, the CPP deal is most favourable when the spouse has not worked and paid nothing at all into CPP.<br />
<br />
A <span style="color: #38761d;"><b>married woman employee investing in a RRSP</b></span> (who thus faces a more expensive longevity-based price for the annuity) benefits the most of anyone. She would have to beat a 5.16% annual compound return to outpace the CPP.<br />
<br />
<b>Who gets the least?</b> <br />
A <span style="color: red;">single self-employed man</span> investing in an RRSP is at the opposite end. He might consider attaining a 1.14% annual return to be quite feasible. It is especially costly to be making the employer contribution as well as his own that makes the huge difference.<br />
<br />
<b>CPP offers solid returns for most</b> <br />
Thus, for the majority of working people who are employees, it would be hard to beat a compound real return of 5% or so per year for the whole of an investing lifetime of 39 years.<br />
<br />
Compare a hypothetical portfolio using historical data for the 35 years from 1980 to 2014 on the <a href="http://www.ndir.com/cgi-bin/downside_adv.cgi" target="_blank">Stingy Investor Asset Mixer tool</a>. A portfolio of 50% each of the broad Canadian bond index (something like iShares' <a href="http://www.blackrock.com/ca/individual/en/products/239493/ishares-canadian-universe-bond-index-etf" target="_blank">XBB</a>) and the TSX equity Composite index (e.g. iShares' <a href="http://www.blackrock.com/ca/individual/en/products/239837/?referrer=tickerSearch" target="_blank">XIC</a>) with all dividends reinvested and the portfolio religiously rebalanced once a year, costing ETF-like management expense ratios, would have produced a real compound return of 5.91%. The comparison doesn't quite match up since of course there were no ETFs back then and mutual fund fees were much higher, reducing investor returns. Second CPP contribution rates were much lower - too low - in the 1980s and 90s. Up to 1986 it was only 1.8%. The current 4.95% rate started only in 2003.<br />
<br />
<b>Other factors</b><br />
<i>Future likely / possible returns</i> - The future probably won't be like the past. Returns are likely to be lower, as we have written about <a href="http://howtoinvestonline.blogspot.co.uk/2014/06/long-term-stock-and-bond-return.html" target="_blank">here</a> and <a href="http://howtoinvestonline.blogspot.co.uk/2014/07/long-term-return-expectations-for-usa.html" target="_blank">here</a>. 4% or less real returns for mixed stock and bond portfolios are the probable ballpark, not close to 6%. The CPP is very competitive.<br />
<br />
<i>Investor discipline and effort</i> - Against the zero effort of the CPP, the chances that the investor will carry out the sustained annual rebalancing and reinvestment must be weighed.<br />
<br />
<i>Inflation uncertainty</i> - While the 2% indexing of the annuity is a best reasonable guess of future inflation, it does not remove the uncertainty about the actual future rate. Inflation might be lower, in which case the investor benefits from rising real income. Or inflation might be higher and the investor loses. A few years of 3,4,5% inflation, even if temporary, would significantly and permanently erode the value of the annuity. <span style="color: #38761d;"><b>The protection against the possibility of inflation exceeding the currently expected rate is a big plus for the CPP.</b></span> The question is whether the government would keep its promise to provide full indexing if inflation got really high. The promise is enshrined in law so not that easy to change, and the promise was kept during the high inflation 1970s but ... you never know for sure, things might be different in future.<br />
<br />
<a href="http://www.servicecanada.gc.ca/eng/services/pensions/cpp/disability/benefit/index.shtml" target="_blank">CPP disability benefits</a> - Paying into CPP qualifies a person for more than retirement benefits. CPP provides substantial payments - a minimum of $453 up to $1212 per month - for those who have contributed but are no longer able to work. <br />
<br />
<a href="http://www.servicecanada.gc.ca/eng/services/pensions/cpp/child.shtml" target="_blank">CPP children's benefit</a> - Children of a CPP contributor can receive money from CPP two ways. 1) Children of someone receiving a disability benefit can also receive a benefit. 2) Children up to 25 can receive a survivor benefit if the CPP contributor dies.<br />
<br />
Perhaps we should not be surprised that polls find that Canadians love the CPP and want to expand it, as <a href="http://www.theglobeandmail.com/news/politics/canadians-support-increasing-cpp-benefits-poll-finds/article24234182/">the Globe and Mail reported recently</a>.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-85668837175408546722015-05-05T17:05:00.001+00:002015-05-05T17:05:29.949+00:00How safe is an annuity in Canada?Handing over a large lump sum out of your life savings to an insurance company to buy a lifetime stream of income in an annuity is a sobering step. It is irreversible. A critical question, considering that your retirement can easily last 30 years or more, is whether the insurance company will be able to carry out its promise to pay. How sure can we be of actually getting those payments?<br />
<br />
<i>Protection level 1</i>: <b><a href="http://www.assuris.ca/Client/Assuris/Assuris_LP4W_LND_WebStation.nsf/welcome_en.html?ReadForm">Assuris</a></b> - the backstop for failed insurance companies<br />
As the Assuris website explains in more detail, all companies selling annuities in Canada are required to be members of Assuris, which does a very useful thing. It guarantees up to $2000 per month (or equivalent quarterly or annual amounts) in annuity income, or 85% of income, whichever is higher. It is on a per company basis so it is wise to pick different insurance companies for income above $2000 per month. Thankfully, one of the Assuris FAQs advises that if companies subsequently merge the guarantee continues on the previous basis, i.e. independently and not combined.<br />
<br />
The ability of Assuris itself to carry out its guarantee is based partly on keeping a $100 million fund. That's not much at first glance considering the amount of outstanding annuity obligations - e.g. even a small player like Equitable Life had $456 million in outstanding annuity contracts in 2013 per <a href="https://www.equitable.ca/media/127094/2013annualreport.pdf">its Annual Report</a>. However, the $100 million fund is importantly supplemented by Assuris' power to levy all its insurance company members for any shortfall. Given that a failing insurance company would most probably still have considerable assets to pay a good chunk of its annuity obligations the net shortfall from the fund and the levy would seem fairly limited.<br />
<br />
Assuris has been effective so far in its 25 years of existence. The <a href="http://www.assuris.ca/Client/Assuris/Assuris_LP4W_LND_WebStation.nsf/page/Past+Insolvencies!OpenDocument&audience=policyholder">four insurance company insolvencies in that time</a> resulted in no losses to Assuris-covered customers and only miniscule losses to some non-covered customers.<br />
<br />
<i>Protection level 2</i>: <b>OSFI Regulation</b> - a strict culture of caution<br />
The second reason that annuity holders can find considerable comfort is the strict regulatory regime for insurance companies in Canada, as carried out by the federal government's <a href="http://osfi-bsif.gc.ca/Eng/Pages/default.aspx">Office of the Superintendent of Financial Institutions</a>. There are requirements for companies to maintain high levels of capital to withstand financial shocks. All the major insurance companies exceed the OSFI recommended level by a large degree, let alone the legal minimum. A recent <a href="https://www.imf.org/external/pubs/ft/scr/2014/cr1468.pdf">International Monetary Fund Review</a> of the effect of the harmful low interest rate environment on Canadian insurance companies notes that the regulatory regime in Canada has forced the companies to make required adjustments. Various standards are being revised to improve safety. In the IMF's words "<i>The regulatory regime has served Canada well in the adjustment to a low rate environment</i>". Any future rise in interest rates will benefit companies.<br />
<br />
It is reassuring to remember that though insurance companies suffered in and after the 2008 financial crisis, they weathered the storm. One failed but the Assuris guarantee worked. The current solidity of the Canadian insurers is reflected in their high credit ratings shown in this <a href="http://www.mcgill.ca/hr/sites/mcgill.ca.hr/files/annuity_issuer_ratings.pdf">February 2015 compilation of the annuity issuers by McGill University</a>. Some, like Canada Life with AA ratings, are higher rated than a weaker province like New Brunswick with only A(high) from DBRS. A culture of caution in Canada, that seems to be continuing, reassures for the future.<br />
<br />
<i>Protection level 3</i>: <b>Politics</b>, a possible potent wildcard<br />
"Too big to fail" and "too many voters" adds another dimension, possibly the most powerful of all, to the likelihood that annuity holders will not be left high and dry by insurance company failure. It is hard to imagine that, in the face of a single company failure that Assuris could not cope with, which would entail one of the huge companies such as Manulife or Sun Life, the federal government would not step in to bail out the millions of life insurance holders. Systemic risk domino effects on other companies and on banks might force the issue.<br />
<br />
All in all, it seems that the safety of annuities in Canada is pretty darn good. There's no certainty that things cannot or will not change (is there ever?) but the situation looks very solid at the moment. It's one worry I will not have about my annuity purchase.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-9637055271882346732015-04-16T12:35:00.000+00:002015-04-16T12:40:53.900+00:00How much does the average Canadian financial advisor earn? You will be shocked....2014 was an outstanding year for Canadian financial advisors <a href="http://www.pricemetrix.com/2014-exceptionally-strong-year-retail-wealth-management-industry-advisor-assets-hit-record-high-revenue-sharply-client-retention-improved/">according to PriceMetrix</a>. It could be termed the year of the Yacht (making reference to the classic takedown of Wall Street <a href="http://www.amazon.com/Where-Are-Customers-Yachts-Street/dp/0471770892"><i>Where are the Customers' Yachts?</i></a> by Fred Schwed) for advisors. That's not just figuratively true, it is literally true. Anyone who makes <span style="color: red;">$655,000 in a year</span> is into yacht territory. Yes, that's right, the PriceMetrix press release crows about that being the average advisor income, not the top 1% or 10%, the <u>average</u>!<br />
<br />
Advisors are doing well indeed - their 13% rise in revenue over the previous year contrasts with only an 11% increase in average client assets under their management, all this while advisors have been reducing the number of clients each deals with, i.e. the advisors have been firing clients, and it doesn't take a rocket scientist to know it is the clients with low assets who provide less revenue bang for each advisor time buck.<br />
<br />
There is an increasing shift to fee-based revenue (which probably means a separate charge for assets under management but might include trailing commissions on mutual funds), as opposed to transaction revenue (one-time commission). It's hard to tell exactly what types of charges are being described - see <a href="http://www.moneysense.ca/invest/find-the-perfect-financial-planner">Preet Banerjee's more detailed run-through</a> of various terminology for various charges on MoneySense - but the end result is clear, clients of advisors got dinged for more per dollar of invested assets in 2014.<br />
<br />
Another interesting figure in the PriceMetrix report is that each advisor served 150 clients on average. In a typical year of 236 on-the-job days (<a href="http://www.workingdays.ca/#a10">251 working days</a> minus 15 for holidays on the yacht), that gives each client 1.6 days of advisor time per year, discounting anything else the advisor does in his/her business. No wonder $20,000 client accounts don't pay and advisors want to get rid of such clients (1% of $20k provides only $200 and 150 of such clients is $30,000 of annual revenue).<br />
<br />
Finally, perhaps robo-advisors really are the way of the future. The report says advisors and their clients are getting older. Advisors are making no efforts to attract younger clients, who may not be interested anyway since they can get all of what typically passes for financial advice (10 simple questions and your portfolio is determined) plus automatic rebalancing for a lower cost (using lower MER ETFs plus lower robo charges on assets) from the robos.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com1tag:blogger.com,1999:blog-5433839636644874439.post-80359798085437355162015-04-02T13:37:00.000+00:002015-04-02T13:37:02.042+00:00BMO InvestorLine allows swaps between like accountsRecently I've been liberating cash in preparation for buying an annuity. To my relief and delight BMO InvestorLine allowed me to swap cash in my LIRA for bonds in my RRIF, saving me the considerable embedded commission (around 1% from what I have observed from bid-ask spreads) cost of selling the bonds in the RRIF.<br />
<br />
It's good to know that at least one broker has not thrown out the baby with the bathwater by banning any and all swaps after the Canada Revenue Agency clamped down on abusive gaming of the system to boost tax-protected balances. Swaps between accounts with like tax properties are still perfectly legal (per <a href="http://taxinterpretations.com/?p=13252">this post at TaxInterpretations.com</a>) but some brokers seem to have simply stopped doing any and all swaps (e.g. the discussion following <a href="http://www.canadiancapitalist.com/a-blanket-ban-on-rrsp-swaps-is-a-bad-idea/">this post at Canadian Capitalist</a> and <a href="http://www.canadiancapitalist.com/td-waterhouse-disallows-rrsp-swap-transactions/">this other CC post</a>). Swaps between registered retirement accounts like RRSPs, LIFs, LIRAs, RIFs, or TFSA to TFSA are ok but not between TFSA and RRSP (or other retirement) or with taxable accounts.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-55136601293718748862015-03-27T19:28:00.001+00:002015-03-27T19:28:49.990+00:00Book Review: Never Smile at a Crocodile by Paul DioGuardiThis book (available <a href="http://www.amazon.ca/Never-Smile-Crocodile-Confessions-Traveller-ebook/dp/B00NXID558/ref=sr_1_1?ie=UTF8&qid=1427483847&sr=8-1&keywords=dioguardi+crocodile">here on Amazon</a>) of several dozen two to four page mini-stories, is a disparate random collection with many messages:<br />
<br />
<ul>
<li>cautionary tale about the single-minded unforgiving nature of the CRA bureaucracy and the dangers of disobeying tax laws, deliberately or accidentally (as he says, there is "no compassion in a crocodile brain")</li>
<li>cautionary tale about citizens who don't pay the taxes they should, some of them due to reasons we can be sympathetic to, and others who are just plain cheats - he has met all types</li>
<li>how the insider game works in politics and business deals where who you know makes a big difference</li>
<li>self-promotion and self-congratulation of the tax services of the author</li>
<li>memories of personal holiday and work adventures, (I'd guess all of which were arranged to legitimately be tax-deductible as business expense though he never utters a word about his own tax affairs)</li>
<li>how sometimes innocent people get caught up in the CRA idiotically and harshly using its power</li>
<li>how sometimes very guilty people get away with lots of cheating by hiring a good lawyer</li>
</ul>
<br />
<div>
There's no specific tax advice, just the general message to pay your taxes on time .. because the crocodile is lying in wait.</div>
<br />
<div>
<br /></div>
<div>
It's quick reading, always light and chatty, flows easily, not technical even when discussing specific (all of them non-viable) tax avoidance schemes. One could imagine all these stories being told over a drink in a bar, the reminiscences and tales of an old raconteur, most of it true but some of it probably embellished. Good entertainment value, a few good laughs along the way. </div>
<div>
<br /></div>
<div>
[There is even a defense in the book of his law firm's current on-going dispute with the Law Society of Upper Canada, <a href="http://www.thestar.com/news/investigations/2014/05/21/prominent_tax_lawyer_accused_of_cheating_clients.html">reported in the Toronto Star in 2014</a>, about how to hold client retainer money. He makes a pretty good case. He describes himself a number of times in the book as a fighter, not easily deterred. It certainly seems to be so, as he has <a href="http://www.marketwired.com/press-release/prominent-tax-lawyer-paul-dioguardi-announces-candidacy-for-lsuc-bencher-1993020.htm">announced his candidacy for the Law Society Bench</a> in order to shake it up. If the CRA is a crocodile, DioGuardi might be a leopard, which <a href="http://www.whateats.com/what-eats-an-alligator-or-crocodile-2">this site says occasionally eats crocodiles</a>. I don't know if he looks soft and fluffy but he certainly seems to have claws.]</div>
CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-26944606203243372702015-03-16T18:27:00.001+00:002015-03-16T18:27:19.358+00:00Investment Advice Trust Index - A Simplistic but Simple Retail Investor GuideWhose advice can you trust? It's complex and confusing but you cannot wash your hands of getting an idea of whom to trust because a mistake can be extremely costly, as in having your retirement savings wiped out.<br />
<br />
There are titles galore in the financial and investment industry that we individual investors must deal with. Some titles mean something, others are just fluff to impress us.<br />
<br />
The key idea is that only a few select people we might deal with are <u>obliged</u> to act first and foremost in our <b>best interest</b>, what is called behaving according to <b>fiduciary duty</b>. Most are held to a much lower standard, such as suitability, for instance in the Mutual Fund Dealers Association <a href="http://www.mfda.ca/regulation/notices/MR-0069-2.pdf">Member Regulation Notice on Suitability</a>. That allows the industry professionals to behave with great latitude and often in their own best interest, mostly as salespeople, as long as their "advice" is not outright fraudulent or misleading. <br />
<br />
Two documents from official regulatory sources provide a means to narrow things down to a list that has substance:<br />
<br />
1) Canadian Securities Administrators <a href="http://www.csa-acvm.ca/uploadedFiles/General/pdfs/UnderstandingRegistration_EN.pdf"><i>Understanding Registration</i></a>, a one-page list of all the types of people and firms that can sell or offer advice on securities (mutual funds, ETFs, stocks, bonds). Acknowledgement to the <a href="http://www.sipa.ca/">Small Investor Protection Association</a>, where I found this link.<br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjn6ls671zY7ZFDZcMYDu4XiBnKjgO6r6Z_YeQRMlxxou62xbgLlGjlpo6C8BAFSuCkq8Y5MKIRsHA-fRw5VmJq9mQhgJjIFwBxYoBZ8dVWwpXqBQJtDoGcY7RdNnDSyVT8Iws4RdlRy_M/s1600/registration-CSA-tbl.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjn6ls671zY7ZFDZcMYDu4XiBnKjgO6r6Z_YeQRMlxxou62xbgLlGjlpo6C8BAFSuCkq8Y5MKIRsHA-fRw5VmJq9mQhgJjIFwBxYoBZ8dVWwpXqBQJtDoGcY7RdNnDSyVT8Iws4RdlRy_M/s1600/registration-CSA-tbl.png" height="320" width="312" /></a></div>
2) Canadian Securities Administrators <a href="http://www.osc.gov.on.ca/documents/en/Securities-Category3/csa_20121025_33-403_fiduciary-duty.pdf"><i>Consultation Paper 33-403</i></a>, <i>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</i>, a 37-page legalistic, technical document (why is it that such important consumer information is only to be found buried in such a user-unfriendly place?). Page 9 of the pdf contains the following chart; most of the entries in the fiduciary duty columns have a No, few a Yes and several It Depends.<br /><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzQhcJeRy4w4DBa4m0yu9wjUQdkGCqYHl5hsMh3Fogi8U8iKYao-ZpWZdoMneL_jtOcKwEL1YWvamkmSZmKYUdz9hBiX6cC9o8l5xwLupok36fX5s9palVvDS4dQvPXtz6SZrisH92mO4/s1600/fiduciary-duty-CSA-tbl.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzQhcJeRy4w4DBa4m0yu9wjUQdkGCqYHl5hsMh3Fogi8U8iKYao-ZpWZdoMneL_jtOcKwEL1YWvamkmSZmKYUdz9hBiX6cC9o8l5xwLupok36fX5s9palVvDS4dQvPXtz6SZrisH92mO4/s1600/fiduciary-duty-CSA-tbl.png" height="313" width="320" /></a></div>
<br />
<b>What is your firm's and your personal registration category?</b> This is the first question to ask. <a href="https://www.securities-administrators.ca/nrs/nrsearch.aspx?id=850">Check the registration here</a>. If the answer is "not registered", run for the hills!<br />
<br />
Only three categories of individuals matter.<br />
<br />
Ninety percent of people who call themselves financial advisor, investment advisor, financial planner, wealth advisor or some variation of such are <b>Dealing Representatives</b>, which as we see from the charts, are actually salespeople selling mutual funds. Caveat emptor! Assume they will not necessarily provide recommendations or plans that are best for you (except in Quebec where they are obliged by law to always act in a client's best interest). <br />
<br />
<b>Advising Representatives</b> and <b>Associate Advising Representatives</b> almost all work for Investment Dealers or Portfolio Managers. If they have explicit authorization to buy and sell in your account i.e. a Discretionary account, they have a clear responsibility to act in your best interest (the Yes entries in the second table). Of course, that does not negate human nature and some bad apples might still do lots of trades to generate extra commission income for themselves. <br />
<br />
The "It Depends" situations are very problematic for the individual investor. You have a Non-Discretionary account and still have final say on buying and selling. But you may be reliant on the advice given, which may mean you can or cannot count on that advice being in your best interest, depending on how the five determining factors (vulnerability, trust, reliance, discretion, professional rules or codes of conduct) cited in the CSA consultation paper pan out. In the case of dispute, usually when it's too late and and bad things have happened to the investor, the only way to find out for sure is to go to court at great cost of money, time and effort. The ambiguity, which usually works to the benefit of exploitative abusive firms and investment professionals, is a big reason for the long-standing but so far unsuccessful push to have a much broader best interest fiduciary standard imposed on the investment management and advice industry. Therefore, as a pre-cautionary rule of thumb, assume the "It Depends" will not necessarily provide recommendations or plans that are best for you.<br />
<br />
For all my dislike of the provincially-partitioned investment regulation in this country, I wish the other provinces and the CSA would do what Quebec has done and clear up the ambiguity by statutory imposition of the best interest fiduciary standard.<br />
<br />
A source of much un-necessary confusion is the proliferation of so-called financial certifications and designations, some much flimsier than others. Even for the more substantial ones amongst those listed <a href="http://www.iiroc.ca/investors/UnderstandFinCert/Pages/default.aspx">here on the IIROC site</a>, there is a wide range of best-interest related clauses in the codes of ethics or conduct. Trolling through any one of them to know the exact legal ramifications of each code is time-consuming and of uncertain value. Therefore, ignore designations and stick to the above basic approach.<br />
<br />
That says who you should be able to trust, legally speaking. But even then, there are a few bad apples, so it is of course necessary to keep a watchful eye and be aware of a gut instinct that says something may be wrong.<br />
<br />
As for me, I know where I stand. The Discount brokerage entries show a clear No in both columns. I know I'm on my own. If I mess up my investments, it's all my fault.<br />
<br />CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com0tag:blogger.com,1999:blog-5433839636644874439.post-82332972458752991712015-03-14T18:35:00.001+00:002015-03-14T18:35:38.795+00:00More reasons to buy an annuityLast post, I came to the conclusion that buying an annuity makes sense given a couple of guiding principles and the contrasting alignment of annuities vs my present stock/bond portfolio against key retirement risks and desired features.<br />
<br />
That's not quite the whole thinking, however. Some additional motivations are driving me towards annuities.<br />
<br />
<b>Not burdening my children or the state</b> - I want make sure I have enough income throughout my life not to oblige my children to pay for my upkeep. Call me old-fashioned but I also don't want to count on the government to bail me out at age 85 either.<br />
<br />
Wish and project as we might with the best financial planning, monte carlo software and projections based on historical data, there's always a residual chance that an invested stock/bond portfolio subject to withdrawals might run out except at ridiculously low withdrawal rates or impossibly long planning horizons. But the slower and safer I withdraw, the more chance the money is never withdrawn, so I don't get to enjoy a lot of it. Which complements my next motivation ...<br />
<br />
<b>The inheritance I leave will be what's left over, not any specific planned amounts</b> - I (and my wife) have already given the kids a good legacy by supportive parenting and a solid education that seems so far to be enabling them to make their own way.<br />
<br />
<b>Tax increase risk diversification</b> - Governments can get into financial trouble and may look to the "wealthy" to impose extra taxes, spurred on by social activist thinking such as at the <a href="http://www.broadbentinstitute.ca/en">Broadbent Institute</a>. Turning assets into an income stream today reduces the risk of future rising taxation on either accounts (like TFSAs, which are viewed in some politically-correct quarters as accounts benefiting the rich despite the opposite reality) or dividends and capital gains. <br />
<br />
<b>Living a longer and happier life</b> - It is well-known by insurance companies that people who buy annuities live longer than the average population. Now, it is comforting to me to think that because I am intending to buy annuities, I will live longer. But it may not just be accidental, that people who are in good health figure the odds are good. It may be causal i.e. buy an annuity and it will make you live longer! <a href="http://www.cfapubs.org/doi/pdf/10.2470/rf.v2013.n1.1">Moshe Milevsky's superb summary of annuities for the CFA Institute</a> quotes the research on page 108: "... <i>he found that veteran pensions reduced mortality for both acute and nonacute causes of death</i> ... [and then Milevsky quotes Jane Austen to put it in plain talk] ... <i>All of these findings echo the famous Jane Austen quote from Sense and Sensibility (published in 1811):</i> “<i>If you observe, people always live forever when there is an annuity to be paid them.</i>”<br />
<div data-canvas-width="212.75833333333327" style="font-family: serif; font-size: 18.3333px; left: 92.4773px; top: 186.201px; transform: scaleX(0.779335);">
</div>
It's called buying peace of mind. Bill Gates or Warren Buffett don't get disturbed when markets go down because they have far more than they could ever need. But for those of us who have managed a relatively volatile stock-bond portfolio for twenty years and who cannot sustain a prolonged period of poor returns, we can relate to the findings Milevsky quotes.CanadianInvestorhttp://www.blogger.com/profile/05645767559302303541noreply@blogger.com3