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Financial journalism

Posted: 07 Mar 2005 10:32
by Brix
In an article addressed to fellow business journalists, Jason Zweig meditates on different routes to professional success in covering the retail investment beat:
In the short run, however, the best way to get ahead is to check your conscience at the door. Most readers, and all too many editors, want to hear about the newest, the hottest, the get-rich-quick schemes, the secret “keys to wealth” that have miraculously been overlooked or hidden by “the experts.” Good advice easily gets drowned out by advice that just sounds good. In 1999, any journalist who peddled the sexy idea of putting all your money in tech stocks was hailed as a genius. At the same time, anyone who preached the sober gospel of caution was called a “moron,” a “f--head” or an “ignorant a--hole.” (That is a delicate selection from among the thousands of e-mails that criticized my online columns in 1999 and 2000.)
[via www.diehards.org #40353 -- link may be slow for a while]

The rest of the article is well worth a read, especially for anyone who reckons financial journalists may be largely unaware of their effect on readers (and the market for products).

Helpful Financial Journalism

Posted: 21 Mar 2006 12:53
by Feeonly.ca
Here are a couple of articles that I think people should read before they consider buying Principle Protected Notes or PPN's.

PPN's are extremely popular with some advisors but they have firm place on my standard list of investments to be avoided.

Why you should protect yourself by avoiding PPNs, Tuesday, March 21, 2006, Globe & Mail

https://secure.globeadvisor.com/servlet ... RCARRICK21

PPN offerings are sorely lacking on the disclosure front, Tuesday, March 14, 2006, Globe & Mail

https://secure.globeadvisor.com/servlet ... RCARRICK14

Posted: 21 Mar 2006 14:41
by smelly
(Not trying to start another fight, honest)

You know what my first thought was when I saw this article? I wondered how hard it would be to find a Carrick article where he touted the benefits or at least gave PPNs some free advertising by not saying anything negative about them a year or two ago? I’m sure that at least someone at the G&M did. And now they’re jumping off the bandwagon. Go figure, eh?

(Hey, they highjacked my thread, but I know, put up or shut up, I’ll go away now, carry on with your media love fest :D :D :D )

Posted: 21 Mar 2006 15:12
by yielder
smelly wrote:I wondered how hard it would be to find a Carrick article where he touted the benefits or at least gave PPNs some free advertising by not saying anything negative about them a year or two ago? I’m sure that at least someone at the G&M did. And now they’re jumping off the bandwagon. Go figure, eh?

(Hey, they highjacked my thread, but I know, put up or shut up, I’ll go away now, carry on with your media love fest :D :D :D )
WADR, go find that article where Carrick touted PPNs. Until you do, your spouting "porn". :lol:

Posted: 21 Mar 2006 18:38
by jiHymas
I'm just curious ... do the banks have to do (or do they voluntarily do) a KYC and suitability check on buyers of these notes?

Posted: 21 Mar 2006 19:14
by worthy
Wow!

Already, at least, $7 billion of these suckers sold to, well.....

Posted: 21 Mar 2006 22:00
by parvus
Yielder wrote:
WADR, go find that article where Carrick touted PPNs. Until you do, your spouting "porn".
Well, he did write about one hedge fund PPNin 2003.

jiHymas wrote:
I'm just curious ... do the banks have to do (or do they voluntarily do) a KYC and suitability check on buyers of these notes?
From Investment Executive:
The scandal created by the collapse of Portus Alternative Asset Management Inc. of Toronto has focused regulators' attention on ensuring that distributing firms conduct more effective due diligence and carefully examine such features as structure and guarantees on alternative products such as PPNs.

Although the Portus product was portrayed as a guaranteed note, clients' funds were actually put in a Portus managed account that had other financial obligations, and investors' assets were not directly guaranteed, says Shaun Devlin, director of enforcement at the Mutual Fund Dealers Association.

The MFDA recently issued a notice outlining its expectations for advisor due diligence on PPNs, saying that while "know your client" is a fundamental part of the advisor's job, so is knowing your product and taking responsibility for selling it. Devlin says products that are novel or more complex in structure require comprehensive analysis, and advisory firms cannot simply rely on the representations of the issuer. The firms should also identify investors for whom certain products are not suitable, and there should be portfolio concentration limits applied to particular securities or types of products.

"In all cases, the approval process must be independent and objective," the MFDA notice reads. "Firms must properly follow up on any questions they have raised until they are satisfied they have a complete understanding of the products they propose to sell."

"Complexity is a factor advisors must consider when determining if a product is suitable for their clients," Devlin says.
From Advisor.ca:
Regulatory worries about the proliferation of principal protected notes (PPNs) may well spill over into the Guaranteed Investment Certificate market, at least index or market-linked ones, which have hitherto been exempt from securities rules.

At issue is what might be called a series of "K's" that follow from the Know Your Client imperative every advisor must heed before offering investment recommendations. Lately, Know Your Product has come to the fore — a concern for many advisors who have traditionally relied on their compliance officers for guidance, with the Mutual Fund Dealers Association, for one, saying that's no longer good enough — and now two more "K's" are emerging: Know Your Product's Suitability and Know Your Records, lest the regulators come knocking.

<snip>
That worries Mark Gordon, executive vice-president of the MFDA. IDA registrants have little to worry about when it comes to exempt products, since they are fully licensed. Whether a product is exempt or registered, brokers still have to go through the four "K's" — and they have to run it through their dealer.

Thanks to regulatory arbitrage, Gordon is concerned that advisors with an insurance licence can sell an exempt product outside the securities regime. More than that, PPN's have been structured as deposit instruments rather than securities, because that doesn't have to go through a dealer.

This stems from a concession made at the formative stage of the MFDA. Although mutual fund advisors had only a limited registration, there was a "carve-out" to let them sell GICs. "All of sudden what we meant by that term has morphed into a security," Gordon says.

He doesn't say whether index-linked GICs should be treated as securities — that was a question asked at the OSC conference — but says "to the extent that these deposit instruments have a security element to them, we want to find a way to bring those products back into the securities regulatory regime.

More than that, though, he is concerned about product suitability. "It's not rocket science when we say know your product," he warns. "If it's a security you're not licensed in then don't sell it."
If you've got time on your hands, you may want to look at the IDA's analysis of the "retailization" of hedge funds through PPNs &#151; though hedge funds have largely left the field, while banks are now wrapping GICs around dividend funds.

Posted: 21 Mar 2006 22:05
by yielder
smelly wrote: I wondered how hard it would be to find a Carrick article where he touted the benefits or at least gave PPNs some free advertising by not saying anything negative about them a year or two ago?
The hot spots of 2004 include principal-protected notes, a nanny investment if ever there was one

The costs of capital protection are such that a long-term investor would do better to simply buy stocks or funds.

The price of protection has always been the weak spot with capital guaranteed products
Carrick in an article written Jan 1, 2005.

and again on June 11, 2005
Principal-protected notes are a minor investing craze among risk-averse people who think it's better to have their capital protected in a complex, illiquid security than to simply commit to more transparent, higher-returning traditional investments.

Posted: 22 Mar 2006 12:17
by smelly
Now that Parvus and Yielder have provided links to older Carrick articles about PPNs, does anyone have any comments? Read the three older articles and then his most recent one. What an extreme and shameful about-face! Here is a blatant example of why I "don't like" the financial media and believe they cause more harm than good. I was going to snip and paste examples but it's like shooting fish in a barrel. Not only do his previous articles neglect to recommend readers do any research before investing, except for one minor mention of fees, he has absolutely no negative words or opinions about PPNs! He does everything short of shoving a pen in your hand, hold a gun to your head and force you to sign an application. If anyone here still values Carrick’s opinion after this, you've lost any credibility with me.

I feel another letter to the Editor coming on. Terrence!!!!

Posted: 22 Mar 2006 12:18
by smelly
On a related note, looks like someone else agrees with me.

http://www.canada.com/nationalpost/fina ... 1ee174fc6c

Posted: 22 Mar 2006 12:50
by Feeonly.ca
Smelly,

I think a little disclosure is appropriate before we continue this discussion.

As I said above: "PPN's are extremely popular with some advisors but they have a firm place on my standard list of investments to be avoided."

Have you used PPN's with your customers?

Posted: 22 Mar 2006 13:42
by yielder
smelly wrote:What an extreme and shameful about-face!
Are we reading the same thing?????????????????????

How are the pieces that I quoted positive statements about PPNs? Granted they aren't the same scathing tone of his current pieces but neither are they endorsements. And parvus is talking about hedge funds or notes linked to hedge funds. The PPNs being issued by the banks are a completely different beast. In fact, you can roll your own. You can buy a 9 year Gov't of Canada strip maturing 6/1/15 for $13,681.60 to yield 4.18%. You take the difference of $6,318.60 and buy a riskier asset. Since the strip pays $20,000 at maturity, your principal is protected. But only do this inside a tax deferred account because the strip's imputed income is taxed.

Posted: 22 Mar 2006 14:09
by smelly
Feeonly.ca wrote: Have you used PPN's with your customers?
Nope.

Posted: 22 Mar 2006 14:28
by smelly
yielder wrote:Are we reading the same thing?????????????????????
So you don't think an article describing a product isn't taken as an endorsement of the product by the un-sophisticated? The people who read FP? The majority of DIYers? Last Saturday's Tony Martin investor profile in the G&M featured an investor who said he relies on the G&M and ROB TV for investment direction. Some here are often quick to point out that journalist always/usually caution readers to get advice before investing but Carrick's earlier PPN articles contained zero cautionary words.


And about “notes linked to hedge funds”,
ONE Financial's MSCI Hedge invest index notes guarantee that you'll receive your capital back at the end of the 10-year term, and that you'll receive a minimum 10-per-cent return (the guarantees are backed by the large French bank Société Générale).
So it’s a principle protected note linked to a hedge fund. And when you read the above paragraph, do you really doubt that many readers will say, “hey, it’s guaranteed and Rob is giving it a thumbs up so I think I’ll buy some”?

Posted: 22 Mar 2006 14:44
by yielder
smelly wrote:So you don't think an article describing a product isn't taken as an endorsement of the product by the un-sophisticated?
You started out by saying that Carrick "touted the benefits" or didn't say "anything negative".

It's OK to say oops. :P
And about “notes linked to hedge funds”,
I assume that Carrick did his homework before he wrote about One Financial's MSCI Hedge Invest Index Notes. Do I doubt that readers would say, “hey, it’s guaranteed and Rob is giving it a thumbs up so I think I’ll buy some”? No, I don't. Some would. And some won't. And some will say "That sounds interesting. I think that I'll check into it further."

This is a different beast from the PPNs he talks about in the current articles. He's specifically talking about the bank PPNs. He didn't like them in 2005; he likes them even less today. There's no flip-flop.

Posted: 22 Mar 2006 16:58
by smelly
The hot spots of 2004 include principal-protected notes, a nanny investment if ever there was one
You suggested that this was evidence of Rob “not liking” PPNs in ’05? I have no idea what he means by “nanny investment”. Mary Poppins was a nanny wasn't she? Everyone loves Mary Poppins don't they. So maybe it was a positive comment.

So, for me, that leaves two negative remarks;
The costs of capital protection are such that a long-term investor would do better to simply buy stocks or funds.

The price of protection has always been the weak spot with capital guaranteed products
But the rest of the article says ……………..
The analysis firm Investor Economics has studied the product sales trends in the financial industry and identified a "risk management" theme that will persist in 2005. "Investors haven't really changed their desire, which is to increase wealth," says Earl Bederman, the firm's president. "But they are more conscious of protecting wealth."The fund industry had some bad publicity to contend with in 2004, with four big companies agreeing to pay $156.5-million in fines after acknowledging they permitted a few favoured clients to engage in abusive trading that penalized rank and file unitholders.
Some in the financial realm believe that cumulative negative publicity has turned both investors and some advisers against funds. "If you want the top 10 issues of 2004 from market professional's point of view, numbers one through five would be mutual funds," said one wealth management executive. "Everyone hates mutual funds now."
An increasingly popular alternative to both GICs and funds in 2004 was the principal-protected note, which offers the opportunity to make gains based on various stocks or stock indexes and, at worst, get your principal back. The idea of capital protection obviously resonates with investors.
"Some clients can't handle the volatility, they can't handle the risk factor," said Steven Marshall, president of Open Sky Capital, a major player in structured products like principal-guaranteed notes that is part owned by National Bank of Canada. "They want to know if there is a way to bring a sense of security, which is the capital guarantee, without losing too much of their return, at a reasonable price."
The price of protection has always been the weak spot with capital guaranteed products, but Mr. Marshall said that's slowly changing as the market develops. "Competition has forced many structurers to bring far more innovative products out there, with far cheaper fees," he said.
Mr. Marshall estimates that structured products, including principal-guaranteed notes and closed-end mutual funds that are listed on stock exchanges, have attracted roughly $13-billion in assets. He says asset growth of 50 per cent a year is possible as the structured product market widens to include new products in areas like fixed income.
The surprising thing about the safe investing trend is that it has taken hold during a two-year period in which the stock markets have turned in the best two years since the bull market of the late 1990s. Expectations of weak equity markets in 2005 mean there's no reason for the trend to wane, said Mackenzie's Mr. Feather. "I think you're going to see it prevail for quite some time," he said. "I really do."

And the second article includes……………

For the I-can't-lose-money investor.

Principal-protected notes give in give investors exposure to baskets of stocks, stock indexes, mutual funds and hedge funds without risk of losing money, and now income trusts are available in this format as well. While these notes aren't funds -- they're more like GICs -- many of them are made available through the FundSERV electronic trading system that the mutual fund industry uses.
Two trust-based note series were launched this week from Faircourt Asset Management: Faircourt principal protected ROC deposit notes, which are targeted at non-registered accounts and have been set up to offer tax-advantaged monthly distributions, and Faircourt principal protected income trust deposit notes, which are meant for registered accounts.
Principal-protected notes are a minor investing craze among risk-averse people who think it's better to have their capital protected in a complex, illiquid security than to simply commit to more transparent, higher-returning traditional investments.
From this you deduce that Rob didn't like PPNs in 2005?!?

Posted: 22 Mar 2006 17:06
by smelly
I honestly expected several posters to jump in and finally agree that this was a good example of bad journalism and conceed that maybe I have a valid point about the financial media hurting more than they help. But no. And not one comment about the Cramer issue.

What does it take for you folks to see the light? What do they have to do, kil someone? What if it was proven that someone committed suicide because of something a financial journalist said to them. Would that do it or would you excuse that as well?

Posted: 22 Mar 2006 18:18
by brucecohen
smelly wrote:
The hot spots of 2004 include principal-protected notes, a nanny investment if ever there was one
You suggested that this was evidence of Rob “not liking” PPNs in ’05? I have no idea what he means by “nanny investment”. Mary Poppins was a nanny wasn't she? Everyone loves Mary Poppins don't they. So maybe it was a positive comment.

So, for me, that leaves two negative remarks;
The costs of capital protection are such that a long-term investor would do better to simply buy stocks or funds.

The price of protection has always been the weak spot with capital guaranteed products
But the rest of the article says ……………..
The analysis firm Investor Economics has studied the product sales trends in the financial industry and identified a "risk management" theme that will persist in 2005. "Investors haven't really changed their desire, which is to increase wealth," says Earl Bederman, the firm's president. "But they are more conscious of protecting wealth."The fund industry had some bad publicity to contend with in 2004, with four big companies agreeing to pay $156.5-million in fines after acknowledging they permitted a few favoured clients to engage in abusive trading that penalized rank and file unitholders.
Some in the financial realm believe that cumulative negative publicity has turned both investors and some advisers against funds. "If you want the top 10 issues of 2004 from market professional's point of view, numbers one through five would be mutual funds," said one wealth management executive. "Everyone hates mutual funds now."
An increasingly popular alternative to both GICs and funds in 2004 was the principal-protected note, which offers the opportunity to make gains based on various stocks or stock indexes and, at worst, get your principal back. The idea of capital protection obviously resonates with investors.
"Some clients can't handle the volatility, they can't handle the risk factor," said Steven Marshall, president of Open Sky Capital, a major player in structured products like principal-guaranteed notes that is part owned by National Bank of Canada. "They want to know if there is a way to bring a sense of security, which is the capital guarantee, without losing too much of their return, at a reasonable price."
The price of protection has always been the weak spot with capital guaranteed products, but Mr. Marshall said that's slowly changing as the market develops. "Competition has forced many structurers to bring far more innovative products out there, with far cheaper fees," he said.
Mr. Marshall estimates that structured products, including principal-guaranteed notes and closed-end mutual funds that are listed on stock exchanges, have attracted roughly $13-billion in assets. He says asset growth of 50 per cent a year is possible as the structured product market widens to include new products in areas like fixed income.
The surprising thing about the safe investing trend is that it has taken hold during a two-year period in which the stock markets have turned in the best two years since the bull market of the late 1990s. Expectations of weak equity markets in 2005 mean there's no reason for the trend to wane, said Mackenzie's Mr. Feather. "I think you're going to see it prevail for quite some time," he said. "I really do."

And the second article includes……………

For the I-can't-lose-money investor.

Principal-protected notes give in give investors exposure to baskets of stocks, stock indexes, mutual funds and hedge funds without risk of losing money, and now income trusts are available in this format as well. While these notes aren't funds -- they're more like GICs -- many of them are made available through the FundSERV electronic trading system that the mutual fund industry uses.
Two trust-based note series were launched this week from Faircourt Asset Management: Faircourt principal protected ROC deposit notes, which are targeted at non-registered accounts and have been set up to offer tax-advantaged monthly distributions, and Faircourt principal protected income trust deposit notes, which are meant for registered accounts.
Principal-protected notes are a minor investing craze among risk-averse people who think it's better to have their capital protected in a complex, illiquid security than to simply commit to more transparent, higher-returning traditional investments.
From this you deduce that Rob didn't like PPNs in 2005?!?
I didn't want to get into yet another fruitless discussion but....

1. I've never seen Cramer on CNBC but read an article about him a few months ago. As I recall, he is -- or was -- a licensed advisor. (gasp!) In any event, the academic study you touted is hardly news. Over something like two DECADES, Mark Hulbert (edited to correct name) has documented how very, very, very, very few stock market tipsters have reliably delivered value. For that matter, I wonder how retail advisors like you would fare if an academic combed through client records and computed returns for the median client. :D

As I think about it, who does the greater disservice -- Cramer or outright shills like DR Jerry White, Garth Turner et al who are paid handsomely by experienced, licensed, qualified "professional" advisors (and co-oping product manufacturers). I'd be surprised if many of the Ma and Pa Kettles who go to those financial "seminars" are also watching CNBC.

2. But more to the point, let's go through your critque of that Carrick column:
The analysis firm Investor Economics has studied the product sales trends in the financial industry and identified a "risk management" theme that will persist in 2005. "Investors haven't really changed their desire, which is to increase wealth," says Earl Bederman, the firm's president. "But they are more conscious of protecting wealth."
Carrick is quoting Earl Bederman. That's what journalists are supposed to do -- quote people. Bederman's firm (a client of mine) tracks the types of products that investors are buying by gathering sales data from a wide range of retailers and manufacturers -- including Assante, I believe. Do you dispute Bederman's view? Do you disagree with his findings that products touting downside protection have been big sellers (unfortunately, in my view)? Exactly, what's your problem with this quote?
Some in the financial realm believe that cumulative negative publicity has turned both investors and some advisers against funds. "If you want the top 10 issues of 2004 from market professional's point of view, numbers one through five would be mutual funds," said one wealth management executive. "Everyone hates mutual funds now."
I heard the same talk -- didn't believe it but heard it. This was sloppy work on Carrick's part. The exec probably asked not to be quoted by name but Carrick could have, and should have, identified the type of business this person does. I'd place more value on this quote if it came from a retail brokerage executive than if it came from a guy at a firm that manufactures PPNs.
An increasingly popular alternative to both GICs and funds in 2004 was the principal-protected note, which offers the opportunity to make gains based on various stocks or stock indexes and, at worst, get your principal back.
Are PPNs "increasingly popular"? Yes -- unfortunately. Are they an alternative to GICs and funds? Yes. Do they offer opportunity to make gains based on various stocks or stock indexes? Yes, if you're talking about the generic definition of gains as opposed to the tax act definition. Is the worst case that you get back your principal? Yes, unless there's hanky panky, a risk you face with any investment.
The price of protection has always been the weak spot with capital guaranteed products, but Mr. Marshall said that's slowly changing as the market develops. "Competition has forced many structurers to bring far more innovative products out there, with far cheaper fees," he said.
Here it's Carrick who states that the capital guarantee has always been the weak spot of such products? Was he wrong? He then goes on to quote a market participant who said competition has led to lower fees. I pay no attention to PPNs so I don't know if Marshall was being honest. Do you? In any event, Marshall is with a firm that's registered and licensed to do business. If Carrick shouldn't be quoting someone who knows about the mechanics and marketing of the product from the inside, who should he be quoting -- a "professional" advisor who either loves or hates them based on the marketing bumpf that Marshall published and the gladhanding of Marshall's wholesalers?
Mr. Marshall estimates that structured products, including principal-guaranteed notes and closed-end mutual funds that are listed on stock exchanges, have attracted roughly $13-billion in assets. He says asset growth of 50 per cent a year is possible as the structured product market widens to include new products in areas like fixed income.
I don't know if this was or wasn't factually correct. Carrick should have asked Bederman, the professional market tracker, though Marshall was probably quoting Bederman's data. There's no group like IFIC that compiles data on these products. Bederman's firm does. I don't who else does.
Expectations of weak equity markets in 2005 mean there's no reason for the trend to wane, said Mackenzie's Mr. Feather. "I think you're going to see it prevail for quite some time," he said. "I really do."
Here again we have a journalist actually quoting someone instead of mouting off on his own. In this case, the source is interesting because it's a guy who runs a big company that manufactures both PPNs and mutual funds. What's wrong with running his insight -- especially when it reflected the prevailing view on the street?

Now let's look at the next excerpt:
without risk of losing money,
Assuming no hanky panky, does the PPN guarantee return of capital? Yes or no. Sure, Carrick could have gone into opportunity cost and inflation, but if I recall correctly, the article was an overview of a lot of products. Whenever you sell a mutual fund, do you directly and clearly tell the client that:
-- He/she can lose money due to market effect or poor management
-- The manager who built the fund's track record might leave, or might not even be around now
-- The manager running the fund might drift away from the advertized style
-- The reported MER does not include trading costs
-- The fund might pay an unexpectedly large taxable distribution
-- The fund might have only a so-so record against an index that can be bought much more cheaply and tax-efficiently through an ETF
-- The fund's sponsor might be acquired by another company, which then might merge this fund with one of its own
-- The fund might be little more than a closet index with some foreign content added on
Do you give those warnings and others verbally, or do you assume the client will thoroughly read and understand the prospectus?
While these notes aren't funds -- they're more like GICs --
Actually they're more like index-linked GICs. But, like GICs and unlike funds, they're issued for a set term. And, like GICs and unlike funds, the open investor's return (if any) is taxed as interest. And, like GICs and unlike funds, there's a guarantee that the initial capital will be returned. And, like GICs but unlike funds, the money is locked in for the specified term. (I understand that some PPNs do offer secondary trading, but there's also secondary trading for some GICs.) So, are PPNs "more like GICs" than they are like funds?
Principal-protected notes are a minor investing craze among risk-averse people who think it's better to have their capital protected in a complex, illiquid security than to simply commit to more transparent, higher-returning traditional investments.
Craze...complex...illiquid

More transparent...higher-returning

Which set of adjectives is more positive?

Posted: 22 Mar 2006 19:45
by smelly
Bruce, at the risk of getting all sloppy and Sammy Maudlin on you, I want you to know that I have a lot of respect for you and your work. If all financial media used your standards and principles as a guidline, I doubt if I'd be pounding back 10 mg of Altace every day.

But on this issue either I'm an abject failure at getting my point across to you or,.... Well some other factor is causing a problem here.

Try to go back to a point where you knew nothing about personal finance. See if you can pretend you are just an average schulb taking the Go train with the rest of the herd to some soul destroying office clerk job in a concrete bunker downtown. Or you drove your F-150 to your mind numbing graveyard 8 hours at the plant (you're wearing a baseball cap, probably backwards, and a Kenora dinner jacket over a black wife-beater and some faded jeans). You reading your Globe and Mail Business section because everyone else does and you come across an article about something you've never heard of before - Principle Protected Notes - by Rob Carrick, the number one personal finance columnist. Now forget the details of the article because you don't know what Bruce Cohen or Mr. Betty or Norbert or Feeonly or Dennis or Bylo or Dan Hallett (sorry if I forgot anyone) knows. Can you imagine yourself in that position? Now tell me. Would that person think Rob is fer or agin PPNs? And would that guy be inclined to consider investing in PPNs or not?

And it's not about what I tell or don't tell my clients or how their investments have done (although I'd certainly not have a problem with a review of how I've affected my client's net worth). You raise the minutest details of my message and go off on immaterial yabbut tangents.

BTW, for what it's worth, my only experience with Mr. Bederman was at the Assante conference in Calgary a couple of years ago. He was speaking about trends in the business. My only recollection of his presentation was that at one point he was trying to make the point that fee based was a hugely growing trend but his slide with projections based on historical numbers showed a very slight growth in that trend. So I was a little underwhelmed.

Posted: 22 Mar 2006 20:42
by brucecohen
smelly wrote:but his slide with projections based on historical numbers showed a very slight growth in that trend. So I was a little underwhelmed.
Yeah, that's an ongoing issue with IEI's work. Their clients are the top execs of companies like Assante, so they feel compelled to base a good part of their consulting business on spotting "emerging trends" early. As a result, they often get ahead of themselves in declaring trends. (I've had more than one go-round with them on various issues.)
You reading your Globe and Mail Business section because everyone else does and you come across an article about something you've never heard of before - Principle Protected Notes - by Rob Carrick, the number one personal finance columnist...Now tell me. Would that person think Rob is fer or agin PPNs? And would that guy be inclined to consider investing in PPNs or not?
I honestly think Carrick appears to be down on them. Would I, as an F-150 driving, ballcap wearing working stiff, be inclined to consider them? Maybe, if I had just lost my shirt in the equity mutual fund downturn. In that case, I'd mention the PPN article to my advisor and expect him/her to tell me the pros and cons. That's actually exactly what happened years ago when I saw an article about some new life insurance contracts that paid partial benefits on events like heart attacks that were not fatal. I asked my insurance agent about it, and he explained how they weren't worthwhile for me. That's also what happened when I saw a piece on TV about a specialized leading-edge clinic that used a roto-rooter type of device to clean out arteries. I mentioned it to my cardiologist. He said they'd been doing that at Toronto's St. Mike's for 10 years but only in particular cases because it carried considerable risk.

While eating dinner tonight, I skimmed a newspaper about Lincoln producing a pick-up truck. Can't say it's driving me to trade in my F-150. If I did that, I'd have to get a new ballcap too. :wink:

Posted: 22 Mar 2006 20:57
by dagan
[Restored from backup 2006-07-18]

Lordy, this topic seems to never end. Smelly, you risk turning people off and against with over kill.

FWIW, I think that you make some contradictory assumptions about people.
you drove your F-150 to your mind numbing graveyard 8 hours at the plant (you're wearing a baseball cap, probably backwards, and a Kenora dinner jacket over a black wife-beater and some faded jeans). You reading your Globe and Mail Business section because everyone else does
1. You assume that the average Joe is an unintelligent schlub. Maybe 'yes', maybe 'no'. I tend to believe that even people working average jobs are more intelligent than you might give credit for. Some of the most intelligent people I have ever met worked in factories. some of the dumbest people I have ever met had degrees. Some were financial planners.

2. Second, you assume that although the average schlub is incapable of independant, intelligent thinking, they regularly read the Globe and Mail and financial reporters.

IMO, these 2 things do not easily fit together. I think that the reality is that there are 2 general categories:

1. People are not interested in this stuff. They hire financial planners at whatever level, and any flubbing of decisions is made by the professional.

2. People are interested in this stuff. They read and educate themselves and they are able to comprehend and balance perspectives better than the near zero credit that you give them.

But I'm willing to be wrong on this. I'll keep my eyes out for beer guzzling, chick oggling factory workers reading the Financial Post.

Posted: 22 Mar 2006 21:01
by dagan
[Restored from backup 2006-07-18]

BTW, I've read that the F-150 is the number 1 vehicle of choice of self made millionaires. Somehow they were able to read financial journalists and still make good decisions.

Have some faith and give some credit. You'll feel better and be able to cut down on the blood pressure medication that you mentioned.

Posted: 22 Mar 2006 22:17
by Jo Anne
dagan wrote: I think that the reality is that there are 2 general categories:

1. People are not interested in this stuff. They hire financial planners at whatever level, and any flubbing of decisions is made by the professional.

2. People are interested in this stuff. They read and educate themselves and they are able to comprehend and balance perspectives better than the near zero credit that you give them.
I think there's a third category, and that is people who are not interested in this stuff and so they ignore it. Mind you, people in this category may change to category 1 or 2 as they get a little older/closer to retirement. But there are A LOT of people who don't give finances a second thought, usually because they don't have much money and they figure it wouldn't make any difference anyway.
the F-150 is the number 1 vehicle of choice of self made millionaires
Everybody around here drives an F-150.

Posted: 22 Mar 2006 22:27
by NormR
Geeze smelly, Carrick is one of the better financial journalists in Canada. You really take things way too far with your attacks against him.

Posted: 22 Mar 2006 22:45
by smelly
Fine. I'm the only one here who talks to hundreds of these regular, real people every year but you all know better. I get lots of people quoting what they think they read or heard on TV but it must be an aberration. A local phenomenon.

I'm getting tired of debating this topic.