CBC News tonight: Investors Beware!
CBC News tonight: Investors Beware!
Just watched Sunday Newsworld. Last 1/2 hr was about the investment business. Well worth watching. Should repeat at 10:30pm EST on CBC.
Can You Trust Your Financial Adviser?
For those who missed it, it is available here:steves wrote:I was surprised by all the "declined to be interviewed" senior executives they mentioned. It certainly did not make the industry look good.
http://www.cbc.ca/sunday/2009/04/041209_3.html
I wonder what CIBC thought about the program!
Interesting audience comments about program on above site.
Not just seniors.sayhey wrote:Very well done I thought. All of us here are aware of the high fees, but too many are not. We need a program advising seniors and near seniors the pitfalls of being entirely in equities.
I see my kids making the same mistakes that we did. They wait until last minute to contribute to RRSP, then go to their bank and get sold some type of bank mutual fund that has high management fees and will never make them any money.
I sent them the link and just hope they watch it!
The masses do not understand...drawing a picture for 'em does not help one iota.We need more programs like this that will get through to the masses.
as an aside...CBC can air the same program next year and the response from the masses will be the same 'Surprise'.
Why support and reinforce WASTE...Pure-WASTE?
Sometimes the questions are complicated and the answers are simple...Dr Seuss
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind...Dr Seuss
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind...Dr Seuss
IMO this segment did a rather lousy job of making any distinction between what are fraudulent activities and what is nothing more than 'business risk'. A halfhearted attempt to tie together common sales practices with a hefty dose of principal agent problem and then linking it with outright fraud and regulator impotence does not do anyone any good, including the people a segment like this is supposed to help (the real guppies). Just my 2 cents but highest MER's in the world and the FA disappearing with the guy's 3M are not related. One is a matter of onus on the consumer to shop around and ask questions and the other is a crime.
As a sidenote, why does it seem that financially non savvy entrepreneurs who hit the jackpot (positive Black Swan owing entirely to luck in all but a few cases IMO) feel the need to gamble their 10M, 20M or 100M on something they don't understand? I'm not talking about understanding complex financial products.....I'm talking about street smarts 101 as in understanding how not to get completely ripped off. You think one would learn that being an entrepreneur. I guess it is easily explained away with Taleb's if your so rich how come you're not so smart?
As a sidenote, why does it seem that financially non savvy entrepreneurs who hit the jackpot (positive Black Swan owing entirely to luck in all but a few cases IMO) feel the need to gamble their 10M, 20M or 100M on something they don't understand? I'm not talking about understanding complex financial products.....I'm talking about street smarts 101 as in understanding how not to get completely ripped off. You think one would learn that being an entrepreneur. I guess it is easily explained away with Taleb's if your so rich how come you're not so smart?
Show me the incentive and I will show you the outcome
--Charlie Munger
--Charlie Munger
The focus was on the banks. Real problem is with equity mutual funds and all of the salesman out there pushing their funds. The problem with banks is how they screw the retail investor on bonds. Not a word on this issue. I am over 60 % bonds. Globeinvestor has corporate bonds with a yield of 9%. I deal with RBC discount broker and they are selling the same bond for a yield of 6%. Who is raking in the cash these days? Thank goodness Flarety is looking at a national registry and full transparency on bond pricing. I don't believe in a big central government except for a central securities regulator
-
- Contributor
- Posts: 723
- Joined: 15 Jan 2007 02:34
What I find interesting is that even if it is outright fraud, you cannot expect the bank or the regulator or the police to help you recover that money. If there is no assistance with outright fraud, then what chances do you have with anything less serious?
What I take away from watching that segment is that - it is every man (or company) for himself. The regulators are there to protect the industry, not the investor.
What I take away from watching that segment is that - it is every man (or company) for himself. The regulators are there to protect the industry, not the investor.
Fraud is big business in Canada and enforcement lacking.Clock Watcher wrote:What I find interesting is that even if it is outright fraud, you cannot expect the bank or the regulator or the police to help you recover that money. If there is no assistance with outright fraud, then what chances do you have with anything less serious?
What I take away from watching that segment is that - it is every man (or company) for himself. The regulators are there to protect the industry, not the investor.
- stardancer
- Contributor
- Posts: 202
- Joined: 08 May 2009 21:01
I agree; although the segment did contain valuable information, as usual for this kind of reporting, it was sensational and designed to instill fear. It always amazes me at how people can turn over control of their $$ to someone else, then cry when they get taken to the cleaners. I have a financial advisor at TD Waterhouse, and he has always deferred to my choices. Yes, he chooses TD funds, but in the sectors that I am comfortable with. Now that we have been with him for a number of years, I can see how his long term planning is coming together. I do NOT blame him for the recent losses; those are out of his control just as they are mine.FinEcon wrote:IMO this segment did a rather lousy job of making any distinction between what are fraudulent activities and what is nothing more than 'business risk'. A halfhearted attempt to tie together common sales practices with a hefty dose of principal agent problem and then linking it with outright fraud and regulator impotence does not do anyone any good, including the people a segment like this is supposed to help (the real guppies). Just my 2 cents but highest MER's in the world and the FA disappearing with the guy's 3M are not related. One is a matter of onus on the consumer to shop around and ask questions and the other is a crime. [/i]
- Norbert Schlenker
- Veteran Contributor
- Posts: 7960
- Joined: 16 Feb 2005 09:56
- Location: An Argument Surrounded By Water
- Contact:
I was a little disappointed with it. Of course people should keep their eyes open for thieves. Of course ass covering by brokerage management is going to occur. However, I think way too much time was spent on the Elford/Kyle/Buell/Urquhart complaints about ten or fifteen year old frauds.
Nothing can protect people who want to buy the Brooklyn Bridge.
Don't know if it's a repeat but an expose on cbc news sunday last night (but I'm just watching it now).
newguy
edit : repeat, I got fooled when they talked about Canada's new financial literacy program.
http://www.thestar.com/business/article/657537
Sounds like a good idea......in theory.
newguy
edit : repeat, I got fooled when they talked about Canada's new financial literacy program.
http://www.thestar.com/business/article/657537
Sounds like a good idea......in theory.
Like every other thing they taught us in high school. Caveat emptor (from my grade 10 latin class). Ipso facto. Et cetera. QED.newguy wrote:repeat, I got fooled when they talked about Canada's new financial literacy program.
http://www.thestar.com/business/article/657537
Sounds like a good idea......in theory.
For the fun of it...Keith
- Mike Schimek
- Veteran Contributor
- Posts: 2698
- Joined: 04 Nov 2007 18:25
- Location: Montreal, Quebec
Sounds like a great idea, improving folks financial literacy in any way benefits the country as a whole. Things like this and the TFSA somewhat erode the anger I feel at Harper for running us into deficits.Sounds like a good idea......in theory.
Research until your head hurts then scream Banzai!!! and charge fearlessly to victory or death!
- parvus
- Veteran Contributor
- Posts: 10014
- Joined: 20 Feb 2005 16:09
- Location: Waiting for the real estate meltdown on Rua Açores.
What, take away the entertainment value? (BTW, did Joe Killoran put in an appearance?)Norbert Schlenker wrote:I was a little disappointed with it. Of course people should keep their eyes open for thieves. Of course ass covering by brokerage management is going to occur. However, I think way too much time was spent on the Elford/Kyle/Buell/Urquhart complaints about ten or fifteen year old frauds.
Let's think this through. Greater financial literacy (through taxes supporting public education, among other things) may not lead to lower spreads, as investors instead opt for GICs (with embedded spreads), fixed-rate mortgages (with predictable spreads) and so on. That's fine, and perhaps retail investors should not be participants in wholesale capital markets for bonds, IPOs and secondary offerings.newguy wrote:edit : repeat, I got fooled when they talked about Canada's new financial literacy program.
http://www.thestar.com/business/article/657537
Sounds like a good idea......in theory.
After all, they're not bearing the pre-market risk of bringing an issue to market, be it a bond, an IPO or a bought offering for a secondary issue, or a new issue of prefs, that dealers are going to shop, and shop as fast as they can, in the broadest possible quantity. Retail investors want the best price; institutional investors want the best execution of a trade. The two are not the same.
It seems to me that stock and bond markets are not quite utilities, deserving of regulated prices — and prescribed markups. But I may be wrong.
On the other hand, intermediaries in financial markets, unable to earn a profitable spread between fixed GICs and riskier long-term bonds (including corporates) or between variable mortgage rates and Libor, might simply stop. Again, there is no free lunch.
All we get, then, is the daily money market rate, less fees, for investment purposes, and for debt purposes, pay the daily money market rate plus 3% (representing the real cost of money). So risk capital dries up, or retreats from public markets.
It's reminiscent of
Just some thoughts. By political persuasion, I'm a socialist; as a student of the markets, I can see their role in funding innovative research, intermediating risk, overcoming inefficiencies that stand in the way of economic growth and, thus, by fostering productivity, contributing to improved living standards.the old banking saw was the 3-6-3 rule: pay depositors 3%, lend the money out at 6%, and be at the golf club by 3 o'clock.
Do unregulated markets misfire? Do regulated markets misfire? Do dirigiste markets misfire? I would suggest all do.
Which redoubles the need for financial literacy, recognizing that it has move from placebo to inoculation, when it comes to risk.
There are, at best, three options for risk reduction (of various sorts): the family (extended or not), the state, or the markets. Nor are these perfectly separable. Both families and states rely on markets to finance day-to-day money needs.
Again, just some thinking out loud, not really responding to anything here but more to recollections of investor advocates who seemed to have wanted it both ways: high returns without any risk (or taxes). Sigh.
Wovon man nicht sprechen kann, darüber muß man schweigen — a wit
finiki, the Canadian financial wiki Your go-to guide for financial basics
finiki, the Canadian financial wiki Your go-to guide for financial basics
Parvus, just how smart are your friends? If I read that to the majority of my coworkers they wouldn't have understood a word let alone cared. To me financial literacy is just the basics. Yoy guys have to get among the masses to see what they are thinking.Parvus wrote:Let's think this through. Greater financial literacy (through taxes supporting public education, among other things) may not lead to lower spreads, as investors instead opt for GICs (with embedded spreads), fixed-rate mortgages (with predictable spreads) and so on. That's fine, and perhaps retail investors should not be participants in wholesale capital markets for bonds, IPOs and secondary offerings.
Some examples for greater literacy;
Credit card balance insurance, an informal poll of my coworkers over the last few years >50%
CSB's by payroll deduction are the only non pension investment that all of my gf's coworkers have. (maybe ok)
Extended warranties, virtually everyone, including any gift I've received.
RRSP's, the few friends I have with these are all at IG except a few who use the bank wrap funds.
Taxes, no one does their own, (except one CA friend).
One employee was crying because she didn't know how to write a check (19yrs).
Nobody keeps the minimum balance in checking to avoid fees.
I could go on and on so just my favourite
paluwagan A scheme to save money.
Oh one more 6/49 is not a retirement plan.
newguy
Couldn't agree more. Never mind the general public. Even here it would help if posts were in plain English. The forum may attract a larger audience.newguy wrote: Parvus, just how smart are your friends? If I read that to the majority of my coworkers they wouldn't have understood a word let alone cared.
I happened to see two job ads in the local paper the other day. One was for an electrical technician.
Part of the ad read "As a key member of our reliability team, you will lead root cause analysis processes to solve reliability problems and drive the implementation of long-term solutions to improve asset availability"
Shoot time flies, must run - As a key member of our household reliability team I must go out and find the root cause of an environmental problem with one our mechanical transportation assets with a view to implementing a long term solution that will improve asset availability.
IOW, go out and check the darned oil leak on my old diesel.
In Saudi our 'Buildings Department' produced an instruction booklet aimed at low paid TCNs, (Third Country Nationals), whose English, if they possessed any at all, was mega-basic.Springbok wrote: Part of the ad read "As a key member of our reliability team, you will lead root cause analysis processes to solve reliability problems and drive the implementation of long-term solutions to improve asset availability"
The section on mopping a floor began with "In order to facilitate the distribution of the cleaning fluid..."
Exit, pursued by a bear.
William Shakespeare, Stage direction in "The Winter's Tale"
William Shakespeare, Stage direction in "The Winter's Tale"
Yes I agree. It is likely to be more like bringing back Home Economics 101,newguy wrote:...To me financial literacy is just the basics. Yoy guys have to get among the masses to see what they are thinking.
Some examples for greater literacy...
viz:
The biggest concern I would have is how to train the teachers to adequately cover the material. But wait, maybe they just need to invite the friendly guy from Investors Group!as a curriculum area that facilitates students to discover and further develop their own resources and capabilities to be used in their personal life, by directing their professional decisions and actions or preparing them for life
For the fun of it...Keith