Investment dealers who sell both mutual funds and securities could see industry savings of nearly half a billion dollars over a decade if Canada’s self-regulatory organizations were merged into a single entity.
A review by Deloitte LLP to be published on Tuesday analyzes the potential benefits to the financial services industry of a merger between the Investment Industry Regulatory Organization of Canada (IIROC), the member-funded group that oversees investment dealers across Canada; and the Mutual Fund Dealers Association of Canada (MFDA), the industry group that oversees mutual fund distributors.
The report – which was commissioned by IIROC – estimates that investment firms that run both a mutual fund business and an investment securities dealer could, together, reduce operating costs between $380-million and $490-million over the next decade.
“Firms have been telling us for years that the No. 1 barrier to innovation is regulatory fragmentation,” said Irene Winel, IIROC’s senior vice-president of member regulation and strategy.
“Eliminating duplicative and overlapping regulation will generate significant savings for reinvestment, as well as simplify and improve the overall client service experience.”
The MFDA and IIROC are industry-funded self-regulatory organizations that can sanction and fine delinquent member companies and individual advisers. The MFDA oversees about 90 mutual fund distributors, while IIROC is responsible for the supervision of 170 investment dealers.
The two organizations have faced criticism for their overlapping oversight as more wealth managers serve customers who buy both mutual funds and individual securities, requiring some to be licensed by both regulators.
In late 2019, the Canadian Securities Administrators (CSA), an umbrella organization of Canada’s provincial and territorial securities commissions, announced it was reviewing the regulatory framework that governs both organizations. The review prompted the MFDA and IIROC to publish their own proposals.
IIROC suggested a merger in which the two organizations would operate as a single entity, without changes to their existing regulatory rules, business models or fee structures. Earlier this year, the MFDA released a report that recommended building a new organization from scratch.
The Deloitte report comes one month after the CSA published its review asking for more public input before it makes a decision.
“One regulator means the [investment dealer] can take a holistic view of the client’s needs and goals over their financial life-cycle,” said Bill Packham, chief executive officer of Aviso Wealth, a dual-licensed investment company. “The client can have one adviser, one [sign-up procedure], one statement, and gain access to a full suite of investment solutions on one platform.”
The Deloitte report does not examine whether a merger would increase or reduce the membership fees, but does suggest the combination would eliminate several administrative costs for operating systems and technology, legal expenses, staffing and other expenses – such as compliance – that are related to overlapping regulation.
Companies would also be able to combine training programs, accounting and audit groups and work under one set of regulatory rules, the report says.
New firms could enter the market more easily because they would not have to decide which regulator to operate under, the report said. Investors would have greater access to investment products under one roof, and it would be clearer where to make complaints with a regulator.
Christopher Enright, president of Aligned Capital Partners Inc., said while reducing costs is definitely an important part of the consolidation proposal, it is secondary to improving investor outcomes.
“We need to eliminate a lot of the investor confusion that continues to be out there today,” he said. “The industry has already invested so much around transparency and investor protection, but we need to do more to provide investors the access to all the products and services they need.”
Desjardin Group’s chief compliance officer, Sylvain Perreault, said if the financial services industry can adapt to the new technology that is rapidly emerging, the overall cost savings will eventually pass on to clients.
“This is an evolution of the client’s needs, which over the past 20 years has shifted from being products-driven to advice-driven,” says Mr. Perreault, who oversees both the company’s mutual fund dealer and investment brokerage.
“A [regulatory organization] based on one product no longer makes sense, as clients are looking for an entire bouquet of services, including estate planning, fiscal planning and family offices.”
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Lawyer for prominent Halifax investor says the bank is to blame in multi-million investment loss – Global News
The lawyer representing a high profile investment advisor in Halifax says his client is not at fault in a civil lawsuit that is seeking $40 million from a failed investment strategy and is placing the blame squarely on the National Bank of Canada and its subsidiary National Bank Investment Network (NBIN).
On Sept. 14, a $40 million civil lawsuit was filed on behalf of 30 plaintiffs at the Nova Scotia Supreme court against Fredrick Saturley and his investment firm High Tide Wealth Management and the NBIN who supervise the accounts.
High Tide’s lawyer Chris Robinson says many of the plaintiffs in the civil suit are long-time clients who have had financial success with Saturley and as part of their investment strategy had signed discretionary trading agreements which allow Saturley and High Tide to pursue trades without consultation.
Robinson says every one of these clients listed in the civil suit entered into and signed an agreement as part of their investment policy statement with High Tide.
“And that investment policy statement for these clients indicated that they were seeking capital appreciation, generation of income and that they were willing to accept above-average risk to achieve these results,” said Robinson.
A discretionary agreement allows Saturley and High Tide the ability to make trades without having to call and consult the client said Robinson which contradicts exactly what many of the clients are claiming in the lawsuit.
$40 million lawsuit filed against prominent Halifax investor and national bank
Lawyer Ian Gray represents the 30 plaintiffs and acknowledges that some of his clients may have signed discretionary agreements with High Tide but says they didn’t sign up for the high-risk trading that he says put their investments at risk.
“We’ve got people who wanted relatively aggressive strategies and we’ve got people who wanted extremely safe strategies and as best we can tell, they all got the same risky ride,” said Gray.
Gray and his clients allege Saturley was independently executing these risky investment strategies, and when the COVID-19 pandemic hit and the market crashed, so did the clients’ portfolios.
Retired Canadian Armed Forces member Trevor Long is one of the plaintiffs, he says he invested a significant amount of his disability payout from veteran affairs with High Tide wealth management in early 2019.
Long says he initially invested $80 thousand and when his portfolio was doing well, he added another $36 thousand.
“Everything was going good until the middle of February and then March, I get a call and a lot of money disappeared,” said Long.
Long estimates he lost more than $80 thousand and alleges Saturley was pursuing high-risk investment strategies which he never signed up for.
“He was doing what he wasn’t authorized to do by me as a client and the bank obviously let him do it and we all got run roughshod over,” said Long.
Coronavirus outbreak: The impact COVID-19 is having on the global economy
Robinson says the client’s anger is misplaced and says it’s not Saturley or High Tide that is at fault but suggests it’s the bank and NBIN who panicked in Mid-March when COVID-19 sent the market crashing.
On March 9 as the market was sinking, many of the clients received a margin call on their account and needed to make a deposit to bring their accounts back onside says Robinson and in the meantime, Saturley was working with his clients to come up with the money the bank was looking for.
Robinson said the bank came calling again on Sunday, March 15 and said they were going to liquidate all the accounts on Monday if the money wasn’t in place, which he said left Saturley and the clients little time to come up with the money.
“The bank panicked and I have no idea why they did that,” said Robinson. “What they did however is step into the shoes of Mr. Saturley and his clients and simply said if there’s not a cheque there at market open, everything is getting liquidated and that’s what they did.”
Robinson said Saturley and his clients didn’t have time to meet the bank’s demands and if they only allowed them a few more days the market would have turned itself around and the accounts would have stabilized themselves.
“If the bank had of just been patient,” said Robinson. “Within 10-days those accounts would have been back onside and none of those liquidating transactions would have needed to happen.”
Gray said he agrees the bank is at fault but says Saturley was operating outside of his clients’ agreement.
“Make no mistake we say the bank is responsible for this,” said Gray. “But we say Mr. Saturley and his company are responsible as well.”
Global News reached out to the National Bank for an interview but they declined to comment for this story.
Neither side has filed a defense statement at this point as the legal counsel for the plaintiffs said they will likely be adding further names to the civil lawsuit and will make amendments to the lawsuit in the coming weeks.
None of these allegations have been proven in court and no court date is scheduled at this time.
© 2020 Global News, a division of Corus Entertainment Inc.
Event Store Secures Series A Investment English English – PRNewswire
BATH, England, Sept. 29, 2020 /PRNewswire/ — Event Store today announces it has secured Series A financing from strategic investor Qualasept Holdings (‘QH’).
Event Store is the company behind EventStoreDB, the popular open source event stream database. EventStoreDB was open sourced in 2012 and has relatively quietly built a strong commercial business. In late 2018, Event Store Limited was formed and an expanded leadership, engineering, and support team were introduced. The Series A investment represents Event Store’s next stage of growth towards EventStoreDB’s adoption in the broader database market.
EventStoreDB is an operational “source of record” database technology. It has similarities to event-oriented integration technologies, such as Apache Kafka, from a stream and API perspective. However, it was built for database workloads from the start. Dave Remy, Event Store CEO, explains, “Most mainstream database technologies, whether relational, graph, or document-oriented, keep the latest state of the data, throwing away the old data when it changes. In contrast, EventStoreDB, the leader in the emerging class of databases, called Event Stores, is specifically designed to keep the changes along with the business context of those changes, in the form of events. Current state can then be derived from replaying the event stream. This pattern enables a myriad of benefits, including powerful audit, debugging, caching, occasionally connected scenarios, and much more.”
Event Stores are foundational to the increasingly popular Event Sourcing design pattern.
EventStoreDB is applicable across industries and is particularly valuable for those with challenging audit requirements, such as financial services and healthcare. Innovative companies like Walmart, Xero, Insureon, Linedata, Made.com, UK National Health Service, Swiss Air Traffic Control and many more use EventStoreDB in mission-critical production environments.
Building on its momentum, the company is launching Event Store Cloud, a multi-cloud database as a service (DBaaS). The subscription service, currently in Preview, will provide cloud convenience and make EventStoreDB more accessible to developers and companies of all sizes.
“As applications increasingly move toward event-driven architectures, foundational platforms like EventStoreDB will be a critical first source of truth in capturing and enabling analysis of event data. This technology will generate meaningful and measurable value across multiple industries,” said Ben Kolada, Director, Head of DataTech at ICON Corporate Finance.
“From the time Greg Young and his team released EventStoreDB in 2012, it has been the go-to database for CQRS and Event Sourcing projects. This Series A investment represents a new stage for Event Store and EventStoreDB. We will accelerate the development of Event Store Cloud, improve the developer experience, increase scalability, and build new products and services to help developers build systems within an event-driven architecture,” Dave Remy said.
Tech investment bank ICON Corporate Finance advised Event Store on the transaction and corporate structuring, while QH was advised by BDO, Roxburgh Milkins Limited, and Alantra.
Email: [email protected]
SOURCE Event Store Limited
View Marketing as an Investment—Not an Expense – Advanced Manufacturing
Trends and Ideas in Strategic Marketing
Peter Drucker, known as the father of modern management, was quoted in a 2006 article in Forbes as saying, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Although today’s business owners are often inclined to see marketing as an expense, Drucker’s view is more accurate. Marketing is a needed investment. Marketing drives results by finding new customers.
Time to Build a Moat
When organizations treat marketing as a cost, they often focus on short-term sales and ignore the long term. However, if you want your company to continue growing, your goal should be to build as much of a moat around your business as you can. This is achieved by expanding your investment of marketing dollars into your company’s owned assets. Such investments may include; updating your message and website every year, producing customer video testimonials for use as sales tools, developing a series of educational webinars, and developing content that can be used both for thought leadership and for search engine optimization (SEO). Although these efforts may not produce short-term returns, they will aid in strengthening your manufacturing business over time.
The problem is that if you only look for marketing initiatives that guarantee an immediate ROI—consistent with a view of marketing as an expense—you will never plant any of these long-term marketing seeds needed to build the moat that is necessary to create a sustainable competitive advantage.
Examining my own life as a business owner, I have “walked the walk” while growing TribalVision. The reason TribalVision has achieved success is that, from day one, I’ve understood the importance of marketing to unlock dramatic growth. Before even opening the doors for business, and with little money to spare, I wrote a book, spent months crafting TribalVision’s message, built a website that made TribalVision look like an established company, developed an animated video to explain the “why” behind TribalVision, wrote multiple white papers, developed numerous marketing presentations, and crafted a 30-page marketing plan to identify and capture new business.
If I had viewed marketing as an expense rather than an investment, I never would have done any of these activities. I simply would have started TribalVision with a business card, an average 10-page website and not much else, which is what most startups with little money do. Looking back 10 years later, although I cannot attribute a specific ROI to each of those assets, I know those investments as a whole provided a much larger payoff than I would have earned by focusing only on short-term ROI initiatives.
Take a Leap of Faith
If we are to build something great, we must take a leap of faith—a calculated leap of faith but a leap of faith nonetheless.
If Howard Schultz, Steve Jobs, Richard Branson, or Elon Musk invested only in efforts backed by guaranteed results, they never would have built their empires.
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