COVID-19 has provided financial advisors with an opportunity to build greater relationships with clients that focus on holistic wealth management principles, including behavioural coaching and estate planning.
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The COVID-19 pandemic has been one of the most disruptive events of our lifetimes, unleashing economic effects that have been sharp, expansive and unprecedented.
The stomach-churning stock-market declines of March appear to be behind us, but the worries about a second wave of the pandemic along with the deep scars of job losses, increasing debt loads and continued economic uncertainty remain top of mind for most Canadians.
The pandemic has changed our lives completely, and we have to assess its true impact on the household finances of many Canadians as we begin the transition toward recovery.
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For small-business owners, their employees and others who have borne the heavy brunt of this crisis, economically, retirement planning will become even more important to ensure they’re able to make up for this difficult time.
For some investors, this crisis has tested their appetite for risk and has encouraged others to seek a greater level of financial advice and knowledge.
For financial advisors, COVID-19 has provided an opportunity to build greater relationships with clients that focus on holistic wealth management principles, including behavioural coaching and estate planning.
Although economic recovery is already underway, getting business activity back to prior levels could take some time given the health risks and the continued adjustment to a “new normal” in our society.
Profound economic shocks have historically accelerated certain trends that were already underway, leading to changes in society and consumer behaviour. Amid so much change today, there are three things that need to happen to help us emerge stronger and give middle-class investors the best chance for long-term success.
1. Improve transparency on investment fees
This crisis is forcing many Canadians to evaluate their expenses to ensure they’re getting value for them. We need to continue on this track by improving investment fee transparency in order to truly help investors understand what they’re paying for when receiving financial advice and products – particularly middle-class investors who will need the help of financial professionals to reach their retirement and savings goals.
A recent CFA Institute study out of the U.S. found that full disclosure of fees and other costs is a key factor among 83 per cent of retail investors surveyed in creating trusted relationships with an advisor.
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Kathy Bock, managing director and head of Vanguard Investments Canada Inc.
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We’ve seen signs of progress on this matter, with the Canadian Securities Administrators moving to limit or ban the use of deferred sales charges on the sale of mutual funds. That’s a strong signal and a move in the right direction.
But more can be done to help make investment fees and the cost of financial advice more transparent and aligned with other professional services, in which clients are fully aware of what and how much they’re paying for the services provided.
As an industry, we must provide our clients with simple and meaningful disclosure of investment costs in a way that’s easily understandable. Our credibility and the trust of investors depends on it.
2. Support innovation in the delivery of financial advice
The financial services industry gone through – and will continue to undergo – significant changes as a result of COVID-19. New technologies and evolving needs have raised the expectation for advisors to make interactions with clients more digital and mobile-friendly. That trend is poised to accelerate further in the months and years ahead.
Smart use of technology can create tremendous value and opportunity for all financial services firms to deliver better capabilities at a better price point for investors. Making financial services more accessible to a broader category of investors can have a significant long-term economic benefit.
A supportive regulatory framework is needed to help accelerate innovative approaches in the delivery of digital financial advice and solutions that are investor-focused.
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3. Strengthen Canadians’ financial literacy
The Ontario provincial government’s recent announcement to introduce enhanced financial literacy courses in the updated school curriculum that will take effect in September is an encouraging sign.
The recent bout of extreme market volatility and the fear that gripped many investors during the past few months shines a light on the importance of having strong financial advice and acumen in sticking to your long-term plan.
For investors, changing your strategy as an emotional response to market downturns can be a huge mistake, as many learned when they moved money to the sidelines in March only to miss out on the recovery that followed.
Strengthening financial literacy is a key component of helping Canadians save more and invest effectively. Policy-makers and regulators need to adapt and become more proactive and collaborative in helping Canadians improve their financial literacy and overcome a potential retirement savings gap in a future low-growth economy.
Kathy Bock is managing director and head of Vanguard Investments Canada Inc. in Toronto.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
