Tag Archives: Letter from the President

The Investment Industry at Mid-Year (IIAC Blog)

The Investment Industry at Mid-Year (IIAC Blog)

My September 2017 Letter from the President provides an overview of recent performance in the investment industry, highlighting developing business trends, the challenges faced by large and small investment dealers, and the outlook for the mainline businesses and firm groupings. 

Click here to read it.

 

 

 

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IIROC Rule 42 Compensation-Related Conflicts Review (IIAC Blog)

IIROC Rule 42 Compensation-Related Conflicts Review (IIAC Blog)

The traditional advisory and brokerage business is replete with extensive conflicts of interest, notably the conflicts between buyers and sellers, from proprietary dealings though dealers in over-the-counter debt securities, new securities offerings, and the fees and charges to clients for services. These inherent conflicts have been the driving force behind the reforms for greater transparency in client dealings and for a higher standard of obligations for advisors. Continue reading

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Worrisome Fragmentation of Global Capital Markets (IIAC Blog)

Worrisome Fragmentation of Global Capital Markets (IIAC Blog)

In my May Letter from the President, I discuss developments that threaten fragmentation of global capital markets. These include Brexit, the rise of populism and protectionism across Europe and elsewhere, and the push for deregulation and dismantling of existing regulations.

Global and regional authorities are working to maintain open and integrated markets to ensure the smooth and efficient functioning of markets. However, there are no quick fixes. Bond and repo market liquidity conditions remain a concern. Automation has the potential to transform the industry and deliver more liquidity to investors.

Click here to read more.

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Letter from the President: Wisdom from the Asian Financial Forum and the lessons for Canadian policymakers (IIAC Blog)

Letter from the President: Wisdom from the Asian Financial Forum and the lessons for Canadian policymakers (IIAC Blog)

In my latest Letter from the President, I look at the rise of populism in the developed world. The emergence of the so-called “new normal”, marked by weak GDP growth and stagnant incomes, has unfolded as a troubling, persistently enduring economic condition, rather than a cyclical phenomenon. I argue that governments must find consensus for pro-growth policies to break the economic malaise, embracing low tax rates, broad tax reform, stimulative spending, and deregulation, and avoid the impulse for excessive social spending and protectionism. Failure risks political pressure for even more radical policy solutions.

The IIAC has … Continue reading

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Have We Reached the High Water Mark for Global Regulatory Reform? (IIAC Blog)

Have We Reached the High Water Mark for Global Regulatory Reform? (IIAC Blog)

The aftermath of the 2007-2008 global financial crisis was an intensive period of financial regulatory reform across the developed world. The urgency and extent of reform, particularly in the early years, laid the ground for excessive and unintended consequences.

There is a growing consensus that the pendulum has swung too far. Regulators in many jurisdictions are taking stock of the impact of reform on markets and on the economy.

We expect that an ongoing review of the reform impact and rising compliance costs for the financial sector will slow the rulemaking process, roll back certain rules, … Continue reading

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Attracting Capital to the Wealth Management Business (IIAC Blog)

Attracting Capital to the Wealth Management Business (IIAC Blog)

My latest Letter from the President describes the opportunities and challenges for the retail investment industry. While we estimate about 30 retail boutiques lost money, on a net basis, in each of the last four years, it is important to stress that many small and mid-sized firms have been profitable.

Firms have made herculean efforts to control cost increases through staffing reductions, increased reliance on technology and out-sourcing, and adjustments to advisor compensation grids.

Firms have also focused efforts on improving advisor productivity through training and continuing education programs. They have boosted their competiveness by providing … Continue reading

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The Cost-Benefit Thinking of Securities Regulators Needs to be More Transparent (IIAC Blog)

The Cost-Benefit Thinking of Securities Regulators Needs to be More Transparent (IIAC Blog)

Cost–benefit analysis is a valuable tool for assessing major public policy decisions, projects and regulations—for example, evaluating prospective regulations in a number of fields, including health, safety and the environment. The nature of securities regulation, however, makes costs-benefit analysis more difficult. Rather than focusing on a particular action, like releasing a pollutant, financial regulation cost-benefit analysis focuses on behavioural and market reactions.

Canadian securities regulators have refrained from conducting formal (quantitative) cost-benefit analysis because it is so complex. However, this not an excuse to avoid it. A more disciplined and rigorous approach to the rule-making process—one … Continue reading

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The ‘Top of House’ Issues Facing the City of London and Implications for Financial Services (IIAC Blog)

The ‘Top of House’ Issues Facing the City of London and Implications for Financial Services (IIAC Blog)

Now that the UK has voted to leave the EU, what will happen next? When the UK government starts to negotiate the withdrawal process, two key issue will need to be taken in consideration. The first, and most essential, will be the terms of the UK’s exit from the EU. The second will be the negotiation of a new relationship between the UK and the EU.

My recent trip to London and meetings with key officials provided the opportunity to better understand the underlying themes and implications of Brexit for the UK, the City of London … Continue reading

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Facilitating SME Access to Equity Capital (IIAC Blog)

Facilitating SME Access to Equity Capital (IIAC Blog)

Creating an environment favourable to entrepreneurship, enterprise formation and small business growth requires a broad range of mutually reinforcing and supportive policies.

In my latest Letter from the President, I explore ways to facilitate small and medium-sized business access to equity capital.

Click here to read the IIAC’s recommendations.

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The Changing Landscape of the Investment Industry (IIAC Blog)

The Changing Landscape of the Investment Industry (IIAC Blog)

Following two years of back-to-back earnings gains, overall operating profit for Canada’s investment industry declined 13% year-over-year in 2015. Both revenue and profit improved for the industry as a whole in the first quarter of 2016.

Aggregate numbers do not tell the whole story. A tsunami of change continues to batter Canada’s investment industry.

Fixed costs escalate relentlessly to meet the technology and systems demands of front and back office.

Regulatory reforms not necessarily efficient as cost/compliance dimension not scoped out beforehand through cost-benefit analysis.

Larger firms like RJO FuturesContinue reading

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