There is an undercurrent of change happening in the wealth management business, driven by stiff competition, fee compression, regulatory obligations, evolving investor needs and preferences, and applications of new technologies. Industry operating costs have escalated and margins have been squeezed. Further, there is no end in sight to rising costs.
How do wealth-focused investment dealers position themselves for a new phase of growth and profitability?
Read my latest Letter from the President.
Earlier this month, I attended the International Capital Market Association’s 50th AGM and Conference. Issuers, investors, intermediaries and market infrastructure providers from the cross-border fixed income markets, together with market experts, regulators and policy makers, discussed the state of the global industry and future developments.
In Europe and elsewhere, financial markets are continuing to evolve rapidly, influenced by regulation, disruptive financial technology, demographic trends and an increasingly important environmental agenda.
The Canadian industry is closely watching developments in Europe in the advent of MiFID II. The general view in Europe is that improved post-trade transparency should help … Continue reading
The June 2018 IIAC Letter from the President focuses on the proposed tax treatment of passive investment income in Canadian-controlled private corporations and the implications for small business financing.
Roughly 50,000 large private corporations are negatively impacted by the proposals, many of them deeply integrated into the small and mid-sized business sector, engaged in debt and equity financing, strategic corporate advisory services, and merchant banking. The government’s proposed measures will discourage them from undertaking these types of activities, constricting the already scarce flow of capital to new and emerging enterprises.
My Letter offers a number … Continue reading
In my latest Letter from the President, I write about China’s steady integration into the global economy and financial markets, and the massive infrastructure projects it has launched to protect its economic influence. I focus on the opportunities for Canadian firms presented by the Belt and Road Initiative – a massive infrastructure project linking China to central and south-east Asia and Europe. Financing the Belt and Road Initiative will take many different forms, including the monetization of resource assets. The needed valuations of these resource assets provide an attractive opportunity for many Canadian businesses with … Continue reading
On the surface, Canada’s economy seems to be doing well. Yet, there is one area of persistent weakness that weighs on policy makers – private sector capital formation. Canada is well down on the list of OECD countries when it comes to business spending as a share of GDP.
Businesses investment in physical capital (especially machinery and equipment) matters critically for productivity growth. It spurs innovation, efficiency gains and increased competitiveness.
In my January Letter from the President, I outline some reasons as to why businesses may be underinvesting and propose some policy initiatives to boost … Continue reading
My December 2017 Letter from the President examines Brexit and its implications for UK-EU and global capital markets. Brexit’s impact could be modest, if financial regulation relies on mutual recognition or national treatment, or considerably disruptive, if the EU forces UK dealing banks to conduct trading and clearing with European clients within the EU, requiring a shift in UK operations to Europe.
It is clear post-Brexit, the UK and the EU need a model of regulatory cooperation. I believe the Financial Stability Board (FSB) may be the best possible vehicle to take on responsibility for a … Continue reading
On July 18, 2017, the federal government unveiled proposed changes to address tax planning strategies involving the use of private corporations. The government is concerned that so-called wealthy Canadians are exploiting tax “loopholes” and the tax system must be made more fair. This is highly misleading. Business owners are following existing tax rules that are legislated, clear and in effect for decades.
The tax proposals have created a firestorm of protest. In my latest Letter from the President, I focus on the proposed tax treatment of passive investment income in private corporations and the potential … Continue reading
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.
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
Canada’s Investment Industry: A Year in Review (IIAC Blog)
Canada’s Investment Industry: A Year in Review (IIAC Blog)
My latest Letter from the President examines year-end 2017 securities industry statistics, the challenges faced by large and small investment dealers, and the outlook for the mainline businesses and firm groupings.
Overall, the industry turned in a mixed earnings performance last year. Fee-based business powered retail earnings. The self-clearing retail firms recorded the highest earnings in three years, while the institutional boutiques fared the worst. Falling share values contributed to weak investment banking results in the last months of 2017, and dragged down earnings at the integrated dealers, even though corporate advisory fees held up … Continue reading →
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