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Financial Planning Assignment -

Background: Because of your industry expertise you have been asked to appear on the business program BNN next week. The program producer informs you that you are to talk on a "hot topic" within the investment industry that your audience will be interested in. The producer reminds you that millions of Canadians watch the show each week with a vast difference in industry knowledge. Your presentation will have to be interesting and understandable to beginner investors as well as expert level investors and everyone in-between. The shows' producer wants you to prepare a written report of your proposed presentation and provide him with a copy for his approval before the show.

Assignment Objective: As discussed above, prepare a report that examines a current issue related to personal financial planning or personal finance in Canada.

Topics to selection from are listed below.

Potential topics

1. Financial planning designations and titles have been a source of confusion for investors for more than a decade now. There is no specific designation required in order to call yourself a financial planner in Canada. In addition, the investment industry supports the proliferation of specialty certifications among its investment advisors in almost every area of the investment industry. For example, by taking a short term course (usually no longer than one week in duration) an investment advisor can receive a certification in a specialty area such as retirement planning, divorce planning and estate planning, just to name a few. Should investment industry designations and certifications such as these be controlled and restricted by the provincial government (rather than industry Regulatory Organizations) in order to improve consumer protection? What are the pros and cons of making this change? Provide a conclusion and justify it.

2. It is quite common in the investment industry for financial planners who work for a large bank or investment firm to provide financial planning services and investment trading account services to a client at the same time. Does this create a conflict of interest for the advisor? In this type of scenario how are the consumers interests protected? Should there be a clear separation of duties between financial planning and investment sales? Discuss the pros and cons of a change in this industry practice.

3. Investor education services are provided by government agencies such as the Ontario Securities Commission at a significant cost to the taxpayer. Does investor education to the general public really help consumers to make better investment decisions with their advisor? Discuss the pros and cons of these services, citing the results of research studies where applicable. Provide a conclusion on your research and analysis.

4. Recently there have been many articles written and published expressing concern that working Canadians are not saving enough for retirement and are likely to run out of money in their senior years, as life expectancy for Canadians continues to increase. Some experts in the industry want governments to increase government payments such as Canada Pension Plan and Old Age Security. These increases will have to be funded by increases in your personal income taxed. Other experts state that working Canadians already pay too much in taxes and suggest that the current laws (e.g. RRSP and TFSA contribution rules) should be changed to encourage more retirement savings. The issue of retirees running out of money in their senior years is a serious and growing problem in Canada. Discuss this dilemma in detail.

5. Started in 2017, the CRM2 initiative was intended to improve transparency for investor so that they could make more informed decisions about their investment strategies. So far, is it working? What are the pros and cons of these new disclosure rules? Justify your conclusions.

6. Currently in the industry many investment advisors receive part of their commission from the various mutual fund companies that they do business with on behalf of their clients. This commission is called a "trailer fee" and is based on the size of the portfolio that the advisor holds with each mutual fund company. Investor advocates argue that this fee structure creates a conflict of interest for the investment advisor. Industry executives have stated that if the mutual fund companies are no longer allowed to pay the advisors for selling their product than investors will have to pay much more for investment advisory services. Discuss both sides of this argument and provide a justified conclusion.