VOLUME XX NUMBER 1 | SPRING 2011
IN THIS ISSUE
FIRST QUARTER UPDATE
Strong Market Conditions
WHEN DEMENTIA
STRIKES
A Devastating & Frustrating
Disease
EXECUTORSHIP
What is involved?
DALBAR SURVEY
The results are in!
CONTACT US
CHRIS FORMAN
Senior Financial Advisor
Phone 604.687.4587
[email protected]
MARK RICHARDS
Senior Financial Advisor
Phone 604.484.4559
[email protected]
MIKE FRASER
Financial Advisor
Phone 604.484.4558
[email protected]
PETER GRAHAM
Financial Advisor
Phone 604.484.4577
[email protected]
TOM CHIPMAN
Associate
Phone 604.484.4552
[email protected]
MAIN BRANCH
#1310-925 West Georgia St
Vancouver, BC | V6C 3L2
Phone 604.688.2123
www.roadmapforsuccess.ca
"I was a multi-millionaire from playing hockey. Then I got divorced, and now I am a millionaire."
-Bobby Hull
First Quarter Update
Anyone who expected a calm and uneventful start to
2011 was promptly disappointed. Within the first three
months of the year, we experienced momentous
geopolitical unrest in North Africa and the Middle East,
European sovereign debt concerns, surging oil prices,
and the Japanese earthquake and its nuclear concerns.
If these facts could have been predicted going into the
quarter, the prudent reaction may have been to move out
of equities and into fixed income. This would have been
an undesirable course of action.
Notwithstanding a significant drop in stock markets
during the month of March, markets the world over
generally showed positive on a year-to-date basis.
In fact, the U.S. S&P500 posted the best first quarter
results since 1998, up over 5% in the quarter!
The Bank of Canada, U.S. Federal Reserve, and the
European Central Bank (ECB) all held their rates steady
during the quarter. This did little to stem speculation in
the commodities markets, thus pushing up top line
inflation rates despite significant available capacity
in the developed world.
Markets in the face of these events have continued to be
strong because of good market fundamentals (such as
strong corporate earnings growth, relatively reasonable
stock prices, and healthy corporate balance sheets) and
strong economic data (such as improved unemployment,
strong global trade numbers, and healthy GDP results).
These factors continue to support a positive outlook for
equity markets overall. However, each of the abovementioned risks remain significant and thus represent
very real concerns for the short-term outlook of capital
markets, and therefore further volatility is to be expected.
When Dementia Strikes
Our planning practice is nearly 20 years old and in that
time we have seen booms, busts, market highs and lows,
natural disasters, wars, famine, the effects of cancer, heart
disease, AIDS, and malaria. But we have only seen the
beginning of what may be the most dramatic of
all…Dementia.
We have already seen close-knit families torn apart by
the ravages of this incurable scourge that is just now
sinking its claws into the Baby Boomers. As these Baby
Boomers age, one out of eight of them will develop
dementia – a horrible, costly, heartbreaking disease.
Increasingly for these Baby Boomers, it will no longer
be their grandparents and parents who have
dementia – it will be them.
A diagnosis of dementia is devastating for a person –
but it’s also incredibly tough, perhaps tougher, for their
close family and friends. Dementia is a complicated,
often confusing disease. It is as frustrating for the person
experiencing its symptoms as it is for the caregiver. The
term “dementia” refers to a chronic, progressive problem
of cognition that usually affects memory and almost
always affects judgment, decision-making, and
relationships with others. Alzheimer’s disease is the most
common type of dementia.
Dementia originates in the cerebral cortex of the brain,
which accounts for approximately two-thirds of the
brain’s mass and controls sensory functions such as
hearing, vision, touch, as well as cognitive functions
such as thought, perception, and communication. Thus,
once the cerebral cortex starts to degenerate, the person
with dementia experiences difficulty in his or her ability
GIC INTEREST RATES 2011 (%) **
JAN
FEB
MAR
1 YR
1.80
2.00
1.85
3 YR
2.70
2.75
2.75
5 YR
3.35
3.45
3.30
ANNUALIZED RATES OF RETURN AS OF MARCH 31, 2011
(%) ***
CDN$
1 YR
3 YR
5 YR
TSX
20.4
5.0
4.7
S&P 500
15.6
2.4
2.6
TSX DEX
5.1
5.1
5.3
*EAFE
6.3
-4.2
-1.9
* Europe, Australia, & Far East Index
** Source: GICInvest.net
*** Morningstar
Manulife Securities and the block design are registered service marks and trade marks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Securities Incorporated.
VOLUME XX NUMBER 1 | SPRING 2011 | PAGE 2
to think, feel, understand, speak, and act. As dementia progresses, the person
will experience trouble performing basic life functions that were once second
nature.
Sadly, no cure for Alzheimer’s disease or other types of dementia presently
exists. Drug treatments have been developed and continue to emerge, which
can slow the progression of the disease and assist in controlling symptoms.
Symptoms that signal the onset of dementia are usually subtle and may not be
noticeable for a number of years. In fact, earlier signs usually are identified in
retrospect, and often by someone other than the patient. Most people think of
memory loss as the primary symptom of dementia. While most dementias
affect memory, some forms of dementia do not initially involve memory loss.
Other areas that may be affected include language, perceptual skills, reasoning,
and personality. This is especially true in individuals whose symptoms begin
before age 65. New research shows that one of the first signs of impending
dementia is an inability to understand money and credit, contracts, and
agreements
If you have a loved one that you feel may be showing early signs of dementia,
the first step is to see a doctor right away. While incurable, current approved
drugs do slow the onset and the sooner one is diagnosed, the sooner the
disease’s advancement may be slowed.
Did you know?
• Your executor becomes personally liable for their actions when handling your
estate, and can be sued by your beneficiaries if they make a mistake.
• It takes approximately one year to administer most estates.
• While you may feel you are honouring someone by appointing them as your
executor, in fact serving as an executor can be an onerous burden that will
impose on their personal time and finances for at least a year.
• Most of an executor’s work must be done during normal business hours, and
may conflict with their own work if they are employed.
• Very few people have served as an executor previously, and therefore most
personal executors will be learning on the job.
• Every executor, personal or professional, is entitled to the same compensation
for administering your estate.
• Many people who have acted as an executor say they would not willingly
accept the job again.
Serving as executor is a huge responsibility, especially if you have anything
beyond the simplest of estates. For a friend or family member charged with
that responsibility, it can be overwhelming and stressful. By using a Corporate
Executor, responsibilities are placed in the hands of experienced estate
professionals. Their familiarity with the ever-changing tax and estate laws
can be useful to ensure that your wishes are properly executed.
The next step is to ensure all your papers are in order, specifically Power of
Attorney, your will, lines of credit, life insurance contracts, any mortgage/real
estate holdings, and any non-registered accounts should all be updated to reflect
your new reality. Further, make sure someone else knows where everything is,
who your financial planner is, and any other pertinent information someone
would need to know in the event of an unexpected death. This is not a time to
be coy with the details of your affairs.
Client Survey
For more information visit www.alzheimer.ca.
The survey is designed to rate financial professionals against other survey
participants and the National Average Benchmarks I the four key components
of Trust, Financial Performance, Satisfaction with Services, and Quality of
Advice. The intention of the survey was to identify overall client satisfaction
as well as to help us see where we can improve our services. We feel the
survey was a great help in meeting these objectives.
(Source: New York Times, October 30, 2010)
Executorship
You have worked hard to accumulate your estate, but have you taken the time
to plan what will happen to it when you pass away? Do you know who will
settle your estate on your behalf? Almost 50% of Canadians have not
developed a written plan for the financial management of their estate after their
death. Failure to consider how your wealth will be passed on to future
generations results in an incomplete wealth plan.
Your executor is the person or trust company that you name in your will to
administer your estate after death. Your executor carries out your wishes as
stated in your will. Before choosing an executor, it is important to understand
their duties and responsibilities, so you can decide if they have the necessary
time and skills to look after your affairs.
DALBAR ratings are issued to financial professionals who meet the criteria of having five years of experience,
no disciplinary sanctions by certain regulators for five years, and are active practitioners. Financial
professionals pay DALBAR a fee to obtain a rating of performance from clients. DALBAR ratings are not
representative of any one client’s experience and are not indicative of future performance.
As mentioned in our last correspondence, we received the results of the
DALBAR client survey that we commissioned late last year. We had an
extremely high response rate of almost 50%, and again, we thank each of
you who took the time out of your busy schedule to provide your valuable
feedback. Given the large sample size, we are very confident with the results.
Following are the scores in the above-mentioned four areas:
CATEGORY
TRUST
FINANCIAL PERFORMANCE
SATISFACTION WITH SERVICES
QUALITY OF ADVICE
NAT’L AVERAGE
OUR SCORE
2.99
3.15
3.27
3.37
3.35
3.29
3.52
3.47
Scores are based on a 4-point scale, with 4.0 being the highest available score.
While we are pleased with the overall results, we have been able to identify
areas where we may be able to enhance your overall client experience.
We are exploring ways in which to effectively incorporate these ideas
into our practice. Thank you again for your participation!
If you like our service, please let others know. The greatest measure of our success is the referrals we receive from our clients.
Manulife Securities Incorporated is a member of the Canadian Investor Protection Fund. This publication is solely the work of Christopher Forman for the
private information of his clients. Although the author is a Manulife Securities Advisor, he is not a financial analyst at Manulife Securities Incorporated
(“Manulife Securities”). This is not an official publication of Manulife Securities. The views, opinions and recommendations are those of the author alone and
they may not necessarily be those of Manulife Securities. This publication is not an offer to sell or a solicitation of an offer to buy any securities. This
publication is not meant to provide legal, accounting or account advice. As each situation is different, you should seek advice based on your specific
circumstances. Please call to arrange for an appointment. The information contained herein was obtained from sources believed to be reliable; however, no
representation or warranty, express or implied, is made by the writer, Manulife Securities or any other person as to its accuracy, completeness or correctness.
Manulife Securities and the block design are registered service marks and trade marks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Securities Incorporated.