I am writing to you as an ex-pat Winnipegger who moved to Calgary in 1997 and bought a house. The article by Geoff Kirbyson in the August 2007 issue of Investment Executive omitted a few key considerations that should be made before jumping on the “move back to the Peg” bandwagon.

Kirbyson failed to mention the discrepancies in the tax regimes of Calgary and Winnipeg. Property tax? Income tax? Provincial sales tax? My brother, who lives in Winnipeg in a house comparable to my house in Calgary, pays about 300% more in property tax annually than I do.

I know another ex-pat Winnipegger who is doing exactly what Geoff is saying, and the 1,800-square-foot home he is building in a community just outside Winnipeg is running between $340,000 and $360,000. Add in a higher tax environment, and how many real dollars is he coming out ahead at the end of the day?

What about the need to continue working, as most of these ex-pats will surely want or still need to do? Can you earn the same income? Are there the same opportunities? Commuting to work? My commute to downtown Calgary on average is 20 minutes. What about the kids? Will they be happy when they become young adults in the Peg?

About buying a cabin. We take our kids back to Manitoba for a week every summer. We go to the lakes. The appeal of a cabin is obvious, but the water quality and algae problems in many parts of cottage country is a deterring factor. I just read an article about Winnipeg having a real problem with partially treated and totally untreated sewage flowing into the waterways, contributing to and possibly creating the algae bloom problems in some parts of cottage country. A July 20 article in the Winnipeg Free Press said it best: “Fun at the lake can turn toxic blue-green algae a threat with every breath you take.”

I liked Kirbyson’s article, but I think he could have balanced it out with some of the realities people need to consider before taking the plunge and moving back to the Peg.

On careful consideration, they may find the grass is pretty green here in Calgary.

Daniel Gillis, CFA
Olympia Trust Co., Calgary
IFIC position clarified


IFIC position clarified

As a result of an editing error on the part of Investment Executive, my article on the proposed point of sale regulation in the August issue gave an erroneous interpretation of the Investment Fund Institute of Canada’s views of one aspect of the proposal.

As noted in my article, there is a proposal for a new, two-page disclosure document for mutual funds and segregated funds, called Fund Facts. This will do much, we believe, to encourage investors to read the information about their investments and is better than the current simplified prospectus, which is often lengthy and often goes unread.

Under the regulatory proposal, a simplified prospectus would still need to be filed by mutual fund managers and would be available to investors upon request. IFIC is pleased that the current requirement to mail the prospectus to investors is being eliminated, as investors are generally tossing it into the recycling bin.

As we move toward putting more useful disclosure practices in place, we must ensure that the delivery requirements for the point of sale document do not limit customer service or customer access to a wide choice of products.

For example, investors who now make subsequent purchases or switches over the phone, or investors who are comfortable going to a Web site to review information about their fund, should continue to be able to do so. They should not be subject to an overly prescriptive requirement that says they can only receive information about their fund at a particular point in time or in a particular way. This approach, we believe, will not be in line with investors’ expectations that they are in control of when and how they will conduct an investment transaction.

We look forward to working with regulators over the next few months to ensure that investors receive the information they need to make informed choices, while allowing them to continue to access advisory services and products in the manner that best meets their needs.

Joanne De Laurentiis
President and CEO
Investment Funds Institute of Canada

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Numbers “far from reality”

I hope you are planning to publish an immediate correction to the figures shown for average first-year commissions in the 2007 Insurance Advisors’ Report Card in the August issue of Investment Executive. I recognize that they are based on “limited numbers,” but those figures are so far from reality that they should not have been published.

As someone who works in a large MGA, let me assure you there is no way that the average advisor earns $446,000 first-year commissions from life insurance.

And, as someone who has spent 38 years in living benefits, your $81,800 figure for living benefits is even more absurd. The figures I have regularly seen show that 16% of all advisors sell living benefits at any level. So you are basically saying that 16% produces enough to create an average across 100% of $81,000.

If these figures remain uncorrected, you are going to be responsible for a great deal of misconception of what their advisors earn.

Tim Landry
Director, living benefits, MSA Financial

Montreal

Editor’s response: The numbers are accurate as reported by the advisors surveyed. But the numbers can be thrown off by outliers, in this case, advisors at a particular MGA. In this situation, median numbers would have been more appropriate than averages. For example, the median first-year commission on life insurance was $81,000; on living benefits $39,000.