Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

May 17, 2011

An Idea, Not a Plan.

Here are 3 mistakes you’ll want to avoid when seeking money.

An idea, not a plan
Never say, “I have this really good idea,” or “This has always been a dream of mine.” Nobody wants to hear about an idea. You must have an actual business and not a dream, or your banker will take a pass, says Mike Bonner, Bank of Montreal.
Any good business starts with a solid plan, and entrepreneurs seeking financing must have one in tow.
“We need to understand the customer, the business and the industry – in that order,” says Mr. Bonner. “In the early stages it’s really about the business plan, the planning and preparation.”
It doesn’t have to be complex, he says. Details can be added and strategies adapted, but the core plan must be in place.
The long-term view
Don’t offer up business projections that look 10 years out – no one can predict the future, and it is not in your best interest to try.
“We’d never ask them for that,” says Mr. Bonner. “We really don’t want to see any more than one year.”
Bury mistakes
Never attempt to hide a poor credit history. A credit check is the first step in any due diligence process.
“We have to take a good look at management and how they handle finances,” says Mr. Bonner. “It’s a good proxy for future viability of the success rate of the business.”
 “They should come prepared to tell us why they may have had credit problems,” says Mr. Bonner.
“There could be very good reasons and we could help them deal with it.”

May 13, 2011

Tips and Traps when joining an EMD - Vipool Desai, Ara Compliance

“A drowning man will grab, even the tip of a sword”,                                                                            Tsun Tsu
I have a guest blogger this week to talk about the Exempt Market Dealer registration. Vipool Desai, Ara Compliance, has simple and sensible advice on how to approach the EMD registration. Vipool explains it and his contact details are listed below too if you want to chat further.

National Instrument 31-103 and the recent CSA staff notice 31-323 regarding mortgage funds have mandated a dealer registration for a large number of existing businesses and salespersons that were previously free to operate without registration.This has understandably created an unhealthy amount of fear and confusion.  It has also encouraged certain businesses and salespersons to address the new registration requirement by joining third party Exempt Market Dealers (EMDs).  In this article, we will review what you need to consider before joining an existing dealer, and introduce the option of creating and operating your own independent registered EMD.
Moving in with your EMD
When confronted with new registration obligations, many new industry participants focus on the ticket price for entry to the securities industry (e.g. proficiency, capital, etc.) and, don’t fully appreciate that registration is the beginning of one’s regulatory obligation -  not the end of it.
Joining an EMD is like moving in with a new spouse or partner.  It can be a positive and fulfilling experience if you and your EMD are compatible.  However, it can also be a source of tension and conflict, and even a messy divorce, if you two are not in sync.
An EMD can provide a range of services in addition to a regulatory platform, including:
  1.  Product Due Diligence
  2. Training
  3. General Marketing Support
  4. Compliance Support
  5. Administrative Support


As a first step, you should review your business needs against the type and quality of services the EMD can reasonably provide.
It is important to pick an EMD appropriate to your requirement.  If the purpose of joining is primarily to address compliance issues, then registering with a firm that has sparse compliance and registration experience in a multi-branch dealer may not be helpful.
Your compatibility with the EMD management’s style is also important.  Salespersons who are used to operating independently can find it frustrating to work under someone else’s direction and control.  This problem is magnified if EMD management has a different outlook, or has objectives that are not in alignment with the salesperson.  Conflicts can often arise over matters such as product due diligence and acceptance. 
Prior to joining any EMD, you should carefully review its internal policies.  Discuss your obligations and management’s involvement/oversight of your business.  For example, it is required that management execute agreements relevant to your business, pre-approve any products sold through the dealer, and handle any referral payments.  However, management may have other restrictions and controls that you need to be aware of, such as restrictions on the use of trade names, or restrictions on dealing with out-of-province clients.
Management’s reputation and prior regulatory difficulties are also important considerations.  However, it should be recognized that many prior regulatory problems are not a matter of public record and can remain hidden.  Management’s fundamental orientation toward regulatory and control matters is often a better indicator of potential future problems.
For example, if the firm’s compliance manual appears disorganized, misses key topics, discusses principles in lieu of specific procedures, and/or appears to be pieced together from other manuals - run away.  A poorly defined compliance manual is often a prime indicator that management may not appreciate the challenges or seriousness of operating a multi-branch securities registered firm.
Finally, you need to consider who else will be joining the EMD.  If regulators sanction a firm, or the financial press publishes a distasteful article against a dealer, it tarnishes the reputation of everyone operating under that firm.  
Salespersons don’t fully appreciate that when joining another EMD, they are also placing their reputation in the same boat as other registered persons who may operate under different branches or divisions of the EMD. Your business can be affected by actions of other salespersons over which you have little or no influence, or oversight. Hence, you should also interview management on their criteria and due diligence process when accepting new businesses and salespersons.
Build your own
Given the above considerations, it would be wise to also think about creating your own EMD.
An EMD is a relatively easy category of registration for which to qualify, on the basis of proficiency, capital, regulatory insurance, etc.   However, as noted above, obtaining registration is only the beginning of one’s obligations, not the end of it.
The real barrier may be uncertainty about whether you have adequate time, attention and/or knowledge to manage compliance issues for your own registered firm.

Please contact us at info@aracompliance.com  for more information.

EMDA Toronto Event: Private Equity: Opportunities in Canada and Beyond

The Canadian Private Equity industry is more vibrant than ever, and is increasingly seeing greater deal volumes and variety.  Speakers at this session will provide insights stemming from their active involvement with private equity deals that range from small to super-large, and related to investing across Canada and globally. 

Date:
Tuesday May 17, 2011
Time:
11:30 AM - 2:00 PM
Location:
The National Club
Main Dining Room
303 Bay Street
Toronto
CE Credits:
Eligible for 1.5 CE credits

David Austin, CFA (Northleaf Capital Partners), Jacoline Loewen (Loewen & Partners ), Kamal Pastakia (OMERS Private Equity), and Gerhard Pries (Sarona Asset Management ) will share their knowledge and experiences in the sector, highlight opportunities/constraints and discuss future prospects for Canadian private equity investment in Canada and internationally.
Who Should Attend
Professionals involved or interested in the private equity and alternative investment space.  Private equity practitioners, portfolio managers, analysts, private client investment professionals, wealth managers, investment advisers, consultants, family office professionals, and private bankers.

Registration Details
Register here or email eventregistration@torontocfa.ca to receive the CFA Society member rate of $65 ($85 registration fee for non-members)

Learn More (This is an embedded link to the CFA Society event page)

May 12, 2011

Exempt Market Dealers Association offers 1.5 CE credits Course

Private Equity: Opportunities in Canada and Beyond
Presented by CFA Society             Supported by Exempt Market Dealers Association EMDA

 The Canadian Private Equity industry is more vibrant than ever, and is increasingly seeing greater deal volumes and variety.  Speakers at this session will provide insights stemming from their active involvement with private equity deals that range from small to super-large, and related to investing across Canada and globally. 

Date:
Tuesday May 17, 2011
Time:
11:30 AM - 2:00 PM
Location:
The National Club
Main Dining Room
303 Bay Street
Toronto
CE Credits:
Eligible for 1.5 CE credits

David Austin, CFA (Northleaf Capital Partners), Jacoline Loewen (Loewen & Partners ), Kamal Pastakia (OMERS Private Equity), and Gerhard Pries (Sarona Asset Management ) will share their knowledge and experiences in the sector, highlight opportunities/constraints and discuss future prospects for Canadian private equity investment in Canada and internationally.
 Who Should Attend
Professionals involved or interested in the private equity and alternative investment space.  Private equity practitioners, portfolio managers, analysts, private client investment professionals, wealth managers, investment advisers, consultants, family office professionals, and private bankers.
 Registration Details
Register here or email eventregistration@torontocfa.ca to receive the CFA Society member rate of $65 ($85 registration fee for non-members)

Learn More (This is an embedded link to the CFA Society event page)


May 6, 2011

How did Flickr beat WebShots?


Website technology is going through the next change that impacts big organizations, threatens them, in fact. The scavenging weeds are always hard at work pulling down the mighty oaks of industry. Sean Wise has a great interview with Don Tapscott on what is the biggest impact on technology for companies.
If you look at internet traffic for various properties, in each case, an old HTML web site gets eclipsed by a new XMP based community that harnesses the power of self-organization.
Don Tapscott says:
The immutable, standalone Web site is dead. In fact, I've banned the word "web site" from my company. Today, people are engineering software, databases, and Web sites so that they not only meet private objectives, but they can be used in ways the originators did not know nor intend. It's now getting easy to build new Web services out of these existing components by mashing them together in fresh combinations.
The result is that today's most exciting and successful Web companies and communities are stitching together their own services from shared databanks and Lego-style pieces of Web software. Rather than define the user experience and publish information for people to observe, they use Web services to create platforms for people to self organize and co-create with their peers. And it's pretty much true that when they built it, people came—usually by the tens of millions. In fact, 2006 was the year when the programmable Web eclipsed the static Web every time. 
  • Flickr beat WebShots; 
  • Wikipedia beat Encyclopedia Britannica; 
  • citizen journalist bloggers beat CNN.com; 
  • epinions beat consumer reports; 
  • upcoming.org beat evite; 
  • Google maps beat mapquest; 
  • Myspace beat Friendster; and 
  • Craigslist beat Monster.

That is a shocking list and well worth discussing with your team. If you are a good size business (revenues at $30,000) there is a great deal of exciting private equity out there looking to invest in smart business owners who are looking at the big changes.
Jacoline Loewen, Panellist on The Pitch.