Month: January 2018

Lunch and learn sessions should be more than free pizza

President of Transcend, a pay-for-performance service.

A quick Google search of the words “lunch and learn” generates tens of thousands of responses and many of them offer advice on how to host the perfect lunch session in the workplace.

Too often, the same buzzwords are bandied around to describe what can be achieved in fewer than 60 minutes. They include transparency, understanding, building a community and other neat buzzwords. We have all attended these sessions – and munched through the quickly cooling pizza – during our careers. Some may have been helpful, but most likely you left the room with your appetite satisfied but feeling unfulfilled.

Let us step back for a minute and look at why these sessions are being held and, more importantly, how they are missing a great opportunity.

It seems many companies see them as an easy and quick way to reinforce their agenda and as a training tool. Wrong! These sessions work best when they are trying to generate creative thought and look at issues through a different prism. Sadly, too many have the opposite effect and appear to be more concerned with reinforcing the status quo.

Today, it is an undisputed fact that we have access to more information than we could have ever imagined just 20 years ago. However, instead of broadening our horizons, the opposite is happening.

In a successful workplace, it is the capacity to do something for the benefit of your employees in a meaningful way that will have the greatest impact, rather than just looking at how it directly benefits the company.

Want committed employees? Managers need to do more than talk to their team; they need to listen.

The overarching question should be: how do these sessions help the employees?

Wasting time talking about time

If you were to compile a list of the topics covered in lunch-and-learn sessions, it is likely “time management” would be near the top. While this is a very useful skill, it is, to put it mildly, uninspiring. As most of us know, these sessions rarely start on time, so perhaps for that reason alone it would be better to consider topics that spark an emotional reaction.

Time management is much better suited to being part of the ongoing cultural practice that is used throughout the company. To quote the legendary UCLA basketball coach John Wooden: “If you can’t be on time, be early.”

That means all meetings and conference calls should start on time and never be held up by a senior manager who needs to “grab a cup of coffee.” On a day-to-day basis, meetings should have a fixed duration and recognize that everyone’s time is valuable. That way, important issues have a greater chance of being resolved and it becomes part of the company DNA. It will also be noticed by clients and customers.

There is no such thing as a free lunch (TINSTAAFL)

If we accept the premise there is no such thing as a free lunch, we need to start asking ourselves: What could we achieve if we offer something different to employees in these sessions?

Lunch in most workplaces is “free time,” therefore, why not aim to make the lunch-and-learn session more enriching to the people attending? This will not only increase the chance of real engagement but also encourage employees to take a fresh look at the existing company culture.

One of the first steps to improving employee engagement is assisting in the work-home balance, so why not consider lunch-and-learn sessions that have no direct links to the job? Instead, look at what matters to people in their personal life.

Here are three ways to make your lunch-and-learn session better:

  • Select topics for different audiences in the workplace
  • Invite employees to submit life-related topics
  • Limit the number of sessions so they are seen as special events

Staff will soon begin to see your company as more than a necessary stop between sleeping and quality time. And it is clear that the bottom line benefits when employees are engaged.

As the success of the sessions take hold, you will start to see this percolate into other aspects of the workplace and encourage some employees to develop their outlier potential.

The pollination of ideas and expertise will strengthen the existing brand and, in these ever-changing times, lay the foundation for a more dynamic company.

Tips for reaching your retirement goals

It’s February which means thinking about the future and how much you contribute to your RRSP next month needs to be top of mind.

Here are some thought starters that are key to reaching long-term financial goals.

  1. Plan what your future looks like from all angles

    We are often planning what our financial future looks like, hoping to have a certain amount saved up by the time we retire. But, to help your financial plan it is important to picture what your life will look like in retirement from all aspects. Are you going to be in the same home? Will you want to spend more time with family? Will you spend time travelling? Your retirement lifestyle will be the best indicator of your financial needs.

  2. Create a retirement income plan

    People are busy ensuring they have saved enough for retirement but fail to create a plan to ensure their savings are providing a steady stream of income. Investing smartly before retirement should ensure that even though you are drawing from your investments there is still a stream of income that provides increased longevity to those investments.

  3. Don’t forget about taxes

    People often fail to realize that one of the biggest expenses for a retiree is taxes. These tax bills often appear as a result of transitioning your RRSP into an income fund. While, they are unfortunately unavoidable, they should always be taken into consideration in planning, to ensure you know exactly what your eventual financial situation looks like.

  4. Seek help

    This is the biggest financial transition in your life and you do not have to make it alone. Seeking active advice from a professional ensures you are maximizing your investments for your future. It is never too early to have a retirement conversation. If you dream about it, start strategizing on how to save for it.

Compression and Commoditization

Competition for new clients is increasing and advisory fees are shrinking in part because clients have access to greater information and expertise in the form of low cost platforms. In 2016 the average U.S. advisory fee for new accounts was 1.02%, down from 1.04% in the prior year and 1.21% in 2014, which is a 15.7% decline in two years. Canada appears to be experiencing a similar situation. Greater access to free or low cost information and expertise is making it hard for investors to appreciate the value good advisors bring to the table. When investors shop around for better fees they drive down prices. This means that to a certain degree, fee based advisory services are becoming commoditized.

Advisors can elect to cut expenses to offset the fee decline and maintain their income but only for so long. Advisors really have only three options: get bigger, specialize or outsource.

Increasing competition and more options for investment services leaves advisors with less pricing power which means advisors could consider getting bigger by adding clients to offset lost revenue. To do so advisors should think of actively marketing their practices, offering new products and services or enhancing existing services.

Advisors could also join a team through a formal business partnership to cover different areas of expertise and provide services that are beyond their skill set or capacity to offer. Alternatively they could choose to work with another advisor who has a complementary expertise. Another option is to merge with another firm but at the expense of giving up the autonomy of running their own practice.

One challenge of getting bigger is to ensure that the appropriate staff and infrastructure are in place. The top clients need to get great service and have access to the best advisors. A staffing option is to add a dedicated client service professional who is not an advisor but whose job is to make sure clients’ needs are met. On the infrastructure side advisors will need to consider technology to make sure they are equipped with the latest customer servicing options.

Advisors who do not want to get bigger or find that getting bigger is too much work could find a specialty and make sure they are known for it. Whatever the specialty having an area of expertise means that certain clients will not be inclined to shop around based simply on price. Advisors must build their brand by touting their expertise with the credentials to back it up so they will need to obtain any number of the numerous professional designations and certifications available. They will have to network with other professionals or organizations that share their niche and differentiate themselves from advisors who are generalists. They must be willing to meet with prospective clients themselves rather than delegating this important meeting to another advisor or member of their support staff. Specialist advisors will find they have an edge when marketing their expertise to prospective clients through websites, in publications or by speaking to groups interested in that advisor’s expertise.

Getting bigger or specializing often means that something has to give. This is where outsourcing comes into play. Outsourcing administrative tasks and investment management allows more time to be spent with clients. A study by Northern Trust in the U.S. found that 70% of advisors reported growing their practices significantly after outsourcing. Not only did they spend more time helping clients plan their lives, it also brought them more personal satisfaction.

Working with a third party provider to handle everything from portfolio construction and management to rebalancing, compliance, research and back office support has been a fast growing trend among advisors over the past decade. Before choosing an outsource supplier, consider the following:

  • Look for providers that share your investment philosophy
  • Determine all fees and costs
  • Confirm advisor and client account minimums
  • Find out who is the firm’s custodian
  • Ensure the technology is easy to use and integrates with your structure
  • Consider the ease of transitioning in and out of the plan
  • Evaluate the advisor and client logistics to change to the new business model

Some advisors fear clients will not respond well to the idea of outsourcing. Of course advisors will need to educate their clients about the benefits of this type of partnership. If handled correctly the client experience will be improved, as was confirmed by 92% of advisors surveyed who have outsourced since 2014. Ultimately advisors will have to make decisions that are going to change their practices as market forces reshape the world around them. The only real question is which path they will choose to take.

The two sides of January

Most investors have heard of the January Effect which is the observation that January has historically been one of the best months to be invested in stocks. However there is another January Effect which states that, “as goes January, so goes the year”. While January has produced positive performance 66% of the time between 1968 and 2017 for the S&P/TSX Stock Index, it has also produced negative performance one-third of the time.


What is striking is that in years when January had a positive return, those returns were well above average relative to the returns in other months of the positive January years. For example, of the 33 Januarys with positive performance, the S&P/TSX was up an average of 4.3%. The next best performing month in those years, as can be seen in the table to the left, was December which returned half that amount at 2.1%. Conversely, when January had negative returns, -3.5% on average; the remainder of the months of the down January years produced better returns. Although in total only 7 months had positive returns, they were more than enough to lift the overall years performance into positive territory but still well behind the 50 year average market performance and still further behind the years where stocks came roaring out of the gate in January.The chart below depicts the average annual cumulative returns for months that had positive Januarys and negative Januarys net of the S&P/TSX average annual return for the period. While the relative performance between good and bad months of January time periods did narrow over the course of the year, it clearly shows that the opening month of the year often sets the pace and influences the remaining months of the year. We then looked at how these markets performed for the full year. In those years where January was positive the S&P/TSX (including dividends) returned 12.6% versus an average of 10.7% for all 50 years reviewed; a 17.8% improvement. On the other hand, negative Januarys underperformed the market as a whole by -39.3%. These numbers confirm that “as goes January, so goes the year”, translating into above or below average annual performance in those years.

The most widely accepted explanation for the January Effect is tax-loss selling. The tax circumstances of taxable investors are often more important than a security’s fundamental valuation, as such investors will sell whatever securities are required at the end of the calendar year to establish capital losses for income tax purposes and then repurchase the shares after a prescribed waiting period. As the waiting period most often expires early in the next year, the repurchase orders flood the market in January, hence creating abnormal returns in the month. In addition to tax issues, researchers have also suggested other reasons for the January effect. One is “window-dressing”, as portfolio managers unload their embarrassing stocks at year-end so that they don’t appear on their annual report, and then redeploy the proceeds in January. Another reason, which we may see more of in 2018, is short sellers covering their successful short positions early in the next year so they usually do not have to pay taxes on the gains until April of the following year.

Whatever the explanation, predicting the future is impossible (even if it is only one month’s prospects), but it is good to know the end result is just a question of how large the annual gain will be on average. Because it is clear that investors should not be out of the market if January is a good or bad month because the returns over the rest of the year are just a question of magnitude. Of course one must always bear in mind that past performance does not mean this trend will continue. It will be interesting to see how it plays out in 2018.

Market Data


This report may contain forward looking statements. Forward looking statements are not guarantees of future performance as actual events and results could differ materially from those expressed or implied. The information in this publication does not constitute investment advice by Provisus Wealth Management Limited and is provided for informational purposes only and therefore is not an offer to buy or sell securities. Past performance may not be indicative of future results.

While every effort has been made to ensure the correctness of the numbers and data presented, Provisus Wealth Management does not warrant the accuracy of the data in this publication. This publication is for informational purposes only

Good goals: they aren’t just for clients!

It is not a surprise that when January is mentioned, “goal setting” is often also used in the same sentence. Yes, it seems like a cliché to set goals as the new year rolls around, but there is something to be said for starting a new year with a solid new plan.

As advisors, we are often setting goals with our clients. We use our expertise to assist them in creating a well thought out plan that will help them achieve success. When you are so busy helping others with their goals, it is undoubtedly difficult to take a step back and set some of your own.

We know people who give advice for a living are not usually the best at taking it, which is why we created this short list of tips to set good, attainable goals this year to improve yourself and your business in 2018.

Tip #1

Your business goals need to align with your personal goals. This means that your goals for your business must make sense for where you are in your personal life. For example, if you are at the retirement stage of life, your goals should reflect this and be based upon the smooth transition out of your business. In contrast, if you are new to the business and just starting out, your goals need to be challenging but not out of the realm of possibility.

Tip #2

Let your team know about your goals. Make communicating to the team a priority. This not only helps keep you accountable, but it also inspires those around you to do the same. Keeping everyone motivated is key to any businesses success and a great way to do this is to encourage those around you by sharing your own plans for improvement.

Tip #3

Good goals are widespread; they do not just focus on one area. It can be difficult for someone with an entrepreneurial inclined mind to not limit your goal setting to numbers; trying to achieve a certain volume of sales. This would be doing yourself and your business a disservice. Yes, they are important, but it is also important to improve other areas of your business, such as your communication, administration and work environment.

Tip #4

Review your goals often. It can be easy, as work piles up and the months go by, for the goals you set in January to become forgotten. Setting time aside each month can be difficult, but it is so important in ensuring you are successful. It is not enough to set goals and forget about them. Active goal management should be part of your agenda to consistently review your progress and set you up for attainability.

Instead of letting another goal-less year go by, cease your opportunity this January to set yourself up for success. Being proactive in this endeavour improves yourself and your practice. Good luck and all the best in the year to come!