Can you believe we’re in the last couple week of 2016? Where did the time go? 2016 has been quite a year in the business world. Robo-advising has really taken off as a viable investing option for Canadians. Meanwhile, in the world economy, there were two historic votes both with surprising outcomes: Brexit and the US presidential election. Let’s look back at the year that was 2016.

CRM2: A Real Game Changer

Canadians pay among the highest investment fees in the world. That could change in 2017 once Client Relationship Model - Phase 2 (CRM2) comes into full force. As of July 15, 2016, registered firms will need to provide an annual report showing fees in dollars. This will be a real eye-opener for investors. A 2.3 percent MER may not sound high, but when you find you you’re paying, say, $575, in fees a year based on a portfolio of $25,000 for a mutual fund that underperforms the benchmark, you might think twice about investing in actively managed funds. This could only accelerate the pace of money moving from mutual funds to ETFs.

undefined

The Year of the Robo-Advisor

2016 has been yet another banner year for robo-advisors. Canadians are increasingly moving their money from traditional high-fee mutual funds (many that underperform their benchmark) to robo-advisors that offer low-fee exchange-traded funds (ETFs). Unlike traditional financial advisors with brick-and-mortar operations with high overhead costs, robo-advisors are virtual operations that operate on the World Wide Web and mobile phones. Robo-advisors are the perfect compromise between DIY investing and mutual funds. They offer simple, yet custom built investment portfolios at a fraction of the cost. Look for 2017 to a stellar year for robo-advisors as well.

undefined

Brexit: The UK Votes to Leave the EU

The British went to a historic vote Thursday, June 23, 2016. The stakes couldn’t be higher: should the UK remain or leave the EU? The key issues for voters were immigration and independence. The polls had the Remain side ahead of the Leave side by the narrowest of margins. When the vote actually took place, it was the Leave side that came out ahead. 51.9 percent voted to leave the EU, while only 48.1 percent voted to remain. The vote’s results has divided the nation and led to an economic slowdown in one of the world’s major economies.
Even months later after the vote, we still don’t fully understand the ramifications of Brexit (or even if it will end up going through). One things for certain though, it introduced more uncertainty into the world economy at a time when we really need stability.

undefined

Donald Trump is Elected President

If Brexit wasn’t surprising enough, we got another shocker in the form of the US election. Just when it looked like the US would elect its first female president, it wasn’t meant to be. Democrat presidential nominee Hillary Clinton had a comfortable led in the polls heading into the vote. Republican nominee Donald Trump’s campaign had lots of missteps along the way. Many people went to bed on election night expecting Hillary Clinton to win the U.S. presidency with ease, but that’s not what happened. In one of the biggest upsets in political history, Donald J. Trump defeated Hillary Clinton to become the next President of the United States.
The real question is what does a Trump presidency mean for Canada? It could end up being a good thing for at least one industry: oil and gas. However, similar to Brexit there’s a lot of uncertainty. It will be interesting to see how this unfolds in 2017 once president-elect Trump takes office.

undefined