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Client Relationship Model


ScotiaMcLeod®, a division of Scotia Capital Inc.

In recent years, a number of countries, including England, Australia and the United States, have changed the regulatory framework that governs their financial institutions. Included have been changes to formalize client communications and create greater transparency in fees. In part, these changes were the outcome of the global financial crisis of 2008-2009 – and while institutions in Canada faired relatively well, we will be implementing similar reforms here at home. Some changes have already been made with the remainder being phased in over a three year period.

Building upon existing requirements that help to ensure fair and honest dealing with clients, the Investment Industry Regulatory Organization of Canada (IIROC) has introduced the Client Relationship Model (CRM). At its core are three key principles designed to enhance investor protection and strengthen the client-advisor relationship:

Transparency regarding the relationship between the client, service provider and firm (e.g. information on account types, services provided, transaction and account fees);

Transparency surrounding performance of the account;

Disclosure of any conflicts of interest.

Additional information on CRM, including its history, can be found on the IIROC website (, link on page bottom

What will this mean for you?

Because the fundamental principles of CRM are a core part of the way we have always tried to serve our valued clients, many of the changes may not be perceived. While in other cases the changes may be apparent, but will not fundamentally change the advisor and client relationship at ScotiaMcLeod. How this affects you will depend upon your specific situation, include your account types and the securities that you hold.

Significant changes have already occurred in the areas of understanding your risk profile and investment suitability. In some cases, paper work and documentation requirements have increased, but in general the challenges in implementing the new regulations are operational in nature that are borne by the institution.

Your advisor is the best point of contact to explain how CRM relates to you and your specific portfolios and accounts. As the components of CRM are implemented over the next three years, additional information will be provided in person and in writing.

We are proud of the depth of expertise and wealth management service we provide. Furthermore, we expect the core principles of CRM will be a benefit to investors and will enhance the ongoing relationship between clients, advisors and ScotiaMcLeod.

Trump Inauguration Speech Highlights


Donald Trump, the 45th President of the United States, noted the following economic issues in his inaugural address on Friday.

 “The establishment protected itself but not the citizens of our country, their victories have not been your victories,”
 “For many decades we have enriched foreign industry at the expense of American industries”
 “One by one the factories shutted and left our shores.”
 “From this day forward a new vision will govern our land, from this forward it is going to be only America first, America first” “We must protect our border from the ravages of other countries”
 “We will bring back our jobs, bring back our borders, bring back our wealth, bring back our dreams”
 “We will build new roads and highways and airports and tunnels and railways”
 We will eradicate radical Islamic terrorism “completely from the face of the Earth.”
 “We will seek friendship and good will with the nations of the world, but we do so with the understanding it is the right of all nations to put their nations first.”
 “Together we will make America strong again, we will make America wealthy again, we will make America proud again we will make America strong again, and yes, we will make America great again.”

Economic & Market Implications

President Trump laid out, in broad terms, his aspirations and goals for his presidency over the coming four years in his inaugural address.  It’s clear that his plans are both ambitious and far-reaching in their possible implications for the U.S. economy and markets, and by implication for the rest of the world including Canada.  However, it should also be clear, given a lack of detail to date in these plans and the likely deep opposition to many of his proposals, that the degree to which his plans materialize and their possible timeline remain extremely uncertain at this point.

We expect global markets will be intensely focused on what is said and what is achieved over the first 100 days and beyond of this presidency.


Market Watch: Global Update


Big Picture

By Andrew Trimble

Euro zone, China in focus

It was a holiday-shortened week in the U.S. but a busy one nonetheless with euro zone inflation and Chinese growth in the headlines.  In China, fourth-quarter GDP data was released late Thursday Eastern Time showing the economy expanded at a rate of 6.8%, up slightly from the previous three quarters which all came in at 6.7%. The fact that China ended the year on an up note is in stark contrast to the beginning of the year when fears abounded about the strength of the world’s second largest economy. Chinese retail sales for December were another positive as they rose 10.9%, the fastest pace in a year.  In the euro zone, consumer prices rose in December in almost all of the 19 member countries, a sign the threat of deflation that once loomed over the currency areas has lifted. The EU stats agency said Wednesday that consumer prices were 0.5% higher in December from November and up 1.1% in the final month of the year. In related news, the ECB met Thursday for its regularly scheduled policy meeting making no changes to interest rates or its quantitative easing program. The central bank said the program would remain in place amid the rising inflation until officials are convinced the trend can be sustained. The U.K. also reported rising consumer prices in December with annual inflation increasing 1.6% in the last month of the year from 1.2% in November. The slide in the price of the pound in the months since Brexit helped fuel consumer prices.  Turning to Canada, the BoC kept its benchmark rate steady at 0.5% Wednesday but said a rate cut was on the table depending how things unfold following the U.S. presidential inauguration. The bank admitted to uncertainty when it comes to the still-unfolding policies of the Trump administration and what impact it may have on the Canadian economy. Elsewhere, the IMF upgraded its global growth targets Monday saying aggregate growth should come in at 3.4% for 2017, up from 3.1% in 2016. Looking ahead, Canada reports retail sales and CPI data today. 


Stocks drift lower

North American stocks retraced some of their steps this week ahead of today’s presidential inauguration of Donald Trump. For the four-day period covered in this report, the Dow fell 153 pts. to end at 19,732, the S&P 500 shed 11 pts. to close at 2,263 and the Nasdaq finished 34 pts. lower to settle at 5,540. In Canada, the TSX also gave back some of its recent gains losing 88 pts. to close at 15,409.  


Staying with strategy settings for 2017

Strategy: Global markets ended 2016 on a strong note with equity markets posting solid gains in the month of December (S&P500: +1.97%, TSX: +1.66%, Euro Stoxx 50:+7.94%). Certainly for full-year 2016, broad market performance largely followed our portfolio strategy settings of overweighting equities (S&P500: +11.95%, TSX: +21.08%) and underweighting fixed income (U.S.: +2.61%, Can.: +1.66%). With equity markets and bond yields having witnessed large gains in recent months, a profit-taking driven pullback (or sideways churn) characterized by rapid sector rotation could materialize in the first quarter of 2017 as investors seek confirmation of anticipated bullish developments including plans for fiscal stimulus in the U.S., oil prices remaining above US$50/bbl, improving corporate profits, etc.  We would see this as a natural pullback within our long-held bullish medium-term view on equities with an overweight in cyclical sectors.


VIX: Volatility Index Chart.  Ten year history

VIX: Volatility Index Chart, January 2007 – 2017

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