Category Uncategorized | Here lies your money

July 13, 2015 by Leonard Goodman

Is a nil fair market value fair? Life insurers think so

Adam Smith (1723-1790) would frown on Canadian life insurance providers

“Open-flat and fair markets are the wealth generators that then enable us to take on great projects like education and science and helping the poor …”

I recently received a tax planning bulletin from an insurance company that addressed a long-standing question in financial planning: How does Canada Revenue (CRA) look at the value of different assets for tax purposes? This bulletin was about products that combine annuities and life insurance, and, for me, one statement stood out.

“One accepted measure of fair market value is based on the value at which arm’s length parties would normally transact. If another person cannot purchase the asset, it is arguable that its fair market value is nil.”

Nil fair market value isn’t always fair

In this bulletin and in the insurance company’s opinion, if there is no arm’s length party to establish a value for an asset then it has no value. I understand the importance of eliminating or reducing asset value for tax purposes; however, there are times when it can have a negative impact on a client’s financial plan. Inherent in this thinking is the less obvious and yet perhaps more harmful issue of eliminating “arm’s length parties” who can establish fair market value (FMV).

I say this in light of the insurance industry’s long-standing opposition to establishing a well-regulated secondary market for life settlements in Canada. When it comes to policy owners receiving FMV through life settlements, insurers wave the tax flag or the “serious risks” misconception. They also imply – sometimes not too subtly – that Canadian financial planners must not address the potential fair market value available in a client’s policy through a life settlement transaction. This, in turn, leads to less than complete, even inadequate, financial planning advice. In the US, financial planners have a fiduciary responsibility to advise clients about the value in life settlements.

Limited and poor financial planning

“The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers.” – Adam Smith, Wealth of Nations, Chapter XI, Part III, p. 292.

A fundamental responsibility of financial planners is to maximize the financial benefits for their client, which requires balancing any number of factors, taxes being one of them, another being the maximization of asset value. Therein lies the rub – and a big short coming in the provision of effective financial planning.

In Canada, if a client of a financial planner owns life insurance the planner cannot adequately advise the client on how to maximize the value of that asset for two reasons. 1) There is provincial regulation, in six provinces, that prevents the establishment of a secondary market for life settlements; and 2) the financial planning firm is at risk of having service agreements with insurance companies cancelled by the insurer if they advise clients about life settlements. As Adam Smith’s principle states: “The interest of the dealers … is always in some respects different from, and even opposite to, that of the public.” Current government regulations serve the self-interests of “the dealers” – insurance companies – over the interests of customers.

For decades insurers have suppressed FMV and subjugated financial planners to the same self-interest; thereby, limiting the value of financial planning to clients. Under current conditions, financial planning serves to aid and abet insurance providers from having to compete in a fair market system. Adam Smith would not approve.

Regulations like Section 115 of the Ontario Insurance Act and as proposed in Saskatchewan’s Bill 177, plus the insurance industry and governments’ continued support of them, means that a life insurance policy’s “fair market value is nil.” It is a complete distortion of the seminal principles set out in Adam Smith’s two great books, The Wealth of Nations (1776) and The Theory of Moral Sentiments (1759) – not to mention a significant distortion of the true value of an asset owned by over 3 million Canadian seniors.

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June 22, 2015 by Leonard Goodman

Death and taxes are certain – but this tax is avoidable

It's the hidden taxes that are killing us. (photo:iz)

This hidden tax is killing us.

Section 115 of the Ontario Insurance Act is a hidden tax on seniors

We begrudgingly accept that there are “hidden taxes” in the price we pay for things like gasoline and liquor, but at least we know it’s there. And we get some benefit – we get to drive and drink (as opposed to drink and drive). But the tax I am referring to is one that few people know about and it’s not even considered a tax. But it is. On seniors. And seniors get absolutely no benefit from it.

Tax (noun): a compulsory financial contribution imposed by a government or other institution to raise revenue, levied on the income or property of persons or organizations, or on the production costs or sales prices of goods and services.

What you own is yours

Millions of us have assets: perhaps a house, a savings account, a GIC, RRSP, life insurance policy. In most cases the value of our assets appreciate over time and, of course, we have the right to sell or divest of that asset in a free market system, any time we want. And depending on the tax laws, sometimes we are taxed on the proceeds and sometimes we are not. Whether we agree with the taxes or not that’s the way it works and we are aware that we live in an insatiable tax system.

At least we get some benefits from the taxes we pay, even the hidden version, but very few are aware of the detrimental impact of the Ontario Insurance Act, Section 115 nor that the only financial benefit it provides is to insurance companies.

Ontario Insurance Act/Section 115: A compulsory financial contribution imposed by government and life insurance companies

The cash value you don’t receive is the hidden tax revenue that goes to insurers. (illustration: twinterfinancial.com)

It’s simple. Section 115 prevents owners of life insurance policies from receiving the fair market value for their asset, if they choose to divest their interests in it prior to death. And receiving less than fair market value due to a government restriction is, by definition, “a tax on income and property.” More egregious is the fact that the compulsory reduced value in the asset becomes revenue, not in taxes to the government to fund social programs but to the insurance companies bottom line. It amounts to billions of dollars every year being in insurance companies’ bank accounts rather than seniors’ bank accounts.

The owner of a life insurance policy is restricted by law and must take the “cash surrender value” rather than accessing the fair market value for their policy. On average, the amount they receive in cash surrender value is less than 25% of what they could get in the open market. That is a punitive tax – “a compulsory financial contribution … levied on property,” which is used “to raise the revenue” of insurance companies.

Who needs money from life insurance?

It’s a simple question and any good insurance broker or financial planner can answer it with any number of good reasons. But if the client needs money now, before they die, advisors have only one answer: Take the cash surrender value in your policy, if there is any – even though it’s significantly less than you could get through a life settlement in a well-regulated secondary market. Sorry, you’ll have to wait until you die.

This misappropriation of policy owner rights and their access to the fair market value has been buried in bureaucracy and the fine print of the Ontario Insurance Act for decades. Unfortunately, the same type of regulations are currently being written into Saskatchewan’s new Bill 177 (see previous blog below: Deja vu all over again), which will set seniors’ financial situation back decades.

Creating obfuscation undermines seniors’ rights

Jim Hall, senior crown counsel for Saskatchewan Financial and Consumer Affairs Authority (FCAA), under the guise of “consumer protection” – which is the red herring insurers role out to obfuscate the real financial problem for seniors – has said, “Unless there is some National initiative that brings together all the jurisdictions…….” What? That’s nothing but spin in support of delay and confusion, which, of course, favours insurance companies. Insurance acts are regulated by the provinces and any suggestion of a “national initiative” is blatant support for years of delay – to the detriment of seniors. Besides, everyone is for regulations, it’s a matter of creating and implementing them, not just using their absence as fear-mongering.

Until such regulations are removed or replaced by a new bill, seniors must live with the inevitability of this counterproductive tax. Unless, of course, they demand that their MPP or MLA insist on changing the offending regulation, thereby, eliminating what amounts to an tax on seniors and the system, while topping up the insurance companies’ coffers by a few extra billion.

With one stroke of a government pen and this tax can be eliminated.

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January 27, 2015 by Leonard Goodman

An open letter to Donald A. Guloien

: Donald A. Guloien is Chair, Canadian Life and Health Insurance Association and President and Chief Executive Officer, Manulife Financial Corporation (photo: 123people.ca)

I recently read the transcript of a speech by Don Guloien delivered at the Canadian Life and Health Insurance Association’s “Advocacy Day,” on November 18, 2014, in Ottawa. The theme of the meeting was, “Investing in Canada’s Health and Prosperity.” In keeping with that theme, I posed several questions in a letter to Mr. Guloien. I raised the following questions based on direct excerpts from the speech. I have also posted the full transcript of Mr. Guloien’s speech at the end of this blog.

My open letter:

I read with interest your speech at the Canadian Life and Health Insurance Association’s “Advocacy Day,” and following from the theme of the meeting, “Investing in Canada’s Health and Prosperity,” I would like to address a few questions.

My wish is to open a dialogue with you and the CLHIA – as I have with a number of elected and government officials – regarding what I consider a critical issue for Canadians and the burgeoning cost of health care, pensions and retirement support for our aging population.

You state:
“We’re deeply involved in … and committed to … the health care and financial well-being of Canadians, and Canada’s economy.”

Question:
If this is true, why do life insurance companies in Canada continue to oppose the implementation of a well regulated and fiscally controlled life settlements industry in Canada? Particularly when life settlements are a well regulated industry that helps millions of citizens in the United States and other countries around the world.

You state:
“From our vantage point, it is evident that Canada’s social programs, such as pension plans and universal health care, are under enormous pressure.

“The life and health insurance industry has the capacity and the expertise to be a strong partner with government and other stakeholders to explore new ways of providing and financing these critical programs. Programs that help make Canada such a compassionate and wonderful place to live.”

Comment: This is an excellent principle, one that is being followed in the United States. For example, in Texas there are bills such as the first Medicaid life settlement law, which allow for proceeds of a life settlement to help fund long-term healthcare needs without barring individuals from enrolling in Medicaid. This helps take the burden off of government funded programs.

Question:
Do you not consider Canadian seniors who are struggling financially, and who own life insurance policies, to be “stakeholders” who need the industry “to explore new ways of providing” help? And if laws in the USA allow for proceeds from life settlements to help long-term healthcare needs then why not in Canada?

You state:
“We are blessed in Canada with a strong, principles-based regulator in the Office of the Superintendent of Financial Institutions. Canada is well respected in international financial circles and is playing a leadership role in developing sensible regulation. As international financial regulators contemplate new rules governing areas such as capital and accounting, Canada must continue to be at the forefront.”

Comment: Regarding “regulators contemplating new rules,” Canada is not at the forefront in key areas that can financially benefit seniors rather we are trailing the rest of the world by a wide margin.

Question:
Why would the life insurance industry not support “a strong, principles-based regulator … playing a leadership role in developing sensible regulation …” that would allow Canadian seniors to access their life insurance asset through a life settlement?

You state:
“Our industry is a participant in public infrastructure and has the ability to do more. We have the funds to invest here at home and we are interested in increasing our stake substantially in this important sector. But our involvement in these projects has to make good business sense.”

Question:
Does “good business sense” preclude good social sense? To your earlier point regarding “Canada’s economy,” does not the financial well being of a growing senior population have serious, government cost implications that can be eased through public-private efforts like life settlements? (See Texas example referred to above).

Near the end of your speech you state:
“Our industry has the capacity and expertise to play an important role in these areas. In partnership with governments and businesses, we can contribute to effective long-term solutions.”

Question:
Why do you not consider well regulated life settlements as a valid, practical and beneficial way of helping Canadians in retirement; thereby, alleviating dependency on social welfare programs?

You state:
As one of three key points near the end you say: “We can and want to do more to help Canadians save for retirement.”

Question:
Why not assist Canada’s aging population to access what is recognized in most jurisdictions as the accepted, fair market value of their life insurance policies by way of a well regulated, life settlement industry?

It is respectfully hoped that you will accept these comments in a constructive and well-intentioned manner.

I take the liberty of enclosing a copy of my recently published book, Why Are Canadian Seniors Worth More Dead Than Alive? which addresses the subject of life settlements – as does my website www.hereliesyourmoney.com. I trust you will find them of interest.

Indeed, I would welcome an opportunity to have further discussions with you on these matters that are so important to Canadians.

Yours truly,

Leonard H. Goodman

Transcript of Mr Guloien’s speech

(see link to CLHIA site and a 17 minute video of the speech)

http://www.clhia.ca/domino/html/clhia/clhia_lp4w_lnd_webstation.nsf/page/79937503945A160F85257D93007305E0

Innovation and Collaboration: The future direction
of Canada’s life and health insurance industry

Remarks by
Donald A. Guloien

Chair, Canadian Life and Health Insurance Association
and President and Chief Executive Officer, Manulife Financial Corporation

November 18, 2014
Fairmont Château Laurier
Ottawa, Ontario

Thank you for your kind introduction, Peter [Braid].
Honourable Members of Parliament, Minister Holder and distinguished guests, I want to welcome everyone on behalf of the Canadian Life and Health Insurance Association. We are delighted that you could join us this morning.

Over the years, our industry’s Advocacy Day has become a highlight of our ongoing dialogue with federal policymakers. CEOs from several CLHIA member companies are here today as part of the 5^th Annual Advocacy Day:

Yvon Charest, President and CEO of Industrial Alliance

Kevin Dougherty, President of Sun Life Canada

Douglas Baker, President and CEO, Teachers Life

Doug Brooks, President and CEO, Transamerica Life Canada

Rino D’Onofrio, President and CEO, RBC Insurance

Dave Johnston, President and COO, Great-West Life/London Life/Canada Life

And Alka Guatam, COO and CFO, RGA Canada

This year’s theme is Investing in Canada’s Health and Prosperity.

We will be talking with Parliamentarians and officials about what we see as the challenges facing Canada and Canadians in areas such as:

saving for retirement

health care, and

funding and sustaining the public infrastructure that will ensure Canada’s future development.

The life and health insurance industry is involved in all these areas. We believe we are making a significant contribution toward finding solutions to these challenges. But more can and needs to be done.

How our country addresses these challenges will help determine Canada’s continued success.

That’s why we are taking an active role in public policy discussions on these issues … and that is why we are here today.

Although our roots are in life insurance, innovation is very much part of our industry’s DNA. As a result, we have been successful in adapting to the changing financial landscape, both at home and abroad.

Today, Canada’s life and health insurers:

provide financial security and supplementary health care products to more than 28 million Canadians,

manage about two-thirds of Canada’s private retirement savings plans,

pay out over $1.5 billion in benefits to Canadians … every single week, and

employ more than 150,000 Canadians, including close to 97,000 agents and advisors.

The industry is also:

one of the largest investors in the Canadian economy, with $650 billion in domestic assets, and

active in over 20 countries worldwide, where we hold assets of another $658 billion.

We’re deeply involved in … and committed to … the health care and financial well-being of Canadians, and Canada’s economy.

From our vantage point, it is evident that Canada’s social programs, such as pension plans and universal health care, are under enormous pressure.

Canadians … from all walks of life …. are rightly concerned about the future well-being of these programs.

The life and health insurance industry has the capacity and the expertise to be a strong partner with government and other stakeholders to explore new ways of providing and financing these critical programs. Programs that help make Canada such a compassionate and wonderful place to live.

The life and health insurance industry already plays a role in two important areas that touch the lives of millions of Canadians:

The first is workplace retirement savings plans. These include:

– defined-contribution pensions,
– group RRSPs, and
– Pooled Registered Pension Plans, or PRPPs, that will increase access to workplace retirement plans for millions of working Canadians.
– Overall, our industry administers over 70% of all pension plans and over 90% of group RRSPs.

The second area is workplace health benefit plans. These help employees and their families with medical costs not covered by provincial plans. They include:

– dental care
– vision care, and
– prescription drugs

For many businesses, extended health benefit plans are effective tools to attract and retain high-quality employees.

Yet employers who offer fully insured benefit plans may face some difficult decisions. For instance, one of their employees could be diagnosed with a rare disease requiring a drug treatment costing thousands per month. This alone could make an employer’s health benefit coverage unaffordable, and that may force them to reduce or completely drop drug coverage.

To help these employers hold on to their plans … especially small- and medium-size businesses … our industry took action. On January 1^st last year, all life and health insurers worked together to launch the Canadian Drug Insurance Pooling Corporation.

Through this pooling arrangement, participating insurers share the costs of very expensive and recurring drug treatment claims. This innovative approach is keeping plan costs affordable for employers. At the same time, it shelters their employees from the full financial burden of the prescription drug treatments they may require.
In 2013, the new pooling mechanism paid more than 4,000 prescription drug claims of over $25,000. Several individual claims exceeded $500,000. One was over $1.2-million.

Another area where we see a much greater role for our industry is ensuring Canada has the public infrastructure in place so Canadians can continue to enjoy a high performing economy and a high standard of living. I’m talking about infrastructure such as:

hospitals,

transportation networks,

bridges

schools, and

green energy

Canada, like so many other countries, has financial challenges when developing and maintaining public infrastructure projects. In fact, estimates suggest we currently have an infrastructure deficit of more than $350 billion.

This infrastructure deficit must be addressed if Canada is to realize its full growth potential in the coming decades.

Sustained long-term growth needs predictable long-term investment. The long-term nature of the insurance business is well suited to this type of investing as our obligations to policyholders often span several decades.

The importance of encouraging long-term investment in public infrastructure has also been recognized internationally by the G20 and the OECD.
The G20 Finance Ministers called for the creation of a Global Infrastructure Initiative to increase quality investment, especially in infrastructure. The CLHIA strongly supports this international initiative and Canada’s role in it.

These countries, Canada among them, are looking closely at how they can encourage Public Private Partnerships, or P3s, and better ways to engage the private sector in these projects.

P3s, for their part, have been effective in delivering infrastructure projects on time and within budget.

The Canadian government has played a very proactive role in promoting P3s across Canada through the creation and funding of a Crown Corporation called P3 Canada. We applaud the government for this, but believe more can be done.

Our industry is a participant in public infrastructure and has the ability to do more. We have the funds to invest here at home and we are interested in increasing our stake substantially in this important sector. But our involvement in these projects has to make good business sense.

We invest in infrastructure to support our liabilities on long-term products. Therefore, we should ensure that changes to financial and capital standards do not constrain our ability to offer long-term products, as otherwise our need for infrastructure investments could see a dramatic decrease.

We must continue to ensure that accounting and capital rules do not penalize investments in infrastructure assets that typically provide stable cash flows to support our liabilities.

In such projects, as in all our activities, the future direction of Canada’s life and health insurance industry will depend in no small measure on the regulatory environment in which we operate.

As financial institutions emerged from the 2008-2009 financial crisis, there’s been an unprecedented leap in the level of regulation.

We understand … and fully support … the role of regulators in protecting the public interest and ensuring the conditions that led to the financial crisis do not occur again.

We are blessed in Canada with a strong, principles-based regulator in the Office of the Superintendent of Financial Institutions. Canada is well respected in international financial circles and is playing a leadership role in developing sensible regulation. As international financial regulators contemplate new rules governing areas such as capital and accounting, Canada must continue to be at the forefront.

Our industry requires a regulatory environment that does not substantially increase the cost of financial services to Canadians or stifle innovation, growth and competitiveness.

Canada has a very bright future. And it boasts a vibrant life and health insurance sector that remains at the economic forefront internationally and domestically.

Our industry will continue to innovate by building on the solid foundation we have developed over more than 150 years.

1) We can and want to do more to help Canadians save for retirement.
2) We can and want to help sustain Canada’s healthcare system.
3) We can and want to invest more in public infrastructure at home.

Our industry has the capacity and expertise to play an important role in these areas. In partnership with governments and businesses, we can contribute to effective long-term solutions.

We look forward to continue working on these with governments and other organizations, such as those represented in this room.

I am confident that, together, we can create the innovative solutions essential to making Canada even more healthy and prosperous.

Thank you.

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November 5, 2014 by Leonard Goodman

How deadly spin could be killing your retirement

An insiders view of the insurance companies and media spin machine

An insiders view of insurance companies and their media spin machine. It’s not working for you!

What life insurance companies don’t want you to know and the spinmeisters are perpetuating

You may not yet have read my book, Why Are Canadian Seniors Worth More Dead Than Alive? or heard about why “life settlements” are financially helping millions of seniors around the world – except in Canada. And if you’ve heard a “negative” story concerning life settlements, it is because misinformation is being spun by Canadian life insurance companies to prevent people from maximizing the inherent value in their life policies – in an open, free and fair market system.

My recently published book (July 2014), lays out the egregious financial disservice Canadian seniors are suffering from because of life insurance companies’ action and inaction. If you want further insight on the action they take to keep people in the dark, read Wendell Potter’s book, Deadly Spin (2010). If you want to know about their inaction, and the potential value you have in your insurance policy, read my book.

Life settlements – the time has come!

In the case of life settlements, my book demonstrates why millions of Canadians who own a life insurance policy cannot maximize their policy’s cash value in an open, market system. I cover, in detail, why it is wrong and how the time has come to fix a blatant oversight that prevents millions of seniors from benefiting financially. The purpose of the book and my goal is to inform the public so that they can be the catalyst that leads to changing the egregious regulations on the legislative books of six Canadian provinces.

The problem is spinning – and it’s out of control

This is a two-pronged problem: 1) It is manipulation of the free market system by insurance companies; and 2) It is perpetuated by the insidious insurance PR machine, and unwittingly or otherwise, by the media’s lack of interest and investigative journalism. An October article in Investment Executive (IE) is a good example.

In short, the editor and a writer at IE ran an ill-informed and misleading article, Insurance: Policy sales, transfers under fire. Ontario regulator says advisors may be on the wrong side of the rules. At best, it misrepresented life settlements and at worse, was a major disservice to Canadian seniors and the financial advisors and brokers who serve them. (See updated postscript at end of this blog).

Millions of dollars, even billions are at stake

Let me be clear, I was interviewed for an hour by the writer, a Ms. Harman, and she had had a copy of my book for several weeks. There is no doubt that she had an opportunity to gain a clear understanding of life settlements and how they are different than other services and products that too often get co-mingled with life settlements. The question is: Why would a well-respected publication like Investment Executive not produce thorough, balanced, fact-based coverage of this most important issue in the financial sector? And why would IE editors allow Ms. Harman to co-mingle a number of non-related or marginally related subjects with life settlements? Viaticals, STOLI and borrowing against life insurance are quite different from life settlements and to treat them as she did is a disservice to readers and the aging Canadian boomer market. They deserve to know what millions of people in other countries know and have the opportunity to access an asset that is theirs. In the United States alone, over $7 million a day is being received by policy owners through life settlements.

A fledgling $40 billion Canadian industry

The current potential for life settlements in Canada is estimated to be $40 billion and that is based on just 5% of the total, in force, life insurance policies in only four Canadian provinces: Saskatchewan, Quebec, New Brunswick, Nova Scotia. In the United States the market is projected to be $140 billion in 2015 (Source: Conning Research). There is a great need to unlock the hidden asset value in millions of life insurance policies and one stroke of a government pen can dramatically improve seniors’ opportunity to financially improve their retirement years.

Life settlements can be a win-win for Premiere Wynne and our aging population

Current reporting, and the confusion it causes, compounds what is a well-documented problem for our aging population as they face declining financial security in retirement. The problem is serious enough that Ontario Premier, Kathleen Wynne proposed establishing an Ontario Pension Fund during the recent election campaign. And yet, the media has largely ignored or improperly and inadequately reported the significant benefits life settlements could play in mitigating a portion of the looming financial crunch. Most have not fully investigated life settlements as a valid financial option for millions of people. Nor looked into why life settlements are among “the most highly-rated investments available,” as ranked by Franklin Templeton, “ … in the same league as government bonds.”

Another insufficient article

Ironically, IE magazine ran another article on Oct. 31, 2014 titled, Financial literacy strategies must take seniors’ needs into account by Lee-Anne Goodman (no relation). In it, they quoted Susan Eng, vice-president for advocacy at CARP, who said the study reflects what her organization is tackling: “Not only do seniors not have enough money saved for their own retirements, but as they try to invest for their retirement, they are often vulnerable to shark activity by financial advisers.” This is a valid point, in part. As are other points in the article. Eng said,”They are losing their life savings, and that concerns us the most.” The article also stated that “The number of Canadians working past the age of 65 has almost doubled over the last seven years. There are now close to 600,000 seniors still in the workforce.” The article goes on to state that Eng says governments of all levels must do more to encourage registered pension plans, and to crack down on financial predators who target seniors. And yet, there is not one mention of the financial benefits that life settlements are providing to lighten seniors’ financial burden, around the world – except in most of Canada. Why are life settlements so ignored by organizations like CARP, Advocis (the association of Canadian financial planners) and the media in general? Or is this part of what Wendell Potter calls the “dark art of PR?” Are organizations like CARP (who receive significant advertising revenues from insurance firms) using code words like “shark activity” and “financial predators” to imply or co-mingle life settlements with pejoratives like “viatical and “STOLI?” Just as Ms. Harman’s article did.

Life insurance profits

I cover in my book why life insurance companies are dead against life settlements for self-serving interests – profits. And why they are not putting customers’ interests first. They are the main reason for the lack of open discussion in Canada.

Current regulations prevent policyholders from being able to sell their policies in an open market, for a fair market value, in a well-regulated industry. In my book, I share my personal experience as to how one life insurer tried to intimidate my firm and stop us from offering life settlements. I suspect such intimidation practices are a regular occurrence between insurers and insurance brokers. Now, as I work with others to change the existing, harmful government regulations, I expect the insurance company lobby and spin machine to shift into full gear. I only hope – trust – that the Canadian media will not “fall for” the spin Wendell Potter describes in his book, Deadly Spin.

There is nothing so dangerous as ignorance in action. – Goethe

If financial advisers and brokers are uninformed or misinformed by erroneous reporting about life settlements they cannot best serve their customers. And although they may not be engaging in what Ms. Eng called “shark activity,” or what Ms. Harman called being “on the wrong side of the rules,” they are still complicit through ignorance.

A well informed adviser should start with an understanding beyond a myopic Canadian market view, one that investigates the real value of life settlements, and how it is bettering the lives of seniors in the United States, Europe and globally. That responsibility rests with the industry professionals, many of whom are members of Advoics and yet, Advocis seems to be ignoring the veracity of life settlements and the benefits available to their members and Canadian seniors.

From CNN, Fox and NBC to Investment Executive and industry newsletters, responsibility is lost in the tumultuous news cycle.

The buck stops where?

Obviously, each financial adviser is responsible for his or her expertise but if they are unaware of the full story or get superficial information, then the burden of responsibility shifts to the “messengers,” which, in most cases, are the associations (Advocis, CARP, CLHIA, et al). But the public media also have a role. If the messengers provide only half the story or distort the facts or spin the information, then they are abdicating their responsibility to deliver a fair and balanced perspective to the public, their customers.

In the hurry-up culture of today’s media, vigilance and in depth reporting has been abandoned. Most of the news is bleached of substance in the 24/7 digital world of CNN, Fox, Twitter and You Tube. The media are caught in the crush and depend too much on the false information spewed out by the insurance PR machines. But somewhere in the pell-mell rush to deadlines there must be – needs to be – some responsible, in depth, principled, investigative journalism.

Postscript, January 26, 2015

Subsequent to the October Investment Executive article by Ms. Harman, I met with the publisher, Ms. Ozy Camacho and was invited to write a column regarding life settlements, which I have done. The first column will appear in February.

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