Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Pervasive sales culture at Canadian banks designed to push customers into high-fee products
In Canada, many branch-based financial planners are paid on a 100-per-cent commission basis, while some are salary-based employees who receive an annual bonus for hitting performance goals, which include sales targets. The rewards for employees are greater when products that make the employer more money are sold, and this system always incentivizes the sale of funds with higher fees, even if a lower-cost option might be better fit for the client. Tim Shufelt and Clare O’Hara spoke with Jane Bolstad, a certified financial planner who spent nearly two decades working for the big banks, about the extreme pressure to meet sales targets and how it affects Canadian bank consumers.
A credit card trap to avoid when paying for hotels and rental cars
Before heading on your next trip, Rob Carrick recommends making sure your credit card balance is well below how much you’ll want to spend, because hotels and credit card companies typically apply a pending charge when you arrive. This can zap your available credit and linger on your statement for days, even though the amount is never actually charged.
Central banks aren’t done raising interest rates, even if that means recession
Having failed to tame stubbornly-high inflation, the Bank of England opted for the element of surprise, raising its benchmark rate by a half a percentage point last week. The U.S. Federal Reserve held its target rate at 5.25 per cent, but Fed officials signalled that more increases are probable. And of course here at home, the Bank of Canada abandoned its own pause earlier this month, raising its target rate to 4.75 per cent. More hikes are likely on the way, Jason Kirby reports.
Larry Tanenbaum plans to sell a stake of Canadian sports giant MLSE
In an estate-planning move, Toronto sports czar Larry Tanenbaum announced he plans to sell a 20-per-cent stake in the family-controlled holding company Kilmer Sports Inc. – the parent company of the Toronto Maple Leafs and the Toronto Raptors – to the Ontario Municipal Employees Retirement System pension plan. The move values the sports business at $8-billion, Andrew Willis, James Bradshaw and Alexandra Posadski report.
Grupo Bimbo’s Canada Bread to pay millions in bread price-fixing settlement
One of Canada’s largest bread producers pleaded guilty last week to a criminal scheme to fix bread prices and will pay a $50-million fine – the largest price-fixing fine ever handed down by a Canadian court. Mexico-based Grupo Bimbo acknowledged that Canada Bread made “arrangements” with one or more unnamed senior executives at competitor Weston Foods, which led to two wholesale price increases in 2007 and 2011. The head of the Competition Bureau Matthew Boswell said the fine “sends a strong message” to discourage price fixing collusion in the future, Susan Krashinsky Robertson reports.
Want a bad plan for retirement? Rely on your house
A recent retirement survey commissioned by the Healthcare of Ontario Pension Plan says 38 per cent of survey participants somewhat or strongly agreed with the idea that selling their home would set them up for retirement, with younger people even more likely to bet on their home for retirement. But Rob Carrick warns that there are some serious flaws in this reasoning.
Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.
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