Christopher

Mason

Writer, Editor, Photographer


TMI — Too Much Information

I consume a lot of information. Too much, really. After many failed information diets, I’ve decided to try to curate instead of quit. Inspired by sites like Longreads, I seek the best and the most memorable writing the web has to offer.

The world’s eyes turn to Canada, thanks to Rob Ford and Gawker.

May 23, 2013, Mason0 Comments

 

If asked the question “What would it take to get the world’s media to pay attention to Canada?” I don’t think anyone would have answered “Allegations that a video may exist showing Toronto Mayor Rob Ford smoking crack cocaine with drug dealers”.

But such allegations have been made, and the world’s media has turned its attention to Canada, producing more coverage of this one story than on any other Canadian story in years. It has the world asking who is Rob Ford?

In Canadian media, the Toronto Star has led coverage of the issue, and taken a lot of flak from Ford and his supporters who have long accused the paper of holding a vendetta against him.

But without Gawker’s coverage of this issue it would have received scant attention in global media, aside from running news wire stories on it. Gawker was the first to publish a story on the alleged video and their attempt to crowdsource enough funding to buy the video has drawn international attention to the issue.

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What is middle class?

January 22, 2013, Mason0 Comments

We’re at a bizarre crossroads where a rising cost of living (in many, but not all, places) meets diminishing career prospects for the 20s and early 30s generation.

The New York Times explores the first issue by asking what, exactly, is middle class in Manhattan? There is context here in that middle class in Manhattan is upper class most anywhere else. I heard a piece on CBC Radio yesterday examining efforts to create a start-up community in Kansas City, in part because of its access to the new Google broadband internet, and also a low cost of living. The person being interviewed said there aren’t many places where you can buy a four bedroom house for $50,000. If I’d been drinking milk at the time it would have been spraying out of my mouth at that moment. It turns out you can get a four-bedroom home in Kansas City for about that price.

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Weekend Reading

January 12, 2013, Mason0 Comments

Among the lowlights of this week’s reading and listening was tuning into a CBC Radio noon call-in show while sick with the flu, only to find the theme of the show to be how bad this year’s flu season is. Salt in the wound, really.

But there were highlights. Here are a few:

1) I’m packing for a quick out-of-town trip this weekend. No matter how daunting the packing job is, at least I’m not packing for a SEVEN YEAR odyssey.

2) I’m making space in my bag for two books I hadn’t even heard of until yesterday. But the obituary of Evan S. Connell suggests these books are well worth a read (and perhaps the movies worth a watch?)

3) A friend passed along an article by the great Howard French about Hong Kong’s Chungking Mansions (French’s book A Continent for the Taking is a must-read). (The friend who passed that French article along has also written about Chungking Mansions, here).

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Weekend Reading

January 5, 2013, Mason0 Comments

Type “Will the internet kill journalism?” into Google and you will see a bunch of articles — most of them written several years ago — about how the web, and technology in general, has, is or will kill journalism as we know it.

Today we’re mostly over the whole “death of journalism” thing (though we’re still in the throes of the “death of newspapers“) and enjoying one of the greatest eras of writing, because of volume, accessibility and new forms of storytelling. Longreads is living proof of that.

I use Evernote to track and organize interesting articles (my biggest folder is labelled “future of journalism”. Judging by the articles in it, there’s no consensus), but even still each week a slew of articles appear as tabs on my browsers, are enjoyed briefly and then disappear. It’s a new year, which is the perfect time to do things a bit differently, so I’m going to try to keep track of some of the favourites from each week and post them here for weekend reading, and to help me keep track of them. If you spot something you think would be up my alley, please drop me a line.

Here’s some of what I was reading this week:

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Into the Ugandan wild (Toronto Star)

November 3, 2012, Mason0 Comments

Published on Saturday October 27, 2007

CHRISTOPHER MASON
Special to The Toronto Star

 

KIDEPO VALLEY NATIONAL PARK, UGANDA–There are two ways to reach Kidepo Valley National Park: a pleasant, 90-minute flight from Kampala, or an arduous drive along bone-rattling gravel roads that, at times, can be flooded by waist-high waters.

Our drive was one of those “times.”

Tucked along the border with Sudan and Kenya, this part of the world is better known for its culture of cattle-raiding and entrenched poverty than its sprawling savannahs and wildlife.

Unlike the rest of northern Uganda, destabilized by two decades of rebel attacks, the people of Karamoja have lived in almost total isolation and resisted outside development. Visitors see a culture that has changed little over the years.

A new sense of peace and a recently built lodge, providing previously unheard-of comfort, is allowing the park to become ambitious in it bid to grow its modest trickle of tourists.

As we approached Apoka Safari Lodge, Barbara Buchanan, who manages it with partner Joe du Plessis, emerged from the collection of grass-thatched buildings perched on an outcrop that overlooks the Narus Valley.

“We’ve been worried about you all week!” she says, referring to the rising floodwaters.

Looking back in the direction from which we’d come, it seemed surreal to be sipping fresh iced tea from sugar-rimmed glasses, zebra grazing nearby, when just a short time ago we had been bumping along roads sprinkled with crosses marking fatal road ambushes carried out by Karamojong warriors.

But that’s part of the niche the lodge is trying to carve out for itself in a competitive tourism market – people can feel that they have visited a picturesque landscape that has a story to tell.

“It used to be like the Wild West around here,” du Plessis says.

That history becomes part of the park’s allure, along with its isolation.

It almost has to, because other parks are easier to reach, or hold more name recognition for tourists coming from afar.

But it is impossible to discuss Karamoja’s allure without facing the reality of everyday life here.

The region is quietly enduring a humanitarian crisis that, until recently, went unnoticed by nearly every international aid organization.

One million people, all but left behind by post-Idi Amin Uganda, suffer from malnutrition levels of Darfurian proportions and die in numbers that elsewhere attract massive relief efforts.

Karamoja’s child survival rate is among the worst in the world, life expectancy is 37 years and families mostly live in the dark, save for one town that has a generator, plus a few hospitals, government buildings and Kidepo’s lodge that can afford solar power or generators.

Before the lodge opened in January 2006, one has to go back to the late 1970s to find the last effort to attract tourists here.

It lies in ruins across the valley, within full view of the lodge’s poolside deck chairs. The “Amin Hotel,” as it is now called, was built at the end of Idi Amin’s dictatorship to boost tourism in the park, but war broke out before the hotel could host its first guests and it has sat empty ever since.

A drive in Kidepo offers a chance to observe animals of all sorts.

We spotted lions several times, including our second night when two lions walked past a few metres behind the dinner table.

“Follow me!” du Plessis said as nine guests stalked behind him to follow the lions on their stroll through the lodge grounds.

“The fact that so few people have traditionally come here makes it that much more of an adventure for those who do come,” du Plessis said. “This park has some of the wildest views I’ve seen anywhere.”

The sights are spectacular and the skilled guides, du Plessis and a Karamojong guide named Augustus, know the park’s every nook and cranny. It was easy to forget that the park only has between 18 to 20 giraffes when you see 13 of them on one drive. The park’s open vistas, since it consists of two sweeping valleys, allow great views of the animals as they meander their way across the land– lions, zebras, elephants, giraffes, buffalo and dozens of bird species among others.

 

Buffalo, gazelles, zebra and waterbuck graze so close to the canvas-walled cabins that whether the buffalo chew with their mouths open or closed could well determine whether you get an uninterrupted night’s sleep– though the sound of lions bellowing their territorial calls at night, a few metres away from the cabin, also has a knack for inducing insomnia.

The cabins are built for comfort. All 10 face the open savannah and have private front porches and outdoor bathtubs carved from rock. Inside, a king-size bed (or two queen-size beds in four cabins) and overstuffed chairs fill the main room, with an adjacent bathroom whose shower, again built from rock, overlooks the savannah through a screen window. Guests can choose between a game drive, a walk through the valley to see the animals, a trip to a nearby village or a restful stay at the lodge.

A Friday-Monday stay provides ample time for all options.

Buchanan and du Plessis, who hail from South Africa, took over management of the lodge in January.

“When we came here, I was wondering what we had gotten ourselves into because I had heard so much about the violence in Karamoja,” Buchanan said. “But then we got here and wondered what the fuss was all about.”

In the villages, Karamojong culture is on full display.

The region’s incredible fashion features Kenyan tartan blankets, often worn with fedora hats with feathers for the men, beadwork and intricate facial scarring for women.

It is a culture du Plessis and Buchanan are keen on introducing to guests in the hopes that the villages will also benefit.

For numbers of animals, Kidepo cannot compete with safari hotshots like the Zambezi and the Serengeti and likely never will, despite being similarly priced.

But there is nothing wrong with that. Kidepo is a niche destination for those who have already done the big-name safari trips.

Better yet, it appeals to those who value an experience where the story of the surrounding area, and the adventure it takes to get there are just as enriching as coming home with 100 pictures of an elephant having a mid-day snack.


Christopher Mason is a freelance writer based in Kampala, Uganda.

United Nations report on civil service reform in Liberia (2010)

October 6, 2012, Mason0 Comments

In 2010 I was commissioned by the United Nations Development Programme (UNDP) to write a report exploring the successes and challenges of a program to reform and strengthen Liberia’s civil service, which had been decimated by the country’s 1989-2003 civil war. I traveled the country interviewing civil servants who were participating in the program and those who were working alongside members of the program to assess successes and challenges while assessing how best to capture lessons learned.

The result can be found here (PDF).

Are MFDA advisors missing out on ETFs?

September 10, 2012, Mason0 Comments

Christopher Mason / November 28, 2011

The growth of ETFs has reinvigorated the debate over the merits of MFDA and IIROC licensing, and more specifically whether an MFDA-licensed advisor can adequately access the fast-growing sector.

Initially, ETFs were only available to IIROC licensees. More recently, however, MFDA advisors have been able to access that market segment through mutual funds comprised of ETFs. But the question remains whether that solution works for the long term or is merely a Band-Aid.

While clients may at this point appear indifferent about how their advisors are licensed, many of the fund-packaged ETFs still contain a layer of fees. So an MFDA advisor needs to at least anticipate an investor asking why she would want that option over a straight ETF.

The answer is that IIROC licensing is a massive change, says Mark Barnicutt, president of HighView Financial Group in Oakville, Ont. “It costs time, money and distraction to make that conversion, but it can be worthwhile if broad product offerings are important for you and your clients.”

Six questions your clients will ask you about ETFs:

  1. What are ETFs and why is everyone talking about them?
  2. Are they risky?
  3. Do I have any in my portfolio? Should I?
  4. How much do they cost?
  5. How do you get paid?
  6. Is an ETF in a mutual fund wrapper the same as an ETF?

 

Even once you’ve completed the courses, the process of moving clients to the new platform can take months and once settled into the new system, an IIROC advisor has to keep up-to-date on a vastly expanded array of products. “That can be overwhelming,” Barnicutt says.

MaryAnn Kokan-Nyhof agrees. “The more options you have available, the more you need to know about those options,” says the MFDA-licensed CFP and vice-president of MGI Financial’s Kilcona branch in Winnipeg. “I have learned a handful of styles and I know them inside and out. [You can’t] pretend you can be an expert in every available option.”

Kokan-Nyhof considered the merits of switching to IIROC licensing, but decided to stay with MFDA.

She’s since increased the use of mutual fund-wrapped ETFs in her clients’ portfolios, and finds them useful for accessing lower-cost investments.

ADDITIONAL OPTIONS

Changing licensure may also involve changing dealership. That may be more onerous than clients expect. So present the options: explain the hassle of moving to another firm, and ask whether paying a few basis points to maintain a working relationship is worth it.

Besides, “I don’t think you have to move anymore,” says DundeeWealth advisor Bruce Cumming, who’s passionate about index investing and switched from MFDA to IIROC licensure in 2008 specifically to sell ETFs. Now that they’re available in a wrapper, “the Herculean effort required to move can be avoided.”

Cumming doesn’t regret the switch, because his Oakville-based practice has grown substantially due to his expanded product shelf. But from a strictly ETF perspective, had the fund-wrapped products been available, “I could have had access to fundamental indexing with PowerShares, and market cap indexing with BMO.”

To reduce the fee gap between an ETF and a fund-wrapped version, consider F-class funds under a fee-for-service model. That might be a better switch than a change of licensure, says Cumming. “The regulators don’t want embedded fees. We should be getting away from trailers.”

4 questions TO ASK YOURSELF BEFORE…

MOVING TO IIROC TO SELL ETFs

  1. Is it important to my core business to offer my clients a full range of financial products?
  2. Are my clients asking about ETFs?
  3. Have I lost any clients because I can’t offer ETFs directly?
  4. Will the financial benefits of selling ETFs outweigh the costs of switching from MFDA to IIROC?

 

To get close to an IIROC advisor’s fees, “the MFDA guy has to be on a fee-for-service platform,” says Cumming. “He’s got to be able to sell indexes as F-class and add his fee on top. That’s all taken care of for me in the IIROC world. I can plagiarize the wrap accounts’ asset mix and use ETFs instead of active managers, all for 30 basis points. And then I’ll add my 1% fee that’s tax-deductible. You’ve got institutional pricing—lower than pension funds after the tax deductions.”

There’s still a spread—MFDA advisors can get just under 2% with F-class funds—but it’s certainly smaller, which will help in attracting the price-sensitive wealthy. “You can’t be selling mutual funds to $2-million-dollar clients,” says Cumming.

Barnicutt agrees. “The closer you get to the million-dollar level, you begin to have to look at alternative solutions that are akin to the ones you see on the IIROC platform and with investment counsellors.”

An MFDA advisor can suggest the client open an electronic brokerage account, or work with a third party to purchase ETFs, with the existing advisor staying on to provide advice.

One branch manager in Markham, Ont. has directed about 20% of his clients’ ETF investments into straight ETFs via HAHN Investment Stewards in return for referral fees. This, he says, has proven an effective way to offer a broader range of investment tools without going through the hassle of re-registration.

“Over the next few years I’m looking to double our ETF exposure, and my preference would be” to continue using a third party, he says. “We see it as best of both worlds.”

Of course, adding layers between the client and the ETF will always add costs. Nobody but you can gauge the fee sensitivity of your clients, and ultimately, that should drive the decision to make any changes in your practice.

Originally published in the December 2011 issue of Advisor’s Edge magazine.

Planning for disabilities

September 10, 2012, Mason0 Comments

 

Planning for disabilities

Christopher Mason / February 01, 2012

Barbara Turnbull was 18 when she was shot during a convenience store robbery in the early 1980s, leaving her paralyzed from the shoulders down.

The experience took a physical, emotional and psychological toll, but also left her facing a future of motorized wheelchairs, attendant care and home and vehicle modifications, in addition to other medical costs and concerns. Turnbull’s expenses were covered by the Workplace Safety and Insurance Board, but not all disabilities arise on the job.

“Nothing is cheap,” Turnbull says, noting for people without coverage, a new wheelchair every five-to-seven years can cost up to $40,000. The more specialized an item, the more expensive.

Provincial coverage varies. In Ontario, for example, the province covers 75% of significant equipment costs, which could include wheelchairs, orthopaedic braces and breathing aids.

But for people with disabilities, who face challenges in supporting themselves financially, their share of such costs can quickly become overwhelming.

In the early years after her injury, Turnbull struggled to manage donations that came in after her cause garnered national attention. She wound up with a sizable amount of unpaid taxes.

Greater support

In 1991, she came to Bennett March IPC in Toronto and began working with advisors Valerie March and later Kathleen Peace.

For Peace, the process of support and planning for disabled clients runs far deeper than in her other client relationships and includes regular budget planning discussions and ensuring they’re working with an accountant experienced in disability issues.

“[The strategy] covered the bigger picture of costs, taxes and what I need to live independently,” Turnbull says. “A central part of our conversation was looking at how often I’ll need a new vehicle, and other big-ticket items.”

Still, advisors need to build a cost list that goes beyond core expenses. It can include vitamins and supplements (which can run $500 a month), physiotherapy, buying a vehicle, modifying that vehicle ($25,000), modified computers and software, and other related peripheral expenses that can easily total thousands of dollars each year.

Disability Tax Credit

Make sure they’re registered for the Disability Tax Credit. Then open an RDSP. Use the $1,600 captured via the tax credit to fund the annual $1,500 RDSP contribution. Ask if the client has claimed The Disability Tax Credit as far back as possible (10 years). a full recapture can net $16,000.

Non-medical costs come into play as well. One of Peace’s clients has a child with special needs and spends thousands each summer to send her children to camp. “They love it, and she regains her sanity,” Peace says. “It’s a non-negotiable expense.”

Peace does a comprehensive calculation that takes into account government and employer benefits, any settlement received from a lawsuit or insurer, anticipated equipment and care costs and other expenses unique to a person’s circumstances.

Another of Peace’s clients, Carolyn Pioro, was paralyzed in a trapeze accident in 2005. She received compensation meant to cover her current and future expenses.

In investing that sum, “The general approach is similar to anyone in their 30s planning for retirement,” Peace says. “We have a basic portfolio, 60% equity, 40% fixed income, with a maxed-out TFSA and RDSP.”

Incorporating the expenses associated with her disability into that approach took months. The process included ensuring Pioro could buy and retrofit a home to suit her requirements, without jeopardizing her long-term finances.

“[Now,] she has a comfortable condo,” Peace says. “She is looking for a job and knows her future is secure.”

AVOIDING MISTAKES

Unfortunately, not all clients are so lucky. Several advisors have built their businesses around correcting financial plans that do more harm than good for disabled clients.

“I’m fixing a lot of mistakes,” says Graeme Treeby, a Stouffville, Ont.-based financial planner who co-founded the Special Needs Planning Group, a consortium of lawyers and accountants. The group also includes planners who have children with disabilities and advise families with disabled children.

Errors that Treeby and others often spot include specific misinformation, such as clients being told if they claim the disability tax credit, their disabled child will not qualify for the RDSP (see “Common Mistakes,” right).

Common mistakes

Here are some bits of misinformation that are frequently passed on about RDSPs.

  • WRONGTelling parents they no longer qualify for the tax credit if their adult child does not live with them.RIGHT The adult child can, in fact, live with them. The credit also applies when the child goes into supported living if the parents continue to provide food, occasional shelter or clothing.
  • WRONGAdvising parents to charge rent to a disabled adult child if they also make meals for that child.RIGHT To avoid having to repay benefits, the adult child must plan and prepare their own meals, or if they are not capable of doing so, then someone must be paid to help with food planning and preparation for the lease agreement to be accepted.
  • WRONGLetting an unmonitored mutual fund hit $5,000, so as to cause a client to be exempt from benefits.RIGHT RDSPs, Henson Trusts and segregated funds are the three tools to allow asset accumulation without jeopardizing government benefits.

More broadly, advisors say asset rules are too often misunderstood. To qualify for support in Ontario, people cannot hold more than $5,000 in liquid assets.

“I have a client who has become disabled and can no longer work,” Treeby says. “His advisor told him to qualify for ODSP he would have to spend all of his RRSPs. That is one way of doing it, but not necessarily the best way.”

Treeby instead put the money into a segregated fund RRSP, which allows a person to hold up to $100,000 while continuing to qualify for government support.

Segregated funds, RDSPs (see “RDSP Issues,” below) and Henson Trusts (see “Help special-needs clients have enough for the future”) are the three key tools people with disabilities can use to accumulate assets without jeopardizing government benefits.

For Henson Trusts, your client (or his or her guardian) will have to choose a trustee. So get to know the family members to understand whether either one of them, or a professional trustee, is best suited to manage a trust set up by parents to care for someone with disabilities.

“Early on, you want discussions among the family, bringing the kids in, to make sure they are on board with the planning,” says Rachel Blumenfeld, a partner at Miller Thomson LLP.

The ramifications of not using a Henson Trust are significant, so it should be at the top of your discussion list early in your relationship with a client with disabilities.

“I get a call every second day from executors saying their mom or dad has died, an inheritance exists and they heard there should be a Henson Trust,” says Kenneth Pope, an Ottawa-based lawyer.

“Most times we can fix it, but the trusts should be drafted into the will in advance, not at the last minute.”

RDSP Issues

Your client must first qualify for the disability tax credit. The RDSP allows those with disabilities to accumulate assets, and others (usually family members) to offer financial support, without affecting government benefits. There is no annual contribution limit, but there is a lifetime limit of $200,000. Contributions can be made from age 19 until the end of the year the beneficiary turns 59, and accessed at age 60.

“It’s a tremendous savings tool,” says Kenneth Pope, an Ottawa-based lawyer. But it’s also underutilized. Of more than 600,000 Canadians approved for the disability tax credit, only about 48,000 have opened RDSPs.

When establishing an RDSP with a lump sum, leave room for $1,500 annual contributions for 20 years to continue to qualify for up to $4,500 a year in matching government contributions, which stop at age 49.

Issues to be aware of include vesting rules, age limits, and competency for clients over the age of 18. If a person cannot sign for powers of attorney, a guardian may have to apply to the courts before they can sign the paperwork for an RDSP.

That was one of several issues catching the attention of a federal government review of the RDSP, announced in October. Others included legal guardianship in the case of an intellectual disability, as well as the 10-year rule that restricts when money can be taken out of the plan.

Modifications to your practice

You won’t have to make significant changes to your practice from a compliance and liability standpoint. With a physical disability, your client may prefer to receive documents in PDF form by e-mail so they can view them on a computer using assistive devices and programs. If you make home visits, take the same precautions as with any off-site meeting. Make sure any electronic devices are password-protected and encrypted, and take only essential documents related to the client you are meeting.

Clients will consistently be your best resource for what they need, especially if they and their families have lived with the disability for years.

 

Originally published in the February 2012 issue of Advisor’s Edge magazine.