We live in the information age and yet in certain industries the information gap between the buyer and seller remains a mystery. The financial industry attempted to rectify the problem by introducing CRM2, which discloses how much investors pay advisors and their firms – and expressing those fees in dollars rather than as a percentage of assets. The new regulations shockingly don’t capture all the fees – only the trailer fee is revealed in dollars, while the rest of the expense ratio remains hidden – but it’s a start.
This week a federal court ruled that real estate agents must make home sales data public. That includes sales figures, pending sales, and broker commissions, which are not currently disclosed. The Competition Bureau first brought this complaint forward in 2011, alleging that the Toronto Real Estate Board (TREB) prevented competition and stifled digital innovation by prohibiting its realtor members from posting sales data on their websites.
TREB vowed to continue the fight (of course!), saying disclosing sales data violates consumer privacy. What’s at stake, though, is greater access of information for consumers as well as greater competition in an industry starving for low-cost online solutions for buying and selling a home.
Meanwhile, CREA, which represents more than 100,000 real estate agents across the country, is lobbying the federal government to change the Home Buyers’ Plan rules to allow parents to each withdraw the maximum amount ($25,000) from their own RRSPs for their children to purchase or build a home.
Josh Gordon, an assistant professor at Simon Fraser University’s School of Public Policy, says this is “a remarkably stupid idea:”
“One of the dumbest ideas I’ve heard in the housing debate.” The policy change would only fuel demand for real estate, he says. With more access to funds, buyers are able to pay more for homes, driving up prices and exacerbating the very problem CREA purports to address. “You’re just allowing people to take on more debt, meaning they can bid more for the same house.”
Next up: Let’s have a go at car dealers to disclose the true cost of a vehicle so we can all avoid the painful negotiating dance when buying our next car.
This Week’s Recap:
On Monday I closed out Financial Literacy Month with 10 financial lessons to share with friends.
On Wednesday Marie gave you a year-end financial planning checklist to consider,
And on Friday we opened up the mailbag and answered a reader question about holding bond funds in a rising rate environment.
Many thanks to the Globe and Mail’s Rob Carrick for highlighting the year-end financial planning checklist in his Carrick on Money newsletter.
Jeers to this financial planning firm for blatantly ripping off my mom’s year-end financial planning checklist and publishing it as their own:
Here’s a company called WEALTHplan ripping off my mom’s year-end financial checklist article. Great service you are providing to your clients through our original work 😐 pic.twitter.com/5SDkJ2nJtF
— Boomer and Echo (@BoomerandEcho) December 1, 2017
Just embrace passive management already. Some advice from Eugene Fama, the father of efficient markets.
Rob Carrick and Doug Hoyes talk about when it’s okay to break the first commandment of personal finance:
Jason Heath explains why making RRSP withdrawals to pay off a line of credit debt could be double trouble.
Who doesn’t love sales? There’s just one problem: they lead us to make dumb choices. A great excerpt from Dan Ariely’s new book, Dollars and Sense.
Jonathan Clements shares a timely tale: Imagine an idealized chart that summarizes our finances over the course of our lives. What would the chart look like?
The three months of Bill VanGorder’s retirement were among the longest of his career. Why more Canadians work past 65.
So is this the new retirement era? Let’s have a moment of silence for the late, great dream of early retirement.
In their own words: “I’m scared to death of the cost of living as a senior.”
“Even though I planned my post-retirement financial affairs with great thought, I am still surprised how much more expensive it is,” says a man, 70, from Goderich, Ont.”
The best time to start CPP – if you don’t know when you will die.
Should you delay taking CPP and OAS? Michael James offers a thorough analysis to help you decide.
Google Finance is shutting down and Million Dollar Journey blogger Frugal Trader offers two alternatives for tracking stocks.
Jason Heath explains how to evaluate the investments in your Group Savings Plan at work.
Department stores were once temples of commerce and hubs of cultural activity. But rising competition, then the internet, rendered them irrelevant. #RIPSears
Finally, a monster expose by the Globe and Mail’s Kathy Tomlinson reveals how doctors are taking in millions of dollars a year by putting their names to accident injury reports for the insurance industry.
Enjoy the rest of your weekend, everyone!