ers. So in fact, the article’s assertion is in itself unethical as it states one cannot pur- sue self-interest, which is your right. I am oſten dumbstruck by the narrow perspectives this column presents on the subject of ethics. If we’re going to discuss business ethics in this magazine — and we should — please focus on actual ethical debate rather than providing a platform for evangelizing a personal point of view. Dave McNab TORONTO


AUTHOR’S REPLY: It’s wonderful that we should be discussing the theoretical basis of ethics in CPA Magazine. But it also illus- trates why I generally shy away from the- ory in my columns. I prefer the practical objectives of thinking about actual busi- ness problems in different ways or calling out what I see as bad behaviour. But I did weigh into theory in the July/August issue and so deserve to be questioned. In individual ethics, one can look at


questions from the perspective of what is morally right (this assumes there are ab- solute moral norms), what is best for the overall good of others (assuming this can be measured) or what a virtuous person would do (this is where the concept of eth- ics as its own intrinsic reward comes in). In none of these cases does pure self-interest count, although a larger sense of enlight- ened self-interest (i.e. what kind of society would I like to live in) is certainly relevant. Business ethics introduces additional complications. Some people say business ethics is an oxymoron. They believe that business strives to create shareholder val- ue and has no other purpose. Others think business is inherently evil and needs strict regulation as a result. Milton Friedman thought CEOs who talk about corporate social responsibility were hypocrites, al- though he was bucking a trend since these days almost all CEOs talk about their larger responsibility (some of which continues to be hypocritical).


My point was that bad ethics is bad


for business, at least in the longer term. If shareholder value is to be measured in terms of sustainable growth rather than in meeting quarterly analysts’ numbers, then surely providing value to customers, treat- ing employees fairly and playing by the rules are relevant goals. Mr. McNab may disagree with my wording, but I suspect we agree on that.


Only fourth on the list? I WAS INTERESTED to read the article on the CEO of Vale Canada (“The Mindful Miner,” June) until the sentence listing the issues faced at the business. Including the phrase “miners getting crushed to death” is a flip- pant way to describe a serious health and safety problem that deserves more than fourth place on a list of “issues” for the CEO to overcome. Scott Wark OTTAWA


Online Comments


Some good, some bad (On the Money, July/August) I AM ASTOUNDED at how someone can make blanket statements without backing them up and passing them off as fact. Per- haps the author could estimate how many Canadians are actually alarmed [at the state of their investments]. Is it two million or 1,000? Both qualify as many. Using a financial adviser is “usually a


mistake.” Where do you get off making that statement without backing it up? Study aſter study shows the opposite to be true. People who use advisers, on the whole, have significantly more money accumu- lated, have a higher savings rate, are more confident heading into retirement and are better prepared to help with their chil- dren’s education. It’s like saying using a CPA for your taxes


is usually a mistake. Why? Lousy returns and high fees. Easy to say that when there are no facts to back up the statement.


Just as there are bad advisers, there are


bad CPAs, and to paint every one of them with the same brush is irresponsible. Shame on David Trahair for writing it and shame on CPA Magazine for publishing such tripe. Chris Forman


AUTHOR’S REPLY: I don’t think it’s possible to know how many Canadians are alarmed at the state of their investments. But the number isn’t the point. The fact is that many people had been in the dark about the fees they had been paying and the rate of return they had received until the recent disclosure rule changes. I did not say using a financial adviser is


usually a mistake. I said, “If you are still reading, chances are you have mutual funds sold to you by a financial adviser (of- ten a salesperson) to make your retirement dreams come true. This is usually a mis- take.” The point is that using a certain type of adviser is a problem. Those are the ones who can only sell mutual funds and are compensated to push the ones that have the higher MERs that are more profitable to the firm they work for. Since these fees come out of the investor’s rate of return, it puts them in a conflict of interest with the client’s goals. I also said that if you are hap- py with the return you are getting and the fees you are paying, “don’t change a thing.” So people in this case are probably using a good adviser and that’s fine. I talk about using a full-service invest-


ment dealer/broker and “if you can find a good one willing to take you on, this is probably the best option.” I am a fan of using a well-qualified, inde- pendent financial adviser who charges ful- ly disclosed fees. I use one. He is licensed by the Investment Industry Regulatory Or- ganization of Canada and is licensed to sell all types of financial products. The rest of the article focuses on robo- advisers, which for some people may be the best option.


SEPTEMBER 2017 | CPA MAGAZINE | 5


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