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Get in the know about ICOs
by FCNB on 

Get in the know about ICOs


If last year was all about Bitcoin and cryptocurrency, then 2018 is the year of the ICO.


Although ICOs reportedly raised almost $14 billion so far this year – nearly tripling the total in 2017 – many people still wonder: What is an ICO anyway?


If you are among them, then this blog post will help explain what they are and why you need to be cautious before jumping on the bandwagon. Next week’s blog will take a closer look at the risks of investing in cryptocurrencies and ICOs, including the risk for fraud.


The hype


Short for Initial Coin Offering, an ICO is an emerging form of fundraising, similar to crowdfunding. They have also been called a Token Allocation Event or Token Distribution Event to skirt some of the scrutiny that has befallen ICOs.


Regardless of the term used, they are typically used by ventures to sell digital tokens or coins to finance their ventures. However, the tokens often have value only inside the proposed project. If the project is never realized, the tokens are worth nothing.


Still, many ventures have raised lots of money through ICOs in little time. Take one ICO out of the Cayman Islands, which has so far raised $4 billion, making it the largest ICO to date. Another, out of China recently raised $750 million within five minutes of being launched. Another reportedly raised $36 million in 60 seconds.


Headlines like these may be impressive, but the reality is that participating in an ICO is very risky. According to a new research paper out of the Carroll School of Management at Boston College, more than half of startups that run ICOs fail within four months of the ICO. The very title of the study labels ICOs “digital tulips,” a reference to one of the most famous market bubbles of all time.


IPOs versus ICOs


They may sound the same, but initial public offerings (IPOs) and ICOs are very different. An IPO is a mechanism that enables private companies to go public for the first time to raise funds. It triggers a process that involves an underwriting firm or investment bank helping the company to determine the best type of security to issue, the offering price and the number of shares. ICOs, on the other hand, are the sale of digital tokens, often to fund a blockchain-related project.


Unlike an IPO, most ICOs are made without following any formal disclosure requirements. All that is usually provided is a “white paper” describing the proposed project.  Many of these contain inflated expectations and in some cases outright misrepresentations.  In many cases it’s hard to find reliable information, such as who is behind the ICO and how the money raised will be spent.


Consider this: Anyone with a good imagination, a bit of money and an internet access can create an ICO; in many cases, they can do so anonymously.


Before investing in an ICO, understand that you are likely not getting any actual interest in the venture. The token you get for your investment can represent a lot of different things: paid membership or early access to a service, a share in a cryptocurrency, or perhaps a reduced product price. But there is no guarantee that the project will be successful so you may never realize these benefits.


Think of it this way. It’s like buying poker chips to help finance the construction of a new casino project. If the casino is never built, your poker chips are worth nothing.


Are ICOs regulated?


The short answer is maybe. In August 2017, FCNB and other members of the Canadian Securities Administrators (CSA) issued a notice on the offer and sale of cryptocurrency offerings. It stated that, in many cases, cryptocurrency offerings may be subject to securities laws that would help protect investors. Whether they are subject to regulation or not is assessed on a case-by-case basis. This past June, the CSA issued a followup notice on the offering of ‘utility tokens’ and when they are subject to regulation.


Before you invest, ask questions about the investment and any disclosure documents that you are entitled to receive. Any document should be in plain language and easy to understand. It is very important that you take time to review all documents and understand the venture fully, including your rights as a coin/token holder.


Fast-changing environment


Because this is an emerging and fast changing environment, we, along with our Canadian counterparts, continue to research and analyze cryptocurrency offerings, such as ICOs.


If you are still scratching your head, here’s a video that goes into more depth. We will also be looking at the risks surrounding ICOs in next week’s blog.


Before investing in an ICO, be an informed investor!

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Considering investing? An investment professional can help.
by FCNB on 

Considering investing?  An investment professional can help.

I am a big believer in focusing on people’s strengths. I rely on a professional hairstylist to cut my hair, I seek out an accountant to do my taxes and I hire a mechanic to fix my car. Even though I might be able to figure out how to do these things, (except maybe the car repairs as I’m not very mechanical), I prefer to consult someone with expertise in areas where I don’t excel. Why should investing be any different?

I think I’m like a lot of people when it comes to investing. I want to do it, I know it is good for my financial future, but the idea of wading through stock market reports and charts on income growth are overwhelming. This is where an investment professional can be exactly the resource you need to begin your investment journey.

How do you know if you need an investment professional?

An investment professional might be a good idea if:

  • You are worried that you might not have enough money to live the lifestyle you are accustomed to in retirement.
  • You like structure and want someone who can help you make a solid plan to reach your financial goals.
  • You want help investing during your retirement as well so that your money continues to work for you.
  • You want to be confident knowing your financial future is in good hands and that you are prepared to continuing living your life, your way.

Another thing to remember is that investment professionals are not only for rich and money-savvy consumers. Investment professionals can help when you don’t have a plan at all or you are not sure where to start. They can offer unbiased, expert advice as well as share tips and strategies you might not even know about.  They can guide you in understanding which types of investments will fit your risk tolerance and can help you feel more in control of your financial well-being.  Think of it this way: you would seek out a doctor for your physical health; why not consider an investment professional to keep your finances healthy too? Once you have decided to work with an investment professional, the next step is choosing who to work with you. 

First Step – Check credentials

Just like your hairdresser or accountant (chances are you either read some reviews or got a referral when you sought out these professionals), choosing the person who will help you invest your hard earned dollars shouldn’t be any different!  In fact, did you know that financial advisers are required to be registered in New Brunswick? In addition to confirming that they are registered, it is also a good idea to check their category of registration.  This will tell you what they can and can’t sell to you. Before you hire one, visit to see if the firm or individual is registered and to learn more about the categories of registration.

Next – Investigate!

Once you have determined whether the individual or firm is registered, you should also consider the following questions:

  • What is their history?  Have they ever had disciplinary actions brought against them?
  • What is their investment philosophy?
  • What type of relevant education do they have?
  • How much they will cost?
  • Can they help you determine your risk tolerance?

FCNB has a great tool called Five Steps to Choosing an Advisor* that goes into more detail on what to look for and what questions to ask!
Once you’ve chosen your investment professional, think of your relationship as a partnership, with both of you working to achieve your financial goals.

*The terms ‘advisor’ and ‘financial advisor’ generally refer to a financial professional, and do not indicate a category of registration or licence. The registration category and type of licence is more important than a title. Click here to learn more about registration.

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Make your money work so you don’t have to… be an informed investor!
by FCNB on 

Make your money work so you don’t have to… be an informed investor!

If you are anything like me, I relish the idea of something in my life that doesn’t require extra work.  Driving kids to practice, emptying the dishwasher, doing 10 loads of laundry over the weekend to catch up after a busy week… these tasks all feel like insurmountable obstacles that are in the way to what we all crave: wellness.  We can’t make our money drive our kids, wash our dishes or clean our dirty clothes.  But, what if our money could work for us in other ways? It could be growing and building a nest egg for our future while we simultaneously go about our lives. Doesn’t that sound heavenly?

I know what you’re thinking: won’t this require more work on my part?  I too was wary of adding more to my plate. Investing is not without risk; but, a little upfront preparation can go a long way in helping you achieve your financial wellness goals. By investing so that your money can do the work for you, you can be one step closer to financial wellbeing and the ability to live your life your way. To reach your financial wellness goals, you first need to become an informed investor.

Understand how the investment works:

You need to understand the game before you start playing!  When it comes to making a new investment, ask these questions before signing on the dotted line:

  • How does the investment make money? Does it pay interest or dividends?
  • What fees are involved? Do I have to pay to buy, hold and sell the investment?  How will this impact the overall value of my investment? Do I have to pay a fee if I have to sell the investment quickly or before its maturity date?  Ask about the Charges and Compensation report, a required annual document that details the account operations and transaction fees paid to your financial professional to manage your investments.
  • How risky is the investment?  If I wanted out, how easy would it be to sell and how long would it take to get my money back?  Are there any penalty fees or restrictions involved?
  • Will this investment help me reach my financial goals and am I comfortable with the level of risk involved?

Understand what you’re investing in:

If you are like me, reading income charts and indexes are really overwhelming!  Basically, you need to focus on understanding the company’s business and whether or not it is making money.  If you are still unsure, this is where an investment professional or accountant comes in handy.  These professionals can read and explain the financial statements to you and help you with your decision.  A few more questions to keep in mind include:

  • How long has the company been operating and is it making money?  If the company is fairly new, there could be more risk involved.
  • What could affect the company’s performance?  Are there any red flags in the financial statements?

How is the company managed? Are there any ongoing legal issues?

Where to find out more

Seek out disclosure documents like prospectus, Fund Facts or annual reports to give you an even bigger picture of your possible investment.  In fact, your financial professional is required to provide you with a Charges and Compensation report as well as an Investment Performance report annually.  They should discuss these documents with you before committing to an investment.

You can also do your own research on companies through the media, newsletters and analysts’ reports or through the company itself.  Remember to be cautious of anything you read on websites, through unsolicited emails or company news releases. These should never be your sole basis for an investment decision. Fraudsters are using the Internet to reach potential victims with fake investment opportunities. Use this checklist to help you decide if the investment opportunity is too good to be true.

FCNB also has a great resource entitled, How to be an Informed Investor.  Check it out for even more tips on becoming an informed investor!

Once you have decided to invest, how do you protect your money?

Now you are ready to take the plunge, but you still want a life preserver!  Consider these tips to keep your investments safe:

  • Only buy investments that you are comfortable with.  Remember, no investment is “risk-free.” 
  • Never sign documents you don’t understand.  Take your time with investment decisions and walk away from high-pressure sales tactics.
  • Check to see if the investment professional you are working with is registered with FCNB.   We are here to answer any questions or concerns you might have.

Doing some initial research and surrounding yourself with registered and knowledgeable professionals will alleviate a lot of the insecurity felt when it comes to investing.   These tips should help you on the way to making your money work for you so you can ultimately have the resources and time to live the life you want!

Visit us at FCNB for more information and tips on investing, budgeting and financial wellness.

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How to beer-proof your budget
by FCNB on 

How to beer-proof your budget 

One of my friends and I were talking about how she came to own a machine that carbonates water, despite the fact she barely drinks carbonated water. It turns out she’d bought it on impulse after dinner and drinks out with friends. So, although she rarely uses the machine she keeps it as a reminder that money and alcohol don’t mix. I’ll admit – I love online “window shopping”.  But I’m careful to do it with the right frame of mind. I rarely make a purchase unless I need something that I can find at a great price online, and I keep my credit card away from the computer desk.  I know that online shopping spree with a glass of wine or suds in hand may seem like a great idea at the time, but, along with the credit card statement, I’d also likely be dealing with a hefty case of buyer’s remorse.  Mixing shopping and alcohol can lead to blown budgets, credit card abuse, and even identity theft.

Alcohol knocks down our inhibitions, making us more impulsive and less able to stand up to temptation. We tend to spend more money after a drink or two.  Retailers recognize this and send “happy hour” marketing emails, or they launch online sales later at night to catch the post-bar crowd. To guard against such practices, check out our program “I’m Worth It”.  It’s full of spending and saving information to help you develop your skills as a smart consumer.

Here are some tips to “booze proof” your budget and to avoid waking up with a spending hangover:

Leave credit cards at home or in another room.  If you know you’ll be sipping a little, leaving the cards at home can help remove the temptation to spend more than you have.  Leaving your purse or wallet in another room can also help.  The simple act of having to walk to another room may be enough to deter (or at least give you time to reconsider) the purchase. When shopping online, it’s also a good idea to not leave things in your cart that you could come back to and one-click buy later. 

Make a list and stick to it. If you do have shopping to do, make a list of things you need to purchase.  Put the price of the items on the list for that extra reminder of your budget. That way, even if you do have a little extra “glow” while making purchases, they’re ones you have already included in your budget.  Even though you may get a great deal on an online purchase, if you didn’t budget for it or make a plan to pay off the credit card bill, the added interest charges can end up costing you much more in the long-run.

Shop first.  If you are meeting friends to do some shopping and socializing, and you know there will be alcohol involved, get the shopping done first.  Then relax and enjoy a social drink without worrying about waking up to find out you’re the proud owner of a new cashmere sweater that looks alarmingly similar to one you already own, or a leather recliner for your man-cave that you don’t recall purchasing.  And don’t forget to budget safe transportation home if you do enjoy a social drink or two once the shopping is done!

Always keep receipts.  If you do wake up with a regrettable purchase, you may be able to return the item under the store’s return policy.  But remember, a store does not have to take the item back just because you changed your mind.  Each store sets their own return policy, so know the details before you make a purchase.

These tips can help you this holiday season to ensure you don’t end up with more than you bargained or budgeted for.

More information about smart spending, budgeting and preventing buyer’s remorse is available at   

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After an indulgent summer, here’s how to get back on your financial track
by FCNB on 

After an indulgent summer, here’s how to get back on your financial track

As the cool breeze blows through my window these days, I find myself asking, where did the summer go?

Sure, it’s not technically over until September 22nd, but try telling that to the kids who are back in the classroom and the frazzled parents who are trying to get their families back in to some sort of routine. I bet they won’t be laughing!

Between the longer days, the trips to the beach, the lazy bonfire nights, and vacation days, summertime can feel like such an indulgence. And, before you know it, fall sneaks up on you, carrying a heap of responsibilities with it.

More than likely, you’ve opened your wallet in the midst of your summer fun – and in some cases, maybe you’ve overspent once or twice.

So you got off track

It’s normal to stray from your financial plans, but try not to get discouraged. No one ever said it was easy to do (unless they were trying to sell you something). Now is a great time to make a September resolution, according to life coach Lisa Carpenter in a CBC interview.

Here are some tips to help you get back on track for your financial goals.

1. Identify your most important financial goal

If you have more than one financial goal, you can take advantage of the time that’s passed since you last made them. One will likely be more of a priority than the others – paying down debt, for instance, would take precedence over saving for a nonessential item. In other cases, it could be the opposite – replacing your car before it dies might have to come before paying off debt. Follow your own judgement – there is no “one size fits all” in the financial world!

2. Make a new plan

Ask any pro athlete - a goal is just a goal until you have a plan to achieve it. The plan can be as simple or as complicated as you want it to be – and we have a budgeting tool that can help you do just that.

3. Plan for next year

The big expenses that come up around September are fresh in your mind – so plan for next year. Try to start setting money aside right now so that when it’s time to buy school supplies, textbooks, sports registration fees, car inspections – you’ll be ready.

4. Set reminders for yourself

Maybe it’s a calendar reminder on your phone, or a note in your agenda, or even an email that you schedule to yourself in advance. Regardless of how, the why stays the same: you want to stay accountable to yourself on your goals. We lead busy lives – it’s easy to lose sight of your goals, so a little tap on the shoulder can help remind you of what’s important in the long term.

And if you stray from your plan again, no problem. Just go back to step one and try again!

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