The rights of investors should be improved



The committee wants to receive feedback. If you want your voice heard on this important subject, we recommend you participate in the process.
The committee wants to receive feedback. If you want your voice heard on this important subject, we recommend you participate in the process.

Good news is coming… we hope.

Beneficial changes could be introduced that will provide a much fairer environment for individual investors. Nothing has happened yet however the winds of change are blowing in the right direction.

Ontario took one small step forward in the slow journey to increase investor protection. The idea is to implement investment industry practices that are designed for the best interest of investors.

A committee has recommended a “Statutory Best Interest Duty” to all individuals and firms that provide financial planning advice and/or sell investment products.

Current practice is based on know-your-client and suitability requirements.

An advisor must understand their client and also understand if a specific investment recommended is suitable.

There is no requirement that advice given, or the investment product recommended for purchase, be in the best interest of the client.

It amounts to “buyer beware”.

Many investment products sold pay a sales commission to the advisor.

The obvious question is: Is there a conflict of interest between what is good for the advisor and what is good for the client?

The report Preliminary Policy Recommendations of the Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives was released this month.

Report part of ongoing process

This one report is just part of an ongoing process leading to a final report.

Now, the committee wants to receive feedback either in writing or by interested parties attending one of several meetings scheduled during the coming months.

If you want your voice heard on this important subject we recommend you participate in the process.

Written submissions can be emailed to: 

For a list of dates and locations of the public consultation sessions please visit the Ontario Ministry of Finance website:

If you believe the standard of care in the investment business should be elevated, and that advisors act in the best interest of their clients, then we strongly recommend you get involved.

Your opinion has been requested. This is your opportunity to make a difference.

One of the most interesting parts of the report commented on the duty of best interest of the client, stating, “It would also bring regulatory requirements in line with consumer expectations.”

Several other organizations both in Canada and the U.S. are also considering investment standards.

The U.S. Department of Labor just announced a new fiduciary rule will be implemented by 2018.

Investment advisors providing retirement advice will have to put their clients’ interests ahead of their own.

The Investment Industry Regulatory Organization of Canada are adjusting their regulatory efforts by looking at conflicts of interest resulting on how advisors are paid.

The Canadian Securities Administrators will soon publish a paper proposing how the investment industry improve their obligation towards working with clients.

There is real momentum that the rights of individual investors will finally overcome the resistance of the financial services industry.

Cross your fingers… change is coming.