There is an increasing appetite and expectation for transparency
November 9, 2017
This has had implications for you on how your investments are handled.
The expectation of the modern-day investor is to better understand the details of investing.
Humans have always been curious. As a society, we are used to finding out what we want to know, when we want to know it.
We feel entitled to have the details on things that affect our lives.
Take the Internet for example.
With a click of a button, or a voice command into a smart phone, we get an instant answer to anything from what movie to see to which airplanes are flying overhead.
Then there are the bigger questions where Canadians expect easy access to knowledge in the form of transparency.
There was a push for transparency regarding whether or not Finance Minister Bill Morneau still owned shares in Morneau Shepell, the company he used to run before taking office.
The Conflict of Interest and Ethics Commissioner was also asked to look into SCI Mas des Morneau, a company incorporated in France that manages his villa.
The federal Liberals were also recently criticized for their lack of transparency in how they appoint judges. The claim being that some judges were picked from the ‘recommended’ list and some from the ‘highly recommended’ list.
On the provincial level, the public wants to understand the previous Ontario Liberal government’s role in regard to the cancelling the Oakville and Mississauga power plants.
Events that cost taxpayers hundreds of millions of dollars are fair game for voters.
Look around and there is a request for transparency everywhere.
Facebook, Google, and Twitter are on the hot seat in front of the U.S. Congress regarding possible Russian interference in the 2016 election. The demand is for more advertising transparency, especially when a political agenda is involved.
In my opinion, transparency is a good thing. People have a right to understand things that influence their lives.
Transparency has been a hot topic within the financial services industry.
Regulators and financial consumers wanted to know and understand the details of how they invest.
Much of the conversation about investments was concerned with the disclosure of fees paid, and to whom, by investors.
Dialogue between regulators and investment industry participants had been ongoing for years.
Investors wanted to better understand how to interpret their investment statements.
They wanted to know how much they invested, the current value of those investments, and what rate of return they had earned.
2017 has been a year of positive change for the investment industry as new rules mandated by Canadian securities regulators came into effect.
The Client Relationship Model – Phase 2 (CRM2) requires industry professionals to disclose investment performance, and fees for advice and commissions, to their clients.
The significance to investors is we now live in an era of increasing transparency.
Make use of all information as it becomes available.
Investing is all about achieving good investment returns while minimizing risk through diversification.
Investing is all about achieving your financial objectives.
Understand the cost of advice and also the separate cost of owning specific investments. Use this information to determine if your interests are being served.
In our capitalistic society, there is always an ongoing balance between customers and those companies that serve them. Be an informed consumer and make decisions that are most beneficial for you.