1) Can an advisor/professional disciplined under your rules continue to stay in business advising others/ what are the repercussions?
2) Does your organization get people’s money back?
3) Can people check a public website to see if your member was disciplined?
The Ombudsman for Banking Services and Investments (OBSI) said that although they do not have the power to take disciplinary action or to enforce compensation settlements, they have great persuasive power and that over 99% of the complaints they receive have been successfully resolved.
Their power is derived from what is commonly known as the “name and shame” provision of their mandate. They can recommend an institution compensate a client for up to $350, 000. If a financial services firm doesn’t follow one of their recommendations, OBSI must announce and publicize the refusal. These announcements are searchable via their website.
It should be noted that that clients looking to have access to OBSI dispute resolution should ensure that their firm, bank, credit union, investment dealer, mutual fund dealer/manager, investment counsel and or portfolio manager is a participating partner. Recently TD and Royal Bank have pulled their funding and participation from OBSI. To read OBSI’s full letter, please click here.
The Investment Industry Regulatory Organization of Canada (IIROC) can take disciplinary action against its members. They require all IIROC- regulated firms to participate in the Ombudsman for Banking Services and Investments as well as an independent arbitration program. Investors can also search their database of disciplinary cases dating back to March 2003 relating to IIROC-regulated firms and their employees across the country. To read IIROC’s full letter, please click here.
Advocis (The Financial Advisors Association of Canada) does not have the authority to strip an advisor of their licence to practice and sell product; this is the responsibility of industry and provincial regulators. The Institute does not seek monetary compensation on behalf of consumers for any financial loss suffered over the course of a client-advisor relationship with an Advocis member. They do, however, require that members be bound by a professional code of conduct that requires them to always act in their clients’ best interest as well as to hold professional liability insurance. To read the Advocis letter, see below:
Advocis (The Financial Advisors Association of Canada) Response to CARP
A professional and ethical financial advisor will take the time to gain a complete understanding of your short- and long-term goals, your overall financial situation, your tolerance for risk and any other pertinent information. Depending on your objectives, the advisor may also make recommendations on investment and insurance products. Product recommendations must fit within your overall financial plan, and a responsible advisor will explain the potential risks and rewards for any investment product.
The majority of consumers don’t have the time, desire or knowledge to manage their own investments. Studies show that those who use a financial advisor have two to three times the assets than those who do not; however, it’s important that investors find the right fit when it comes to choosing a financial advisor. Look for a licensed professional who is knowledgeable, trustworthy, and with whom you feel comfortable.
Outside of Quebec, anyone can call him or herself a financial advisor or planner. Surprisingly, not all financial advisors are bound by a code of professional ethics and conduct that establishes an overriding duty of conduct.
There are some warning signs that a so-called advisor may not have your best interest at heart. For example, if the person promises you consistent returns on an investment, or puts pressure on you to invest beyond your comfort level.
While every industry has its “bad apples,” membership associations such as Advocis, The Financial Advisors Association of Canada, seek to prevent bad behaviour that may be harmful to investors through codes of professional conduct, practice standards, best practices applications and continuing education for those advisors who are members.
Advocis is the oldest and largest voluntary professional membership association of financial advisors in Canada. Its 11,000 members are bound to a professional code of conduct and ethics that requires them to always act in their clients’ best interest, to act transparently and to act competently, diligently and with integrity. Our members must also hold professional liability insurance (also known as errors and omissions insurance) in the event that a claim is made by a client for a financial loss due to an error or omission on the part of the advisor.
Consumers who believe they have been wronged by their financial advisor can appeal to Advocis. Advocis investigates and disciplines its members for any violation of its Code of Professional Conduct. The disciplinary procedures followed uses a peer review process to provide a consistent and transparent means for determining the facts and imposing sanctions for conduct that is found to be unbecoming of the Code of Professional Conduct.
The Institute for Advanced Financial Education (The Institute), a wholly owned subsidiary of Advocis, is responsible for the administration of the disciplinary procedures for Advocis members. The Institute and Advocis have no authority to strip an advisor of their licence to practise and sell product; this is the responsibility of industry and provincial regulators. The Institute does not seek monetary compensation on behalf of consumers for any financial loss suffered over the course of a client-advisor relationship with an Advocis member.
Taking the time to find a qualified financial advisor can help prevent an unfortunate situation of financial abuse. It’s important to interview at least two or three potential advisors until you find the right person. For a list of specific questions to ask when interviewing a financial advisor, or to find an Advocis member who works in your community, please visit www.advocis.ca.