CARP calls for Regulation of Investment Advisor Titles and Designations

PinkPigBank_700x500

Description: Description: https://meltwater-apps-production.s3.amazonaws.com/uploads/images/57ebf964134c0b43a565d561/CARP-logo-for-use_1484321746640.jpg

For Immediate Release

March 29, 2017

Toronto, ON:

CARP is urging securities administrators to regulate titles in the investment industry.

The CBC reported today that misleading titles have too many people “feeling duped”:

CARP believes the myriad of unregulated titles used by the financial services industry leads to investor confusion.  CARP members overwhelmingly believe they are dealing with someone who has a fiduciary responsibility to them, when all too often the individual is an investment product salesperson.

CARP’s VP of Advocacy, Wanda Morris noted: “When people realize they are dealing with a salesperson, they naturally bring a degree of skepticism to their decision making; they instinctively protect themselves from poor advice that doesn’t serve them well.  Misleading titles result in misplaced confidence and trust, and in the worst of cases, substantial financial losses.”

In its 2016 submission to the Canadian Securities Administrators, CARP recommended changes to the use of unregulated titles in the investment industry:

Individuals working in the investment industry who are not designated by an approved regulatory body must have a title that clearly indicates they are a sales person. For example, an individual might be a mutual fund salesperson, an investment product sales person or a stock sales person. This does not preclude the individual from providing advice about a particular product – this is indeed what good sales people do – but it will clearly indicate to the client the nature of the relationship. Other titles such as Vice President, Seniors Advisor or Wealth Management Specialist are not appropriate and should be eliminated. CARP is particularly concerned about unwarranted titles signalling expertise to seniors, which may not be warranted.

Too many investors have placed their trust in individuals with credible sounding titles, such as Vice-President, Seniors Specialist, or Wealth Manager, without realizing that such titles are essentially meaningless; they do not promise a specific level of education or experience, or a commitment to a standard of ethics,” noted Wanda Morris.

Misleading titles are one of the reasons that Canadians pay the highest investment fees in the developed world.  (Morningstar noted in its 2015 Global Fund report – page 20) that Canada sits 25 out of 25 in terms of the costs of our mutual funds, with a D- rating.)

In order to protect our members and indeed all investors, CARP has launched an online Campaign to Stop Fee Gouging.  We are asking concerned Canadians to sign a petition calling for change: carp.ca/protectmysavings.

Wanda Morris is available for media interviews:

[email protected]