The Canadian Association of Retired Persons (CARP) recently submitted its support for the Canadian Investment Regulatory Organization’s (CIRO) initiative to enable discount brokers to offer non-tailored advice in the Order Execution Only (OEO) channel. CARP was pleased to offer its opinion on CIRO’s proposal, which reflects on the changing reality of investors in Canada–and certainly among a growing number of seniors.
More and more, seniors and younger Canadians, have taken the Do It Yourself (DIY) route when it comes to investments. Many are unhappy with old fashioned brokerage tactics and the higher transaction costs when dealing with investments in a traditional manner. But when going with the OEO channel, it can still be helpful to get some advice from brokers operating in a more limited manner.
CARP’s Senior Advocacy and Education Officer Bill VanGorder wrote to CIRO after being asked to comment on the following: Non- tailored Advice in the Order Execution Only Channel Consultation
https://www.ciro.ca/news-room/publications/non-tailored-advice-order-execution-only-channel
VanGorder wrote, in part, “We fully support the objective to enhance investor protection by ensuring access to reliable information from verified sources and allowing the use of tools designed to help investors make better investment decisions.
“This ‘advice’ would include analyst research reports, educational materials, model portfolios, self-assessment questionnaires, charting capabilities, portfolio analysis tools and alerts. An alert could inform the client about RRSP contribution room, money sitting idle etc.
“The new capability would allow retail DIY investors to make better investment choices for themselves. This approach would reduce dependence on social media and other non-regulated information sources.”
The best protection for senior investors is to obtain advice from brokers who understand their portfolio and can help to guide them properly.
VanGorder offered one suggestion, that there be a self-assessment questionnaire for applicants, which would help to determine whether the DIY route is appropriate for them.
CARP is confident that empowering discount brokers with more tools will promote better investor outcomes and support the financial well-being of older Canadians.
