A Long-Standing Problem That Demands Immediate Action – See our CARP Member Call To Action, Below
A major new regulatory review by the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) confirms what CARP and investor advocates have been saying for years: bank-based mutual fund reps are under significant pressure to sell, even when it’s not in the best interests of the client.
The joint survey of nearly 2,900 bank-affiliated mutual fund dealers found that:
- Over 40% of reps said performance scorecards influenced what they recommended
- One in four admitted to recommending products that weren’t in the client’s best interest
- Many couldn’t even define the management expense ratio (MER)—a basic cost concept
These results are alarming—but they are not new.
While the OSC and CIRO claim to be surprised by these findings, the truth is they’ve been aware of sales-pressure-driven misconduct for over a decade. Investment Executive, a leading industry publication, has been documenting these concerns extensively.
Seniors and retirees are having their retirement income security chipped away by commission-driven advice, lack of access to mutual funds and other investments not controlled by their banks, and systemic conflicts of interest.
CARP remains concerned that bank-based advisors are not living up to their fiduciary responsibility, and are only required to ensure that mutual funds are “suitable” for their clients, and not in their “best interest.” From CARP’s point of view the space between those two standards allows for many conflicts of interest, including the self-interest of the ‘advisor’ and that of the banks.
CARP members are not speculators. They are trusting Canadians seeking to preserve their hard-earned savings. When a financial advisor at a major bank recommends a product, it should be because it’s the best possible advice for the client, not because it helps the mutual fund sales representative meet a quota.
Join CARP in Demanding Stronger Protections for Investors and Requiring Advisors to be acting truly in the best interests of their clients. We will be watching closely to ensure this review results in action—not another delay.
Protect investors. End sales-driven advice.
Take a few minutes to help make this needed change happen.
Send an email to your provincial Minsiter of Finance:
Ontario:
Peter Bethlanfalvy: minsiter.fin@ontario.ca
Blair Hains, Chief of Staff: blair.hains@ontario.ca
British Columbia:
Brenda Bailey: fin.minister@gov.bc.ca
Saskatchewan:
Jim Reiter: fin.imnister@gov.sk.ca
Alberta:
Nate Horner: tbf.minister@gov.ab.ca
Constituency email: Drumheller.Stettler@assembly.ab.ca
Jesse Robertson, Chief of Staff: jesse.robertson@gov.ab.ca
Manitoba:
Adrien Sala: minfin@manitoba.ca
Quebec:
Eric Girard: ministre@finances.gouv.qc.ca
Constituency email: Eric.Girard.GROU@assnat.qc.ca
New Brunswick:
Rene Legacy: Rene.Legacy@gnb.ca
Nova Scotia:
John Lohr: FinanceMinister@novascotia.ca
Constituency: johnlohrmla@gmail.com
Prince Edward Island:
Jill Burridge: jsburridgeminister@gov.pe.ca
Deputy Minister: Lewis Fleming: dlewisfleming@gov.pe.ca
Backgrounders:
Enhancing Retirement Security for Canadians
CARP’s official response to federal consultations on pension and retirement income security, calling for a legal best-interest standard for financial advisors and stronger fiduciary protections for investors.
Read the full submission (PDF)
Strengthening Investor Protections in Ontario
CARP’s submission to the Ontario Securities Commission urging the adoption of a best-interest duty, protection from financial exploitation, and mandatory safeguards for seniors.
Read the OSC submission (PDF)
Fixing Complaint Handling: Letter to the Canadian Securities Administrators
CARP calls for a modernized, fair system to handle complaints from seniors against financial institutions, including alignment with best practices from Quebec and Australia.
Read the letter to CSA (PDF)
*photo: www.facebook.com/share/p/1N3oPhwgxZ/
