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Milo Anderson, Alberta
Financial Advisors serve a very key role in the investment industry and I agree with Evan that compliance
requirements need to remain high. However, the fee based costs to investors who essentially have been
moving backward in their investments due to low growth and the built in fees need to be aware of ALL
of their options. The exempt market is now under far more regulatory control and a “tightening” of the
compliance requirements should make it a viable option for all consumers to consider. Not for all of their
investments, but definitely for a percentage of it. To assist consumers in ensuring they have all of the
information we need more information to be readily available and easily found and understood. Once
they have this information they are far better equipped to speak with a financial advisor about various
product options and ensure they understand any fees associated. To ensure consumers get the best
representation however, financial advisors themselves must diversify their understanding of options and be
able to present some feasible options in the alternative investment space and not just traditional avenues.
Evan Thompson, Ontario
We’ve seen the Australian ban (as of July of this year) on commissions paid to financial advisors for financial
products they sell to their clients. And the UK is planning to implement a similar ban effective January 2013.
Canada’s reputation for keeping investors’ nest eggs safe is pristine compared to that of Australia and the
UK where advisor fraud has cost investors billions of dollars. We are disgusted by occasional stories of
Canadian advisor dishonesty, which stirs media and public outrage, not to mention shaking many investor’s
belief in the integrity of the “system.” In her June/July editorial, Advocis Forum editor Kristin Doucet notes
that “Currently 9 million Canadians use financial advisors, most of whom pay for their advice through
embedded fees.” She concludes, “Clients need to feel they’re in good hands and they’re receiving adequate
value for the fees they’re paying - regardless of how they are paying.” In my view, Canada needs to ensure
the compliance bar moves higher to keep investors believing in the financial advisor model - through all
market conditions. Federal and provincial governing bodies need the necessary budgets to properly enforce
laws and the power to remove advisors from the arena who take advantage of their clients and prospects.
That way, Canada will be spared the Australian UK experience and not have to resort to the drastic step
of stripping commission structures from our investment model.
How would you improve Canada’s financial services system?
Canada is now respected around the world for our financial services sector. There is always room to
improve. How would you improve our financial services sector and manage risk, investor protection
and create the right business and capital raising outcomes?
Charles E. Faron Boston, Massachusetts
As an American with a good number of years running operating companies in
Canada and having since maintained my relationships in Toronto, Ottawa, etc. I do
have definitive thoughts on this matter, albeit somewhat general in nature. First and
foremost, I would like to see the obstacles (tax, security, GAAP, FASB, exchange-rates,
etc.) of cross-border business activities like investments and M&A, etc., to be easier
to deal with for all involved. My sense is we’re heading in the right direction, but policy
makers need to do more. Second, I believe many would welcome a strong resurgence
of VC/Angel investment community in Canada. Third and lastly, some greatly improved
form of regulatory uniformity through the EMDA and FINRA would be helpful.
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