Issues like creating a best interest standard and banning embedded commissions should only be decided in forums that include the direct involvement of financial advisors, says the president and CEO of Advocis.
The Ontario Securities Commission, for example, released its latest statement of priorities in June, announcing its intention to introduce a best interest standard, a view that has not been held by all provincial regulators, including British Columbia, which has come out against introducing the standard, Greg Pollock told an Advocis symposium in Toronto yesterday.
Best interest standard
Pollock said Advocis already adheres to a best interest standard as part of its code of professional conduct and supports an industry in which all advisors are held to that standard.
“However, we do not support a standard that is applied and interpreted by a regulator that does not include advisors in its membership,” said Pollock. “This lack of voice from financial advisors – the very individuals who are at the heart of the advisor-client relationship – is unacceptable and must be addressed.”
Part of the problem, he said, is that financial advisors are not seen by the province as a real profession, like doctors and lawyers and most recently, travel agents, all of which have their own self-regulatory organizations (SRO).
Pollock shied away from saying that Advocis should become an SRO. In an interview, he said the Advocis original model stated that it would like the provinces to recognize various professional associations as self-regulating, as long as they meet certain standards.
Debra Foubert, director, compliance and registrant regulation with the OSC, told a symposium session that the SRO model is basically a North American scenario and tends to duplicate laws that are already in existence.
“There are a ton of issues to consider,” said Foubert. “So it’s a question on where can we focus and get the results that are best for the Canadian market as well as the Canadian investor.”
John Wilkinson, a former Ontario cabinet minister and president and CEO of Wilkinson Insight Incorporated, said the role of regulators is to protect consumers with the tools they have been given by the legislature.
But Wilkinson added that the only way to know if someone in their industry is competent is to be regulated by someone in their own industry.
“If you want things changed it will not come from regulators – without them it would be the wild wild west,” he said. “[But] if the accountants can do it, and the lawyers can do it and the carpenters can do it and the travel industry can do it, there is no reason why this industry can’t.”