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I Investment industry regulation is stuck in the dark ages Dollars & Sense Guest Contributor 23 | Thursday, February 4, 2016 | OAKVILLE BEAVER | www.insideHALTON.com For more news, visit insidehalton.com/oakville-on. f investors could listen to conversations about how the investment business is regulated, I am sure their blood would boil. There has been talk about reforming the investment industry for two decades. So far, it is pretty much business as usual. That might change -- a new co-operative capital markets regulator (CCMR) is being discussed. The comment period for the proposed new regulations ended at the end of December 2015. We should hear the nal results this year. Some of the opinions put forward by industry associations are resisting changes that would be bene cial for individual investors. This seems absurd. The business model of any industry should be to put the customer rst. Especially in an industry as important as investments. The Investment Industry Association of Canada (IIAC) is against the notion of introducing a duciary duty, or a best-interest standard for investment advisers. It is my opinion most investors would automatically assume that all investment advisers should be required to conduct themselves in the "best interest" of their clients. Any lesser standard would be unacceptable. The Independent Financial Brokers of Canada (IFB) is also against any changes that might allow raising conduct standards for advisers. They want the status quo to remain. A move to a best-interest standard On the other side of the argument is the Canadian Foundation for Advancement of Investor Rights (FAIR) and the Ontario Securities Commission's Investor Advisory Panel (IAP). Both of these organizations support moving to at least a best-interest standard. IAP's comment was, "a best-interest standard would immediately require advisers to be the true agents of their clients, putting clients' interest rst." It wants this embedded in the new regime. Organizations are arguing for and against individual investors having greater protection. In the spirit of democracy, the ultimate decision should be what is best for the citizens of Canada. When Canadians turn over their life savings to an investment adviser, they are entitled to expect that adviser to put their interests rst. The fact that we are having this conversation is in itself a joke. Rights of individuals should be put rst In our advanced society, the rights of individuals must be put rst regardless of with whom they are dealing. This includes receiving the advice from your doctor, lawyer, accountant and anybody else you rely on for counsel that is critical to your well-being. On another front, recent research about the fee structures of mutual funds done by the Canadian Securities Administrators (CSA) is going to result in changes. The CSA will release its decision on fee structures and conduct standards during the rst half of 2016. All this industry internal dialogue can make you think that the investment industry still operates in Peter Watson $ FURNACE diAgNostiC spECiAl AR REGUL $99.00 the dark ages. Canada is an advanced society. see All on p.24 9 locATIoNs To seRve you beTTeR www.aireone.com 49 liMitEd tiME oNlY! Must Present Coupon. Cannot be Combined with other offers. A+ RATING (905) 849-4998 Want to see your money doing better? Talk to us st. Watch your money grow with great rates from FirstOntario. 12 Month GIC 1.90 1.70 %* Conditions apply. Rates subject to change. *Rates apply to registered and non-registered products. e-Savings up to % Original artwork by Michael Byers Call us at 1-800-616-8878 or visit FirstOntario.com