Canadian financial advisers have voiced opposition to moves towards fee for service and enhanced disclosure requirements, claiming that, unlike the Australian and UK markets, Canada is not in need of reform.
While governments around the world have moved to further regulate retail financial planning industries since the global financial crisis, the Financial Advisors Association of Canada (Advocis) is resisting the global trend.
"We don't have the same problems [the UK and Australia] had," Ed Skwarek, vice president of regulatory and public affairs at Advocis, told Reuters, alluding to non-compliance and instances of criminal activity in the financial advice space.
Rather, Advocis advocates self-directed raising of professional standards instead of government imposition of new rules.
Calgary-based certified financial planner Wade Baldwin told a recent Advocis symposium that a fee-for-service business model is not feasible in the long term.
However, consumer groups in Canada are watching Australia’s FOFA reforms and the UK’s Retail Distribution Review closely, and lobbying against conflicted remuneration for Canadian financial advisers.
"If you remove the third-party commission, advice will be less conflicted and therefore in the interest of the client, and there won't be these biases whether conscious or not, that lead to perverse outcomes," said Marian Passmore of the Canadian Foundation for Advancement of Investor Rights.
"I'm optimistic that we will get there. Given the fact we have a multitude of jurisdictions, the process takes a bit longer here, but I think the momentum will get us there."
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