Liberal Member of Provincial Parliament (MPP) Rick Bartolucci introduced a private member’s Bill this week that would see financial advisers compelled to register with a new self-regulatory body.
Having pushed for reforms of this kind for more than a decade, Canadian advice industry association Advocis has warmly welcomed the introduction of the Bill.
“Doctors, lawyers, engineers, accountants and many other groups are regulated as a profession. It’s time for those who are critical to the financial well-being of so many Ontarians to be regulated as well,” said Advocis president and chief executive Greg Pollock.
“We want to maintain the highest level of trust and confidence in our profession. We want to prevent the unqualified from practising, and put the unscrupulous out of business.”
Looks like the Canadians are about 20 years behind. How is the above announcement a revolutionary outcome. Regulation here protects all but the people it was intended to, the consumer. Has the Veteran been under a rock and missed the last 20 years. Regulation is no substitute for being professional and client focused. To think regulation will provide you with a cloak of trust ignores your own responsibility as a professional. If you don’t feel like a trusted advisers you should focus first on your actions and practices, regulation isn’t going to fix it for you or for anyone else.
Spot on Gerry. Great question on who is the SOA for. We all know it’s for the PI insurance, the dealer group, and to cover our own backsides. The problem is that the advice component ends up hidden between all the BS and the authority over us will have us standardize advice as if we were a computer program. “if this…then that…”. And if it continues in this way, then those with the bigger IT budgets (Banks) will eventually replace us with a computer program that does exactly the same thing? Maybe this is why they embrace 40 – 60 pages of ‘compliance’ between 4 – 6 pages of advice?
Daniel, I think the problem is….ASIC wants RG175 complied with, FOS wants to blame someone who can pay up , the compliance team wants a 50 or 60 page SOA to cover both sides…and yet the client just wants to understand what’s going on and is it right for them? Most of the gunk in an SOA could be held on file. As if a client wants to read a mission statement, a Best Interest Duty statement, value statement, next steps, how to proceed, product replacement tables and so on…fair dinkum. Who is this document really for? Seriously, who it is for?
Gerry, I couldn’t agree with you more. It was interesting to read the other day that ASIC has actually released example SoAs that are compliant and relevant to consumers and they are roughly 13 pages long….. Can a client read that? Absolutely. Is it easier to understand than 60 pages of waffle…. yep.
I’m all for protecting clients and I have always put their interests first. My belief is that if you look after clients then you will be rewarded.
But something needs to change with the documentation we provide. A 40-60 page SoA is not in the clients best interest.
Philip I agree the FPA blew it big time but murder has been illegal for millennia but it still happens.
There needs to a better way than ham fisted union sponsored rubbish whilst “general advice” (tele sales ppl swapping ignorants into union funds) remains shoot at will.
Of course advocis supports the bill, they’ll have more fees. I just hope they actually focus on professional stds not revenue raising which is what led the FPA astray.
I don’t have a problem with regulation that protects consumers. I do have a problem with regulation that was pushed by those of vested interest. Perhaps if advisers had less onerous requirements when providing advice they could spend more time explaining the risks and general concepts to the client rather than channelling it into a compliant 60 page document that the client won’t read. Think about that. Most complaints are because clients say they “didn’t understand” or come back and say they were “conservative”. You can have the best SOA in the world and best FSG and best client data form…but the client can still come back and say “we didn’t understand it”
In summary, yes to regulation that protects consumers from bad advice but a big NO to regulation that stifles good advice.
See – it’s not so hard. The Canucks are onto it and know that well-regulated professions are trusted. How about all those over here who are being precious about being “regulated to death” just get on with understanding that consumers need protecting… We could have self-regulated but orgs like FPA blew that chance. Now we should accept and drive regulation so that consumers really can know that we put their interests first, second and third.