Australia opt-in rule come to Canada?

Australia opt-in rule come to Canada?

Australia opt-in rule come to Canada? A key element of Australia’s disclosure model could – no, would -- harm Canadian advisors if adopted here.

British financial magazine Money Marketing recently profiled Mark Rantall, CEO of the Financial Planning Association of Australia about the effects of tough financial regulations Down Under – rules now considered the most stringent anywhere in the world.

Particularly irksome for financial advisors in Australia are the opt-in rules which require them to contact new clients obtained after July 1, 2013, every two years in order to obtain written acceptance of the existing fee arrangement they have with their advisors.

Brad Fox, CEO of the Association of Financial Advisers, suggested this past November that the opt-in rule would result in thousands of clients having to be contacted since it took effect in 2013.

"It means financial advisers would need to have all clients who joined them after July 2013 opt-in every two years to stay a client," says Fox. Advisors are understandably perturbed because it forces them to create even more paperwork than they already produce costing them time and

Worse still, it’s uncertain whether this rule will do any good says Rantall.

“Whether it actually serves to protect the consumer is still a question. Maximum consumer protection comes from evolution and development of a profession. Legislation alone doesn’t adequately do it.”

Here in Canada we are facing a similar debate whether it be properly defining professions and titles or introducing legislation that protects consumers from unscrupulous advisors. There are people in both camps when it comes to how best to deliver financial advice.

Does Canada need to implement ‘opt-in’ rules? Share your comment.
  • Dean 2015-03-17 11:05:49 AM
    Unfortunately we have people on the outside trying to regulate an industry that they have no idea how it works. In Canada it should be about choice and we have it today. The amount of money that is poured into the debate whether we have imbedded fees or fee for service is mute. Canadians enjoy the freedom of choice, which model fits them best today is in there hands not the regulators. Why take the options of choice away and regulate to one standard (FEE for service model) that the regulator in their ignorance feels one shoe fits all. It will be a sad day for Canadians should these bully's ever get their way.
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