As administration costs soar under the regulation squeeze, one advisor is contemplating whether it’s the regulators, rather than the clients, ready to reap the benefits.
“When you add on all the additional admin costs that we as advisors have to bear, you have to wonder who will be further ahead, the client or the regulatory bodies?” questions Michael Gentile, an advisor with Personalized Investment Planning, Inc. based in Waterloo, Ont.
Having been in the business for almost 40 years, Gentile is no stranger to rising fees and administration costs, likening the tightening of the belt to the bullet-proofing material, Kevlar.
“It’s like adding a layer of Kevlar to bullet proof the investor,” he says. “The problem as I see today is that the consumer is now dying under the weight of too many layers of Kevlar.”
Though not adverse to regulation that is fair and protects investors, Gentile worries that given the state of the industry, the number of regulatory bodies and the various provincial interests to consider, there’s a risk of inefficiency and duplicated efforts. A man of analogies, Gentile likens it to a hockey game where there are 12 players on the ice – two goalies and five people on each team – who are being monitored by between 30 and 40 referees and linesmen.
“At the end of the day, what it boils down to is treating the end user fairly without tacking on costs. I’m ok with putting together a regulatory body that makes sure everyone is treated fairly,” he says. “But we don’t have to reinvent the wheel …. There’s potential for redundancy, and that’s a concern.” (continued.)