Regulation creating a bullet-proof investor, says advisor

Regulation creating a bullet-proof investor, says advisor

Regulation creating a bullet-proof investor, says advisor 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.)

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  • Jaye Walter 2014-02-26 11:47:12 AM
    I think that it has become evident that we need to streamline the regulatory process and costs. Otherwise, we have redundancies and duplication of effort which may or may not actually benefit clients at all levels. To paraphrase the Mr. Scott from Star Trek 3, " the more you add to the plumbing, the easier it is to mess it up.."
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  • Neil Hughes 2014-02-26 11:57:34 AM
    It seems to me that regulators work hardest to justify their positions and any benefit to retail clients is incidental. We have so many levels of regulation that advisors spend too much time jumping through hoops and filling out forms to satisfy some obscure regulatory game with no measurable benefit to clients, and not enough time working directly for their clients.
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  • Bob White, CLU 2014-02-26 6:23:36 PM
    I agree with the comments on the extra fees that are getting passed on to clients and advisor's alike, and the down loading od a tremendous amount of admin, which either paralyzes a practices to the point of being unable to do the proper planning job for the clients, or hiring more support staff and minimizing the return on time and knowledge and expenses of the advisor.

    Yet, regulators get paid very well, check out the pensions they get vs, the clients, the advisor's, so it is very self serving.

    It is starting to look and feel like the Income Tax act. A big machine that protects us from ourselves.

    Spend some money educating the public not to make stupid mistakes and that they should not buy anything unless they know what they
    know what it is they are doing, and then let social services look after their retirement plans.


    Bob White
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