Wealth Professional forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Notify me of new replies via email
Wealth Professional | 14 Apr 2015, 08:56 AM Agree 0
Thousands of advisors will commit regulatory arbitrage as they look to get around any move by the OSC to ban embedded commissions, predicts one industry veteran.
  • Ken kivenko | 14 Apr 2015, 04:23 PM Agree 0
    No doubt this is happening and it may amount to more than 5%.This is yet one more reason titles need to be controlled. Advisers work for clients, salespersons work to create sales.Governments need to come to grips with regulatory arbitrage or Main Street will pay a heavy price.
  • Curtis Findlay, CFP | 14 Apr 2015, 07:11 PM Agree 0
    I don't disagree with the general theme that regulatory arbitrage is one potential outcome of CRM2. But, there is more to consider.
    I do worry that in attempts to close "loopholes" regulators may damage an otherwise terrific product embraced by many consumers.
    Over the past several years I've often noted the commentators regarding segregated funds are not strongly associated with the insurance industry. Could they describe in detail the differences between a mutual fund and a deferred variable annuity contract? Some, maybe. Could they list specific benefits that drive consumers to want to own these investments rather than securities? Some, maybe. Have they ever recommended consumers use them to satisfy their specific needs? Or, perhaps they are product biased themselves? Perhaps the industry shouldn't be so quick to ask non-jurisdictional security regulators to intervene.
    Besides, there are other securities specific regulatory arbitrage events occurring, not least of which is the trend to leave the registration behind and receive referring fees from portfolio managers. One can argue that the fee-only movement is supported by advisors dropping their registrations. Those referring fees look a lot like trailer earnings to me. Disclosed or not, those fees impact results. A much deeper discussion will take place over coming weeks and months, I'm sure.
    I believe the majority of MFDA advisors embrace CRM2 and are not as threatened by disclosing fees as many commentators believe. I wonder if some of the fee-only advisors will be able to defend their revenues as well?
Post a reply