Call grows to standardize advisor titles

Call grows to standardize advisor titles

Call grows to standardize advisor titles

"Investor stakeholders" are calling for a sea-change in advisor accountability, according to a consultation update from the CSA, released Tuesday.

"Investor stakeholders strongly believe that advisors should be required to act in their client’s best
interest and that a statutory best interest duty must be introduced in order to protect investors," reads the report from the Canadian Securities Administrators (CSA). "They point out that a best interest duty would be consistent with investors’ general expectations, as shown by recent investor research that found that most investors believe advisors already have a legal duty to act in their best interest."

In the view of stakeholders responding to the CSA's call for industry and investor input, a best interest duty addressing issues relating to conflicted remuneration, including embedded commissions, would reduce bias in advisors’ investment recommendations.

Ostensibly, that would make recommendations more objective and would at the same time eliminate much of the need for conflict disclosure -- something investor advocates argue is currently flawed and ineffectual.

Some investor stakeholders also called on the CSA to overhaul embedded advisor compensation. Those concerns, according to the report,  have been compounded by other potential areas of concern about the advisor-client relationship, including confusing advisor titles and low advisor proficiency (continued on Page 2).


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