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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  • Doug McCaw 2013-12-17 11:45:18 AM
    About time
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  • Kevin Cahill 2013-12-19 7:56:45 AM
    Completely agreed Doug! We need more passionate people to stand up and say enough is enough. Consumers know the difference between a general practitioner doctor and an oncologist yet few know there is a huge difference between someone who has a mutual fund licence and someone who has gone on to get their Certified Financial Planner
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  • Meredith Swanson CPCA 2013-12-20 7:25:48 AM
    I think that the most important point here is the need for formal education for all of the advisors whether it is CFP or CLU or just a good education program by the insurer. Also, each advisor should be a member of Advocis.
    Would you go to a doctor whether a GP or oncologist if they didn't belong to the Canadian Medical Association or at least the provincial counterpart? Yet you can get a licence to sell life insurance or sell mutual funds with very little training. I don't think you even need a licence to handle money products like GIC's, etc. and there is no need to be associated with an industry professional association that works on behalf of the public and the professional.
    Sun Life does a very comprehensive study of the proposed candidate before bringing them on board. I know of an advisor who failed to meet Sun Life's requirements in terms of goals and personality traits yet got hired by an other company. She absolutely broke nearly every part of the code of ethics provided by Sun Life.
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