Consumer protection tops mind for Feds

Consumer protection tops mind for Feds

Consumer protection tops mind for Feds

The federal government is upping the ante when it comes to protecting Canadian consumers.

Announced Tuesday by the finance department, consultations over the next 12 weeks will be used to create a new and comprehensive financial consumer code, with the needs of vulnerable Canadians, including seniors, top of mind.

“With the launch of the Consumer Code consultations …, Canadians will be better protected, informed and positioned to make responsible financial decisions for their families,” said the Minister of Finance Kevin Sorenson in a release.

The goal is to streamline the current mix of legislation and implement more effective regulation that limits potentially harmful business practices such as prohibiting pre-loaded funds from expiring on customer-purchased products and maintenance fees for at least one year after activation. Suggestions are also being sought on how the Financial Consumer Agency of Canada can more effectively carry out its supervisory role. (continued on Page 2.)

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  • Bob white 2013-12-03 10:04:15 PM
    What does it mean by not allowing pre loaded funds to expire?

    Are we talking DSC fee? The article is not very informative. It implies that Canadians will make better decission because inbedded fees are bad. What is bad is that people are not educate to make an educated and informed decission. Changing how advice is paid for or possibly taking away the compensation, will not inprove the advice, and most likely elliminate what advice is being offered today.

    Inforcing that all finaicial products must me sold/purchased, not only by an advisor/poffessional who is licneced, trained and educated but has to be an acerdited member of a professinal organizarion to offer the products.

    In my 37 years of financial service I have seen so many cases were the consumer purchased products that are so out of their knowledge set and that of most advisors, buy because the amount is $25,000, sophisticate investor rules in BC, and they have lost all the money invested, even though that is the last money they had.

    The product did not require any licencing to be sold, your neighbour could have sold it to you and no recouse. Client bought because of greed, wanting more than is reasonable. The product sold because of greed the advisor (use that term loosly in this case, SALES PERSON) most likely was paid 10-25% comissions.

    So, regulate that, stop allowing what is called off book product unless the advisor is educated in the product and has some degree of finanical education.

    I am very pro education to sell product as a qualified advisor. Changing the way compensation is paid on products produced by fund companies and life insurance companies is not the solution to protecting Canadian's. That said they do need to have dislocure of the different fee strucutures that can be charged, deferred sales charge, low load, front end and fee for service, (this needs to be fully disclosed prior to engagement) as should tax structure of funds, taxation on income and all the other things that typically do not get talked about, YET they effect every canadian.

    I read an responce to anothe article on the similar topic and it was by an old timer like myself, 30+ years in the business, and would apear to be the life insurance business, and his rant was was heart warming, because it was trying to defend the fact he is in a small community, which he was probably one of the most educated in financaial stuff, even helping local lawyer in a case because he had the knowledge. And his point was he was in the boonies and di not have the luxury for atending many educational events like those in Toronto or vancouver. Change, this man's way of being compensated that is to protected the people of his community and guess what, now they have no advice. Ask them to start paying fee for service and what do you think will happen, yep, they will say no, even though they already know that guy does not work for free. They will not understand. The stock jockey type trader, will not have to dislose anything, and all the cases I have come across the clients have not been informed as to the fees, and as soon as they go to move accounts they are charged 2% trade fee, no advice, lack there of.

    So, what is all this noise about? Regulators trying to bandage after the fact of some bad asses have ripped off millions from those who were sold on what is a greater return than what is reasonable and that bad ass knew that people are greedy and he would capitalize on there greed.

    The reason they bought in to the scheme is that most likely they they did not understand, because they have never been educated as to risk return. Or, they felt they needed more money for their future and because they did no planning with a financial planner, they gambled on the carismatic saleman (the madoff's of the world).

    I would like to see what all those involved with the proposals that are being bantered around have done with their planning what products they own, what planning they have done! I know it would be very revealing.

    The problem as I see it, there are those that think they understand making rules for those who do understand. As a 35 year member of Advocis Canada, I know first had the ethics and practice of what I will call the old days and our association fought tooth and nail to protect the Canadian consumer from issue related to change in the banking modles, taxation issue from CRA, and many other issues related to the everyday mom and dad who do not know the ramifications that they might face by those who make decission that often for political face.

    What i have not heard from anyone, or any article or organization presenting the changes, is, what do they expect will be the result of what is being propose. How will it benefit maw and paw Canadian?

    I can tell you with out question from what I understand it there will significant harm to 25-40% of Canadian's, they will loose the only advice they have been getting. We will loose 20-30% of advisors, look at England and Australia.

    Canada has a reputation of being leaders, not followers in the financial services indusrty, let's keep that record and make it better by taking a different approach by making our proffessionals the best trained and the highest ethics and let us weed out the scum bags who dare harm our clients, give us the power to fill justified complaints that will be acted on by the regulators. In the past 3 years I have had 3 cases where I advised the client to sue the advisor, and they would not, mostly because they felt shame in not knowing better. 2 were sold products that require no licencing, and one was a product that is illegal in Canada.

    Here is hoping the right thing is done!


    Bob White, CLU

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