IIROC’s 2015 Enforcement Report showed nearly half of prosecutions against individual registrants involved violations of suitability requirements, most of which affected seniors and other vulnerable clients. This is echoed by statistics newly released by the organization, which suggest that unsuitable investments generate the most complaints reported to the IIROC.
Over the past two fiscal years, spanning from April 1, 2014 to March 31, 2016, IIROC has received 838 complaints from clients of firms that it regulates. The top five issues, comprising 48% of all complaints to IIROC, involve service issues, disputed fees, firm policies and procedures, unauthorized trading, and unsuitable investments. Unsuitable investments were the biggest concern, accounting for 222 complaints in all.
The statistics also indicate that seniors are the most affected demographic, with individuals aged 61 to 100 years old accounting for 63% of complaints and 59% of inquiries from those who disclosed their age; only 41% of contacts disclosed their age to IIROC.
"It's not surprising that suitability is the top investor complaint as it continues to be the number one matter that IIROC prosecutes every year," said IIROC President and CEO Andrew Kriegler. "The trend of unsuitable investments reinforces exactly why IIROC needs and is committed to seeking more effective enforcement powers under provincial securities legislation so all investors, particularly seniors and vulnerable investors, are better protected."
The organization has also provided feedback to all the dealers they regulate by way of confidential Complaints and Inquiries Statistics Reports. Most got firm-specific information along with ranking information relative to their peers. Other firms, owing to the small number of investor contacts and the nature of their business, received general statistics only.
“We wanted to share this important information with IIROC-regulated firms to help them improve their compliance and customer service,” said IIROC Vice President for Western Canada Warren Funt. “Going forward, dealers will receive an annual Complaints & Inquiries report so they can strengthen their internal processes and reduce the number of complaints.”
Dealer representative banned from advising leveraged strategies
IIROC encourages investors to check up on advisors