Best Interest Standard and Targeted Reforms
In June 2016 the Canadian Securities Administrators issued a consultation paper proposing a regulatory best interest standard (BIS) and a series of targeted reforms with the regulatory goal of addressing perceived shortcomings in the existing standard and rules governing the advisor-client relationship. However not all CSA jurisdictions were aligned on the consultation – B.C. in particular disagreed with the need for a BIS arguing that it will only create uncertainty for registrants and may be unworkable in the current regulatory and business environment.
The industry has always publicly supported the principle of placing the interests of the client ahead of the interests of the registrant but feels this is best met through reforms that address gaps in the existing regulatory framework. As such, IFIC supports reforms that improve the investment process but has cautioned against adopting new, overriding and vague concepts that may have detrimental effects on the client/advisor relationship.