IFIC Welcomes Recommendations Addressing Vulnerable Investors
Toronto, ON – November 16, 2017 – The Investment Funds Institute of Canada today congratulated FAIR Canada and the Canadian Centre for Elder Law on the thoughtful recommendations contained in their Report on Vulnerable Investors: Elder Abuse, Financial Exploitation, Undue Influence And Diminished Mental Capacity.
“IFIC was pleased to have hosted one of the consultations that contributed to the report. We are encouraged to see that the report’s recommendations reflect the input of IFIC and its members on several fronts, particularly the need for a regulatory safe harbour, authorization to place temporary holds on trades and disbursements, clear regulatory guidance, and the importance of advisor education,” said Paul C. Bourque, president and CEO, IFIC.
The need for a legal safe harbor was identified as a priority two years ago by IFIC’s dealer members participating in an IFIC-hosted multi-stakeholder task force on vulnerable investors. “We believe that several of the report’s recommendations can be acted upon in a timely way. IFIC is pleased to have the support of organizations such as FAIR and the Canadian Centre for Elder Law in bringing about these needed changes,” added Bourque.
Two of the recommendations – mandated reporting and requiring firms to become familiar with outside local resources will require further development. “In the U.S., where mandated reporting is common, most states have Adult Protective Services offices that are equipped to respond quickly to reports of suspected financial abuse,” noted Bourque. “Most Canadian provinces do not have an equivalent and many police departments lack the resources and training to deal with these types of cases, creating a reporting dilemma for financial services firms. The report’s recommendation that securities regulators take on that responsibility is one potential solution. We look forward to working with all stakeholders to close this gap in Canadian investor protection.”
IFIC’s Vulnerable Investors Task Force is working to advance the industry’s ability to respond effectively to the challenges faced by investors who are at risk for issues arising from diminished capacity. In addition to advocating for regulatory and system changes, IFIC is working with its members and regulators to develop training materials to help advisors work with their clients. “As the population of older investors increases, advisors are seeing more of their clients begin to struggle with day-to-day investment decision-making,” Bourque stated. “IFIC’s task force is currently developing an advisor toolkit that will guide advisors as they work with clients to create plans for the possibility of reduced decision-making ability, learn to recognize the signs of age-related cognitive decline when they arise, and understand the steps they should be taking to ensure their clients’ financial security.”
The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation. The organization is proud to have served Canada’s investment funds industry and its investors for more than 50 years.
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