IFIC Urges Ontario to Lead National Collaboration on Financial Planning Rules
Toronto, ON – June 17, 2016 – The Investment Funds Institute of Canada (IFIC) has urged the Ontario government to take a leadership role with its provincial counterparts to create nationally harmonized rules governing financial planning. The recommendation was one of several submitted by IFIC in response to the Ontario consultation on Preliminary Policy Recommendations of the Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives.
“Regulation of financial planning will address an important regulatory gap in investor protection, and enhance investor confidence in financial service providers,” said Joanne De Laurentiis, IFIC president and CEO. “Given the national footprint of many financial services firms and their clients’ mobility, the investment funds industry is recommending that Ontario lead the creation of rules that would be applied nation-wide.”
In its submission, IFIC noted that many of the Expert Committee’s preliminary recommendations reflected previous representations made by the industry, especially on the need to avoid regulatory duplication and overlap.
“The funds industry appreciates the care the Expert Committee has taken to recommend that duplication be avoided, and to support a framework that utilizes existing regulatory bodies such as IIROC and the MFDA,” De Laurentiis noted. “To further guard against overlap, we recommend that the proposed definitions for ‘financial planning’ and ‘financial product sales and advice’ be narrowed,” she added.
The industry is also recommending that, in order to avoid potential investor confusion, the Expert Panel should advocate that specific protocols be written to address potential situations involving multiple regulators, such as a complaint against a dually licensed practitioner.
IFIC cautioned against adoption of an overly broad restriction on referral fees, indicating that the industry supports regulation of referral fees for financial planners but that the proposed rule would also capture many forms of referrals that pose no harm to investors, such as alumni associations that refer their members to commercial partners in exchange for fee revenues.
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 mutual funds industry and its investors for more than 50 years.
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