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The Voice of Canada’s Investment Funds Industry

Fiduciary Duty/Best Interest Standard

What exactly is a fiduciary duty? What do we mean by the term “best interest standard?” What is the difference between a statutory (legislated) standard and one based on common law? What does it all mean to the investor? To the advisor? To the industry?

As a minimum, all advisors are required “to deal fairly, honestly, and in good faith with clients.” They are required to “observe high standards of ethics and conduct in the transaction of business with clients.” Securities commissions and self-regulatory organizations strictly regulate disclosure, conflict of interest, education requirements and more.

Each advisor/investor relationship is unique, with different levels of knowledge, reliance and decision-making. As an industry, we believe the existing system is best able to accommodate this wide variety of relationships, serving both investors and the advisory community well.

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