FAIR Canada

In Its March 2010 Edition

FAIR Canada — Wed, 10 Mar 2010 18:19:13 +0000

Protégez-Vous journalist Frédéric Perron asked FAIR Canada to review the monthly statements of 10 different financial institutions to gauge the quality, quantity and usefulness of information provided to mutual fund and segregated fund investors. Information considered most useful included: (a) amount invested at outset, (b) performance of investment compared with a specified benchmark, (c) cost of fees over course of the investment, (d) impact of fees on investment returns, and (e) overall rate of return of investment, net of fees. That information was not provided in the majority of the statements reviewed.

To read the full article in french, click here.

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FAIR Canada and The Hennick Centre for Business and Law Hold Joint One-Day Conference in Toronto – March 25, 2010

FAIR Canada — Tue, 09 Mar 2010 15:05:43 +0000

The Fiduciary Standard and Beyond: Rethinking the Financial Advisor-Client Relationship | One-Day Conference
Thursday, March 25, 2010 – 8:00 am to 4:30 pm | OBA Conference Centre | 20 Toronto Street, 2nd Floor

In today’s economy, clients demand high standards from their financial service professionals. Investors are increasingly focused on long-term financial prospects and are highlighting the need for greater integrity to avoid another financial crisis. Implementing a uniform fiduciary standard for both dealers and advisors is one proposal for addressing client demand and protecting the financial sector from future downturns. Examining the fiduciary standard will shed light on the crucial relationship between clients and their financial service professionals – pointing the way to potential policy reforms and regulatory changes in Canada.

The concept of the fiduciary duty does not exist in Canada in the context of the client-advisor relationship. Instead, financial professionals in Canada (including both individual representatives and firms) have a duty to satisfy suitability obligations to their clients. The suitability obligation includes both the “know your client” and “know your product” obligations.

Should that duty be broadened to a fiduciary standard?

Why You Should Attend

This one-day conference will focus on the client-advisor relationship, and how that relationship connects to the debate over extending the fiduciary standard to all financial service professionals. Speakers will provide Canadian and international perspectives, and will include scholars as well as regulatory and industry experts. Our ultimate objective is to inform and motivate relevant policy initiatives in Canada through discussion and comparative analysis.

Who Should Attend

Lawyers
Investor and Shareholder Advocates
Industry Representatives
Financial Dealers and Advisors
Regulators
Business and Law Faculty and Students

Key Benefits

Gain a clear understanding of the issues, especially regarding the fiduciary standard
Learn what other countries are doing with respect to the financial advisor-client relationship
Understand the impact on your business of various policy reform proposals

The Conference Programme

8:00-8:30	Registration and Continental Breakfast
8:30-8:45 am	Welcome and Introductory Remarks
8:45-10:00 am	Panel 1: Introducing the Fiduciary Standard Debate
10:00-10:15 am	Break
10:15-11:30 am	Panel 2: Rethinking the Client-Advisor Relationship
11:30 am-1:15 pm	Lunch with Keynote Speaker (TBA)
1:15-2:30 pm	Panel 3: Enforcement and Remedies
2:30-2:45 pm	Break
2:45-4:00 pm	Panel 4: Implementing a Fiduciary Standard and Beyond
4:00—4:15 pm	Concluding Remarks

Registration Fee is $100 General | Free for Faculty and Students

Fees include attendance, program materials, breakfast/refreshments and hot buffet lunch.

Click here for full Conference Programme/Brochure.

This event is jointly hosted by FAIR Canada and The Hennick Centre for Business and Law.

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CCGG Makes Submission to Standing Committee reviewing the CBCA

FAIR Canada — Tue, 09 Mar 2010 03:33:56 +0000

The Canadian Coalition for Good Governance (CCGG) made a submission to the Standing Committee on Industry, Science and Technology regarding the Committee’s five-year review of the Canada Business Corporations Act (CBCA). The submission follows the CCGG’s appearance before the Committee in November 2009.

According to the CCGG’s brief, governance requirements for public companies in Canada have not kept pace with Canadian or international best practices. FAIR Canada supports CCGG’s recommendations to enshrine basic democratic and governance norms for public companies into the CBCA. In particular, FAIR Canada supports the CCGG recommendations that the CBCA be amended to: (i) prohibit slate voting; (ii) require a majority voting standard for director elections; (iii) require annual director elections for all CBCA public companies; (iv) require public companies to disclose the detailed results of shareholder votes for matters on the ballot; (v) give significant shareholders access to the proxy circular; (vi) require all shareholder approval for significantly dilutive acquisitions; and (vii) give shareholders more meaningful ways to resolve claims under the oppression remedy.

FAIR Canada also supports the CCGG’s call for the Committee to broaden the scope of its consultations. FAIR Canada recommends that, during its consultation provess, the Committee issue a public consultation document and request submissions from interested parties.

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CSA Urges Canadians to “take the next step” to protect themselves from investment fraud

FAIR Canada — Tue, 02 Mar 2010 20:34:59 +0000

March is Fraud Prevention Month, and the CSA is urging all Canadians to take 4 simple steps to protect themselves from investment fraud. Read full release here.

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Task Force on Financial Literacy releases Consultation Document

FAIR Canada — Sun, 28 Feb 2010 02:16:08 +0000

The Canadian Task Force on Financial Literacy has released a 47-page consultation document describing the issues and asking the public to respond to specific questions. Topics include understanding financial behavior, saving and investing, planning for retirement, and protecting against financial fraud. A recent article in Investment Executive describes the national consultation process.

The state of financial literacy in Canada and the financial services industry’s responsibilities are central themes of FAIR Canada’s work. We published a newsletter devoted to the topic of financial literacy in October, 2009. Financial Literacy Matters is FAIR Canada’s review of the financial literacy problems facing Canadians and efforts to address them. The report describes the emerging consensus of what must be done and the limits of financial literacy education.

OSC Announces Creation of Investor Advisory Panel

FAIR Canada — Fri, 26 Feb 2010 20:39:28 +0000

FAIR Canada welcomes today’s announcement by the Ontario Securities Commission (the OSC) of its decision to create an Investor Advisory Panel (the Panel), particularly the details regarding the panel’s make-up, as well as the expected timeline for its creation. As noted in FAIR Canada’s recent comment letter to the OSC on its draft Statement of Priorities, we encourage the OSC to consider the following recommendations in creating the Panel:

payment of members, which could be modeled on a combination of the UK Financial Services Consumer Panel and OSC Commissioner payment systems,
articulation of a specific, written mandate that is made public,
transparency of the selection process for Panel members,
assignment of a specific staff person to assist the Panel with logistical matters, and
transparency of the Panel’s work, including recommendations made about OSC initiatives, and responses to those recommendations.

FAIR Canada looks forward to continuing to work with the OSC and other investor advocates on strengthening the investor voice in Ontario.

Click here to read the Investment Executive article reporting on the OSC announcement.

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Blog article on why mutual funds are abused and misused

FAIR Canada — Fri, 26 Feb 2010 20:06:01 +0000

Financial blogger Mike MacDonald, a fee-for-service financial planner at Weigh House Services, wrote an interesting review of mutual fund fees.

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Investment Executive Reports on FAIR Canada’s Ongoing Research

FAIR Canada — Mon, 22 Feb 2010 16:29:35 +0000

On February 19, 2010, Investment Executive reported on FAIR Canada’s ongoing research in the area of financial scandals. The research is currently being finalized, and FAIR Canada staff expect to publish their findings in March.

Read James Langton’s full article entitled It’s time to fight scammers here.

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FAIR Canada recently submitted its comments on the OSC’s Statement of Priorities for the fiscal year ending March 31, 2011

FAIR Canada — Fri, 12 Feb 2010 16:04:42 +0000

FAIR Canada recently submitted its comments in response to the request for comment on the Ontario Securities Commission’s Statement of Priorities for the fiscal year ending March 31, 2011.

Summary of Recommendations

FAIR Canada supports the OSC’s initiative to request comments on its Statement of Priorities at an earlier point in the process so that comments from market participants can be better integrated into the Commission’s planning and budgeting process. Addressing the lack of a strong investor voice in securities regulation was one of the key reasons for the founding of FAIR Canada.

FAIR Canada’s two principal recommendations are as follows:

Create a Small, Paid Investor Panel. It is FAIR Canada’s view that the OSC needs to take the Investor Steering Committee/Secretariat to the next level or replace it with another structure in order to have a truly effective, transparent and credible mechanism for investor consultation and feedback. FAIR Canada recommends that the OSC create a small, paid investor panel that would consist of eight to ten members representing retail investor and shareholder rights. The OSC needs to create and implement a concrete proposal for the creation of such a panel, including a specific workplan, mandate and timeline for its creation.

Appoint a Commissioner with a Strong Retail Investor Perspective. FAIR Canada strongly urges the OSC to appoint a Commissioner with a strong retail investor perspective. There is currently an imbalance at the Commission, in terms of influencing OSC decision-making and policy development. Given that the OSC’s primary mandate is investor protection, it is incumbent on the OSC to ensure that the interests of key stakeholders, notably retail investors, are well-represented in senior levels of the organization, including the Commission itself. FAIR Canada continues to be concerned that retail investor representation is lacking in the make-up of the Commission as it is presently constituted.

Read the full submission to the OSC here.

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FAIR Canada Director Robert Pouliot writes seminal article

FAIR Canada — Thu, 11 Feb 2010 20:52:11 +0000

FAIR Canada Director Robert Pouliot wrote a seminal article in November 2007 regarding fiduciary risk in the management of mutual fund portfolios. The article also draws attention to highlights the high mutual fund management fees paid by Canadians, as compared with fees charged in other industrialized countries.

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