Mandating increased fee transparency, duty to act in investors’ best interests and CPP expansion among key recommendations

In advance of a December meeting of ministers of finance, FAIR Canada is urging the government of Ontario to implement greater investor protection measures for retail investors in Canada’s retirement income system. In its submission to the Ministry of Finance, FAIR Canada supported the introduction of a requirement for financial advisors to act in the best interests of their clients and increased transparency of mutual fund investment fees. FAIR Canada also called on the province to take a stronger stance against investment misinformation that can contribute to depriving millions of investors of their hard earned retirement nest eggs.

 “As the mechanisms for retirement planning become increasingly more complex, the need for greater transparency for retail investors has also grown,” said Ilana Singer, Deputy Director, FAIR Canada. “Increased transparency in financial reporting and formally aligning the interests of financial advisers and their clients will go a long way to strengthening Ontario’s retirement system.”

FAIR Canada’s submission further called for the expanded breadth of the Canada Pension Plan (CPP) to ensure that all Canadians benefit from an improved pension upon retirement. The national investor rights advocacy organization called for an increase in both the CPP replacement rate and earnings ceiling.

“Ensuring the strength and integrity of our retirement system is in all of our best interests,” said Ms. Singer. 

 FAIR Canada Recommendations – Executive Summary:

1. Increase transparency of investment fees and returns, particularly for mutual funds. Require mutual funds to provide benchmarks and specific endpoints to provide investors with the tools to measure performance.
2. Mandate a duty for financial advisors to act in the best interests of their clients.
3. Provide more resources to arm adult investors with the tools they need to make informed financial decisions. Take a hard line at combating misinformation and misleading information in the financial services industry.
4. Expand the breadth of the Canada Pension Plan. Continue to manage the CPP publicly, and leverage publicly managed resources by allowing private investments to be managed by the CPP. Automatically enrol members in a plan, but allow for opt-out.

Click here to view the complete submission.