As governments and regulators move toward granting the Ombudsman for Banking Services and Investments (OBSI) binding authority, some industry voices have begun to raise the spectre of higher costs and reduced access to advice and products for smaller investors.
That argument risks presenting decision makers with a false choice between effective redress and access to advice. Binding authority may entail implementation and compliance costs, and firms whose clients have more complaints upheld may face higher compensation costs. But no evidence specific to binding authority shows that those costs would be material enough to raise the price of advice or widen the advice gap. Speculative warnings unsupported by evidence or constructive proposals do not advance the debate; their practical effect is to impede reform and preserve a system that can leave investors without meaningful redress.
The status quo imposes real costs on investors. When a firm declines to follow an OBSI recommendation, an investor may be left to accept less, abandon the claim or pursue litigation. Making OBSI decisions binding would give firms a stronger incentive to resolve legitimate complaints fairly and promptly.
Investors should not have to accept less than OBSI recommends simply because they cannot afford to go to court. Canada can provide access to advice, competitive markets and enforceable redress—and a financial system that works for investors should deliver all three.