FAIR Canada has commented on the Competition Bureau’s Draft Report, which reviews technology-led innovation and emerging services in the Canadian financial services sector. FAIR Canada believes that FinTech presents potential benefits and opportunities for consumers, but may also present risks to investor protection that should be examined and addressed. FAIR Canada has encouraged the Competition Bureau, given its clear expertise, to work collaboratively with securities regulators so that Canadian financial consumers and investors are served by an investment industry that has effective competition in the interests of consumers.
In its submission, FAIR Canada agreed that FinTech could offer value in the investment advice industry. However, fundamental reforms – such as a best interested standard and the elimination of embedded commissions and other kinds of conflicted compensation – are needed to better protect investors and support FinTech firms in the area of financial advice, as this will accelerate innovation and competition. FAIR Canada also expressed concerns with some aspects of FinTech such as equity crowdfunding, which is an example of when FinTech may not result in good outcomes for financial consumers. The benefits of FinTech should always be encouraged with an eye to ensuring fair and efficient markets and adequate investor protection.