According to a new global survey commissioned by the CFA Institute, “…investors report that trusting an investment manager to act in their best interest is the single most important factor in making a hiring decision, with achieving high returns and fees cited as much less important.” FAIR Canada believes that this survey reiterates the reality that investors expect an advisor to act in their best interests, and highlights the need for regulators to implement a statutory requirement for advisors to act in the best interests of a client. The survey indicates that investors see regulators as having the greatest opportunity to enhance trust. If Canadian regulators choose not to introduce such a requirement, at a minimum it must be made explicitly clear to Canadian consumers that there is no legal obligation for an advisor to put the client’s interests first. This would be necessary in order to warn consumers to critically evaluate the quality of the advice they receive and to improve Canadians’ awareness of the conflicts of interest inherent in the current advisory framework.
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