01:54:33 EDT Fri 29 Mar 2024
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Globe says OSC, others kowtow to mutual-fund behemoths

2018-06-22 07:54 ET - In the News

See In the News (C-*OSC) Ontario Securities Commission

The Globe and Mail reports in its Friday edition that the dream of creating a standard of transparent, client-focused service in the investment industry died Thursday. The Globe's Rob Carrick writes that regulators bailed on reforms that would have made a huge difference. Instead, it was replaced with a scattering of proposals from provincial regulators. Notably, advisers would be required to recommend investments to clients that are suitable in terms of cost as well as other factors such as risk. Regulators had been looking at whether to eliminate the practice of advisers being paid for their services through commissions embedded in mutual-fund fees. The right move would have been to ban these commissions and require advisers to charge clients directly for advice, as professionals such as accountants and lawyers do. The Canadian Securities Administrators announced that embedded commissions will be banned only for on-line brokerage firms selling mutual funds. In terms of investor empowerment, this is a peripheral issue at best. Embedded commissions have been eliminated in Britain and Australia, but it always seemed a long shot for Canada's powerful investment industry to be corralled the same way.

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