TORONTO, March 18, 2013 /CNW/ - The Investor Advisory Panel (IAP) today
released "Strengthening Investor Protection in Ontario - Speaking with Ontarians". The study, conducted on behalf of the IAP and the Investor Education
Fund (IEF), explores the views of more than 2,000 Ontario investors
regarding their relationships with their financial advisers and how
they perceive and use investment product information and advice.
"This investor research will inform and support our recommendations to
the Ontario Securities Commission regarding future statements of
priorities," said IAP Chair Paul Bates. "The research will also inform
our positions regarding investor protection initiatives, including the
introduction of a statutory best interest duty to replace the current inadequate
suitability regime and reforms to mutual funds' compensation structures
Highlights of the study include:
While investors generally trust the advice of their financial advisers,
two things highlight the skepticism that many investors feel. Only 20%
of investors strongly agree that they generally trust their financial adviser's
advice and 25% strongly agree (39% agree- 64% overall) that how a financial adviser is paid impacts the
recommendations that they receive. Advisers need to give their clients
greater assurance that their best interest is being served.
There is strong support for a statutory best interest duty: 93% agree
that it is needed (with 59% strongly agreeing that it is needed).
Investors want strengthened regulation of financial advisers, including
clearer professional standards on use of the title, rigorous
educational requirements and ethics training, and stricter regulatory
enforcement of the rules.
An investor/adviser power imbalance exists for most but is particularly
problematic for those who lack confidence in their financial literacy.
This places advisers in a powerful position. The majority (58%) rely on
their financial adviser as their main source of information. More than
four in ten do not know how their adviser is being paid.
The project was initiated and directed by the IAP and the IEF and
received administrative support and funding from the Ontario Securities
Commission. The IAP and IEF Project Team- IEF President Tom Hamza and
IAP Past Chair Anita Anand, former IAP member Steve Garmaise, current
IAP Chair Paul Bates and current IAP member Nancy Averill- engaged
Ascentum Inc. to conduct the research project. 2,030 Ontarians from the
Ekos Probit research panel participated in the online survey and 52 participants
took part in one of two in-person dialogue sessions. In addition to the
quantitative data generated by the online survey, nearly 82,000 words
of qualitative text were analyzed, roughly the same length as one and a
half copies of "The Wealthy Barber Revisited". The findings and
analysis are intended to support and inform the work of the Investor
Advisory Panel and the Investor Education Fund in their efforts to
strengthen investor protection and investor education in Ontario.
The Investor Advisory Panel is an independent body established by the Ontario Securities Commission
in 2010. Its mandate is to represent the views of retail investors to
the OSC in its rule and policy making process.
The full study and accompanying documents (Choicebook and Dialogue Guide) are available on line.
SOURCE: Ontario Securities Commission
For further information:
Chair, Investor Advisory Panel
905-525-9140, ext 20512