What Is Fiduciary Duty?

It is the legal obligation of one party to act in the best interest of the other.

In a report titled "Advisor Title Trickery" (October 2016), the Small Investor Protection Association (SIPA) research stated that only 3% of registrants in the investment industry in Canada had fiduciary duty to their clients.

As a portfolio manager licensed with the Ontario, Alberta and B.C.  Securities Commissions, High Rock is legally bound to provide fiduciary duty to our clients.

The Canadian Securities Administrators (CSA)  is made up of each of the securities regulators from Canada's provinces and territories. In June of this year they announced a proposal to:

1) Address conflicts of interest in the best interest of the client

2) Put the client's interests first when making suitability determination

3) Provide clients with greater clarity on what they should expect from their registrants

Unfortunately, there is nothing in there about fiduciary duty. The current standard of care about investment suitability is only there to protect you at the moment of purchase. Beyond that you are (technically) on your own. A good advisor will, hopefully, monitor your investments and inform you when he/she believes that you may need to sell them if they are no longer suitable. However, they are not legally obligated to do so.

If they fail to tell you to sell them, they are not legally responsible because they do not have that fiduciary duty imposed on them.

As discretionary portfolio mangers, we, at High Rock, have the legal fiduciary duty to protect our clients capital and we do so by managing their risk across all the asset classes that we own in our collective portfolios.

Who would you rather have managing your family's wealth and future?