Client First? 

Regulators Leave Investors Wanting

It would appear that the latest on the Investment Industry Regulator's progress to protect investors from the investment industry advice channels conflicts of interest are going pretty much nowhere.

If you can, read Rob Carrick's  Globe And Mail article: "Relentless fighter for investor rights sees little progress yet in battle against financial industry" 

In a nutshell:

"It was about one year ago that provincial securities regulators let the industry off the hook on two key reforms - one that would require investment advisers to work on a standard of what's best for the client and the other that would stop the practice of hiding advice costs in the fees associated with investments, mainly mutual funds".

As the financial industry under IIROC "self-regulates", a complete conflict of interest, it is an enormous advantage to the advisors who can continue to sell those securities and funds that best pay them and the firms that they work for leaving many investors at their mercy (not all advisors are bad, they are just following the lead of the firms that they work for: see John De Goey's book: Standup To The Financial Services Industry) 

So the onus is put on the investor to protect themselves.

Unfortunately it is easy to be swayed by the salespeople at banks and financial institutions and the great marketing machines that promise to create wealth for you.

But, they are under no obligation to put your interests ahead of their own: Their interests? Gather Assets Under Administration (AUA) and generate revenue for themselves (commissions) and their firms and provide dividends (and capital growth) for the shareholders. 

I know this. I worked as a branch manager under this regime. It favours the advisors and shareholders over the clients. It is a sad state of reality in the financial industry.

In my time I witnessed advisors who's sole purpose was to bring in as many clients as possible and then sell the book of business (for a very large sum), cashing in without ever properly looking after the clients, just popping them into a "one size fits all" portfolio of ETF's or mutual funds for ease and simplicity, charging a fee, but failing to live up to the implied promise of helping them. Shame.

I do enjoy looking after our clients. So I helped create a place where I could do it better, with someone of a like-minded nature.  

Portfolio Managers (like High Rock), have a much higher standard. We have a fiduciary responsibility, which is not only a regulatory obligation, but also a legal obligation to put our client's interests first: we put it up front, on the home page of our website: 

So if you have not visited it or want to review it, click on the High Rock Code of Conduct button and ask your advisor if they can offer you this?

You are likely not going to be protected by the self-serving financial services regulators, so you have to protect yourselves by finding the folks who will serve you and protect you.