Comments on IIROC’s proposed guidance on Order Execution Only Services

Regulation in Canada often suggests that investors should take responsibility for their investment decisions and to educate themselves (perhaps much more so than other markets and jurisdictions), and have placed their primary focus over the years on disclosure to force such (CRM, POS etc). 

The retail model in Canada is also often portrayed as one where the “advisors” are merely helping the investor to make his decisions, more of a tool almost that helps links the investor with the necessary products:

If you’re an experienced investor, you may want an adviser who offers a wide range of products and lets you choose. If you’re newer to investing, you may be more comfortable with fewer choices and more guidance from your adviser.

The role of your adviser is to give you helpful, informed advice as you build and carry out your investment plan.

The more experienced investor appears to be assigned an even more precarious position of heightened responsibility for their decisions, even within the supposed safety of the “the regulated recommendation”! 

Yet, a one dimensional IIROC consultation on Order Execution Only Services appears to take the opposite tack and paints a picture of a world where responsibility and education are risks even to those investors who have expressed a clear preference to invest on their own account.  

Continue reading