The OSC’s Investor Advisory Panel was holding a Webinar for retail investors to provide input into a number of issues this week.
“The webinar is a great opportunity for investors to present their views to the Panel about issues that are important to them. We look forward to hearing from individuals across Ontario.”
I was asked by some if I was going to take part? No. I feel that those who are informed and who have long been involved in trying to argue for change are well past the ABCs and so should the IAP be. So the webinar in my opinion was to garner the opinion of the less, to varying degrees, well informed. There is nothing wrong with the ABCs, of course, but these should be clear by now, and it is a worry that the IAP is still interested in finding out what they are.
A cynical person might suggest, “tongue in cheek”, that the “let us hear and understand investor issues” is more of a marketing exercise: how can we package regulation and the industry’s services in a way that consumers will understand it, in a way that will be less confusing? As if the problems are more of perception, the message more than the integrity of the system.
If we are just investigating the ABCs, the building blocks, if that, then we are well away from the necessary complex analysis needed to thrash out what needs to be done. It is how things are compounded, how they interact and corrupt over time that is more important. This is where we are!
The real question is not what investors think, but why are we still here, why has nothing changed? I think I can answer that?
Why is OBSI under threat? Because the host is rejecting what is essentially a foreign body, because the foreign body is wishing to change the cell structure and operation.
Implant any functional but foreign entity into a host without an immune suppressor and the entity will likely be rejected. The IAC was rejected, OBSI is in the process of being rejected, and so will the IAP, ultimately be rejected – it may even be that the OSC’s Office of the Investor is already doing this. It is worthwhile noting that the Office of the Investor will be much better funded than the Independent IAP and few if any of the IAP’s requests for greater funding and a wider mandate have been accepted by the OSC, but the OSC has planned their own internal response, one which cannot be accessed in a transparent manner by the public.
How can organisations like OBSI and consumer panels operate effectively in the public interest? Grant them a guaranteed life expectancy and operational powers and funding that are independent of the whims of the host.
Research on what consumers understand and do not understand is of course important, but you do not need to speak to me for a few minutes (or indeed many of those who have been campaigning for change) to find out the substance of my views: my views are clear, well documented and publicly available. This goes for most of the issues that are germane to investor protection: they are well known, unambiguous, in the public domain, well documented and exist largely because the consumer lacks the sophistication and purview to be able protect their own interests.
There would be no need for regulation if investors were rationale, knowledgeable and intellectually capable, and information about services, products, risks, costs and responsibilities were all freely available and transparent. Regulation exists because of the actions and integrity of the few who have taken responsibility for the needs and inadequacies of the many, yet here we are, apparently, feebly asking what is wrong! Regulation is most often the effect and not the cause.
I do not think, therefore, that the webinar is for those who understand, and who have well documented stances on regulatory and industry issues, because this is not the type of forum for the delivery of such rich context and synthesis. It is for the uninformed to briefly and succinctly express their feelings and views on issues upon which they may have limited understanding.
This is not to say the feedback of the investor is unimportant, because it is, but it is not important in defining the problems and the issues as of now. Such feedback is however key to implementing measures designed to protect the consumer and to enhance the effectiveness and efficiency of the market place. But to rely on what an uninformed consumer says about issues, in order to define the structure and physics of a problem is like the medical profession deciding that doctors no longer need to go to medical school to learn medicine and can rely on the communications of their patients to decide what is wrong with them. This is absurd!
If this was the first time in Canadian history that it was realised that the needs of Canadian retail investors might be important, then possibly, this data gathering exercise of views and wishes at a very basic level might be important. But it is not such a time.
Perhaps the IAP feels it lacks a mandate from the people, or it is insufficiently aware of the fundamental issues itself in order to be able to take an effective stance. Without the necessary elucidation, I fear the IAP are treating the current problem as an ill founded academic exercise: find out what consumers want, assess whether what they want is reasonable and practicable, and where so attempt to educate regulators and industry over these issues and negotiate improvements based on consensus.
The issues we are dealing with are not emotive issues that can be assuaged by empathy and understanding, but real physical problems that are impacting the integrity and efficiency of the market place and the financial security and rights of Canada’s consumers.
The IAP it would appear does not know which way is up and is unable to shape its own arguments.
Besides, when all is said and done, we are caught in a wider drama, for the host, the financial services industry is itself in decline, under attack from many structural economic and financial quarters. The IAP and the consumer right is another unwanted enemy at the gate and consulting the views of the uninformed will not bend these timbers. No matter how well meaning this all is, at least on the surface, it is not going to deliver as is.