Sara Gelgor, director, human rights, enterprise ESG strategy, RBC; Kris Birchard, chair, Advocis National Government Relations Committee; Sara La Gamba, senior advisor, SPM Financial; Trevor Theobald, member, Ontario Provincial Advocacy Committee.
COMPLIANCE CHALLENGED BY FRAUD High-profile data breaches at Mackenzie Investments and Equifax in recent years have contributed to “a growing concern regarding security, privacy, and fraud within the financial services space,” said Jack Mazakian, vice-president of Advocis Broker Services. Jill McCutcheon, partner at Torys LLP, said advisors have to balance the need to have Know Your Client paperwork and other important client data in their files against privacy regulations that require collecting only what is needed for as long as it’s needed. “Unfortunately, for the field we’re in, that’s a very long time.” She said cyber insurance is “one of the most important things” businesses and individuals can put in place to help manage risk. “I know that a lot of people in this room might think it’s not necessary, but I can tell you that every single client we have — institutional and smaller — could at some point be the victim of a cyberattack.” Nataša Milojević, vice-president of business governance and controls at Sun Life Financial, said the cybersecurity regulatory regime and navigating vulnerability to cyber threats “is a whole massive area that, from an expertise perspective, cannot be absorbed by a single advisor.” Her firm has been handling it at an enterprise level by requiring advisors to use secure Wi-Fi and
update their software regularly, as well as monitoring advisors on the internet to catch any impersonators quickly. McCutcheon said financial services firms and advisors need to be aware of the federal government’s Digital Charter Implementation Act, which will beef up individuals’ privacy rights and establish a tribunal to adjudicate complaints from citizens whose privacy has been breached, with fines for breaches. In addition, it will introduce rules around the use of artificial intelligence — an area she said insurance companies and investment firms are likely to find themselves embroiled in.
COST DISCLOSURE MOVES FORWARD Advisors must also begin preparing for CRM3, which will give clients the total dollar amount of their investment fund expenses and charges for all funds owned by the investor, as well as the fund expense ratio for each fund the investor holds. The disclosure will take effect for the year ending December 31, 2026, with clients receiving the disclosure documents in early 2027. Geoff Gibson, vice-president of investment product and marketing for Empire Life, said the disclosure will mark a significant change in how clients understand investment costs, as management fees have traditionally been displayed as a percentage rather than a dollar figure. “A danger of this could DECEMBER 2023 FORUM 17
