SYMPOSIUM
Wade Baldwin, president, Baldwin and Associates Financial Services Ltd.; Huston Loke, executive vice-president of market conduct regulation, Financial Services Regulatory Authority of Ontario; Melaina Vinski, associate client partner, behavioural science, AI, and analytics, IBM Consulting; Louise Gauthier, senior director, distribution policies, Autorité des marchés financiers.
be sticker shock, and that’s something we all want to avoid,” he said. Louise Gauthier, senior director of distribution policies for Quebec’s Autorité des marchés financiers (AMF), said the regulators wanted investors to have comparability between reports for their segregated and investment funds. “If, of course, this transparency put pressure on costs, that would be a good thing for investors as well.” Gauthier noted the content of the disclosure is mandated, but the way advisors present it is not. The AMF worked with behavioural science specialists at the Ontario Securities Commission to test disclosure models with real investors, finding that it’s best to put the most important information on the first page and highlight what’s important for clients to know. “There are risks, and I recognize that, but I think that’s where the advisor’s role comes in,” she said, adding that the report can be a “powerful tool” for starting conversations with clients about other aspects of their portfolio, including concentration and liquidity. Melaina Vinski, associate client partner for behavioural science, AI, and analytics at IBM Consulting, said advisors should strive for simplicity in their reporting, avoid technical jargon, and tie the cost of the fund back to the client’s overall financial goals and the role of the advisor in helping to achieve them. Huston Loke, executive vice-president of market conduct regulation for the Financial Services Regulatory Authority of Ontario, noted fund performance will also be baked into these statements, information that has previously been hard for investors to determine. 18 FORUM DECEMBER 2023
Geoff Gibson, vice-president, investment product and marketing, Empire Life.
Gauthier said that in the CFRs, regulators have enhanced advisors’ obligations to ensure an investment product is suitable for the client, with cost being one of the determining factors. “When you have this report in hand, you’ll have a personalized report of the cost for clients, and you can use that to help make a suitability determination,” she said. KELSEY ROLFE is a Toronto-based business reporter and editor.
