Navigating Complexity

Advisors gathered in November for Advocis’s 15th Symposium. Kelsey Rolfe shares insights from industry and regulatory representatives

The financial services industry is undergoing significant regulatory and technology changes that add new complexities to the role of financial advisor, speakers told the 2023 Advocis Regulatory Affairs Symposium.

The merger of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA) at the beginning of 2023 is set to change the way both groups of advisors are regulated. The Canadian Securities Administrators (CSA) and Canadian Council of Insurance Regulators published their total cost reporting disclosure requirements for investment and segregated funds, also known as CRM3, in April this year, which will prompt a wave of new conversations with clients when they come into effect. And all the while, advisors must contend with keeping clients’ data safe in the face of increasingly sophisticated fraud technology.

“Over the last number of years, it has become harder to do your job,” said Andrew Kriegler, the inaugural president and chief executive officer of the Canadian Investment Regulatory Organization (CIRO), the result of the IIROC–MFDA merger. “Regulation … has raised the bar and it’s putting more burden, if you want to call it that, on the day-to-day job.”

Anthony Giglio, president and CEO of Quadrus Investment Services, said Client Focused Reforms (CFRs) have evolved the definition of compliance, with “disclosing away” conflicts of interest no longer considered an acceptable practice, and advisors also needing to provide evidence for the advice they give their clients. He said these reforms have caused plenty of confusion throughout the industry around interpreting the principles of the regulation.