AdvocisNews ASSOCIATION UPDATES AND EVENTS
CHAPTER NEWS Calgary Event – “Lean In and Help Shape the Future of our Industry”
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dvocis Calgary hosted one of the first live events in more than two years with national leadership in attendance at Lean In and Help Shape the Future of Our Industry. Held on March 22, the event was well attended by Advocis members from across Alberta and featured hosting by Wade Baldwin, as well as presentations by TFAAC board chair Rob Eby, Calgary Chapter president Jayshri Patel-Amin, and many more.
Will Britton, CLC Chair; Heather MacDonnell, director of chapter relations; Julie Martini, vice-president, strategic engagement; and panel moderator, Rob Eby, Advocis chair.
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he Advocis Chapter Leadership Council hosted its annual Western Regional Meeting in Calgary. Among chapter-building activities, volunteer leaders participated in a workshop led by past chair and longtime volunteer Izumi Miki McGruer. Attendees left with a better understanding of how they can support their individual chapters, and are looking forward to future collaborations with one another.
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LEGAL AND REGULATORY AFFAIRS UPDATE Insurance Regulators Move to Ban DSCs in Segregated Funds
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n February 10, the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) announced their intention to completely ban the use of deferred sales charges (DSCs) in segregated funds by June 1, 2023. In the joint statement they also encouraged the industry to refrain from using DSCs by June 1, 2022. This latter date would align with the ban on DSCs for mutual funds set out by the Canadian Securities Administrators (CSA). In making their decision, CCIR/CISRO seem to be leaning heavily on the work done by the CSA over the past decade. In 2018, the CSA concluded that DSCs create a serious conflict of interest between clients and advisors: the CSA found that the allure of upfront compensation incentivizes advisors to recommend DSCs when they are not in the best interest of their clients. The redemption schedule characteristic of DSCs also deters the ability of investors to sell poorly performing funds, with restricted fund flows strongly correlated to poor investor outcomes in the CSA’s research. Insurance regulators believe that DSCs in segregated funds represent similar consumer protection issues. While we believe these issues merit investigation, we are concerned that CCIR/CISRO did not undertake an analysis of DSCs specifically in the context of segregated funds. Segregated funds share similarities to mutual funds, but there are also important distinctions related to their use as an insurance product and the duration that consumers typically hold the product. These distinctions will be important as the CCIR/CISRO have announced their intention to study other segregated fund compensation options, such as front-end loads and chargeback options, this fall.
