FAIR Focus
September 2022
In this month’s newsletter, we discuss the debate about what Canadians should expect from someone calling themselves a financial advisor. We explain the difference between a Trusted Contact Person (TCP) and a power of attorney (POA), and share our views on the importance of promoting fair outcomes for investors. In addition, we highlight an upcoming Conference on Access to Justice for Investors on September 8, organized as part of the fifth anniversary of Osgoode Hall Law School’s Investor Protection Clinic (IPC).  

What Does it Mean to be a Financial Advisor? 
What qualifications would you expect someone to have if they call themselves a financial advisor? Would you expect them to be highly trained and capable of providing you comprehensive advice about your financial situation, or would you expect them only to be trained to sell you one type of financial product?
This basic but critically important question is yet again front and centre in a new proposal published by the Financial and Consumer Affairs Authority (FCAA) of Saskatchewan. Their proposal concerns who can use the title financial planner or, more troubling from our perspective, who can use the title financial advisor in that province.
The FCAA points out that a “product-focused” approach may lead to
more than unfulfilled expectations—it may result in
poor financial decisions for consumers.
The FCAA’s proposal builds on rules adopted in June 2022 by the Financial Services Regulatory Authority (FSRA) in Ontario. At the time, many stakeholders argued that Ontario’s approach would not protect consumers, nor would it address rampant consumer confusion over the financial services industry’s use of titles. In part, this was because the FSRA failed to focus on this basic question and ask themselves what average Canadians would expect from a financial advisor. The result is that anyone who called themselves a financial advisor in Ontario before June 2022 can continue to do so without much more effort or substantial training.  

Signaling that it is genuinely concerned about the potential harm to consumers, the FCAA is seeking the public’s input about what we should expect from a financial advisor. It notes many Canadians believe such a person would provide “broad-based comprehensive financial advice.” It also states that many people would assume financial advice goes “well beyond” providing recommendations only about one type of product. Equally important, the FCAA points out that a “product-focused” approach may lead to more than unfulfilled expectations—it may result in poor financial decisions for consumers. We fully agree.  
In response, the FCAA is considering imposing higher educational and credentialing standards to ensure financial advisors in Saskatchewan can develop workable financial strategies, based on their clients’ personal circumstances, rather than just recommend buying a product.
The problem for the FCAA is some in the industry are using Ontario’s approach to pressure Saskatchewan officials into not introducing higher consumer protection standards in that province. They conveniently ignore that Quebec set high standards many years ago, when it comes to title protection. In short, industry lobbyists want an organization or individual licensed to be a financial advisor in Ontario to be rubber-stamped when they provide financial advice in Saskatchewan. Their argument is if it is good enough for Ontarians, it should be good enough for Saskatchewanians—don’t worry so much about protecting consumers.  
We are encouraged by the FCAA’s more thoughtful and consumer-centred approach to this policy debate. They are keeping the focus where it should be—protecting consumers like you. This is far more important than harmonizing Saskatchewan’s rules with a weaker standard adopted in Ontario. Given that only Ontario and Quebec have yet to establish title protection rules, now is a good time for Saskatchewan to develop a better model that could be adopted in the rest of the country.  
By creating standards aligned with what investors expect, Saskatchewan can seize a unique opportunity to create a better consumer protection framework. 
The FCAA is requesting public comments on the approach it should take on this and other related issues. FAIR Canada will provide its detailed comments to the FCAA later this month and keep you posted as things develop.
If you’re receiving investment advice from a financial professional, always make sure you ask them about their qualifications and credentials, including where and how they are registered. You might be surprised by what you hear. Visit our website for information on choosing an advisor.
Trusted Contact Person Versus Power of Attorney
Beginning this year, registered dealers, advisors and their representatives must take reasonable steps to see whether you may want to appoint a Trusted Contact Person.
You may be asked to consent to specific situations where the advisor or their firm may contact your TCP. This could include, for example, contacting your TCP when they suspect someone may be trying to financially exploit you, or when they have concerns something may be affecting your ability to make sound financial decisions. You can also authorize your advisor to contact your TCP if they are unable to get in touch with you.
While appointing a TCP is something you should consider, it is different than someone acting as your power of attorney (POA). 
What’s the difference between a TCP and POA?

A TCP is intended to be someone your dealer representative can speak to in certain limited circumstances, particularly when they have concerns about trading instructions affecting your account. 

A TCP cannot make any financial or legal decisions on your behalf. And, unless they have your specific permission to do so, the dealer representative cannot share any details about your finances with the TCP.
Unlike a TCP, a POA has the authority to make financial decisions for you in specified circumstances. The specific rules for a POA depend on which province or territory you live in. In some provinces, the legal term for POA is “substitute decision-maker.”
Typically, your POA will have the power to make decisions for you if you become incapacitated, or otherwise are unable to make decisions for yourself. If your POA document does not specify any limitations, however, your POA may be able to make any decision that you could regarding your finances and property.
The POA does not have to be the same person as your TCP, nor do they have to be a lawyer. 

Having both a TCP and a POA may be beneficial to you, particularly if you are older. For more information about TCPs, please visit:

For more information on powers of attorney please read:

Promoting Fair Outcomes for Investors
Last February, we urged the Ministry of Finance (Ontario) to ensure regulators put more focus on promoting fair outcomes for investors. We believe it should be one of the main objectives of securities regulation, alongside the existing objective of protecting investors from unfair or fraudulent practices.
You might ask, “Isn’t promoting fair outcomes for investors the same thing as protecting them from these types of harm?” Not necessarily. The difference between these two concepts was illustrated last September, when three of Canada’s big banks decided to stop selling “third-party” mutual funds to certain segments of their clients. This decision made it easier for the banks to follow new rules that require their staff to have an in-depth knowledge of the products they sell.
While the banks’ decision may not have directly harmed their customers, it seems to have fallen short of producing a fair outcome for them. This is because of the dominant role the big banks play in providing retail investors access to mutual funds. As a result of their decision, many Canadians will now find it more difficult to invest in third-party mutual funds.

What if the banks had been required to promote fair outcomes for their customers? 

The approach in the United Kingdom (UK) is a good example of what promoting consumer fairness might look like. In the UK, financial firms are required to show that the fair treatment of customers is at the heart of their business model. Recent reforms have raised the bar even further by introducing a new Consumer Duty, which requires UK firms to ensure that delivering “good outcomes” to retail customers is at the heart of their business.
As a result of the Consumer Duty, before a UK firm could decide to stop offering a product, it would be expected to:
  • Consider whether the decision could lead to foreseeable harm for their customers or a specific group of customers.

  • Take steps to mitigate the impact of the potential harm, for example, by allowing time and support for customers to find suitable alternatives.
  • Engage with the UK’s Financial Conduct Authority (FCA) if its decision could significantly impact the supply of the product in the marketplace.
The UK’s work in this area demonstrates a continued focus on improving investor protection and achieving fair outcomes for them. Rather than the ever-present focus we have on reducing regulatory burden, we need to establish a more consumer-focused culture within Canada’s financial services industry. The UK’s Consumer Duty may be a good first step.
For more information about the Consumer Duty, see the FCA’s FG22/5 Final non-Handbook Guidance for firms on the Consumer Duty.
Investor Protection Clinic Hosts Fifth Anniversary Conference
On September 8, the Investor Protection Clinic (IPC) at Osgoode Hall Law School will mark its fifth anniversary. The IPC was founded together with FAIR Canada in 2017. It provides free legal advice to people who believe their investments were mishandled and who cannot afford a lawyer. To celebrate its important milestone and contributions to investor protection, it will be hosting a full-day conference focused on Access to Justice and Fair Outcomes for Harmed Investors.
The conference will feature a series of expert panels, including one moderated by FAIR Canada’s Executive Director, Jean-Paul Bureaud. This panel will examine whether access to justice for harmed retail investors has improved over the past five years, what has changed, and whether it’s now easier for harmed investors to obtain compensation.
Space is limited! Register to reserve your spot by visiting the link below:
We’d Love to Hear From You!
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