It is not very often that I get on the wagon and become political, but this is definitely one time that I am at the front of the wagon. For some reason, there are those who believe that it would be a good idea to impose a logistical nightmare of compliance and disclosure to a point that is completely inane.
For the last twenty-five years I have worked with many people from all backgrounds, I have assisted families in meeting their financial objectives, protecting them against financial ruin when catastrophe strikes and become Uncle Brian to many children.
I have often said that I am a ‘financial missionary’. The only mentor that I have ever had in my career was my grandfather who worked in the financial world for decades before I joined. One of the things he made sure I understood was that there would come a time when I would be able to give back and I should embrace that opportunity – and I have.
If the changes are enacted and Canada becomes similar in any way to the UK or Australia, then I will be left with no choice but to start to charge significant fees when someone wants to work with me. Given that I work with many people who have just graduated from a professional education (chiropractors, physiotherapist, naturopathic doctors, occupational therapist to name a few) and are often doing so with large amounts of debt, I have always charged far below what I could because I feel a sense of responsibility to help the youth of today get started properly.
The changes that are being proposed are the brainchild of a select few who are doing so, in my opinion, to justify their existence. It is pretty simple, if they get their way then I will be forced to charge fees in the range of 10 to 20 times what I do now each and every year. Why? Because it will be the only way that I can afford to stay in business.
In turn, this will lead to a large amount of unemployment in the financial sector. Think about it, in the UK 75% of advisors left the business after the introduction of these proposed changes. Studies have shown that there has actually been an increase in problems and a decrease in wealth as a result. Do you want to be dictated to by the politicians or maintain the choice of who and how you set up your finances. If the changes go through, only large institutions, like the banks, will be able to afford to deal with the majority of the general public. If you are wealthy, you will be able to afford the fees, if not I hope you find a teller that is knowledgeable.
Below is the commentary that has come from Advocis, one of the many associations I am a member of. I implore you to read it and then to sign the petition.
Professionalizing Advisors to Protect Consumers.
Instead of turning our relationship on its head, let’s fine-tune how advisors and clients work together.
Here’s how you can maintain consumer choice, enhance consumer protection, and get more from your advisor.
A successful advisor-client relationship is one with a high degree of intimacy and trust. This is not the sort of thing that can be legislated into existence by politicians and maintained by regulators. But it can be legislated out of existence. And as hard as it is to believe, this may in fact happen!
Sign our online petition (link below) to:
-maintain our trust-based relationship instead of reducing it to legalisms
-enhance the professionalism of all financial advisors
-preserve the flexible set of payment options consumers now enjoy
Read on to learn how regulators may change forever the way you and I do business — and how to stop it while simultaneously offering Canadian investors enhanced protection.
You and me: building on trust, we reach agreement on what is best for you
Any successful relationship is built on trust. This is especially true in financial services. As your advisor I have to be able to trust that you, as my client, feel sufficiently comfortable to be fully candid with me. This openness goes far beyond mere transparency of financial information, like how much money you have in your savings account. It is a willingness to discuss more fundamental truths—ultimately, your hopes and dreams—for your own life and for your family members. This is not something that can be reduced solely to checking boxes on forms.
As my client you should feel assured that as your advisor I will act with your interests foremost at all times. Indeed, as an Advocis advisor I am already committed to acting in your best interests. As my client you need to know that I understand and support your life goals and aspirations. And you must be satisfied that I am providing value to you, that my advice and services are worth your time and money. Unfortunately, all of this could be irrevocably changed if current regulatory discussions become reality.
It’s your choice: a personal connection based on trust, or a formal relationship based on ever-expanding legal requirements?
Here’s the problem: regulators of financial services have recently contemplated massive new changes to how you and I would do business. Our mutually-arrived-at relationship would be dramatically reconfigured into one which would severely limit your options in deciding how I work for you, and how you pay me. When it comes to paying their advisor, some clients want to pay by retainer, some by an hourly fee. Others prefer a transaction basis. The way you pay for your advisor’s advice and services is, again, part of a shared understanding about what works best for you. But the regulators would effectively replace our trust-based relationship with one based on strict observation of legal procedures. The upshot? Trust-building would be replaced with legalistic formalities, and the cost of using a financial advisor would rise. Cheque-writing would become the foundation of our relationship. And many Canadians would decide they can no longer afford access to financial advice.
A better option: preserving trust and flexibility while protecting you better
Underlying the recent regulatory consultations is a fundamental goal, which we as advisors wholly support: enhancing consumer protection. Where we differ with regulators is how best to achieve it. Advocis, The Financial Advisors Association of Canada, has an idea that will help the regulators achieve what they want — without significant cost to the public — while also preserving the open, two-way relationship of personalized service and trust with your advisor. Let’s maintain the number of options all consumers currently enjoy when paying for financial advice and services.
Advocis's Professions Model calls for all financial advisors to become members of an accredited professional association. This is a low-cost yet comprehensive way to mandate enhanced advisor professionalism without creating needless barriers for Canadians seeking financial advice. Our model has resonated well with politicians and regulators in several provinces, and now we are seeking the public’s help — your help — in making it a reality.
What you can do
Let government and regulators know you want enhanced consumer protection while preserving our tried-and-true trust-based approach to delivering professional financial advice. Let’s avoid needless costs and instead hold all advisors to higher standards.
To do so, simply sign the online petition at www.Advocis.ca.