Bitter pill: Saskatchewan advisor agrees to Ontario regulator’s sanctions

(June 19, 2003) A Saskatchewan advisor reprimanded by the Ontario Securities Commission (OSC) for working with out-of-province clients says he’ll grudgingly accept his punishment. Martin Bernier, a senior advisor with Assante in Saskatoon, has been ordered to complete a basic industry course, despite the fact that he’s worked in financial services for 14 years and holds both the CFP and RFP designations.

“I don’t like the ruling,” Bernier told Advisor.ca. “I think I’m more than qualified to be a rep in Ontario or any other province. I think they’re saying that ‘we have the power to make you jump through these hoops and we’re going to do it,’ it’s that simple.”

Bernier admits he dealt with three long-term clients who had moved from Saskatchewan to Ontario. He says he agreed to register in Ontario last year after Assante told him of the need to do so.

The trouble began earlier this year, when Bernier went to renew his licence in Ontario and received a letter from the OSC.

“They were concerned that I had dealt with clients who were in Ontario when I was only registered in Saskatchewan,” he explains. “Clients move and if you continue to deal with them, you’re offside the rules.”

OSC staff submitted that before being registered in Ontario, Bernier should be forced to successful complete either the Canadian Investment Funds course offered by IFIC or the Canadian Securities Institute’s Conduct and Practices Handbook course.

In his written response, Bernier pointed to his years of experience, his designations, as well as the CE credits he is required to pursue each year through his membership in Advocis and the Financial Planners Standards Council. He also noted that he has never solicited clients in any other province but Saskatchewan and has no intention of doing so.

But in a final ruling released this week, OSC senior legal counsel Susan Greenglass upheld the original staff submission, stating that engaging in the trading of securities without appropriate registration indicates an “inadequate level of understanding of the ethical and regulatory responsibilities of a securities industry professional.”

“Requiring appropriate registration before engaging in the trading of securities in Ontario is a basic requirement of the regulatory system,” she added.

Bernier, who also has a handful of clients in Alberta, says although he’s reluctant to drop anyone, he’ll take a hard look at whether it makes financial sense to continue servicing out-of-province accounts.

He accuses the securities commissions of being out of touch with reality. “We’ve got the Internet now, it’s a smaller world but the commissions haven’t kept up with the times,” he says.

“With fax, e-mail and telephone I can do as much for a client in Edmonton as I can for a client in the north end of Saskatoon,” he adds.

Bernier says the obvious solution is some sort of national regulatory system, or a passport model, where an advisor registered with one securities commission would also be able to do business in other provinces.

“It’s a little onerous to license yourself in six or seven different jurisdictions,” he says. “I’ve asked Assante to consider lobbying the securities commissions in Canada so we can have a national system,” Bernier adds, noting that firms face similar hurdles when they introduce new products in more than one province.

“It’s a waste of time and effort,” he states. “It would a lot easier if there was a national body, or some kind of passport system.”

Bernier says he’s decided to go the Conduct and Practices handbook route, since he took the IFIC course 12 years ago. “I’ll take the course and toe the line. I don’t know if I’ll be better for it, but I will do it.”

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Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(06/19/03)

Doug Watt