Industry lacks risk assessment standards: OSC panel

The OSC’s Investor Advisory Panel (IAP) has submitted its 2013-2014 annual report to the Commission. The report lays out the panel’s priorities and investor protection recommendations.

Throughout the past year, the IAP has focused on pinpointing flaws in Canada’s investor protection regime. In particular, the report says, “the panel has issued a […] proposal to conduct independent and objective investment risk tolerance assessment research [to] identify approaches to risk profiling currently in use, and compare those with international best practices.

“Currently, there are no standards for how risk tolerance assessment[s] should be performed, and practices […] employed during the KYC process can and do vary. A better understanding of best practices in Canada, and internationally, will benefit industry participants and investors.”

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In September 2014, the IAP made headway in highlighting seniors’ rights by taking part in the first Roundtable on Seniors’ Issues, which was co-hosted by the Office of the Investor. During the roundtable, the panel discussed:

the fact that the population is aging, which means advisors will potentially have to deal with clients who have diminished capacities;
the challenges seniors face in effectively planning for retirement; and
the risk of seniors facing financial fraud and financial abuse.

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Prepare for client incapacity
Make way for centenarians

Despite these efforts, says IAP chair Connie Craddock, “we remain concerned that measures which could improve investor protection continue to [be] subject to additional review and study,” rather than being implemented.

The IAP is comprised of nine members who were appointed by the OSC chair. It provides regular reporting through the Investor Advisory Panel website.

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