Securities regulators’ latest initiative – Customer Relationship Model phase II or CRM2 – is well under way. After mid-July 2016, CRM2 will require investment dealers to report personalized performance, charges and commissions annually to each client. To their credit, many dealers are now providing performance reports.
But two disturbing trends are brewing beneath the surface in an effort to skirt the reporting of charges and commissions.
Escaping securities regulation
Compliance obligations of investment dealers and their individual financial advisers (i.e. registered salespeople) have ramped up over the past decade. Over that time, I’ve heard many stories of financial advisers giving up their investment licenses to focus on the sale of insurance products. Firms and individuals licensed to sell insurance are regulated by provincial insurance regulators (e.g., Financial Services Commission of Ontario or FSCO) but are out of reach of provincial securities regulators.
Dan Hallett – Globe and Mail – March 17, 2015
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