Earning plaudits from sponsors, speakers and attendees, and media coverage and reviews from industry organs of opinion like Investment Executive and The Wall Street Journal, Advocis’ 3rd Annual Regulatory Affairs Symposium took place in Toronto on November 23, 2011, at the historic Le Méridien King Edward Hotel. “Convergence - The Next Wave: New Products, Regulatory Responses and the Role of the Advisor,” addressed the problems posed by our industry’s growing regulatory and product convergence.

From complex new insurance and investment products and the ways in which retiring “boomers” will seek to disinvest themselves, to the gradual harmonizing — official or coincidental — of the regulatory responses of leading jurisdictions around the globe, our industry has been showing signs of regulatory and product convergence for several years. This year’s symposium examined that convergence and its interaction with those key elements which define the role of the financial advisor, including professional education, client relationships, new advisor supervision, product distribution, and so on.

Attendees listened to and engage with industry heavyweights, government officials and other regulatory thought leaders about the key challenges and opportunities facing advisors and their clients.

Symposium reveals growing importance of the advisor’s role

Highlights included the following expert panels:

The Regulatory Panel: Phil Howell, CEO and Superintendent of Financial Services for the Financial Services Commission of Ontario, Gerry Matier, Executive Director of the Insurance Council of British Columbia, and Mary Condon, Vice-Chair of the Ontario Securities Commission, all outlined their own challenges and expectations regarding regulatory responses, advisor discipline and education, and the possibility of introducing statutory changes to the roles and responsibilities of the advisor.

Phil Howell emphasized the importance of advisor professionalism, noting that “financial advisors need to be trail blazers in the area…of marketing products in a way that is informative and neutral for clients.”

In terms of regulatory convergence, Mary Condon noted that Canadian regulators are following international trends by shifting their focus to consumer protection, away from simply monitoring the solvency of financial institutions. She stated that increased product complexity in and the blurring of the lines between the securities, banking and insurance sectors means that “regulators are now required to evaluate the perimeters of the market and change established approaches if they don’t protect investors.”

Gerry Matier discussed the Insurance Council of British Columbia’s new supervision requirements for new agents, who “are to be guided and trained to be good agents to their clients by a more senior agent,” said Matier. “They will need to be shown proper documentation and file maintenance for their client cases.” He also highlighted the need for improved regulation in the area of managing general agencies, including making it easier for MGAs to report bad agents directly to regulators.

The Investor/Advisor Panel: This quartet of advisors and Advocis members — Terry Zive of Zive Financial, Jack Snedden of Executive Retirement Planning Inc., Curtis Findlay of Compass Financial Planning Services Ltd., and the newly-minted Chair of Advocis, Dean Owen, of Cherry Financial Services — gave attendees four perspectives on the convergence of economic, regulatory, and product trends. Broadly stated, they examined how advisors will play an increasingly critical role in helping consumers identify and understand the financial products and planning strategies which will best meet their needs; how those needs and strategies may evolve given today’s economic climate; and when and how advisors should be regulated as the future unfolds.

New Chair of Advocis, Dean Owen, CLU, CH.F.C.: Advocis will continue offering input to policymakers and regulators to help ensure that new laws and regulations are carefully drafted to target specific problems without causing unintended spillover effects. "Action should only be taken when the consequences are identified," noted Owen.

The underlying message of the symposium
Financial advisors can find a point of stability in this time of near-continuous change by embracing the need for heightened standards and committing to a high level of ongoing professionalism. Given the increased focus on consumer self-reliance, it is absolutely critical that consumers understand that when dealing with a financial advisor, they are dealing with a committed professional who has a high degree of knowledge about the advice, products and related services he or she is offering.

 

Terry G. Zive, CLU, CH.F.C, RHU, FLMI, TEP, summed up the position of many advisors when he stated that “the greatest risk that we have as financial advisors in these times of change is to do nothing, and to have our futures dictated to us by those who lack our expertise and understanding.”