The arrival of robo-advisors in Canada has prompted CSA to issue guidance for advisors who choose to use online service platforms.
In its release, CSA says, “Some Canadian registered portfolio managers and restricted portfolio managers have begun operating as ‘online advisers.’ This includes new registrants, as well as portfolio managers that are already registered and who have changed their operating model[s] to provide advice using online platform[s].”
These firms and advisors, CSA adds, typically provide discretionary, online investment management services at a low cost to retail investors.
However, there’s a difference between the robo-advisors operating in Canada versus the U.S., says CSA. “Online advisers that have been approved to carry on business in Canada are not ‘robo-advisers’ of the kind that are operating in the United States, which may provide their services to clients with little or no involvement of an advising representative. Canadian online advisers provid[e] hybrid services.”
As a result, says CSA, all robo-advisors in Canada must still meet the requirements of NI 31-103, which sets out registration and ongoing client-service requirements. The regulator notes, “The rules are the same [whether] a PM operates under the traditional model of interacting with clients face-to-face [or] uses an online platform.”
For more on how CSA will continue to monitor robo-advisors, click here.