The Canadian Advocacy Council (CAC) for the Canadian CFA Institute Societies says it “strongly support[s] the introduction of the proposed regulatory best interest standard.”

In a recent comment letter to regulators across Canada, the CAC notes, “We have agreed to uphold our Code of Ethics and Standards of Professional Conduct, which requires us to put the interests of our clients ahead of our own. We are also supportive of many of the proposed amendments to National Instrument 31-103 […] that are aimed at clarifying and heightening the obligations of advisers and dealers to their clients.”

On the topic of standard of care between advisors and clients, the CFA Institute and its members have written extensively, says the letter. The CAC says, “One such article contend[s] that among other benefits, a uniform fiduciary standard of care could serve to:

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Further, says the CAC, there are no negative implications that can be directly attributed to establishing a best interest standard. Instead, it adds, drawbacks that industry opponents have listed—such as the potential widening of the client-advisor expectation gap—are actually “attributable to a number of factors unrelated to the proposed best interest standard itself. These include low market returns, changing client expectations and CRM2.”

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In fact, says the CAC, “our view is that these issues will continue to impact the industry if Canadian regulators do not proceed with a best interest standard, which would provide a consistent and overarching standard for registrant conduct. […] However, in order for the best interest standard to be most effective, it is important that it be harmonized across all of Canada’s securities regulators.”

Still, there may be differences in how such a standard might apply to an advisor who’s responsible for a client’s entire investment portfolio and who has an ongoing advisory relationship versus an advisor who is responsible for only a portion of a client’s investment portfolio, says CAC.

Read the full comment letter.