Governor Mark Carney says its time for financial professionals to be more accountable to clients.
But despite relentless negative media coverage of financial services, the majority of investors do indeed have faith in their advisors.
That’s because clients base their opinions on personal experience, said Ian Russell, IIAC President and CEO, at an Empire Club of Canada event. He cited a national survey his organization commissioned.
However, while investors trust advisors and the firms their advisors work for, only one-in-three have confidence in the investment industry as a whole.
As such, he urges regulators to use better judgement when it comes to additional regulatory measures.
“It’s better for [them] to think carefully about what they prescribe, especially when some proposed new rules and regulations may be aimed at curing a problem that does not exist,” he says.
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“Rather than addressing investor concerns, regulators may only be addressing perceptions of investor concerns, amplified by a ubiquitous internet and a 24-hour news cycle.”
Reforms, he added, should be accompanied by thorough cost-benefit analyses before they’re implemented.
“Excessive rules mean excessive costs, and those costs will be borne by investors,” says Russell.
He attributed the discordant note in the survey findings to “the difference between personal experience and second-hand information.”