OBSI’s top investor complaints of 2017

Rise in activity

In 2017, OBSI was busy: it handled more inquiries, and opened and closed more cases than in the previous year. In total, it recommended that $2,591,996 be compensated to investors.

Overall inquiries (5,477) were up 8%, and cases opened (721) and closed (731) rose 13% and 11%, respectively, over last year.

While the number of investment cases opened (351, from 92 investment firms) didn’t increase over 2016, the cases closed (382) grew by 15%. For banking services, both the number of cases opened (370, from 26 firms) and closed (349) rose, by 28% and 8%, OBSI says in a release.

Ombudsman and CEO Sarah Bradley says that along with resolving disputes, “We increased our organizational transparency, accessibility and awareness, while focusing on managing our enterprise risk […].” OBSI also improved its case management systems “to allow faster and more accurate reporting,” says Bradley, and redesigned its website to better serve investors. In 2017, the report says, the average number of delay days per case dropped by more than 50%.

OBSI still lacks power

OBSI still has no power to make binding awards—in spite of longtime industry pressure to make that happen. In 2016, an independent evaluation of the dispute resolution body included 19 recommendations, one of which was to grant this power.

Read: Are firms responsible for advisor misconduct?

The review argued that binding powers would help OBSI fulfill “the fundamental role of an ombudsman, securing redress for all consumers who have been wronged.”

In its 2017 report, the chair of OBSI’s board, Fernand Bélisle, said that OBSI supports the recommendations.

“While no final decisions have been made, the Canadian Securities Administrators, the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada have publicly stated that they strongly support OBSI as the dispute resolution service for the investment industry in Canada […],” he adds.

The 2016 independent review wasn’t the first to support expansion of OBSI’s powers. In 2014 the OSC’s Investor Advisory Panel (IAP) wrote a letter that said “Ontario investors deserve better” when it comes to independent dispute resolution.

In response to that call, some experts have recommended caution and argued binding powers should be doled out judiciously. Others have taken a wait-and-see approach.

In November 2017, Ontario’s Ministry of Finance discussed plans to expand the powers of the Ontario Securities Commission.

Read:

• Give OBSI enforcement powers, says investor panel
• Pro bono legal clinic backs wronged investors
• OSC’s priorities provide clues to enforcement

Consumer feedback

As part of its complaint-handling process, OBSI sends surveys to consumers once cases are closed and to participating firms once per year.

As expected, OBSI says in its report, “There is a strong correlation between higher satisfaction and receiving compensation.”

For 2017, for which it received feedback that represented about 35% of closed cases, it says 20% of consumers were either very or somewhat satisfied while 80% weren’t.

Of that 80%, respondents said that OBSI offers poor-quality service and that it was unhelpful, but were neutral on whether its complaint-handling process is easy or difficult to follow.

Its one area of strength, for both happy and unhappy consumers, was that the dispute resolution body keeps people informed of the status of their cases.

Also read: What to do when clients break market rules

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.