: Manulife - Submission

June 17, 2016

Expert Committee to Consider Financial Advisory and
Financial Planning Policy Alternatives
cjo Frost Building North, Room 458
4th Floor, 95 Grosvenor Street
Toronto, Ontario

Expert Committee:

I am writing to provide comments on the Preliminary Policy Recommendations of the Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives.

Serving one in five Canadians, Manulife is a leading financial services organization offering a wide range of protection, estate planning, investment, and banking solutions through a diversified multi-channel distribution network. Manulife Securities, consisting of the IIROC regulated Manulife Securities Incorporated, the MFDA regulated Manulife Securities Investment Services Inc., and Manulife Securities Insurance Inc., which is regulated by FSCO in the province of Ontario, are wholly owned subsidiaries of the Manufacturers Life Insurance Company (Manulife).

Manulife Securities advisors and life agents provide Ontario's consumers with access to stocks, bonds, mutual funds, and other investment products as well as a suite of insurance solutions.

Financial advisors play an important role in helping Ontarians grow and protect their finances. Independent studies continue to show that individuals who work with an advisor over time benefit from more savings, more confidence in their investment decisions and a more disciplined approach to their savings behavior. Advisors are also excellent leaders in the promotion of financial literacy among their clients, especially in smaller communities.

We are pleased to note that a number of your recommendations reflect the representations in our September 2015 response to the Expert Committee. I will limit the comments in this response to the specific recommendations raised in the preliminary report.

Regulation of Financial Planning in Ontario

Utilizing the existing regulatory regime to address any potential gaps with the regulation of financial planning, as recommended by the Expert Committee in their preliminary report, will allow Ontario's policymakers to leverage a well-functioning regulatory framework and avoid the costly duplication of regulation.

Definition of Financial Planning

The definitions of "financial planning" and "financial products and advice" as proposed in the Expert Committee's preliminary report are too broad.

It is important that the Expert Committee provide clear, distinct, and rigorous definitions for "financial planning" and "financial products and advice" and moreover that these terms be well-understood by consumers across Canada.

Harmonization of Standards

We are generally supportive of the approach being put forth by the Expert Committee to harmonize the education, training, credentialing and licensing of individuals engaged in the provision of financial planning, across distribution channels. We would further recommend that Ontario work together with their provincial and territorial counterparts to develop a harmonized, national series of rules to govern financial planning and ensure consistent outcomes for consumers.

Titles and Holding Out

Consumers are best served when they clearly understand who they are working with and are confident in the advice and services they receive. We agree with the Expert Committee's recommendation of developing an approved list of titles and designations for financial advisors and financial planners.

If any such list were to be developed, we would encourage Ontario to consult with their provincial and territorial counterparts to ensure that it is nationally harmonized and appreciates the diverse expertise and services of advisors and planners.

In our September 2015 submission we recommended an approach to differentiate titles by the types of products and services that the advisor or planner is licensed to sell and provide, and account for financial planners that do not hold a FSCO/MFDA/IIROC license. We would encourage the expert committee to continue to consider this approach.

Best Interest Standard

We note that the Canadian Securities Administrators (CSA) has recently released Consultation Paper 33-403: Proposals to Enhance the Obligations of Advisers, Dealers, and Representatives toward their Clients.

While we are appreciative of the efforts of the Expert Committee to review the merits of a statutory best interest standard, we will defer our comments on this topic to the CSA's Consultation Paper. We would also recommend that the Expert Committee ultimately adopt an approach that is consistent with the results of the CSA Consultation.

Thank you for the opportunity to provide the Expert Committee with our feedback to these preliminary recommendations. We would be happy to provide further information upon request and answer any questions that you may have.


Rick Annaert President and CEO, Manulife Securities
Senior Vice-President, Advisory Services, Manulife Financial

cc: Expert Advisory Panel - FSCO I FST I DICO Mandate Reviews
Hon. Charles Sousa, Minister of Finance