: Sun Life Financial - Submission

June 15, 2016

Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives
c/o Frost Building North, Room 458
4th Floor, 95 Grosvenor Street
Toronto, Ontario
M7A 1Z1

Expert Committee:

Thank you for the opportunity to provide comments on the Preliminary Policy Recommendations of the Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives (the "Consultation Paper"). Our comments complement the submissions made by the Canadian Life and Health Insurance Association (CLHIA) and the Investment Funds Institute of Canada (IFIC).

Regulation of Financial Planners

As stated in our letter dated September 21, 2015 in response to the Initial Consultation Document, we support the initiative to regulate financial planners in Ontario. We believe this regulation will increase consumer protection and enhance public confidence in the financial services industry.

We agree that individuals who hold themselves out as financial planners should be regulated and recommend that holding out be the basis of that regulation instead of attempting to define financial planning and then regulating those who engage in it. The proposed definition of financial planning in the Consultation Paper is too broad and may create confusion and overlap with the normal needs analysis and "know your client" activities of life insurance and mutual fund representatives who do not hold themselves out as financial planners. Quebec has successfully regulated financial planners for many years using a holding out test.

We agree that harmonized standards should be used for the regulation of financial planners. We support the Expert Committee's proposal that licensed insurance agents and mutual fund representatives who hold themselves out as financial planners should continue to be regulated by their existing regulatory bodies.

Statutory Best Interest Duty

The Consultation Paper recommends a statutory best interest duty for financial advisors and financial planners. The Canadian Securities Administrators (the "CSA") are currently consulting on this matter. In its Consultation Paper 33-404 Proposals to Enhance the Obligations of Advisors, Dealers and Representatives Toward Their Clients, the CSA notes that there is no consensus among securities regulators on the value to the consumer of a statutory best interest standard. We share the view of several members of the CSA that specific targeted reforms will be more effective in providing consumer protection.

In the context of regulating financial advice and financial planners, we believe that specific targeted reforms are the most appropriate way to effectively protect consumers. Specific targeted reforms can address areas of concern, while avoiding a negative impact on access to financial advice and other unintended consequences. Pursuing a contentious issue such as a best interest duty standard may unnecessarily delay the important work of implementing a regulatory regime for financial planners.

Referral Arrangements

The Consultation Paper recommends that both parties in a referral arrangement be licensed and comply with a best interest duty standard. We believe this recommendation is too restrictive and may prevent consumers from being connected with an advisor or financial planner. We see no reason to prohibit referrals where the referrer is not engaging in a regulated activity. Existing requirements for disclosure such as those in National Instrument 31-103 and MFDA Rule 2.4.2 are appropriate and working well.

Thank you for the opportunity to express our views on the Consultation Paper. We would be pleased to provide further information or answer any questions you may have.


Rocco Taglioni Senior
Head of Distribution