: Larry Elford - Submission June 29

Thank you so much for the work you are doing to help protect and serve Canadians, and thank your for the simple, direct questions, which I must say are so much easier and simple to respond to.  This will save so much writing of presentations, and reading by your committee.  I appreciate this opportunity to reply.  I insert my point of view in RED beneath each good question:

  1. What activities are within the scope of financial planning? Is the provision of financial advice different from financial planning? If so, please explain the distinction. In my view, it comes down to two vastly different activities.  One is the giving of advice or investment guidance, and the other is the selling of investment products.  Giving advice is NOT selling, and sales is NOT advice.  But the industry has blended to two together so that an average consumer cannot determine what is being promised or offered, as compared to what is being delivered.  Financial planning can also be used as a "blending term" so that the average consumer has no idea what is being offered.   The actual elements which such industry terms conceal, rather than reveal to the public are rather simple, and can be described by me in this article (found here  http://www.investoradvocates.ca/viewtopic.php) titled Four secrets your financial "advisor", dealer or regulator will not share 
  2. Is the current regulatory scheme governing those who engage in financial planning and/or the giving of financial advice adequate? In my opinion, it will remain a potential (and practical) harm to Canadians, of approximately one billion dollars per week ( Columbia University, and U of Toronto studies and some personal experience I am happy to share) until the great systemic mechanisms (see link in #1 above) inside the investment industry are brought into the light of day.
  3. What legal standard(s) should govern conflicts of interest and potential conflicts of interest that may arise in financial planning and the giving of financial advice? "Fiduciary" is a few hundred year old legal standard, but one which the industry merely "pretends" to deliver in all its advertising, while actually fighting tooth, nail and lawyer to avoid when called into complaint.  These and other standards of "fairness, honesty and good faith", are faily simple, however the impression of regulatory "capture" which disallows these standards to be clearly explained to consumers, and clearly enforced by regulators renders them to mere words and not deed of the industry.  It is sad to witness the entire credibility of the Candian financial industry being slowly (or quickly) unravelled and it is unkown if it will recover the lost trust, in my lifetime.  ("Suitability" as it now is used, is a license to financially abuse investors, as my 20 years in the industry proved to me again and again,  and yet, again, regulators are acting as if these distinctions need not be explained, nor investors protected from the huge gap/differences between suitability and fiduciary.)
  4. To what extent, if at all, should the activities of those who engage in financial planning and/or giving financial advice be further regulated? Please consider the following in your response:
    1. Licensing and registration requirements; approx 1/4 million stock, mutual fund and insurance salespeople, MIS-represent their true licnense and registration category when seeking to gain customer's trust) This is a violation of every securities act known to me (eg section 100 of the ASC) and yet I no of not one Canadian regulator who enforces this (or informs consumers) of this grand deception) http://www.investoradvocates.ca/viewtopic.php
    2. Education, training and ethical responsibilities;
    3. Titles and designations of individuals who engage in financial planning and/or the giving of financial advice; (see #1 above)  I know of one case filed recently in Calgary court where a major Canadian bank is charged (civil) with fraud for the misrepresentation of its "advisors" and more will no doubt come, at the expense of the reputation and credibility of not only the firms involved, but the regulators who turn a blind eye.
    4. Specific activities that should be included or excluded in a regulatory scheme; (included should be a stronger mandate on protection of the public, and a lesser mandate on protection of billion dollar industry players.  As it stands there is a vast imbalance and an assymetry of information/strength/power which is, in my view an abuse of market dominance of overlty strong financial players in Canada, sleeping regulators, and weak, trusting and vulnerable Canadians)
    5. Costs and other burdens of regulation;
    6. Regulation of compensation; and
    7. Complaints and discipline mechanisms.
  5. What harm(s) and/or benefit(s) do consumers experience in the current environment? Please provide specific evidence to support your views where available. It is my own view, based upon personal experience, well documented Canadian examples and about 20 years of taking notes and examples into this web site, and Financial Cheating, Shortchanging and abusing of Canadians, BY investment industry professionals is a greater financial harm to Canada than is the cost of every other crime in the country‚Ķ.combined  http://www.investoradvocates.ca/viewtopic.php?f=1&t=177  I can come up with rough napkin examples to justify this statement on the fingers of one hand, rather easily, using credible stats and industry sales and other figures.
  6. Should consumers have access to a central registry of information regarding individuals and entities that engage in financial planning and the giving of financial advice including their complaint or discipline history?

During the back and forth between like-minded thinkers, some of them made these comments:

  • I think the real matter is fiduciary.All else matters little if the industry is not held responsible and accountable. Various issues including fees are arguable and will be argued until the cows come home. Fiduciary responsibility for retirement savings should not be an arguable issue IMO.


  • Important for us to accurately define the current state of affairs, 
  • cite applicable research supporting Best interests 
  • describe how we think regulation of fin planners would work in practice given that fin institutions have an over ride on " advisor" conduct. 
  • Another issue is that the three vertical chimneys banking ,insurance and securities all are regulated separately.


  • Here is a very good one FAIR sent in Feb 2014 that hits on many of the above issues could we model something similar without reinventing the wheel?


Again, I thank this committee for trying to be part of the solution rather than the problem, and for the simple, easy to follow manner in which these questions unfolded for comment.

I hope my comments are helpful, I hope they will be published on the OSC site to benefit others, even those who may disagree with my poijnt of view, and I look forward to your solutions.

Best Regards

Larry Elford