Survey: Canadian Small Business Owners Concerned About Changes to the Bank Act

76% Say Keep Protections in Place

April 27, 2006, Toront, ON – According to a POLLARA Inc. survey released by Advocis, three-quarters (76 per cent) of small business owners say that existing measures to protect consumers should be kept in place due to privacy of their personal information and sales pressure concerns. This finding suggests that small business owners believe that the privacy of their health and medical history is more important than having greater access to information about life and health insurance services provided by banks.

Currently, the Bank Act prohibits banks from marketing or selling life or health insurance in their branches due to concerns about consumer privacy and tied selling. Recent proposals from the banks would jeopardize these protections. Publicly the banks say they merely want to inform consumers.

�The issue isn�t brochures,� said Gary McLeod, Advocis chair. �The issue is fundamentally about privacy and whether intimate personal information should be traded, shared or used to get more business. What the banks are calling for is more access to personal information to market more of their products.�

�Concerns about privacy require that banking and personal information always be kept separate and apart,� said McLeod. �To allow banking and health and medical information to come together – under any circumstances � is an intolerable threat to consumer privacy.�

In fact, two-thirds (65 per cent) of small business owners are concerned about whether the personal health information in their insurance application would be kept separate from their business banking information, such as a loan application. The insurance application process necessarily involves asking very personal health questions such as whether the applicant has had cancer, suffers from depression, or has been treated for an STD.

�Consumers don�t want their bank to have access to this kind of information, share it, or potentially use it to make decisions about loans or credit applications,� said McLeod.

The results of the Advocis/POLLARA Small Business Survey are no surprise to the Canadian Federation of Independent Business (CFIB), an association representing 105,000 business-owners across Canada.

�Small businesses are leery of banks expanding their powers, having access to and use of personal information, and the linkage of that information to loans,� said Garth Whyte, executive vice-president of the CFIB. �Small businesses are fearful of tied selling and think that banks have enough power already.�

Without the current protections in place, small businesses and their owners may be vulnerable to aggressive sales pressure from banks that are able to access both their health and financial information. Alarmingly, one in five small business owners (18 per cent) whose businesses have been approved for a bank loan, commercial mortgage, business lease or business line of credit over the past 7 years have felt at least some pressure by their bank to give them more of their business.

�The pressure felt by consumers to give their bank more business will be much stronger if the bank holds the consumer�s personal medical history,� says McLeod, �Existing consumer protections make sense. They strike the right balance between protecting the consumer�s privacy while allowing the banks to sell insurance through subsidiaries. We think that�s fair.�

Survey is available at:

Advocis, working with POLLARA Inc., conducted a survey involving 503 Canadian small business owners, between January 23 and January 30, 2006. The randomly selected representative sample of 503 Canadian small business owners (e.g. business owners of companies with fewer than 50 employees) was interviewed by telephone A sample of this size yields results with a margin of error of +/- 4.5 percentage points, 19 times out of 20, of what they would have been had the entire population of Canadian small business owners been polled. Results were weighted to be representative of the number of small businesses by size of business (calculated by number of employees) and region. Segmented findings have a larger margin of error and should be interpreted with caution.

About Advocis

Advocis, The Financial Advisors Association of Canada, is the oldest and largest voluntary professional membership association of financial advisors. With more than 12,000 advisors in 49 chapters across Canada, Advocis members provide financial and product advice to millions of Canadians across a variety of distinct areas, including: estate and retirement planning, wealth management, risk management and tax planning. Members adhere to a strict Code of Professional Conduct, subscribe to standards of best practice, meet ongoing continuing education requirements, maintain appropriate levels of professional liability insurance and are committed to putting their client interests first. The Association�s website is