Advocis: IIROC’s proposed regulation of financial planners ill-conceived

September 8, 2008, Toronto – Advocis, The Financial Advisors Association of Canada, today released its response to the Investment Industry Regulatory Organization of Canada�s (IIROC) proposal that would define financial planning and establish requirements for the provision of financial planning services.

Advocis highlighted a number of concerns with the proposals in its submission. The most troubling aspect of the proposals is that they will change the nature of the relationships between dealers, planners and their clients by now requiring dealers to supervise planners. Currently, most Advocis members who work with IIROC dealer members have a principal-agency relationship. However, when an Advocis member offers financial planning services to the client of a dealer, the relationship is between the financial planner and the client and does not involve the dealer member. As well, the services provided by the financial planner may be unrelated to the dealer�s business. So, the relationship between the dealer and planner, as well as the scope of the dealer�s involvement in the planner�s activity, could change if these proposals go forward.

Advocis also identified potential conflicts of interest. “Since IIROC dealer members will be responsible for supervising financial planning activities, it is not unreasonable to assume that they will have considerable influence over the financial planning activities and the choices of financial products that financial planners recommend to clients,” said Steve Howard, President and CEO of Advocis.

“This is regulation for the sake of regulation,” added Mr. Howard. “There is no indication that this is being done for the sake of the consumer who is being, or has been, aggrieved by financial planners. IIROC really needs to take this one back to the drawing board.”

Advocis, The Financial Advisors Association of Canada, is the oldest and largest voluntary professional membership association of financial advisors and planners. With more than 10,000 advisors and planners in 43 chapters across Canada, Advocis members provide financial and product advice to millions of Canadians in a number of areas including, estate and retirement planning, wealth management, risk management and tax planning. For more information about Advocis or to view the complete submission to IIROC, please visit