Why Canada doesn’t know ‘best’: Global standard for advisers leaves the country behind

, International

The path to higher standards for advisers has not been without conflict in other countries that don’t have to contend with changing securities regulation like Canada's.

Countries from the United States to Australia have embraced the idea that a “best intereststandard is the right way to go when it comes reducing conflicts of interest in the relationship between a financial adviser and client. But, in Canada, the fractured regulatory system appears to be making it tough to get there.

The Canadian Securities Administrators, the umbrella group for the country’s 13 provincial and territorial securities commissions, is unveiling a new consultation paper Thursday that is expected to contain proposals to “enhance the obligations of advisers, dealers and representatives toward their clients.” But industry sources suggest it will not contain a single unified vision for rolling out the best interest standard, which requires that the client’s interests be put at the forefront of all investment decisions.

“I don’t think there’s a commonly held view on the client best interest standard across all the commissions,” Ian Russell, chief executive of the Investment Industry Association of Canada, told the Financial Post on Wednesday, a day before the consultation paper was to be released.

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