As tug-of-war brews between government and Big Tech, wealthtech firm CEO and co-founder unpacks the implications
A new Canadian law that will require tech companies to pay for news stories that get shared or distributed on their platforms is raising concerns among wealth firms and advisors.
“This will immediately affect advisors and Canadian wealth firms, whether it’s a bank-owned firm or an independent,” says Kevin Mulhern, CEO of Broadridge's AdvisorStream. AdvisorStream is an automated content-sharing platform that empowers advisors to share relevant third-party news with clients across different online channels.
“We’ve been hearing from hundreds of advisors and their firms across the country … They’re all very concerned.”
A brewing tug-of-war
On June 22, the Liberal government enacted the Online News Act, which seeks to force tech companies like Google and Meta to pay their fair share for news that gets posted on their platforms.
The Online News Act is aimed at helping Canadian news organizations, which are losing vital advertising dollars to large tech platforms like Facebook and Google. Under the act, tech giants must negotiate deals to compensate news companies for stories that get posted or linked on their platforms.
Big tech companies are pushing back. Following the passage of the new law, Meta, Facebook’s parent company, moved to block Canadian Facebook and Instagram users from sharing news links on those platforms. On June 29, Google announced it would block Canadian users from seeing news links on Search, News, and Discover.
The bill is set to take effect in six months. Whether tech platforms will eventually relent and agree to the current framework, or whether the government will relax the legislation to make it more palatable for digital platforms – possibly at the expense of news organizations it’s supposed to help – remains to be seen.
Concern, confusion among Canadians and advisors
The uncertainty swirling around the immediate future of news access has Canadians worried.
In a recent survey by the Angus Reid Institute, 61% of Canadians agreed Big Tech should compensate Canadian news organizations when their content is shared. But 63% also expressed concerns about losing access to Canadian news on Facebook and Google, prompting 48% to call on the government to “back down” in its confrontation with tech firms.
“Often people become aware of things that are important to their family and themselves and their financial lives through Meta and Google,” Mulhern says. “They see the headlines, they read a little bit about the story, and if it applies to them, they’ll go over to the publisher to learn more.”
For many advisors and wealth firms, Mulhern says, the ability to share and link to news content has become a keystone piece of their client engagement and marketing efforts.
“We did some research last year in partnership with Dow Jones, and we found that across age groups – Generation X, Boomers, and even the silent generation – what investors valued most from their advisor is education,” he says. “And frankly, education by advisors today now comes mainly in the form of content.”
According to that same research, 85% of Canadian investors consider news content as very important to their financial decision-making process. While advisors and firms might have their own informational assets to share, Mulhern says readers can trust third-party news content to be more objective and fact-based.
“We know it [the Online News Act] won’t take full effect for some time, but this is something people are grappling with right now all the way up the chain – investors, advisors, right up to the firm level,” Mulhern says.
A challenging opportunity
With the passage of Bill C-18 and the ensuing response from tech firms, Mulhern says investors won’t be able to lean as heavily on Google and Facebook as before for important news. Advisors and wealth firms also see risks from the new legislation, but he says those who look at the situation correctly will have an opportunity to increase their engagement and deepen client relationships.
“We’re already hearing from financial firms across Canada who want to ramp up the news content they’re providing to clients through advisors. But they want to make sure they’re onside … it has to be properly licensed,” Mulhern says.
While headlines around Bill C-18 have revolved around Facebook and Google, Mulhern stresses that it applies to any online platform that carries Canadian news stories. Over the past several months, he’s been getting constant inquiries from banks, broker-dealers, and advisors who want to make sure the vendors of the technologies they’re using to share third-party news are compliant with the new law.
“At AdvisorStream, we’ve been working with major newspapers to license their content for almost 10 years,” he says. “There’s actually an existing mechanism for advisors and firms to license stories directly from major news publishers, but it’s very cumbersome compared to just using a sharing platform.”
The new legislation is also raising concerns for large firms with thousands of advisors across the country. At that scale and scope, it’s difficult for head offices to monitor everyone; one advisor may decide to link their clients directly to a third-party news article, creating a headache for compliance officers.
“You’ve got to really ensure that the tools you’re providing to your advisor force are compliant with the Online News Act,” Mulhern says.
“Firms have a six-month period to ensure the vendor they’re using today is onside or get a new vendor. That’s the good news,” he says. “But it takes time to switch vendors, and it takes time to educate and train advisors on a new tool. So they need to get on this right now.”
