Regulators move to align assessment of investment-management experience with evolving business models
The Canadian Securities Administrators (CSA) have taken steps to facilitate portfolio managers’ use of client relationship management specialists.
In a press release, the CSA noted that many portfolio managers have adopted an operating model under which responsibilities are divided between specialized client relationship managers and stock-picking teams. This can prove problematic considering the CSA’s traditional practice requiring all advising representatives to have expertise in stock picking.
In light of this, the CSA has updated its process for portfolio managers that sponsor individuals for registration as an advising representative. The applicant may now be identified as a client relationship management specialist whose advice to clients will not include stock-picking.
The CSA said it will impose terms and conditions to prohibit client relationship management specialists registered as advising representatives from providing stock-picking advice. It added that such specialists will be required to tell clients about the limits of the advice they’re allowed to dispense.
“These steps ensure our experience requirements for advising representatives are responsive to evolving business models and more closely match the services they provide to clients,” said Louis Morisset, CSA chair and president and CEO of the Autorité des marchés financiers.
Proficiency requirements will not change; the CSA said, noting that client relationship managers registered as advising representatives will face a standard condition requiring them to ensure that clients understand the different roles played by the members of the specialized teams that serve them.
“The CSA will monitor and review the experience of portfolio managers that choose to operate with registered client relationship management specialists,” the regulator said, noting that it could inform further changes that would lead to a permanent formal accommodation for client relationship management specialists.
