Inside a year of advocacy at the IIAC

The IIAC isn’t afraid to run headfirst at a brick wall. The Investment Industry Association of Canada, in its role as an advocate and champion for the various facets of the investment industry, has spent 2024 working to make change at government and regulatory bodies. They’ve faced down tax hikes and IPO droughts. They’ve pushed back on SRO changes and fought to make space for innovation. Their work has put them up against major global trends, too, whether that’s in wrestling with the questions raised by generative AI or trying to stimulate a more competitive and productive Canadian economy. The IIAC goes to the heart of things.

Laura Paglia has been leading that work through what she calls “a very busy, extremely productive year for the IIAC.” The organization’s President & CEO explained how her team has tackled these significant topics and why they’ve made such a point of doing this advocacy work. She highlighted the areas where progress has been made and emphasized the centrality of advisors and wealth professionals in her organization’s view of their work.

“What we offer is independent, intelligent advocacy. We’d like to offer that in content and process from financial markets and we see that as an absolute necessity,” Paglia says. “Not for profit associations aren’t generally known for being innovation hubs. They can be weighed down by legacy systems, by culture, by a resistance to change, by a keenness to keep the status quo for the organization. All of that, results in inertia and myopic views. There’s the proverb that the best time to plant a tree was 20 years ago, the second-best time is now.”

On a strategic level Paglia believes that organizations like hers can become innovators by adopting a strategic mindset, a high level of critical thinking, and a relentless focus on the future. Achieving those results requites diversity of input, too. She believes that as the IIAC adds greater intellectual and demographic diversity it adds new perspectives, the ability to innovate, and accountability brought by those different perspectives. She believes the work the IIAC has done this year speaks to their role as innovative advocates.

That work is a long and exhaustive list. From AI and the push for tech-neutral regulations, to the move from green bonds to blue bonds, to advocacy in the anti-money laundering space ensuring cost controls within new supervisory expectations, the IIAC has been tackling this year’s major trends.

They’ve worked to develop solutions for capital markets improvement, notably a push to increase the number of IPOs on Canadian public markets. While Paglia accepts that the source of an IPO is the inherent competitiveness and innovation in an economy, she believes that capital markets regulators can do more to get ideas and innovations from that start-up stage to IPO within Canada.

Part of achieving that goal of more IPOs, Paglia notes, involves working to make Canada a more attractive place to start and grow a business. Taxation is a key consideration because it incentivizes behaviour, Paglia explains. Recent changes in the tax regime may have worked against the goal of creating a more competitive economy where more businesspeople want to stay.

Paglia drives home the work the IIAC has done for and about advisors. She has pushed for CIRO to lower some of the barriers to starting a career as an advisor. The IIAC has recommended that CIRO remove its mandatory prep courses to allow career changes with relevant experience and knowledge to more easily take their certification exams.

In dispute resolution cases the IIAC has expressed numerous fairness concerns. Paglia expects that advisors will face client complaints from time to time, but wants the resulting process to be “fair to all parties.” In a similar vein they have pushed back against CIRO’s proposed doubling of fines and penalties, while recommending that the fines and penalties paid go back to the direct benefit of investors.

Paglia has also been paying special attention to the progress towards advisor incorporation. Every vote for a merged IIROC and MFDA, she says, was a vote for advisor incorporation. Her team has looked closely at the legislation with a view to making small tweaks and improvements without over legislating this new process. She hopes the end result will strike a balance between simplicity and an optimal outcome for advisors and investors.

The breadth and depth of the IIAC’s work is considerable, the challenges they’ve taken on may sometimes seem insurmountable. Paglia, though, is unflagging in her commitment to the organization’s work. She says that advisors can expect the IIAC to keep advocating for them and for the investment industry as a whole on a wide range of fronts and issues.

“We're focused on sound reasoning and good decision making. So we proceed with purpose. We are not interested in superficial observations. We are interested in proper research and attention to detail,” Paglia says. “So what you will see coming from us is well thought out recommendations that grow very healthy, very competitive financial markets for the benefit of Canadians.”