Association makes strong recommendations to capital markets taskforce and warns risks are unfair to elderly
Seniors are “routinely victimized” by financial service providers and more must be done to shield them from these risks.
That’s the stark message from CARP (Canadian Association of Retired Persons), which has provided recommendations to the Ontario Capital Markets Modernization Taskforce (OCMMT) to better protect at-risk older investors ahead of proposed reforms.
The taskforce reports to the Finance Minister and is mandated to guide the transformation of the regulatory landscape for capital markets. CARP believes that while the current focus is on Ontario, this is where the majority of financial institutions are registered, so any reforms will have an effect across the country.
Also, the Ontario government is currently establishing a cooperative capital markets regulator, in collaboration with the federal government and the governments of British Columbia, Saskatchewan, New Brunswick, Nova Scotia, Prince Edward Island and Yukon.
Bill VanGorder, CARP’s chief policy offer, said: “Seniors in Ontario are routinely victimized by their financial service providers and unfairly pay the price at a time when they rely on their investments to sustain their retirement. High fees, sub-optimal advice and an unwieldy complaints system put all older investors at serious risk.”
He added that while CARP supports the work of the OBSI, its visibility problem results in too few seniors utilizing their services to seek compensation for wrongful losses. This compares poorly to other countries. For example, in 2019, the Australian and United Kingdom Ombuds offices handled 138 and 77 investment complaints per million citizens respectively, with Ontario lagging behind at just 11 cases per million.
“In order for Canadian investors to be adequately protected, claims to OBSI need to increase significantly,” warned VanGorder. “Older adults need to be made aware that the OBSI is there to help when they need it. That will require far better disclosure of their services than its member firms are currently providing”.
CARP’s recommendations to the taskforce include:
- binding arbitration powers and a higher compensation limit for the Ombudsman for Banking Services and Investments (OBSI);
- compensation to harmed investors be made a top priority;
- access to more mutual funds and savings-type investments through bank-owned discount brokers, and;
- targeted electronic notifications to ensure seniors do not miss key documents concerning their investments.
CARP believes that investor protection should be the “lynchpin of capital markets regulation and that any proposed changes should be made through an ‘investor-friendly lens’, putting the needs of the average Ontarian before those of the financial firms and advisors who stand to profit from their losses”.
