As we welcome 2025, we extend our warmest wishes for a happy and healthy year ahead! In our first newsletter of the year, we reflect on our progress in 2024—from advancing investor rights to shaping critical policy decisions. We’re eager to share some of our priorities to achieve this and foster greater fairness in Canada’s financial landscape. FAIR Canada also expanded its research in 2024 by publishing two critical reports: Understanding Do-It-Yourself (DIY) Account Holders and Focus Groups – Understanding Canadian Investors. Here’s to another year of impactful change and collaboration! | |
2024 Year in Review – Major Milestones and Achievements | |
An Eventful Year for Complaint-Handling and Investor Compensation | |
FAIR Canada was at the forefront of investor advocacy in 2024, especially concerning complaint-handling and investor compensation. Our efforts led to several key developments that will improve financial consumer outcomes.
FAIR, along with a coalition of consumer advocates, has been diligently working for more than two years to convince the federal government to appoint a single external complaint-handling service for all banking complaints. The government listened and, in November 2024, the Ombudsman for Banking Services and Investments (OBSI) became the sole external complaints body for Canadian banking complaints—a significant win for banking customers!
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We also continued to advocate for much-needed improvements in resolving complaints against investment dealers. For years, the OBSI has relied on its “name and shame” powers to encourage firms to comply with its compensation recommendations because it lacks the power to make binding decisions. This approach has proven ineffective, with some firms outright refusing to pay and others offering lowball settlements that leave harmed investors with little recourse.
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The Canadian Securities Administrators (CSA) presented stakeholders with a fair and balanced proposal for a binding complaint-handling resolution mechanism. This proposal will ensure that investors receive fair compensation when the OBSI determines it is warranted, providing more certainty and fairness in the complaint-resolution process. FAIR Canada supported the proposal in a joint submission in collaboration with our growing coalition of consumer advocates.
The proposal is a significant step forward, but its success will depend on each province and territory introducing new legislation. We commended the Government of Saskatchewan for being the first to introduce legislation enabling binding authority for the OBSI by passing Bill 150, The Securities (Saskatchewan Investors Protection) Amendment Act, 2023.
During the year, we also advocated for and supported new frameworks allowing the Canadian Investment Regulatory Organization (CIRO) and the Ontario Securities Commission (OSC) to return money from disgorgement orders directly to harmed investors. Once in place, these measures will help compensate investors for some of their losses caused by their advisor’s or dealer’s misconduct.
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FAIR Canada Research Reveals Fresh Investor Insights | |
Our findings highlighted that many Canadians need help understanding the investing process or navigating the financial services landscape.
As a result, they tend to place their trust in their advisor or in a financial institution. This lack of knowledge and reliance leaves them vulnerable to poor advice and hidden fees.
Our research exposes the pressing need to empower Canadians with better disclosure, clearer titles, and higher-quality advice.
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In October, we released a report on DIY investors, revealing intriguing differences between DIY-only and hybrid investors. Our findings revealed hybrid investors are more inclined to diversify their portfolios, have confidence in their investment decisions, and make higher-risk investments. The research also grouped DIY investors into four distinct profiles that differ in confidence levels, risk tolerance, and other areas.
Our research challenges common assumptions about DIY investors and raises important policy questions, such as how to support informed decision-making on DIY platforms through non-tailored advice.
It also raises questions about whether opening a DIY trading account has become too easy, particularly margin and other accounts that present greater risks to inexperienced investors.
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Reducing Confusion About Job Titles Used in Financial Services | |
Building on our Job Titles Report published in November 2023, FAIR Canada voiced significant concerns with Ontario’s Title Protection Framework, which regulates the use of the “Financial Planner” and “Financial Advisor” titles.
Unfortunately, it creates more confusion about advisor qualifications and makes it impossible for the average investor to understand who they are dealing with.
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We will continue to support efforts that put consumer interests ahead of
those in the industry who call themselves “financial advisors” when, in reality,
they are sales representatives being paid to sell financial products.
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Due partly to our efforts, the Financial Services Regulatory Authority of Ontario (FSRA) is reviewing the framework to see whether it can deliver meaningful consumer protections. We now need FSRA to step up and fix what is widely acknowledged as a significant policy failure.
Notably, despite a few other provincial governments taking initial steps to establish their title protection frameworks, they do not appear eager to base them on Ontario’s model.
We will continue to support efforts that put consumer interests ahead of those in the industry who call themselves “financial advisors” when, in reality, they are sales representatives being paid to sell financial products.
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Supporting Investor Rights to Receive Information From Companies They Own | |
Shareholders are entitled to receive financial statements and management’s discussion and analysis (MD&A) reports from the companies they own. In 2022, the CSA proposed a new delivery model where a public company would issue a press release, and shareholders would then have to retrieve the documents from SEDAR+ or request paper copies. This approach assumed press releases were sufficient notice, despite evidence to the contrary. FAIR Canada and others pushed back on this proposal, citing outdated communications methods and risks to investor engagement. Our advocacy led to significant revisions to the CSA’s proposal to include several key FAIR Canada recommendations:
- A new function on SEDAR+ allowing investors to subscribe and receive email messages with links to company financial documents.
- A requirement for public companies with websites to post their financial statements and MD&A online in addition to SEDAR.
We’ll share a more detailed response in the new year and appreciate the CSA for listening to investors’ concerns!
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In 2025, there will be more progress on binding authority for the OBSI, and FAIR Canada will continue to advocate vigorously for it until it becomes a reality. In November, the CSA announced plans to publish more details about a proposed oversight framework to support binding authority in the latter half of 2025. We also look forward to putting the new CIRO and OSC processes for returning disgorged money to harmed investors into action.
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Establish Guardrails for Using Artificial Intelligence (AI) in Financial Services | |
AI is evolving at an astonishing pace, offering benefits to financial markets but posing risks that could lead to poor investor outcomes. These include concerns about AI-enhanced fraud, gamification, data security, or unsuitable advice based on biased data sets. FAIR Canada will continue to advocate for and support regulatory efforts to develop best practices for using AI responsibly in the financial sector. | |
Focus on Growing Our Public Markets, Not Private Markets | There is growing talk of opening private markets to Canadian retail investors under the guise of democratizing investing. However, there’s little evidence of demand for this. Our research suggests that most are looking for better advice on simple, low-cost liquid products. Private markets lack liquidity and transparency, posing significant risks to retail investors. FAIR Canada will continue to monitor and comment on proposals to expand access to ensure retail investors are protected and informed. | |
OSC and CIRO are investigating aggressive sales tactics at Canadian bank branches, focusing mainly on mutual funds. Since 2017, FAIR Canada has warned that many bank dealing representatives are salespeople pushing financial products to their customers. Even though many call themselves “financial advisors,” they are salespeople trying to meet sales targets.
The joint review aims to uncover how sales pressure conflicts with the claims by banks that they prioritize client interests. It may also highlight a worrisome gap between promised financial advice and sales-driven practices. FAIR Canada will closely monitor updates in 2025 and advocate for changes that benefit investors.
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Board Renewal and Retirements | |
In 2024, we welcomed Ronald (Ron) Smith to our board of directors, bringing extensive accounting, executive and governance experience to our board. He previously served on the CPP Investment Board, chaired the trustee board of Nova Scotia’s public service pension plan, and served on the boards and audit committees of eight Canadian public companies and numerous not-for-profit organizations and private companies. Ron currently serves on the boards of the OBSI and two companies listed on the Toronto Stock Exchange. Welcome Ron!
We also welcomed Soheil Karkhanechi who, was appointed as a board member at our annual general meeting in December. Soheil is an investor, entrepreneur, and lawyer with more than two decades of experience in the investment industry. Currently, he is the managing lawyer at SMK Law, a law firm dedicated to protecting the rights of individual investors. Previously, he co-founded a financial technology firm focused on reducing the cost of financial services. Soheil has also held senior executive roles at leading investment firms in the U.S. and Canada, covering both public and private markets. Welcome Soheil!
In addition, we bid farewell to Wanda Morris and Harvey Naglie, who retired from our board at the end of 2024. Thank you both for your passion, dedication, and significant contributions to FAIR Canada’s mission and success!
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FAIR Canada Welcomed a New Team Member | |
Teresa Pagnutti joined FAIR Canada in 2024 as our public and media relations lead. A senior communications practitioner, Teresa brings experience from top-tier Canadian companies and organizations in the financial services, agency, and not-for-profit sectors. Welcome aboard, Teresa! | |
New Funding in Support of FAIR Canada’s Mission and 2023-2028 Strategic Plan | |
Finally, we were thrilled to announce that we entered into a new six-year funding agreement with the OSC. The latest funding comes from sanctions and settlements in OSC enforcement cases where investors were harmed. It will provide stable funding to support our important work advocating for investor rights. We thank the OSC for their support! | |
Throughout the year, FAIR Canada submits many comment letters on various important policy and regulatory matters that have an impact on investors. Read more about our investor advocacy work. | |
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