May 2025

This month, we showcase our new advocacy and public awareness campaign: Harmed Investors Deserve Better. We also break down how financial advisors earn income through chargeback commissions and look at the growing recognition that we need to raise standards for financial advisors. As a bonus, we have some handy resources for Canadian investors to help navigate through these uncertain times. Keep reading to learn more.

Join Our Campaign – Harmed Investors Deserve Better

FAIR Canada and a coalition of consumer advocates launched Harmed Investors Deserve Better, a new advocacy and public awareness campaign to establish a fairer way to deal with investor complaints. To kick it off, we published an open letter urging the Canadian Securities Administrators (CSA) to stand firm and resist industry pressure to weaken their proposal to enable Canada’s Ombudsman for Banking Services and Investments (OBSI) to issue binding decisions involving investor complaints. If the industry succeeds in watering down the proposed framework, it could reintroduce the unfairness that the CSA’s proposal is designed to fix. We can’t let that happen.

See our explainer and news release.

Share our launch social media post using the hashtag #FairCompensationNow. Thank you! 

How Advisor Chargeback Commissions Can Hurt You

Have you ever heard of “advisor chargebacks”? If not, you’re not alone. FAIR Canada recently undertook important advocacy work related to chargeback commissions, and we’re here to help educate you about how they can affect the financial advice you receive. 

What Are Advisor Chargebacks?

Let’s break it down: Imagine your advisor recommends a segregated fund (also known as an individual variable insurance contract or IVIC). The advisor earns a commission from the insurer. But there’s a catch—if you sell the fund before a specified period (e.g., within four years), your advisor must return part of his or her commission to the insurer. The repayment is known as a chargeback, and it creates two significant conflicts of interest: 

At the time of the sale: The advisor may steer you toward a product with chargebacks that pays them a higher commission—even if a cheaper option would better meet your needs. As a result, you could end up paying more for an investment that may not best fit your financial goals.

During the chargeback period: If you decide you need to sell early (e.g., within the four-year period), your advisor may have a financial incentive to convince you not to sell—because they’d have to repay a part of their commission—even if selling is best for you. This would put your interests in direct conflict with your advisor’s interests. 

These conflicts can influence your advisor’s advice and lead to poor outcomes for you. FAIR Canada strongly supports banning chargebacks. Recently, we’ve sent comment letters to both insurance and securities regulators, urging them to do more to protect investors from products sold with a chargeback commission structure.

Want to learn more? These resources are a great place to start:

British Columbia Securities Commission, Invest Right:

Take a Look at Your Investment Fees – Fees Matter and Here’s Why

Canadian Investment Regulatory Organization:

Selecting an Advisor – The importance of knowing how your advisor is compensated

Title Protection Shake-Up: Are Higher Standards on the Way?

Recent reports show that our advocacy efforts to improve the standards for those who can call themselves “financial advisors” are gaining momentum.

Specifically, some regulators and industry certification bodies in Ontario are openly discussing raising proficiency and competency standards for financial advisors, and enhancing conduct standards and disciplinary oversight.



Protecting Investors by Raising Competency Standards

The primary goal of title protection regulation should be to protect investors and consumers. The new CEO of Advocis seems to agree, recently stating that competency requirements for financial advisors should more closely align with those for financial planners. We agree and have consistently advocated for higher competency standards for financial advisors in Ontario.

Raising competency standards for financial advisors will help protect investors by ensuring they receive comprehensive, reliable advice from qualified advisors.

We have never believed that obtaining a license to sell a single type of financial product is sufficient for someone to call themselves a financial advisor. Nor do we think such a minimal standard aligns with consumer expectations.

FAIR Canada’s research supports the need to raise proficiency requirements. We surveyed Canadians outside Quebec (where the use of the title “financial advisor” is legally restricted) to better understand their expectations of financial advisors. Here’s what we found:

Raising competency standards for financial advisors will help protect investors by ensuring they receive comprehensive, reliable advice from qualified advisors.

Protecting Investors Through Stronger Oversight

Higher competency standards alone are not enough to protect investors. Financial advisors who harm their clients must be held accountable through stronger oversight and disciplinary measures. We also surveyed the same participants about how titles, such as financial advisor, should be regulated. We asked them to choose between two options:

• Basic standards: requiring a financial advisor to remain in good standing with an industry credentialing body.

• Stricter standards: requiring every financial advisor to be directly supervised by a financial sector regulator.

Respondents favoured direct regulatory supervision of financial advisors by more than a four-to-one margin. This finding supports the case for Ontario to adopt a model similar to Quebec’s, in which a regulator directly oversees every financial advisor, rather than a credentialing body.

This kind of reform would be a much-needed and long-awaited improvement to Ontario’s title protection framework.

Staying Grounded in Uncertain Times

Navigating the investment landscape is never simple. And in today’s climate of global conflicts and a growing global trade war, the increasing market volatility can make investing feel even more overwhelming. You’re not alone in wondering what all this means for your investments, or how best to navigate the current uncertainty.

While no one can predict the markets, there are ways to protect your investments and strengthen long-term strategies for the future.

Being informed and prepared can make a real difference!

Here are five practical tips and some trusted resources to help you stay calm and confident, even in volatile markets.

1. Know Your Rights—And Your Appetite for Risk

Did you know that you have the right to be treated fairly, honestly and in good faith by investment firms and advisors? You also have the right to expect your advisor to provide investment recommendations suitable to your personal and financial circumstances, needs, objectives, risk tolerance and appetite, and investment time horizon.

Understanding your legal rights is a great way to empower yourself and feel more confident when investing.   

Investor Rights at FAIR Canada

2. Diversify and Rebalance

There’s an expression: Don’t put all your eggs in one basket. Spreading your investments across different sectors, geographic areas, risk levels, time horizons and asset classes—known as diversification—can help soften the blow if one area takes a hit. Consider how you could diversify your investments. Many organizations provide free online tools and educational resources to help you regularly review and rebalance your portfolios. 

InvestRight.org

3. Know Who You Are Dealing With

Know who you are dealing with to ensure they are appropriately licensed and registered. For investment-related advice, make sure you are working with a firm and individual registered with a provincial securities regulator. Ask questions to understand what services and financial products they can recommend, the costs associated with your account, and how often they will review your investments with you.

CSA, National Registration Search

4. Stay Calm and Stay the Course

It’s easy to feel overwhelmed by news headlines. Stay informed through reliable, non-biased sources, and try not to make decisions based on emotions. Investing is for the long-term—reacting to short-term market dips can cause you more harm than good. 

Get Smarter About Money

5. Know Where to Go for Help if You Have a Complaint

If you have a dispute with your bank or investment firm, start by using their internal complaint process. If that doesn’t work, you can escalate it to OBSI. However, be mindful that firms and OBSI will not compensate you for losses due to market volatility or a period of market decline. 

OBSI – FAQs

Market uncertainty is a normal part of investing. By staying informed, knowing your rights, diversifying your investments, and working with a qualified advisor, you can make more confident financial decisions and stay on track toward your goals.

Board Retirement

Last month, we bid farewell to Larry Bates, who retired from our Board of Directors after many years of service. Thank you, Larry, for your commitment, zeal, and significant contributions to FAIR Canada’s mission and success.

FREE Workshops: Boost Your Money Smarts at the Library

Want to feel more confident about your finances but you’re not sure where to start? Your local library can help! The Canadian Investment Regulatory Organization offers free financial literacy workshops at Toronto Public Library branches across the city.

Workshop topics include:

• Investing Basics
• A Newcomers Guide to Investing
• Youth Guide to Finance and Investing
• Retirement Planning and Living

Workshops run through the end of the year and are open to everyone.

Visit your local branch or check the library’s website for dates and details. Don’t miss this chance to take control of your financial future! The next session on Investing Basics is on August 27. Other sessions on various topics will be held between June and November. Learn more here.

Throughout the year, FAIR Canada (Canadian Foundation for the Advancement of Investor Rights) submits many comment letters on various important policy and regulatory matters that have an impact on investors. Read more about our investor advocacy work.

We’d Love to Hear From You!

Do you have feedback on our newsletter or suggestions for topics you’d like us to write about? Your input is valuable and will help us improve our newsletter content for loyal subscribers like you. Please email us at info@faircanada.ca with your comments and/or suggestions.

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To learn more about our advocacy for investors, visit FAIRCanada.ca