Alberta has passed legislation that allows financial advisors who sell mutual funds and securities to have commissions paid to their own incorporated companies.

On Dec. 17, Alberta’s Bill 5, An Act to Amend the Securities Act, 2014 received Royal Assent and is now in force. The new law makes it possible for financial advisors to establish and have compensation paid directly to registered professional corporations (RPC), while at the same time making it clear that the individual advisor will remain subject to provincial securities laws, dealer supervision, and requirements laid out by self-regulatory organisations. The legislation also stipulates that an RPC's articles of incorporation must restrict its business to acting as a dealer or advisor.

In a recent regulatory bulletin, Advocis praised the changes, saying that Alberta's new law allows individual advisors to choose what business structure works best for them. Advocis also suggested that the move signals a further levelling of the playing field in financial services.

"Alberta advisors will have a simple yet efficient means of incorporating, one which will provide a number of tax and business planning benefits while still maintaining current levels of investor protection," said Advocis.