Demographics and digital tools fundamentally changing Canadian wealth management landscape, says new report

By The IJ Staff | March 21 2019 11:30AM


Changing investor demographics, digital tools and new industry players are transforming how Canadians consume advice and services, says a new report published by the Investment Industry Regulatory Organization of Canada (IIROC) in collaboration with Accenture.

The report, Enabling the Evolution of Advice in Canada, was commissioned by IIROC, to "better understand how the wealth management industry is evolving to serve investors and how regulation can ensure the health of capital markets and protect investors," says the regulator.

As the industry transforms, stakeholders must continue to work together to adapt across the industry, "from the way firms engage their clients, to how varying types of advice and service models are offered, to how rules are applied and interpreted and how firms are regulated," says IIROC.

Transforming to meet the demands of millennials

The report observes that firms are already in the process of transforming to meet the demands of millennials, "a powerful emerging investor segment." In particular, Millennials are looking for digital wealth management offerings and greater transparency and control over their wealth, says the report.

The research also found that due to the changing investor preferences regarding advice and service, "the industry is shifting from a product-led business to one that focuses on holistic advice, financial planning and related services."

Integrating insurance specialists

Wealth management firms are meeting this demand by offering services such as credit, estate, trust and tax advisory support. "To do this, many firms are integrating banking, insurance and other specialists to improve their overall value proposition," found the IIROC/Accenture report.

"The report provides important insights that will help IIROC become more responsive, adaptable and flexible in supporting industry innovation and investor needs," says Andrew J. Kriegler, IIROC president and CEO, said. "We will work with the investment industry to more efficiently and innovatively offer Canadians greater access to a range of investment advice and services that help them meet their financial goals. IIROC is committed to being a leading-edge national regulator by reducing unnecessary barriers to innovation while preserving investor protection and the health of Canada's capital markets."

As a result of the report findings, IIROC plans to take several steps that include publishing new guidance to clarify the use of e-signatures. The regulator is also looking at the use of technology in the supervision of account opening and expects to publish guidance on this issue in the coming months. IIROC says it is also rethinking the way it develops and communicates regulatory requirements to reduce the possibility of industry misunderstanding or uncertainty.

To learn more, consult the study here.

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