Henri-Paul Rousseau says a ban on embedded sales commissions would mean less choice for consumers

By The IJ Staff | July 27 2017 01:30PM

Photo: Freepik

The University of Calgary’s School of Public Policy and author Henri-Paul Rousseau released a report July 27 that says a ban on embedded sales commissions could have serious ramifications for Canadians’ access to financial advice.

“A ban on embedded sales commissions would mean less choice in the market for a service that needs to be competitive and innovative to serve the broad spectrum of clients’ circumstances, risk appetites and needs. In addition, smaller and independent product manufacturers and distributors would be squeezed out, creating a market concentration in the hands of the bigger financial advice players. If the goal is to make financial advice widely accessible, then it is critical that policy makers seriously consider all the implications of a ban on embedded commissions,” warns Rousseau, who is Vice-Chairman of Power Corporation of Canada and of Power Financial Corporation.


The report includes the following policy recommendations for regulators: policies are needed that “both increase financial literacy, and ensure and improve wide access to financial advice; continue current policy efforts by provincial governments to require higher proficiency standards for financial advisors and ensure that policy-makers not lose sight of the need to ensure better access for all Canadians to a competitive and innovative market for the distribution of financial products.”

Rousseau concludes that such access is “a necessary condition for the long-term level of savings and for the retirement readiness of Canadian households.”

To learn more, the report can be found online here.