Industry should focus on helping clients understand key information

By Susan Yellin | October 25 2018 09:30AM

Regulators and the financial services industry should focus on imparting key pieces of information to clients rather than bombarding them with pages upon pages of information they can’t absorb, a Morningstar forum was told.

Advisors need to have more relevant conversations with their clients about goals and expectations rather than inundate them with information they have no desire to learn, said Susan Silma, a former director of compliance for the Ontario Securities Commission (OSC) and now practice leader at fintech software supplier PureFacts.

Silma said she learned a great deal while she was helping to navigate point of sale legislation and CRM2.

Making hard choices

“What we have to do is get to a place where clients are in a position to understand the implications of the choices they’re making and this does not come by more disclosure,” Silma said. “It actually comes from making hard choices as an industry and regulators together about what those key pieces of information are and presenting it to them in a way that they are capable of understanding at the relevant time.”

Plain language, she said, is all well and good, but dozens of pages of plain language won’t get regulators to where they want to go. 

The forum centred on the Canadian Securities Administrators’ proposed amendments on client-focused reforms to enhance the client-registrant relationship rather than adopting an overarching best interest standard.

New Advocis program

While a number of issues were discussed, Greg Pollock, president and CEO of Advocis, said rather than having more regulations, there should be more trust in the value of advice advisors provide.

To that end, he said Advocis is introducing a professional financial advisor (PFA) program next month that will help advisors understand their compliance obligations and enhance their relationship skills with clients.

“We are trying to move the bar,” said Pollock. “It’s got to take time and we have to work together.”