The Canadian Association of Retired Persons (CARP) is providing strong recommendations to the Ontario Capital Markets Modernization Taskforce to better protect at-risk older investors ahead of proposed reforms.
Established in February 2020, the mandate of the task force and its five members is to guide the transformation of the regulatory landscape for capital markets and report directly to the finance minister on how to best protect Ontario investors.
Significant implications to investors all across the country
While the current focus of the work is on Ontario, there are significant implications to investors across Canada. The majority of financial institutions in the capital market sector are registered in Ontario, so any reforms will have a ripple effect across provincial and territorial lines, CARP said in a statement.
CARP’s recommendations on behalf of its 150,000 members in Ontario include:
binding arbitration powers and a higher compensation limit for the Ombudsman for Banking Services and Investments (OBSI);
compensation to harmed investors be made a top priority;
access to more mutual funds and savings-type investments through bank-owned discount brokers, and
targeted electronic notifications to ensure seniors do not miss key documents concerning their investments.
Seniors ‘routinely victimized’
“Seniors in Ontario are routinely victimized by their financial service providers and unfairly pay the price at a time when they rely on their investments to sustain their retirement,” said Bill VanGorder, CARP’s chief policy officer. “High fees, sub-optimal advice and an unwieldy complaints system put all older investors at serious risk.”
CARP supports the work of OBSI, but said few seniors use its services to seek compensation for wrongful losses. In 2019, for example, the Australian and United Kingdom Ombuds offices handled 138 and 77 investment complaints per million citizens respectively, with Ontario at 11 cases per million.
CARP believes that investor protection should be the main focus of capital markets regulation and that any proposed changes should be made through an “investor-friendly lens.”