The Investment Industry Association of Canada (IIAC) says a household centric approach should be made available to clients and firms who wish to participate, recognizing that “investors are looking for an approach that considers their households which involve multiple financial goals,” they state in a summary of correspondence between the IIAC and the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO).
Household centric approach
“A flexible, holistic client and household centric, as opposed to an account centric, approach is needed. Greater efforts are required to close the gap between current regulatory expectations and investor needs, which include tax, family and succession planning,” they add. “Householding methodologies may vary. A reasonable process should be determined by the firm and explained to clients who may wish to participate.”
They say many investors want financial goals considered for their households. “An investor should have the option of choosing to be part of a household or maintaining accounts separately from the household and instructing their firm accordingly,” the submission to the OSC and CIRO states.
Currently, accounts cannot be grouped, even if the beneficial owner is the same and grouping of the accounts is at the beneficial owner’s request. “Any accounts that are grouped are required to have essentially identical investment needs and objectives, time horizons and risk profile for all the accounts. Where applied, the above are overly restrictive,” they state. The report also includes an appendix discussing different methodologies for householding.
“Financial decisions are often made holistically on a household basis. We ask that the regulatory expectation consistently reflect this reality and investor need.”