Search Blog
Blogroll
  • Alan Fustey
  • Becky Wong
  • Bert Griffin
  • Blair MacDougall
  • Blake Goldring
  • Brett Baughman
  • Camillo Lento
  • Chris Delaney
  • Cynthia Kett
  • Darren Long
  • Desmond Jordan
  • Don Shaughnessy
  • Doug Lamb
  • Ed Olkovich
  • Eva Sachs
  • Evelyn Jacks
  • Gail Bebee
  • Gerald Trites
  • Gordon Brock
  • Guy Conger
  • Guy Ward
  • Heather Phillips
  • Ian Burns
  • Ian R. Whiting
  • Ian Telfer
  • Jack Comeau
  • James Dean
  • James West
  • Jeffrey Lipton Fairmont Gloucester
  • Jim Ruta
  • Jim Yih
  • Joe White
  • Jonathan Chevreau
  • Kenneth Eng
  • Larry Weltman
  • Malvin Spooner
  • Mark Borkowski
  • Marty Gunderson
  • Michael Kavanagh
  • Monty Loree
  • Nick Papapanos
  • Norma Walton
  • Pat Bolland
  • Patrick O’Meara
  • Paul Brent
  • Peter Deeb
  • Peter Lantos
  • Riaz Mamdani
  • Richard Crenian
  • Richard Warke
  • Rick Atkinson
  • Rob Peers
  • Robert Bird
  • Robert Gignac
  • Sam Albanese
  • Stephane Ruah
  • Steve Nyvik
  • Steve Selengut
  • Tammy Johnston
  • Terry Cutler
  • Trade With Kavan
  • Trevor Parry
  • Trindent Consulting
  • Wayne Wile
  • Categories
    February 2013
    M T W T F S S
    « Jan   Mar »
     123
    45678910
    11121314151617
    18192021222324
    25262728  

    Tags

    The costs of imposing a legal “fidcuiary duty” on the Canadian financial community

    Ian Whiting

    Presuming that reasonable people understand the need for a legally-grounded requirement for advisors – ANYONE who advices, sells, recommends, etc. any financial product or service – to have a fiduciary duty or responsibility, the next question is “WHO IS GOING TO PAY FOR IT?”

    I can already hear pundits and armchair quarterbacks and experts pontificating that the industries should cover the cost of this new responsibility – and YES, there is always a cost to regulation – ALWAYS. So let us examine the cost issue a bit further. I have no way of quantifying, at this early stage, the cumulative financial impact of this additional layer of regulation, but it will add costs. For every regulation, someone has to supervise it, train advisors and employees, file reports, etc. PLUS, let’s not forget some amount of government supervision that will require more bureaucrats, auditors, examiners, investigators and support staff along with all of their associated staff and benefits costs.

    The easy (and palatable) target is the financial services industry themselves – ALL of it. It is easy, politicians and regulators can say “we aren’t going to raise taxes for this, we will make all of the players pay”.

    Unfortunately, this is utter nonsense of course – the only payor is the consumer – the user of the products and services is always the payor. Businesses are not going to reduce their profit expectations to their shareholders due to more regulation and the costs associated thereto. Those costs are going to be reflected in what those businesses charge for their products or services. Whether it is insurance premiums, MERs, fixed costs, reduced benefits, higher rates on loans, administration fees or something else, we, the consumers will pay for this new duty.

    Please, don’t jump on me thinking I am using this as an excuse to try and stop this move – I am not – I firmly believe that EVERYONE who advises consumers about ANYTHING to do with their money, investments, financial affairs, credit, loans, mortgages, payday loans, real estate agents, general insurance agents, life insurance advisors, bank tellers, etc. SHOULD have a legally-mandated fiduciary duty and responsibility – I just don’t want people to think they are getting something for free! Remember TANSTAAFL (see a previous blog from 2012)

    So the issue now is what is the limit that consumers are willing to pay for this added “protection”? How much is it worth to each of us

    The MONEY® Network