Jul 28, 2026
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Add us on GoogleCanadians filed more than 26,000 inquiries with the Ombudsman for Banking Services and Investments (OBSI) in 2025, and more than 6,100 of those became formal cases. But winning a complaint at OBSI doesn’t guarantee payment, since the ombudsman can only recommend compensation, not order it. A new review of the regulators power is calling for changes to OBSI’s enforcement toolkit.
On July 22, 2026, an independent review of OBSI’s operations recommended the ombudsman be given binding authority over both banking and investment complaints, and that its compensation limit rise from $350,000 to $550,000. It’s the fourth review in a row, since 2011 — and it’s not the first time the question of binding power has come up for discussion. At this point in time, however, none of the earlier recommendations have been adopted.
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Why does it matter? It matters to Canadian investors who are hurt by firms that do not abide by regulatory rules. To appreciate what’s at stake, here’s what the most recent proposal suggests.
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What the latest OBSI review recommends
Under OBSI’s Terms of Reference and its memorandum of understanding with the Canadian Securities Administrators (CSA), an evaluation is required once every five years. The most recent review was conducted by CRKhoury, an Australian consulting firm; the lead consultant at CRKhoury first made the binding-authority recommendation for OBSI back in 2011.
Among 26 recommendations, two stand out for consumers.
The first is binding authority: The power to force a firm to pay when OBSI rules against it. The recommendation is that this authority become operational for every case, not just some.
The second is to raise the compensation ceiling to $550,000, with automatic inflation indexing going forward. The review noted that if the current $350,000 limit, set in 2002, had been indexed all along, it would sit close to $600,000 today.
Despite the decade-plus of recommendations, none of the review suggestions have become law. OBSI’s board says it will fold the recommendations into its 2027 to 2031 strategic plan. Separately, the CSA already has its own binding-authority framework out for comment, including a proposal to have external reviewers check any recommendation above $75,000 before it becomes final.
Still, to date, no recommendations for strengthening and solidifying OBSI’s authority as an investment regulator have become binding.
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Why a firm can say no today
Under OBSI’s current rules, a firm can simply refuse to pay a recommendation. When that happens, OBSI must publish the firm’s name and the details of the case, but that’s the only real consequence.
While the consequence of public-shaming doesn’t appear to be effective, it should be noted that this action doesn’t happen often. In fact, OBSI has resolved more than 99.8% of complaints without a refusal since it was founded in 1996. But when a refusal does happen, the numbers can be large. Sentinel Financial Management Corp. refused OBSI recommendations four separate times, totalling almost $450,000 in unpaid compensation. Union Securities refused to pay $325,122 to a retired investor. De Thomas Financial refused $254,323 owed to a widow whose advisor had her borrow money to invest.
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A recent case shows the gap
A recent case highlights how an anecdotal story can provide impetus for a new rule.
According to an OBSI statement, Ms. Y, a middle-aged single parent of four who also owned a small business, transferred her entire $253,000 life savings into a managed investment account. Her advisor put her in a high-risk, proprietary exempt-market fund that used short selling and options trading while misrepresenting its risk rating as medium. As a result, the value of her investment account fell by more than $152,000. OBSI concluded Ms. Y should have lost only $8,697 had her account been suitably invested, and recommended $143,504 in compensation. The firm didn’t agree. It offered $120,000 instead, and Ms. Y accepted.
Nothing in that outcome was a formal refusal. But it shows how a non-binding recommendation still leaves room for a firm to negotiate down from what OBSI itself concluded was fair.
What this means if you’re owed money
None of the proposed changes affect a complaint filed today. Until binding authority and a higher cap are actually adopted, a favourable OBSI decision remains a strong recommendation, not a guaranteed payment.
Still, Canadians need to know that filing a complaint isn’t pointless. It’s free to file a complaint, and analysis shows that most complaints do get resolved. However, Canadians need to keep their expectations realistic and be prepared to hold a firm accountable — and potentially settle for less — once OBSI has made a decision.
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What investors can do to protect themselves?
- If a bank or investment firm won’t resolve your complaint directly, file with OBSI at obsi.ca — it’s free
- Document dollar losses, dates and communications with the firm before you file
- Ask the firm directly whether it intends to honour whatever OBSI recommends, before you accept a lower settlement
- OBSI’s compensation recommendations are not currently binding, so treat a favourable ruling as leverage in a negotiation, not a guaranteed payout
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Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
