Questions for the Major Political Parties
2017 British Columbia Election Campaign
Who We Are
Advocis, The Financial Advisors Association of Canada, is the association of choice for financial advisors and planners. With more than 12,000 members across the country and 2,000 in British Columbia, Advocis is the definitive voice of the profession, advocating for professionalism and consumer protection. Professional financial advisors and planners are critical to the economy, helping consumers make sound financial decisions that ultimately lead to greater financial stability and independence.
Advocis works with decision makers and the public, stressing the value of financial advice and striving for an environment in which all Canadians have access to the advice they need. Our members are in every community across British Columbia and participate in charities and community-based initiatives.
Advocis has a long-standing tradition of working cooperatively with government and regulatory bodies to ensure consumers of financial services are adequately protected, have ample choice and access to professional financial advice, and that the financial advisory industry continues to be an important part of British Columbia’s economy.
The Value of Financial Advice
Financial advisors help people make sound financial decisions, manage their daily finances, and adapt to changing circumstances, especially during uncertain economic times. Many individuals, families and small businesses lack the time, training or inclination to achieve a sufficient level of comfort in their financial knowledge to make important financial decisions on their own.
Small business financial advisors primarily work out of independent mutual fund and securities dealers, independent life insurance agencies or as exclusive advisors of life insurance companies, and are licensed by the province to provide various financial products to the public.
People who receive financial advice are more financially secure, are better protected and better prepared for retirement and unexpected life events than people who do not receive advice. Studies have shown that advised households have up to four times the financial assets compared to that of non-advised households across all income levels and years working with a financial advisor.
Our Economic Footprint
Thesmall business financial advice industry in British Columbia has a direct economic impact of approximately $2.8 billion in GDP, 24,500 direct jobs and $648 million in tax revenue.(PwC, Sound Advice – Insights into Canada’s Financial Advice Industry)
Our Issues
Banning of Embedded Commissions
Q1. The British Columbia Securities Commission, under a Canadian Securities Administrators (CSA) initiative, is considering eliminating commissions paid to financial advisors by their dealers even though the vast majority of consumers compensate their advisor this way. This was proposed in a consultation document released in January 2017 (CSA Consultation Document 81-408 Consultation on the Option of Discontinuing Embedded Commissions). Commissions are fully transparent and disclosed to consumers today, and consumers have the choice on whether they wish to pay a commission, or a separate fee for service or hourly rate for financial advice.
Does your party support a ban on embedded commissions, which would eliminate this option as a way for consumers to pay for financial advice?
Raising the Professional Standard of Financial Advisors
Q2. Our goal as an association is to make people feel more secure about professionalism and accountability for the financial advice sector. Members of Advocis aim to hold themselves to the highest standard of integrity when dealing with people’s most precious resource – their money. We want to make people feel more secure about our professionalism and accountability.
Anyone today can hold themselves out and act as a financial advisor without clearly mandated standards established by a recognized profession of financial advisors. Membership in a professional financial advisor association is purely voluntary. In order to bring more accountability to the industry all financial advisors should adhere to a code of professional conduct and high education standards overseen by the profession. Higher professional standards will assist in protecting consumers by removing unethical advisors and identifying potential fraudsters, and by instilling greater public confidence that consumers are dealing with a true professional. Financial advisors are one of the last major groups of specialized practitioners whose profession is not formally recognized.
Does your party support the creation of a recognized profession of financial advisors?
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