Financial firms’ treatment of senior and vulnerable investors continues to be a priority theme for regulators. For example, we reported last month on new guidance from the Canadian Securities Administrators (CSA) in this area. In addition, the Québec Autorité des Marchés Financiers (AMF) recently published Protecting vulnerable clients: A practical guide for the financial services industry (Guide). Although some of the recommendations are tailored to address Québec-specific laws and resources, even registrants without Québec ties may find some elements of the Guide useful.
We also encourage clients to read the recent report from the Ombudsman for Banking Services and Investments (OBSI) (Report), which focuses on the financial complaints that senior consumers brought to OBSI in 2017-18. We noted with interest, for example, that:
- :38% of complaints to OBSI were made by consumers over the age of 60, even though they represent only 30% of the population;
- 52% of senior complainants were from Ontario, even though they represent only 38% of Canada’s 60+ population; and
- Two of the three top issues for complainants aged 60+ concerned suitability (of investments in common shares and mutual funds). Complaints about mutual funds relating to fee calculations, fee disclosure, product information disclosure and misrepresentation also ranked high for this age group.
The Report’s case studies focusing on complaints about investment services can help registrants identify potential risk areas in their business and steps they can take to mitigate such risks (including language that can be used in communications with their clients).