what/who this forum is intended to serve

[Guest]

The CFA website says there are 9897 CFA's in Canada. It also says that 14% operate as "investment advisers".

So if you think that you need a CFA to act as an advisor, WOW these 1385 Canadian CFA's are going to be busy being the only financial advisors in Canada! If you are interested in small investor protection, a move like that would effectively cut out any client under $20MM from having an "advisor", don't you think?

Why, in your opinion, does a CFP not count as a financial advisory designation?

[admin]

Please provide the source for your 80% of products placed and your less than 2% are qualified. If these are simply numbers that you picked out of the air then I guess that's a tactic that can be applied to a whole bunch of topics.

thanks for your good question. The source for the 80% of products sold at highest cost to client and highest comp to salesman (under guise of advice) is from mutual fund sales stats (over last decade or so) held at various places like the MFDA web site (for one). Further details on this manner of taking advantage of the position of a trusted advisor and using it to line ones own pockets more deeply can be found at the NASD web site under fraud alerts and scams, title, Class B shares.

As far as the 2% of Canadians calling themselves the wrong title, that was purely a guess, since in my two decades in the industry I have yet to meet a CFA in the role of a salesperson. My understanding of section 34 of the Securities Act requires a CFA prior to a person being allowed to register as an advisor.

I could be wrong, but that's the way I see it.

thanks for the educational debate guys
advocate

[Guest]

Please provide the source for your 80% of products placed and your less than 2% are qualified. If these are simply numbers that you picked out of the air then I guess that's a tactic that can be applied to a whole bunch of topics. From my perspective, 90% of the investor advocate crowd are whiners. 95% of politicians should be in jail. less than 2% of dog owners are responsible when it comes to cleaning up after their dogs (i run in the park). I think you get the picture.

Sure some product is placed by checking the compensation first and the applicability second but 80%? Seems awfully high to me. From my perspective it's probably in the low fifties (still too damn high). As far as qualifications go, there are about 17,000 CFPs, 6,000 CLU/CHFCs, another 2,000 CFAs and about 4,000 other designations and degrees that would qualify an individual to provide advice. There are at least another 10,000 individuals who are in the process of obtaining a credible designation/degree. Out of, say, 75,000 registered advisors, this is about 55% (still too damn low) but that's a far cry from 2%.

Regards


(Advocate reply: Sorry for the long delay, but here, in 2007 are the sales stats for WRAP funds (House brand funds, and funds consisting of other funds, usually with fees upon fees) Prior to this I could have shown up to 90% of mutual fund sales were made using the DSC (deferred sales charge hidden from client while broker takes home 5% up front) but IFIC would not share that particular data…….too embarrassing for the industry I suppose.:)

[Guest]

Finally, where is all of the outrage surrounding the sale of proprietary product by the banks and brokerages to say nothing of Investors, Edward Jones and all the rest?

good comment, we will try that one in due time. It appears a precedent could be for the others if we can get regulators and judges to recognize here in Canada that some of these deals are misleading and taking advantage of clients. The US is fining and forcing restitution for such self serving advice.

That does not inheirently make it evil. If there is proper disclosure of the conflict, compensation and competency

I agree. I have yet to see disclosure (true, plain and clear) when salespersons find a way to generate additional revenue from an account. Most bad salesmen pass this self serving advice on the client under the label of investment advice. The client has no way of knowing what is trusted advice and what is a sales pitch in disguise.

One reason that good advisors are not marching in the streets against such misrepresentation is that greater than 80% of products get sold by methods that produce the highest possible costs to the client, even when less expensive and identical choices exist. Is that trusted advice.

Further, I will say that less than 2% of persons in Canada calling themselves "investment advisors" meets the educational requirements as set out in the Securities Act that is required to be legally registered as an advisor.
cheers
advocate

[Guest]

Finally, where is all of the outrage surrounding the sale of proprietary product by the banks and brokerages to say nothing of all the rest?

good comment, we will try that one in due time. It appears a precedent could be for the others if we can get regulators and judges to recognize here in Canada that some of these deals are misleading and taking advantage of clients. The US is fining and forcing restitution for such self serving advice.

That does not inheirently make it evil. If there is proper disclosure of the conflict, compensation and competency

I agree. I have yet to see disclosure (true, plain and clear) when salespersons find a way to generate additional revenue from an account. Most bad salesmen pass this self serving advice on the client under the label of investment advice. The client has no way of knowing what is trusted advice and what is a sales pitch in disguise.

One reason that good advisors are not marching in the streets against such misrepresentation is that greater than 80% of products get sold by methods that produce the highest possible costs to the client, even when less expensive and identical choices exist. Is that trusted advice.

Further, I will say that less than 2% of persons in Canada calling themselves "investment advisors" meets the educational requirements as set out in the Securities Act that is required to be legally registered as an advisor.
cheers
advocate

[admin]

good debate, my experience is not anything close to 50 cents on the dollar. It is some low ball offer made by a firm after years and years and years of fighting with the firm to try and make them own up to the wrongdoing. They have fairly large imbalance of financial and legal strength over most consumers, not to mention that the easiest and most attractive consumers are elderly.

Consumers have little no chance to see restitution. If they can go to the ends of the earth, they may finally get offered pennies on the dollar, and then they are forced (if they want/need the settlement) to sign a confidentiality agreement promising to help hide the crime. (yes fraud is a crime, and some abuses can be called fraud)

(I have copy of a court case, Blackburn V Midland a while back that gave a pretty good legal definition of fraud. I can post it if anyone would like the reference.)

cheers
advocate

PS. During all this the regulators stand aside and claim "too busy" checking paperwork and other things to get involved on behalf of the
client. (just experiences I have observed) (or they turn 100% of cases over to the local industry association to self police, again without satisfaction to the client)

[Guest]

Who's going to finance this fund to help investors? Well I’m not the one who’s suggesting it’s a big problem so it seems to me that the ball is in someone else’s court on this but just to show what a sport I am, I’ve suggested elsewhere that judgments against the wrong doers could easily fund this effort. The bad guys should be assessed damages, costs and extra to go into the pot.

Wake up and smell the rotten stuff in the financial industry. Yes, in an ideal world, the bad guys get caught, repay the money they stole with extra bucks to set up this "fund" you suggest (and maybe some jail time). In the real world, investors are probably lucky if they get 50 cents on the dollar never mind legal costs or punitive damages for emotional stress etc. while perpetrators continue their evil ways and regulators sit back and say there's nothing they can do. (And don't forget the gag order). You need to get in touch with reality.

[Guest]

If we could all stand back and let the wheels of justice deal with this case instead of trying it in the court of public opinion I am sure that the results would be fair and enlightening.

If the "wheels of justice" punished wrongdoers in this business, investor advocates would not have to be so outspoken. Who would help small investors? Regulators? We've all seen how effective they are. Corporate criminals have high-powered lawyers. Investors have people like Joe whose "tactics" hurt himself more than anyone else. What about the tactics of a certain company and the resulting losses and suffering to a lot of people. Where is this "fair" justice system when the crime is severe?

[admin]

it is kind of interesting to watch the lengths and depth to which we all will go (myself included) to make or win our points.

To watch the industry over the last twenty years, I believe I have found a great deal of lying, misprepresenting, and misinformation in the name of making people wealthy.

Myself and other people (advocates or industry critics) have come to this opinion independant of each other, and now some of our arguments are being attacked as being one sided or slightly skewed at times. No doubt this could be true.

Now we have the critics of the critics stepping into the ring, suggesting that the industry critics are at times misrepresenting or misleading.......................and in thier "passion" to win the argument or win the point, they themselves are stepping over the lines of proper behavior, while they criticise advocates for stepping across the line, while the advocates criticise industry for stepping across the line.

Sorry for everyone who finds this childish, boring or unproductive. We will continue to strive for convincing the public that what we speak of is true, and we will all probably be guilty of excess in these efforts at times. I hope I can at least try and remember myself that I am working towards improving the integrity and the reputation of the industry and how it serves the public while all the schoolyard taunting goes on. Lets all please try and post verifiable known facts, and again, not flames or personal attacks. I will try and live up to this myself. Please tell me when I, or anyone does not.

[admin]

Anyone is and will continue to remain welcome if they can state their case maturely and without resorting to name calling or other behavior best left to the schoolyard. You have failed to live up to these standards and you have become angrier and nastier with each post. It is time we parted company until you can deal with that. No one wants to tune into a place where angry people plug up the forum with name calling.

thanks

[admin]

unfortunately, I have had to ban the forums to one user. I had initially found some of his or her comments interesting and informative, but when they became hostile, unwilling to debate maturely, but more willing to name call and undertake personal attacks I felt I had to draw the line. Fortunately there has only been one such type of person.

You may from time to time see angry posts from someone, and I apologize for that. I am not yet willing to close the forums to all who are unregistered as I am finding some interesting and usefull comments from some folks who see things from a perspective other than that of investor advocates.
These forums are intended to encourage the exchange of ideas that might help benefit investors in Canada. Some will argue that things are just fine and they should stay the way they are. I am fine with any and all arguments if they are made in a mature, factual and reasonable manner. Beyond that I have no time to become part of someones internal anger.

Thanks for keeping in touch and for furthering the interests of the public.
cheers
The advocate

[Guest]

sorry. While I appreciate your concerns about stock talk...........stock talk does not fit this site.

No problem.

http://sirf.proboards49.com/

[admin]

sorry. While I appreciate your concerns about stock talk...........stock talk does not fit this site.

This site is called what it is because it is for investment industry advocates. Those who are expert enough, experienced enough and ethical enough to know what wrongs are happening in the industry against the unprotected public.........and willing to discuss and work together to improve them. That is the billion dollar question we seek to answer here.

To allow this cause to be diluted by discussions of whether Norcen is better than Noranda is certainly a thousand dollar question for some, perhaps more, but it belongs elsewhere.

Sorry We just cannot be all things to all people, but we can certainly try to be the best at what we choose to focus on.

Thanks for your suggestion however
the advocate

PS, try the motley fool site ot financialwebring site for many stock discussions

[Guest]

We should be allowed to talk about individual securities ("stock talk") as well because issues important to investor advocates are connected to stocks, bonds and funds etc. If someone posts a bogus stock promotion members will quickly identify the scam as spam.

[urquhart]

investoradvocates.ca is a forum to share evidence of investor abuses and to collaborate on solutions to these investor abuse problems.

I suggest that we replace the current broken securities enforcement system in Canada with the following structure:
-a single national securities commission created for rule-making and policing functions applicable to a single securities act
-all current provincial securities commissions' rule-making and policing staff merged into this new single securities commission
-the IDA enforcement division to become a special unit of this new single securities commissionl; IDA reduces to lobbying association only
-a new securities administrative court created to replace all of provincial securities commissioners' hearings, IDA arbitrations and OBSI mediations, with two steps to every action:
(1) determination of securities violation, and
(2) assessment of damage remedy and costs
-the new securities administrative court should have special simplified procedures for cases of financial advisor securities law violations and restitution of individual investor losses
-RCMP, provincial police and local police should be given defined mandates and a defined system of referrals from the single national securites commission enforcement staff, when there is evidence of fraud
-introduce a clear process of regular independent auditing by the Federal Auditor General to ensure the investing public that there is integrity in the new single securities commission's enforcement procedures;
have the new single securities commission report to a a Standing Committee of the Federal House of Commons, as well as to the Federal Minister of Finance
-Have the new securitites administrative court report to the Federal Attorney General

There is a consensus for a single national securities commission amongst participants in the capital markets, including investors, the financial industry, and public corporations. The stumbling blocks are the provincial securities commissions' chairs and they have convinced their provincial ministers to support their preservation, except Ontario who wants a single securities commission. We individual investors can make life so difficult for the Provincial Ministers that they might rush to federal government responsibility for this hot potato.