YOUR PRACTICE-Canadian financial advisers resist change to fee model
* Regulators mull ban on embedded fees, but change slow
* Industry argues for self-regulation, improved standards
* Supporters say fee-for-service more transparent
* Opponents argue fee-for-service will hurt poorest investors
By Andrea Hopkins
TORONTO, Oct 28 (Reuters) - Canadian financial advisers have watched regulators around the world ban embedded fees on popular products like mutual funds, but the slow pace of change in Canada has left them lobbying hard to preserve a profitable business model.
While Canada's relatively high fees on financial products were long overlooked when the economy boomed, low returns and the advent of low-cost products like exchange-traded funds (ETFs) have spurred calls for reform.
Advisers argue regulators are trying to reform the industry by changing fee structures as well as duty of care and disclosure rules even though Canada has not suffered the same abuses and failures that prompted changes in the UK and Australia. They say this will drive the cost of compliance so high it will hurt advisers and investors alike.
"We don't have the same problems they had," said Ed Skwarek, vice president of regulatory and public affairs at Advocis, the Financial Advisors Association of Canada. Continued...