The president of the Small Investor Protection Association says there’s nothing his members like less than a shady financial advisor

By Gavin Adamson | October 2004

Stan Buell would probably have no problem selling you a good piece of real estate, but don’t ever try to sell him a bad investment.

Realtor Buell is also president of the Small Investor Protection Association, which industry regulators call a worthy organization and the only one with a Canada-wide focus. It’s also an organization that needs a broader cross-section of membership, more funding and a complete administration to function more effectively.

Buell, who works for Royal LePage Canada and declines to give his age because it makes him feel old, admits the SIPA membership can sometimes appear rife with axe-grinders, but for good reason.

“These investors have been burned, and they’ve become suspicious of all organizations,” says Buell. “They placed their trust in someone and it didn’t work out for them. They have a lot to overcome.
Because of what we are, they tend to trust us, and I believe they can. They look to us for information as to what’s available to get their disputes resolved.”

Buell, who receives no income from his volunteer position, spends time chasing down leaders of the financial services industry to make cases for SIPA. He has had discussions with Ontario Securities Commission chairman David Brown; Mutual Fund Dealers Association president and CEO Larry Waite; Glorianne Stromberg, former OSC commissioner and author of the Stromberg report on the fund industry;
Barbara Stymiest, former chief executive of the Toronto Stock Exchange; and pretty much any senior regulator, lawyer or politician worth the time.

In eight years, he has learned the ins and outs of the Canadian financial system. He’ll quote chapter and verse from the “know your client” rule, and his knowledge of financial legal cases is as great as that of the details of the suburban homes he sells. He is also a civil engineer.

“We have the ritual ‘calling of the engineer’,” says Buell, who graduated from a technical college in Nova Scotia. “It’s a sincere ceremony that you go through after you graduate and you make a commitment to be responsible in your life, and look after people and do what’s right.”

Buell has his own story as an aggrieved investor. He says his advisor starting making inappropriate margin calls on his account while Buell was working abroad as a transportation consultant in 1996. He rattled the cages, called the Ontario premier’s office, then his member of Parliament, “but [the MP] didn’t really understand how the system works,” says Buell. “People don’t know what’s going on. Your MP doesn’t know.”

He then found out about a widow who had an even worse experience. She had lost most of her retirement savings in just a few years. “So she took it upon herself to enter civil litigation, but eventually the situation was resolved out of court,” says Buell.

Restitution was what Buell was seeking, so he tracked the woman down. “I knew her story from the statement of claim that had been filed in her case, but I wanted to hear what she said about it,” says Buell, who served on the Toronto Real Estate Board’s ethics committee for two years. He was inspired.

In June 1998, Buell and a handful of investors who felt they’d been wronged set up an informal organization that would meet occasionally to share stories about experiences in the investment industry. Fifty members and less than a year later, they were incorporated as a non-profit organization that charges $20 a year per family to provide information and services to investors. SIPA set up a phone line and a Web site with some seed money from one of Buell’s clients and the OSC.

SIPA currently has about 500 members from nine provinces, but also counts a few aggrieved U.S. investors among its membership.

The limited resources means Buell keeps SIPA on a tight focus, true to the inspirational widow’s experience. He wants investors to be able to get at least some of their money back. In fact, Buell resolved his own claim in the same way as the widow. He filed a suit, and soon found himself negotiating for a settlement.

SIPA tries to make the public aware of the problems that can be encountered with investing. It advocates better investor protection, and lobbies many provincial regulators and all MPs. A SIPA member also sits on the OSC’s continuous disclosure advisory committee.