Every time there’s a new regulatory initiative, many in the financial services sector harp about the potential destructive nature of those new rules. Yet, despite the repeated concerns about the investment industry’s demise at the hands of increasing layers of regulation, the industry continues to grow, often embracing technology to help it adapt to the new reality it faces.

As an example, during a conversation I had with a senior executive in 2006 about the regulators’ then most recent proposal on mutual fund and segregated fund disclosure, I heard the following warning: “Point-of-sale (POS) regulation will be the death knell for the mutual fund industry.” Ten years later, regulators have now imposed their final stage of the POS pre-sale Fund Facts delivery obligation. This requires investors to receive the specific Fund Facts for the mutual fund they wish to purchase – one document out of a potential universe of 35,000 filed by fund companies through the course of the year – before buying the fund.

But as we head into another RRSP season, total mutual fund assets under management as of Sept. 30 were $1.32 trillion, up by 10.1% vs a year earlier, according to the Investment Funds Institute of Canada. In fact, more than 33% of Canadian households hold mutual funds — and the mutual fund industry has embraced technological solutions to facilitate the Fund Facts disclosure, helping it deal with the introduction of POS regulations.

We’re now in November, financial literacy month, and you can expect even more attention on regulation, disclosure, transparency and suitability — buzzwords that for years have raised concerns in the wealth-management industry, given their potential to add tremendous compliance costs to a financial system serving an increasingly price sensitive consumer. But while regulators have indeed hit the industry with a barrage of new regulation in recent years (with many seeing the 2008-09 global financial crisis as added motivation to increase investor protection), they have modified some rules, such as National Policy 11-201: Delivery of Documents by Electronic Means, to allow the industry to better leverage electronic channels and take advantage of the compelling cost savings available.

Stage 3 of the POS regulation now requires pre-sale delivery of the Fund Facts document, which effectively allows dealers and their advisors to take advantage of the immediacy of electronic document delivery and not delay the sales process by waiting for the printed document to be mailed to the client. E-delivery is cheaper and ultimately more efficient for dealers. As the POS regulation provides opportunities for dealers to reduce costs, a bright light will be shone on fees and performance starting in January 2017 as client statements will begin to highlight these metrics as part of the final stage of the second phase of the client relationship model (CRM2). At a time when there’s more and more scrutiny being placed on the fees being charged to investors and organizations are looking for ways to cut costs, it’s encouraging that the business case for delivering these disclosure documents electronically is stronger than ever.

Although POS and CRM2 are two disclosure regulations that alone have demanded thousands of hours of planning and implementation among organizations seeking to stay compliant, the business case to deliver documents electronically has never been so compelling, but it does require some changes in thinking. Most large financial services institutions have a cost-savings initiative underway that hinges on migrating its users to a digital channel. That said, legacy IT systems, email address availability, consumer behaviour and inertia within the organization itself all serve to slow the adoption of digital platforms.

However, where an organization can deliver a document to an investor without incurring the cost of print and a postage stamp, the case is closed. Organizations that can move the needle on e-delivery adoption from an industry average of 10% to 14-15% stand to save $1 per stamp for a standard letter sent to 1 million of their clients. For larger documents — such as the management reports of fund performance and financial statements, which may cost $8-10 for printing and mailing a single package — the argument is stronger. Some financial services institutions that may have struggled initially to migrate their user base to electronic channels are now targeting 50% e-delivery conversion rates and will never look back.

Although change can be disruptive, it can also be good. Better informed consumers help the industry improve, as they know what they want, will not waste your time and recognize real value when they see it. Innovative organizations and advisors who view regulatory change as an opportunity to rethink conventional investor communications will help ensure the industry thrives.