Earlier this month, the Canadian Association of Retired Persons (CARP) published a pointed letter calling out Canada’s major banks for what it sees as persistent, avoidable harm being done to older Canadians who purchase investment products through bank branches. The letter followed an exchange with the Canadian Bankers Association after the Ontario Securities Commission (OSC) and Canadian Investment Regulatory Organization (CIRO) released their July 2025 review of sales culture at bank-affiliated mutual fund dealers.
The headlines are not the point. The pattern is.
Canada’s consumer-protection framework is rhetorically strong and procedurally busy, but too often operationally permissive. It still leans heavily on individual consumers — often seniors — to detect risk, resist pressure and navigate complexity in the moment. That is a fragile design in any market. It is particularly fragile for older Canadians facing cognitive decline, grief, isolation or an information disadvantage.
Canadian regulators have leaned toward principles-based regulation. They articulate broad expectations, allow flexibility in compliance and rely on supervision and enforcement to correct problems. In practice, principles without hard edges can become elastic under commercial pressure.
Suitability and conflicts of interest illustrate the gap. We say recommendations should be appropriate; conflicts should be addressed in the client’s interest; clients should come first. Yet the sales culture review cited that a meaningful number of advisors reported seeing clients recommended products “not in their interests,” at least sometimes. That is less a verdict on individuals than a signal about systems: incentives, product shelves and sales expectations can align in ways that make harmful outcomes more likely.
If “do the right thing” is the central control, but red lines and consequences are faint, client-first risks becoming more slogan than constraint.
Education is not empowerment
When seniors are harmed, the default response is often education: tips, warnings and awareness campaigns. These can help at the margins. They are not the main line of defence.
Client empowerment is structural. It exists when consumers can exercise meaningful choice without needing to be experts, and when protections are enforceable if they cannot reasonably protect themselves in real time. That implies:
- conflicts constrained, not merely disclosed;
- advice duties that are operationally meaningful, not aspirational;
- product access that supports competitive choice, not institutional preference; and
- redress that is timely and binding, not dependent on voluntary firm compliance.
An older client under time pressure in a branch office, or making decisions after a spouse dies, deserves a supportive experience. The system is failing because it permits pressure, tolerates conflicted incentives and relies on after-the-fact remedies.
Gaps are tolerated
Some weaknesses endure, not because they are hard to diagnose, but because closing them is contested.
Dispute resolution is a clear example. A model that produces non-binding recommendations creates an asymmetric dynamic. The consumer must use the process, but the firm can still treat the outcome as optional.
The prolonged debate over the Ombudsman for Banking Services and Investments has been clarifying. When asked to accept binding outcomes, the industry’s instinct is often to ask for more process.
Consumers are asking for something more basic. If an independent body finds that a client was treated unfairly and the evidence supports compensation, the firm should not be able to decline as a matter of preference.
Similarly, proprietary product incentives and embedded compensation continue to shape recommendations. We have placed considerable faith in disclosure and conflict-management language to neutralize those incentives. That faith is often misplaced.
Better supervision
Senior exploitation is frequently detectable. Common signals include unusual withdrawals, sudden concentration into higher-cost products, repeated switching, atypical trading, third-party involvement and clusters of complaints tied to branches or sales teams.
Many firms already monitor elements of this for fraud, anti-money laundering or operational risk. Regulators could set clearer expectations for surveillance of higher-risk accounts and require consistent reporting on leading indicators of harm. Supervisory technology can also help regulators see patterns across firms sooner and intervene earlier.
If the goal is fewer senior losses, the focus should be less on rhetoric and more on system mechanics. A practical reform agenda would emphasize:
- a clearer, enforceable duty when providing advice;
- binding, accessible redress;
- reduced reliance on embedded compensation;
- more open product access where channels present themselves as advice-driven; and
- a short list of prescriptive red line rules for recurring exploitation patterns, backed by proactive supervision.
Canadian regulatory culture often treats industry flexibility as a policy good in its own right. Flexibility can support innovation and reduce deadweight cost. But flexibility that predictably enables consumer harm shifts risk from institutions to households.
Seniors experience exploitation as a loss of dignity, independence and security. If our systems rely on disclosure, voluntary codes and after-the-fact enforcement as primary protections, then we have built a framework better at managing liability than preventing harm.
The path forward
The CARP-bank exchange is unlikely to be the last such episode. Nor is the OSC-CIRO sales culture review likely to be the last time supervisors surface uncomfortable evidence about how advice channels operate.
The question is what we do with that evidence. We can continue to emphasize education and awareness — useful but limited. Or we can make a smaller number of tougher design choices: clearer duties, binding redress, fewer conflicted incentives, more open product access and data-driven supervision that detects harm early.
That is what it would look like to treat senior exploitation primarily as a market design and accountability problem, not an education problem.