Letters to the editor: IIROC firms already meet the best interests of their clients

Re: Letters to the editor: Compensation has nothing to do with being a professional, www.investmentexecutive.com, Aug. 11, 2016

I have to agree that fee-based accounts are not a panacea — reverse churning is growing in importance as an issue. I don’t agree, however, that you can act in a client’s best interests and still work on an embedded commission basis.

As I understand it, in your practice you sometimes act as a fiduciary and sometimes not, which is an unusual situation. Real world experience and independent research demonstrates that commissions paid by third parties do influence the recommendations advisors make. The evidence is undeniable. With mutual funds, fund companies also pay many other expenses to dealers and advisors as long as they don’t breach National Instrument 81-105.

The conflicts of interest are enormous, as demonstrated by the large number of complaints filed each year and the poor performance of mutual fund portfolios over time. And, by the way, most mutual fund “advisors” have minimal qualifications. They are salespersons/dealer representatives — and that’s their actual registration category.

As a professional engineer, I would never accept a kickback from a supplier. A fiduciary standard for all providers of professional financial advice is essential.


Ken Kivenko, P.Eng.
Kenmar Associates

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