Canadian Investment Regulatory Organization (CIRO) CEO Andrew Kriegler deserves credit for saying out loud what much of the industry prefers to leave unsaid: Canada’s investor protection regime treats identical risks differently depending on how the investor arrives at them.
His example was pointed. A DIY investor can buy crypto or trade on a prediction market without a suitability review. An advisor recommending a small-cap stock to that same investor must satisfy enhanced know-your-client, know-your-product and suitability requirements — and may still face compliance pushback.
Kriegler framed this as a consistency problem. He is right. But consistency has two directions, and the industry’s preferred direction is not the one that protects consumers.
The advised channel is not overregulated. The DIY channel is underregulated. Resolving the inconsistency by lowering the advised standard would not expand investor choice. It would expand investor harm.
Kriegler is also right that costs and benefits must be weighed — and that how they are distributed matters. He noted that regulatory costs fall disproportionately on “folks in the middle.” The same is true of the costs of regulatory gaps.
Sophisticated investors are not the ones who lose money on leveraged crypto or prediction-market positions sold through mass-market trading platforms. Ordinary Canadians are. And many of them reasonably assume that a product available on a mainstream Canadian platform has been vetted by someone.
Closing that gap does not require banning anything. It requires a floor: suitability-light questionnaires for higher-risk products, risk disclosures calibrated to the instrument rather than the account type and meaningful friction at the point of purchase for speculative positions. These are tools regulators already understand. They simply have not been applied consistently across channels.
Consistency is the right goal. The question is which direction it runs.