The concept of independence among financial advisors is deteriorating, and advisors must fight to maintain autonomy, the president of Independent Financial Brokers Canada said on Tuesday.

Speaking at the IFB Fall Summit in Toronto, president Merlin Chouinard called on advisors to fight for independence.

“The whole aspect of entrepreneurship, independence, personal professional autonomy — is getting lost,” said Chouinard. “This word independence has got to start meaning something.”

He said independence is in the best interest of the clients, who need advisors to fight for them on an autonomous basis.

Chouinard said regulation is largely to blame for the erosion of independence. He said regulation has become increasingly cumbersome, and often fails to fulfill its intended mandate.

“There are troubling trends in regulations which we believe if not adequately put into check, would have dire consequences for advisors and consumers alike,” said Chouinard.

As an example, he pointed to the regulatory requirements facing mutual fund dealers. Chouinard said the compliance demands of the Mutual Fund Dealers Association prevent advisors from focusing on effectively meeting the needs of clients. But the MFDA is not to blame — the organization is only part of the regulatory “problem” in Canada, he said.

He called for “good and fair regulation” that protects the consumer. He commended the Financial Services Commission of Ontario for adopting a principles-based approach to regulation, and urged other regulators to follow suit.

Chouinard encouraged advisors to get involved and voice their concerns to regulatory bodies and securities commissions.

“If we stay apathetic, as we have been as a society, you will continue to see your basic freedoms eroded and stolen from you,” he said.

Phil Howell, newly appointed CEO of the FSCO, said the organization is committed to working closely with financial advisors to get input and hear concerns.

“To effectively achieve our regulatory goals, it’s essential to have strong relationships with our stakeholders,” Howell said.

Howell admitted that it can be challenging for advisors — particularly those new to the industry — to keep track of all the applicable regulatory requirements.

Currently, FSCO is working to develop smarter, more efficient ways of working with the industry, he said.

“We strive to do this,” Howell said, “by listening to and communicating effectively with the industry.”

IE