This year has started off inauspiciously, marked by sharply falling markets and geopolitical tensions. Still, 2016 could turn out to be a pivotal year in the history of the Canadian investment industry.
There’s a new government in Ottawa that has promised to enhance the Canada Pension Plan. Although the government’s intentions are not yet clear, this may be the year that we find out – which probably would help to recalibrate the retirement savings strategies of many Canadians and eliminate the uncertainty posed by the possible creation of supplementary provincial pension plans. Arguing that this clarification won’t be good for society – and the economy – in the long run is difficult.
The new government also will have to decide what it’s going to do about regulatory reform. So far, the Liberals have been relatively vague about their views on that topic. But, with the new co-operative capital markets regulator scheduled to launch in this autumn – which it almost certainly won’t be ready to do – the government will have to make a call on whether to keep rolling this rock uphill or not.
Closer to the Street, 2016 is the year that we can finally stop talking about the implementation of the client relationship model. The second phase of this long-running reform effort (known as CRM2) will finally be fully in place by mid-July. And, before too long, clients will be receiving new annual reports spelling out the costs of their investing efforts and the returns they are receiving. It is good to have this done – clients should have had this information well before now. The implementation effort has certainly dragged on long enough.
Finally, 2016 is also the year in which the Canadian Securities Administrators (CSA) has promised to make a decision on whether deeper reform is warranted – namely, whether regulatory action is necessary to address the CSA’s continuing concerns about mutual fund fee structures and industry conduct standards.
There’s no point in forecasting what the regulators will decide. But whatever they conclude may well prove critical for the future of the investment industry – and investors.
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