This article appears in the November issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
The passing of Glorianne Stromberg — a foundational figure in the realm of retail investor protection — is cause for reflecting on the current state of regulation and to marvel at how far it’s come.
To be sure, the regulatory framework remains a far cry from the vision Stromberg laid down in her groundbreaking report, humbly titled Regulatory Strategies for the Mid-90s. And there’s still no shortage of regulatory weaknesses, ethical shams and shady industry practices that need attention.
But these challenges should not overshadow the improvements achieved since Stromberg first surveyed the fledgling Canadian investment fund industry back in 1995. Much of that progress owes a debt to her pioneering work.
Stromberg’s efforts led to the creation of the Mutual Fund Dealers Association of Canada, which brought meaningful oversight to an industry segment still in its Wild West era.
The conflicts, regulatory gaps and structural failings that she pointed out sparked other positive policy developments, including sales practices rules for the fund industry, curbs on trailer fees, enhanced transparency for retail investors and, more recently, measures to tackle conflicts directly with the client-focused reforms. Some of these achievements may have taken more than 25 years to push across the goal line, but they got there.
Along the way, investor advocates have sprung up to illuminate the investor perspective and push back against regulatory capture and industry inertia — a role that Stromberg reluctantly filled, virtually alone, back in the day.
While regulators have repeatedly fallen short — in the face of relentless industry pushback, government meddling and, often, their own timidity — of the ideal investor-protection outcomes, there’s no question that we’ve come a long way since 1995.
Stromberg fought the good fight, and Canada’s retail investors are dramatically better off as a result. The industry, too, has flourished in the halo of investor confidence and trust that emanates from credible investor protection.
Hopefully the next generation of regulators will have the courage to follow her example and champion what’s right over what’s easy.
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