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This article appears in the March 2023 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.

Taking on the big banks often sounds better in theory than it proves to be in practice — just ask Ontario Finance Minister Peter Bethlenfalvy. He made a big show of challenging alleged anti-competitive practices at the banks in the fall of 2021, only to sit on an inquiry’s findings for more than a year.

In the wake of the final report and recommendations from the Capital Markets Modernization Taskforce, the provincial government announced it was releasing the hounds at the Ontario Securities Commission (OSC) to investigate allegations that, in the face of higher regulatory standards, some banks had punted third-party investment funds from their product shelves and engaged in tied selling to corporate clients.

At the time, the government declared that shrinking shelves were counter to the regulators’ efforts to curb conflicts of interest in the retail investment market and to ensure investors have access to a wide array of products.

Since that very public scolding, the banks have changed exactly nothing. They haven’t reopened their product shelves, and no new avenues to competition or innovation in the bank-dominated retail distribution channels have emerged. Retail investors who trundled off to their banks to make their RRSP contributions were met with the same “this fund from our bank, or this other fund from our bank” decision they had a year ago.

Despite receiving the OSC’s report on the issue at the end of the 2022 RRSP season, the government hasn’t taken any action to address the banks’ practices. We don’t even know what the OSC found, as the government has declined to even make the regulator’s findings public.

All we know is that investors and third-party product manufacturers are no better off today than they were at this time last year — and that yet another pledge to take on the banks and defend retail investors has, so far, come to nothing.

Will things be any better for next RRSP season? Only if the government is prepared to back up its tough talk with meaningful action.