Here’s a mystery for you: why has it been more than two years since securities regulators began touting their plans for a “mystery shop” of financial advisors, but they still have yet to publish their results?

The Ontario Securities Commission (OSC) first signalled its plans to examine the quality of advice being provided to Canadian investors with a mystery shopping exercise in April 2013. Now, more than two years on, and despite repeated promises of publishing results along the way, the regulator still has not revealed its findings. According to the OSC’s director of communications and public affairs, Jill Homenuk, the regulator now expects to publish its report on the research “later this summer.”

In the meantime, investor advocacy groups, such as the Canadian Foundation for Advancement of Investor Rights (a.k.a. FAIR Canada), are pressing the regulator to reveal what the research found. Although FAIR Canada lauds the regulator for engaging in this kind of original research, and calls on the OSC to do more of it, the advocacy group also says that the results from the inaugural mystery shopping are “long overdue.”

At the same time, the results of research commissioned by the Canadian Securities Administrators (CSA) into mutual fund fee structures also appears to be behind schedule. After a halting start to that research project – largely due to the fund companies dragging their feet when the regulators asked for extensive sales data from those companies – a report on that research was hoped for by last June. Now, the OSC states, the results of this research also are expected “later this summer.”

Once again, late data from the fund industry is being cited as the cause of a delay in this project. Although the OSC said in March that York University finance professor Douglas Cumming (who has been commissioned to perform this research for the CSA) had received enough data from the industry to allow him to complete his study, the regulator now says some of the data was received as recently as May. This, in turn, has delayed Cumming’s analysis.

These delays are important because both of these projects – the mystery shopping to examine the quality of advice and Cumming’s research into the impact of mutual fund commission structures on fund unit sales – could provide key evidence as the regulators weigh some major policy decisions.

For example, the CSA is considering whether to impose a “best interests” standard on financial advisors and whether to ban trailer fees or otherwise intervene with fee structures. Furthermore, an expert panel in Ontario is now studying regulation for financial planners.

Overdue research inevitably delays decision-making, thus risking the loss of momentum in reform efforts – if that hasn’t already happened.

“More data is good,” says Neil Gross, executive director of FAIR Canada. “And we want the research to have rigour – just not rigour mortis.”

Indeed, why a mystery shopping project should take more than two years to complete is hard to understand. Such projects haven’t been this difficult for other regulators.

For example, when the U.K.’s Financial Services Authority (FSA) launched a mystery shopping exercise to examine the provision of financial advice in 2006, that research was carried out between January and April of that year, and the FSA reported its results four months later.

Similarly, when the FSA sought to assess the quality of advice in the wake of reforms that included raising proficiency standards and banning third-party commissions in the U.K. in 2012, the regulator carried out mystery shopping between March and September of that year and reported results by February 2013.

Regulators in Australia also have carried out a couple of major “shadow shopping” exercises in that country that were completed in about 12 months – from the initial announcement of the project to the publication of results.

Somehow, Canadian regulators have taken more than twice as long to do the same kind of research. After first announcing an intention to undertake mystery shopping in the spring of 2013, the OSC issued a request for proposal to carry out the research in mid-July of that year. And, in August 2013, the minutes from meetings of the OSC’s Investor Advisory Panel (IAP) show that OSC executives were briefing the IAP on the “extensive research” being done on the use of mystery shopping by other regulators to “gain insight and knowledge” into those regulators’ experience with the technique.

The OSC’s field research was launched in the ensuing months. In fact, the OSC reported, it began its mystery shopping exercise in the fiscal year ended March 31, 2014. And, in a report on the project’s progress for that year, the OSC noted that it was aiming to release the results by the end of 2014. Clearly, that did not happen.

Then, in April of this year, the Investment Industry Regulatory Organization of Canada (IIROC) indicated in its strategic priorities report that the mystery shopping results would be published by June. Now, IIROC says, there is no planned release date for the report and, as mentioned above, the OSC says “later this summer.”

Explaining the delay, Homenuk says: “As this is a joint initiative involving the OSC, IIROC and the [Mutual Fund Dealers Association of Canada], we’re taking the time necessary to review the results thoroughly and develop a detailed action plan.”

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