Matthew Latimer
Photo credit: Paul Lawrence

For Matthew Latimer, the road to becoming executive director of the Federation of Mutual Fund Dealers (FMFD) was not a typical one. The Toronto native began his career in the print and design industry, after graduating from the Ontario College of Art and Design in Toronto.

Within a few years, however, Latimer had made the shift to the world of financial services. His career path emphasized back office roles focusing on trust, custody and dealer services in the investment funds industry, including stints at National Bank of Canada and Canadian Western Bank.

Latimer, 46, notes that the development of creative thinking that comes with an education in art and design has been helpful to him. He approaches business problems in a holistic way and sees solutions that colleagues with business degrees may overlook. “It’s been helpful for me in ways that I never would have expected,” he says.

Now, after 15 years in the financial services industry, Latimer has acquired a range of business skills and credentials, including the completion of the Canadian Securities Course and courses in tax and real estate. He is now working on his certified financial planner designation.

Latimer is likely to draw on all of these areas, and more, as he heads into his first year leading the FMFD. He took over last December from long-time head Sandra Kegie, who remains as treasurer and policy advisor.

Formed in 1996, the “federation,” as members call it, represents non-bank dealer firms, with total assets under administration of more than $125 billion, as well as 24,000 licensed financial advisors. Over the last two decades, the FMFD has emerged as a voice for that community, which is regulated by the Mutual Fund Dealers Association of Canada.

The past five or six years have seen sweeping changes in the investment industry, especially in the areas of government oversight and the growing public attention to issues such as fees and commissions, transparency and advisor credentials.

Advisors also are facing a raft of challenges in other areas, including rising competition, the advent of new investment products, such as ETFs, and the growing popularity of automated investment platforms or robo-advisors.

The subject of mental health – among both clients and advisors – is one of the main themes of the FMFD’s annual conference taking place April 23. Latimer notes that regulators appear to be ramping up their activities in this area, and that the FMFD has made the issue one of its key priorities.

“We want to partner with regulators,” he says, “to be at the same pace as them, and to have input on regulation earlier, rather than later.”

Another area of concern is the growing debate over titles, credentials and how advisors refer to themselves when offering services to clients. These titles and specializations have proliferated over recent years, with many new designations being offered by private educational firms. The Ontario government commissioned research on the topic, leading to a set of proposals for change released last spring.

But debate about those recommendations, which would restrict the use of certain titles, continues. “We absolutely agree that titles should be regulated and clarified,” Latimer says. “Titles, historically, have been all over the map. Now, it seems, there is an opportunity to be clear about exactly [who] you are representing.”

Like many regulatory issues, the debate over titles and credentials reflects a lack of harmonization among regulators, Latimer says. With so many regulators, across all provinces, the constantly changing landscape of rules and requirements can be daunting, he says. That is partly why the FMFD supports the Ontario Securities Commission’s burden reduction initiative – which includes a series of industry roundtables on the issue this spring.

Red tape is one of those key challenges facing the industry, Latimer says. “Anything that continues to distract dealers from their primary business plan – [like] complying with regulations, having to expand their organizational structure to include greatly enhanced compliance, technology, product processes oversight and all the associated costs – is really detracting from their ability to move forward and move ahead,” he says. “So, while we absolutely agree with client protection and trying to achieve the best outcomes, there is a lot of red tape.”

The issue also bleeds over into the significantly increased requirements for fee and costs disclosure – and what the FMFD views as an uneven playing field with respect to disclosure requirements imposed on other types of investment funds, such as segregated funds.

“While we agree with the idea of providing investors with all the information on fees and disclosure, we do feel that, at some point, it can become too much disclosure and detracts from the [client’s] objective,” he says. “We also think that it’s important that an equal level of disclosure is provided across all financial products and all financial channels.”

Despite these hurdles, the mutual fund industry is likely to continue to grow, Latimer says, with younger investors contributing to that expansion through rising awareness of their investing options. They will also become aware that what is best for them, financially, is likely to change over time. “And many, if not most, will realize that they need professional support as their assets grow and their lives become more complex,” Latimer adds. “That’s what’s missing in many of these cost reports [to clients]: the value of advice. You [a client] can say, this product is cheaper, or this product is more expensive, but advised clients over 15 years have nearly four times the assets of those that aren’t advised.”

Still, there is no doubt that competition in the mutual fund sector is on the rise – in both newer financial products, such as ETFs, and the growing clout of larger competitors, such as banks. And clients have many more investing choices than in the past. As a result, mutual fund advisors need to be aware that it is crucial to talk to clients about the costs of investing and of financial advice.

“If you’re not willing to talk about fees, you’re an endangered species,” Latimer says. And that advice must be customized and sensitive to the needs of individuals.

“People are a lot more than a risk profile,” he says. “And that’s what advice is. It’s not just a risk profile, and it’s not just investments.”

Advice from an advisor who has a full picture of a client’s situation, including key areas such as tax planning, estate planning and even whether a car purchase is affordable, can provide much more than purely numbers-based financial guidance.

“Advice is having someone in your corner, who knows all the ins and outs, and who can provide advice customized to [your] situation,” Latimer says. “It’s a real human-to-human conversation.”