At the Allan Bush Investment Team, connecting in meaningful ways with you is at the top of our list. Our advice, recommendations and customized service are built to meet your individual needs and we ensure we’re always doing everything we can to bring peace of mind and value to your investment portfolio.

 

In two stages last year, the Canadian Securities Administrators (CSA) introduced Client-Focused Reforms (CFRs) to enhance advice and service through greater compliance that works to improve your overall experience. This fundamental concept puts your interests first in your dealings with firms and individuals that are registered to give investment advice and trade in securities.

           

Even though our team always works to ensure that investment recommendations are in your best interest, avoiding conflict of interest and aligning with overall goals and objectives, this added level of oversight and due diligence ensures we’re all working from the same page.

 

With the new rules, firms and advisors like us are expected to inform you about conflicts of interest, and how they are being addressed in your best interest, in a timely fashion and in an understandable language.

 

From the CSAs perspective, there are several situations when an investment advisor may have a conflict of interest. For example, your advisor may get paid a higher commission for selling you a certain type of investment, creating a situation where your advisor could lean towards recommending this product even though another lower-cost product may be better suited (or equally suited) to your situation or needs at the time. Under the new rules, your advisor must resolve this conflict in your best interest, taking into account different factors, including the suitability of a product for your situation.

 

Another important section in the CFRs works to ensure that investment firms and advisors take necessary steps to understand the securities that they purchase, sell or recommend to you, including the impact of the initial and ongoing costs associated with acquiring and holding each security. These necessary steps are outlined in the “know your product “ (KYP) obligation.

 

Lastly, there are also important updates to the “know your client” (KYC) forms. Looking at account opening and maintenance, CFRs work to document crucial information in the KYC that is reviewed annually. On December 31, 2021, they’ve introduced a section that records your risk tolerance and your financial ability to withstand losses (risk capacity) and the need for us to review the results with you. This new requirements also includes providing information about potentially significant restrictions on what will be made available, investing costs and any limitations relating to the products and services offered (for example, if you will only be offered proprietary products). If so, we would simply demonstrate that the proprietary product we recommend is competitive and of quality compared to other products in the market to meet your needs.

And as much as most Investment Advisors and Portfolio Managers have the ability to sell investments, what they can sell is defined by specific qualifications and proficiency. CIBC Private Wealth already works hard to ensure titles are well-represented by all advisors employed by our firm, but the new provisions ensure that sales-based titles actually function as such under corporate law for any registrant.

 

As always, if there’s anything more we can do to explain the new CFRs or any other measure put in place to create a clear and meaningful experience for you, please don’t hesitate to reach out to a member of our team.