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The disclosure has changed behaviour, but we must go further, says Paul Bourque


Alain Thériault

April 26, 2018 13:30

Paul C. Bourque

CEO of theinvestment funds Institute of Canada (IFIC), Paul Bourque notes that phase 2 of the client relationship model-adviser (MRCC2) has changed behaviour. However, he argues now in favour of disclosure widened.

The CEO of the IFIC has taken advantage of the symposium of compliance of the Board of the investment fund of Québec (CFIQ), which was held in Montreal on April 24, 2018, to plead in favour of disclosure more comprehensive and efficient, making it one of its priorities in its agenda 2018, with the protection of investors, elders, the reform regulation of securities professionals and the collection of data on investment funds.

MRCC2 improves the knowledge

«Although it is in its infancy, the dissemination of reports on the cost of the annual individual and the performance under MRCC2 enhances the knowledge of investors about the costs, and leads even to a change of behaviour shows the surveys on investors,» said Paul Bourque during his speech.

A study conducted by the firm Pollara on behalf of the IFIC found that the degree of knowledge of investors about the fees they pay to their broker, and their advisor was increased from 69 % in 2015 and to 78 % by 2017 to all holders of units of mutual funds. For the investors who have subscribed for units of mutual fund through a representative during the past year, this proportion rose from 72 % to 85 % between 2015 and 2017.

A lot of work to do

«We know, however, that there is still a lot of work to do. There is another element of disclosure costs that would make them more complete and more clear, as we and other sectors of the financial industry, » said Paul Bourque, referring to MRCC3.

This proposed expansion of disclosure requirements so as to take full account of the management expense ratio (MER) of the funds has been the response of the IFIC to the consultation 81-408 on the option to abandon the commissions built in. In addition to providing a more complete picture of the costs paid by the investor, MRCC3 would allow him, according to Mr. Bourque to take investment decisions in a greater knowledge of the facts.

Include the segregated fund

The IFIC is currently working on a timeline for implementation of MRCC3, and seeks a consensus from the industry on the form of the statements in MRCC3. «We will also continue to work with regulators and the canadian Association of insurance companies of persons (CLHIA), for disclosure to insurance and securities is done together, as much as possible «, added Mr. Bourque.

The CEO of the IFIC has reiterated its intention to include the assets and sales of segregated funds on its new cloud platform Fund Reporting Intelligence System (FRIED). The system collects data and produces reports on the funds, their assets and their characteristics. The platform will live on several other improvements, including the inclusion of the data of the aif.

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