The Canadian Foundation for the Advancement of Investor Rights was launched in September of 2008. Undoubtedly you have been as overwhelmed with their good work as I have!
Mr Pascutto, the Executive Director, has raised the funds necessary to launch the Foundation from IIROC ; and of course IIROC is a merged entity created by Investment Dealers Association (IDA) and the Market Regulatory Services organization (MRS). We are delighted to see that such distinguished investor advocates are willing to back this venture!
For those of you without a sarcasm detector, the Investment Dealer Association and MRS are two of the very good reasons we need an advocate for the investing public. Both are “self regulatory bodies”, which in the investment industry seems to mean they help ensure the big players run the industry without having to worry about real regulatory bodies constantly demanding they do what is right for investors!
The goals of an organization often provide some insight into how they will carry themselves in the process of assisting you and me. As an investor advocacy group I would expect that the foundation would “provide clear policies for immediate implementation”, “demand action on outstanding issues”, “fight to ensure investors are treated fairly”! In fact the primary goals include such hard hitting items as “making reports”, “proactively identifying trends”, and when bad stuff happens to investors they will “encourage action”!
So, you just lost your pension money in the market, discovered the advice you received was suitable for either an 18 year old with $40.00 to invest or a gazillionnaire looking for losses! You are mad, frustrated and most importantly broke! Your Advisor referred you to his boss, the Investment Dealer , who said tough luck buddy. You complain to the ombudsman for the dealer (if they even have one) but again, tough luck! ! You can go to the Ombudsman for Banking Services and Investment (OBSI) , again good luck! The IIROC folks appear to have no interest in the matter and the local paper agrees you got shafted but it is so common it’s not even news. So you head to the FAIR folks and say THIS IS NOT RIGHT!
So what can we expect? Based upon the goals of the foundation it may look like this:
Yes, we have identified that a trend that appears to be emerging is that you and your fellow investors are getting shafted on suitability. As a matter of fact we are preparing a report as we speak outlining this trend and also encouraging the IIROC to review their files and see if they are seeing a similar trend. If so we can assure you we will suggest they take some action at an appropriate time to make things somehow better. We want to be careful of course not to do anything drastic that might imply our “one time “funding (nudge, nudge, wink, wink) was being utilized to serve the one sided needs of the powerless investor at the expense of the well funded industry big boys!
Simply put; the best intentions of the FAIR foundation is no match for the fire power of the investment firms. In real life David gets pounded to a pulp by Goliath!
Reality sucks, eh!