The Government of Ontario’s 2010 budget should include measures to better ensure that Ontarians meet their financial goals and objectives, according to Advocis, The Financial Advisors Association of Canada.

In its pre-budget submission to the Standing Committee on Finance and Economic Affairs, Advocis provides six key recommendations around improving the business environment for advisors and planners, so that the industry can better serve Ontarians.

“Advisors and planners need a business environment that is more conducive to, well, business,” said Greg Pollock, Advocis’ president and CEO. “We need to have smart regulation; not regulation for the sake of regulation. It needs to be tied to outcomes and, quite frankly, needs to respond to a problem.”

The first recommendation calls for the Ontario Ministry of Finance to make it a priority to ensure that small business financial advisors and planners remain a vital part of a diverse and competitive financial services sector that offers consumers ample choice as to products and providers, and access to professional, independent financial advice.

To achieve this goal, Advocis says industry regulations must accommodate smaller enterprises, and must avoid favouring large players that are able to devote substantial resources to consultation and to managing their relationships with the regulators.

Advocis also calls for more oversight of regulators, including the completion of a cost-benefit analysis of any proposed regulation that examines the benefit to consumers as well as the costs to advisors and planners of the increased compliance burden. In addition, regulators should consider principles and outcomes-based approaches before rushing to impose prescriptive rules-based regulation, Advocis says.

“Advocis is not calling for less regulation, but for more appropriate and effective regulation that will protect the public without hampering the ability of professional financial advisors to serve Ontarians in these challenging times,” the submission says.

The association also urges regulators to work with the self-regulatory organizations – the Mutual Fund Dealers Association of Canada and the Investment Industry Regulatory Organization of Canada – to ensure that financial advisors are consulted at an early stage in the policy development process whenever regulatory proposals are likely to affect them.

The submission also addresses pension and retirement income adequacy, with recommendations in line with those in Advocis’ pension study, released in mid-September.

The association calls for the government to encourage small and medium-sized businesses to establish pension plans for their employees. Specifically, Advocis says public policy should focus on the steps to improve the regulatory environment for defined contribution pension plans, including harmonized regulations between provinces and with the federal government, to reduce complexities and costs for employers and employees.

In addition, private sector retirement savings plans should have mandatory enrollment for employees as the default option, with opting out provisions, which would likely result in more employees being a member of an employer sponsored plan, Advocis says.

Advocis also urges the Ontario government to consider supporting and promoting a series of federal tax changes that will make retirement planning more attractive and easier for all Canadians. In particular, the submission suggests contributions to retirement savings plans being determined on a life-time average basis; introducing the ability to make past service contributions to defined contribution plans; and increasing the age limit for contributions to retirement savings plans.

“I know the government has the best interests of the consumer in mind because that’s their business — but it’s also the business of advisors and planners,” Pollock said. “Heavy, burdensome regulation does not work for anyone.”

IE