Outgoing Ontario Securities Commissions chairman David Brown delivered one of his last pubic speeches to the Street in Toronto Tuesday, in which he urged members of the financial services industry to take responsibility for the investment recommendations they make to clients.

Brown, who was appointed chairman of the OSC in 1998 and re-appointed for a second term in 2003, will step down on June 30. No successor has been named.

In his address to members of the investment industry, Brown said that 50% of Canadian adults are invested in equity markets through pension funds, mutual funds or direct retail investments. But with the increase in investments, there comes more responsibility on the part of the advisor — and more risk, particularly with the growing popularity of sophisticated investment products.

Though he declined to comment specifically on the investigation of Portus Alternative Asset Management Inc., Brown said the OSC is working with the self-regulatory organizations to find out how the hedge fund product got into the hands of approximately 26,000 retail investors so quickly. In the meantime, he’s calling on advisors to abide by the standards set out by the Chartered Financial Analysts’ standards for professional conduct.

“The responsibilities of the intermediaries are clear,” he said. “They are professionals with a duty to understand the products involved and the risks entailed.”

Brown defends the current regulation and says the “know your client” provision puts the onus on advisors to understand the products they sell their clients

“You can’t apply any particular investment recommendation to the clients’ needs unless you have an understanding of the risk attributes of the investment,” he said. “What everybody involved in the recommendation of complex financial products needs to do is to reassess their understanding of the product, reassess their commitment to investors, and to make sure they are motivated with the best interests of their investors in mind.”

Brown said that the OSC will continue to work with the SROs to examine ways to improve education among advisors both at the entry level as well as for seasoned professionals.

Brown also addressed the need for a single national regulator, saying the OSC is striving for a “pan-Canadian regulator” similar to that of Australia, where each of the country’s six states function as offices for the national regulator.

“Our ideal is a regulator formed by the provinces coming together, but with Ottawa’s involvement,” he said.

Brown has been appointed to a three-year term on the board of the Public Interest Oversight Board. The PIOB oversees the public interest activities of the International Federation of Accountants in setting audit performance standards, independence and other ethical standards, audit quality control standards and education standards.