The embattled ombudservice for the financial industry is proposing changes to its suitability and loss assessment process for investment complaints.

Last year, the Ombudsman for Banking Services and Investments (OBSI) published a consultation paper on the issue, and it received a variety of comments from both the industry and investor advocates. An independent review of OBSI that was published last fall also considered its suitability and loss assessment methodology, concluding that it was consistent with those of other jurisdictions.

However, OBSI announced plans on Thursday to make various changes to its processes in this area, based on the comments received on the original paper and a review of approaches used by ombudsmen in other jurisdictions.

“For example, we propose to use indices for most suitable performance comparison calculations to reduce subjectivity and increase predictability and efficiency in these calculations,” it says.

In addition, it proposes to: take fees and trading costs into account when making suitable performance comparisons; add interest on losses only if a report recommends compensation, but not on facilitated settlements; implement a self-imposed limitation period of six years from the time when an investor knew, or ought to have known, there was a problem with their investments; and, provide firms with working versions of its loss calculation spreadsheets during its investigation.

OBSI says that the consultation process not only allowed it to identify areas for improvement in its suitability and loss calculation methods, it has also provided an opportunity to clarify its approach. And, it notes that, in response to comments about the importance of proper interview techniques, it has enhanced that training. A special in-depth training session on interview techniques was conducted in December 2011, and this training will be repeated on a regular basis, including a session in June, it says.

Comments on the proposed changes are due by July 9, and OBSI says that it will also participate in information sessions organized by the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) to discuss the methodology and obtain feedback.