Advocis, The Financial Advisors Association of Canada, today affirmed its reservations about proposed amendments to several Mutual Fund Dealers Association (MFDA) rules that affect the client-advisor/planner relationship.

Advocis outlined its opinions on the proposed rules in a submission to the MFDA.

A significant concern expressed to the MFDA was that the changes will increase the regulatory burden on advisors with little or no proven benefit for the investor.

“I am concerned by the changes as they stand; I would have preferred if the MFDA had sought the input of advisors and planners earlier in the process. If they had, advisors and planners would not be in the position of responding to proposals that are clearly not well thought out,” said Steve Howard, president and CEO of Advocis, in a release.

For example, with MFDA Rule 2.8.3, advisors and planners will be required to have dealer approval prior to any communication to a client regarding rates of return. Advocis noted in its submission to the MFDA that this proposal does not adequately take into account the realities of the client-advisor/planner relationship.

Howard added, “If the MFDA had consulted advisors and planners earlier in the process, any proposed rules would protect the public without compromising advisors and planners’ ability to meet their clients’ needs.”

In addition, Advocis argues that “the proposals establish more rules and more regulatory burden on advisors and planners without a robust cost-benefit analysis. They are largely inconsistent with the Canadian Securities Administrators’ (CSA) Registration Reform project objective of principles-based regulation.