The global pandemic has caused a tremendous shift in the advisor-client relationship. Evolving client preferences and issues related to the pandemic have led to rapid changes in electronic commerce. The investment funds industry has worked to provide solutions that address changing client preferences and make it easier for clients to complete transactions while complying with social-distancing measures.
Governments in some provinces have adapted to this shift by amending legislation to clearly indicate the parameters around which investors may designate beneficiaries electronically for registered savings plans. Ontario, for instance, made amendments to the Succession Law Reform Act (Ontario) that were included in the COVID-19 Response and Reforms to Modernize Ontario Act, 2020 and serve as an example of how this can be handled. The investment funds industry fully supports the strides that have been made.
In certain instances, however, it is unclear whether beneficiaries may be designated electronically. While it is encouraging that provinces have taken measures to reduce or eliminate inconsistencies in legislation, there is still work to be done.
The push toward electronic transactions has been a welcome consequence of the Covid-19 pandemic. This evolution has benefitted the investor by providing an efficient way to complete important financial tasks. While it has the potential to reduce the need for face-to-face contact, it also helps to ensure that in-person meetings provide maximum value to the client without the added time required to review and complete paperwork.
Designating beneficiaries electronically benefits clients as well as the investment funds industry as a whole. As it stands, the process of opening a registered plan such as an RRSP can be completed online, but has the potential to become unnecessarily complicated in instances where there is still a requirement to download, print and sign a form to designate a beneficiary. Reducing the regulatory burden has long been a priority for the investment industry, and eliminating unnecessary paperwork is one effective method to help achieve that objective while enhancing the investor experience.
Every province has its own unique legislation that must be reviewed and, where necessary, amended to allow for clarity in this area, and these changes take time. In 2020, IFIC joined member firms in urging the Alberta government to make this change. We were pleased to see that Alberta has since made amendments enabling local investors to designate beneficiaries electronically. Prince Edward Island also recently amended its legislation to similarly permit electronic designation of beneficiaries.
A number of other provinces have either commenced the legislative work to allow for electronic beneficiary designation or noted their intent to introduce amendments. The industry recently voiced support for these changes to the governments of Manitoba and Saskatchewan to help ensure these efforts remain undeterred.
The ultimate goals are to enhance the investor experience and reduce the regulatory burden for firms. Designating beneficiaries electronically succeeds in advancing both of these goals, but legislation must be clear and consistent. We applaud provincial policymakers across Canada for the quick action they have taken in response to issues arising from the pandemic and will continue to support legislative amendments that help ensure clear, consistent rules related to electronic beneficiary designations.