Many mass-market and small investors paying for advice through commissions aren’t receiving basic financial planning information, a survey from the Ontario Securities Commission’s Investor Advisory Panel says.

Almost one-third of respondents (31%) were unable to say whether their advisor had spoken to them about planning for retirement, education or buying a home. Only one-fifth had received advice about budgeting or debt management, the survey found, while roughly one-quarter got advice related to tax and estate planning (28%) and planning for a family member’s future needs (23%).

Last year, the Canadian Securities Administrators (CSA) proposed rules to ban deferred sales charges (DSCs) and prohibit trailing commissions to dealers that don’t make suitability assessments. The Ontario government did not support the proposed reforms.

Some in the industry warned the changes could lead to an “advice gap” for smaller investors.

“This assumes investors in these categories currently receive, and therefore potentially stand to lose, a meaningful measure of advice that meets their needs,” the Investor Advisory Panel (IAP) report said.

The survey raises concerns about the scope of advice being provided, it said.

The online survey of 3,083 Canadians by Innovative Research Group focused on investors who have an advisor or portfolio manager. The respondents were broken down into segments: small portfolio (under $50,000), mass-market ($50,000 to under $100,000), mass-affluent ($100,000 to under $250,000) and affluent ($250,000+).

Most mass-market (60%), mass-affluent (62%) and small (75%) investors said their advisor only communicated with them once or twice in the past year, and many spent less than an hour in total communicating with their advisor.

“In our view, therefore, it is not at all clear that preserving the availability of trailing commissions will ensure investors with small and medium-sized portfolios get access to advice that meets their needs,” the report said.

“We hope policymakers will use this evidence to assess the degree of risk actually posed by a ban on trailing commissions, and to assess whether that risk is outweighed by the benefits to be gained from eliminating known harms caused through the use of trailing commissions.”

Read the full IAP report.