The Canadian Securities Administrators’ (CSA) launch of their client-focused reforms (CFRs) is an impressive step toward higher industry conduct standards and enhanced professionalism. The industry should embrace them.

To start, the reforms finally will better align basic industry practice with clients’ expectations by requiring that clients’ interests come first when firms and their reps are faced with conflicts of interest and when reps are making suitability assessments.

The CFRs aren’t quite the comprehensive best interest standard that investor advocates would like to see, but they at least introduce the principle of prioritizing clients’ interests when that matters most.

Moreover, the CSA recognizes that conflicts are common throughout the industry – ranging from the use of proprietary products to the reliance on compensation schemes that motivate reps to serve their firms’ interests rather than those of their clients. By introducing best interest principles rather than detailed prohibitions, the regulators put the onus on the industry to deal with such conflicts on behalf of their clients.

To be sure, the regulators have revised their proposals in several areas, conceding ground to industry concerns about the possible costs of compliance. But the CSA also drew a line in the sand – rebuffing pleas to maintain the status quo or to drag out the exercise with endless consultation.

Most important, these reforms aim to raise standards throughout the industry. Not only is the entire CSA on board, but the industry’s self-regulatory organizations are part of the effort too. Reforms that are both national and comprehensive should help level the playing field throughout the business while also providing a real boost to investor confidence.

Investors can’t be expected to discern the differences among various segments of the industry, so low standards in one area reflect poorly on the entire industry.

By hiking expectations across the board, the CFRs should lift the industry’s image with investors overall – a necessary prerequisite if the financial advisory business is ever to achieve recognition as a genuine profession.