The Investment Industry Regulatory Organization of Canada’s (IIROC) move to fund the Investor Protection Clinic, an investor legal-aid clinic at Osgoode Hall Law School, is a noble gesture. It also underscores the dire state of affairs for aggrieved investors.

If there was an efficient, effective mechanism for resolving investor complaints, there’d be little call for a student-run clinic to help harmed investors. Sadly, there is no such mechanism.

The Ombudsman for Banking Services and Investments (OBSI) was supposed to fill that need, but has suffered a steady erosion of its authority over the years. Beginning in 2012, a succession of financial services firms began refusing OBSI’s compensation recommendations, thus exposing the impotence of OBSI’s “moral suasion” model.

Soon after the erosion began, OBSI lost its authority to investigate complaints involving segregated funds, on the basis that the funds are technically insurance products — a step that left harmed investors in jeopardy of falling through a needless jurisdictional divide.

In 2014, OBSI surrendered its ability to investigate systemic issues, such as the widespread overcharging of clients that led to a succession of no-contest settlements between bank-owned firms and the Ontario Securities Commission.

OBSI has since grappled with many “low-ball” settlement offers. A 2016 independent review concluded these paltry offers stem from OBSI’s lack of authority to issue binding compensation decisions. The review stated “a more effective mechanism for securing fair redress” is required.

Investors are still waiting.

IIROC’s predecessor, the Investment Dealers Association, created OBSI when it and the Mutual Fund Dealers Association of Canada joined the Canadian Banking Ombudsman to create a unified dispute-resolution service. That was a meaningful step toward improved investor protection.

Funding Osgoode’s Investor Protection Clinic — which surely has helped investors and provided valuable experience for fledgling lawyers — still is a far cry from the sort of help harmed investors need.