Whenever anyone at Investment Funds Institute of Canada addresses a group of advisors, we are inevitably asked how advisors can become part of the “system” that is so crucial to their everyday working lives.

Laws, regulations, guidelines and an assortment of other decisions made by governments, regulators, mutual fund managers and dealers can have an effect on how advisors do business. Another piece of paper, another required signature, another form to fill out — these all take time. And for many advisors, it’s time away from expanding or building their practices.

Issues dealing with investor disclosure (how much and how often) and the Canadian Securities Administrators registration reform project have implications for both advisors and clients. When the federal government makes changes to tax regulations, RRSP contribution limits and other financial rules, there is even more information you will want to convey to clients.

So what can you do about it?

> Follow the rules. First of all, there should be the satisfying acknowledgement that if you follow all the rules and regulations, you are in compliance with securities regulators and government-enacted laws. This is a good thing — really. It means you are committed to maintaining the highest standards, you care about your practice and the reputation of the industry as a whole, and you have set the standard you hope other advisors will emulate. Your clients will appreciate this. They don’t want to see your name in the newspaper, unless it’s in a good context, such as winning an Advisor of the Year award. Financial services, perhaps more than any other sector, needs to be as free from scandal as possible.

> Learn as much as you can. While selling products and building relationships are at the heart of your profession, the way to get there is to read everything you can find on the industry. Check out the status of potential regulations on Web sites such as www.ificmembers.ca, read newspapers and get daily e-mailed news of the industry. Attend compliance road shows and conferences put on by your dealer, regulators or trade associations.

I appreciate that this takes time — time that you might otherwise spend prospecting for clients or cementing relationships. But keeping up with what’s going on is essential for your business. As the Chinese proverb says: “Learning is like rowing upstream; not to advance is to drop back.”

> Think ahead. At the recent dialogue with the Ontario Securities Commission in Toronto, regulators let it be known that there are many issues coming down the pike — and some will inevitably affect you. Know Your Client rules, suitability requirements and what constitutes a referral are being looked at again, following the recent scandal involving a hedge fund. Further disclosure of fees and the risks involved in purchasing investments are other areas regulators are pondering.

> Get involved. It doesn’t matter at what level or in what forum. If you feel strongly about an issue, write a letter, pick up the phone, send an e-mail to your MP or provincial member of the legislature and/or talk to your dealer, the Mutual Fund Dealers Association, the OSC or the Investment Dealers Association of Canada.

You can join an advisor group, such as the Canadian Institute of Financial Planners (if you have your certified financial planner designation). A great deal of the CIFP’s mandate is to represent its members on issues of mutual concern and act as an advocate to governments, regulatory bodies and other organizations. Other advisor groups have clout and can help get the word out.

Ah, yes, all of this takes time — the very thing I said earlier in this column that you need more of in order to grow your business. But if you look at the most successful advisors around, you will see they know what’s going on around them. IE



Tom Hockin is president and CEO of the Toronto-based Investment Funds Institute of Canada. He steps down Jan. 16. For more on IFIC’s new president, see page 12.