A recent report by the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO), Sales Culture Concerns at Five of Canada’s Bank-Affiliated Dealers (The Report). The Report, which presents survey results from nearly 3,000 mutual fund dealing representatives from five of Canada’s largest bank-affiliated dealers, found that one in four representatives surveyed reported that they had “sometimes” recommended products or services that were not in their clients’ best interests.
While The Report showed that representatives held some positive perceptions, it also outlined areas of concern. This included that forty per cent of representatives believed scorecards (a means of tracking performance against target measures, including sales targets and/or activity-based targets) influenced product and service recommendations to clients. The Report also found that one in three representatives reported providing their clients with incorrect information about products and services they recommended. The OSC and CIRO believe the sales environment, compensation, incentivization, and performance tracking may be contributing factors to these results.
Sales Culture Concerns at Five of Canada’s Bank-Affiliated Dealers is available for download from the websites of the Ontario Securities Commission.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.