Special Report: Canada Must Maintain Access to Financial Advice and Avoid Unintended Consequences of Financial Reform

Financial Advisors

Policy makers should seize a unique opportunity to learn from other countries where regulatory barriers have made advice a privilege for wealthy households.

Primerica (NYSE:PRI), a leading financial services provider in Canada and the United States, has released a special report titled “The Balance Act: Tightening Regulation Without Compromising Financial Access in Canada.”

Researched and authored by Primerica economic consultant Amy Crews Cutts, PhD, CBE®, the report explores the potential impact of regulation on the financial services industry’s ability to continue to provide advice to the middle class.

Some initiatives, such as banning unfair and deceptive practices, improving product disclosure, and treating customers fairly, will reduce risk and increase the financial security of Canadian households, while others It can lead to fewer choices. Costly compliance, licensing requirements and compensation limits can be costly for investors and disproportionately impact middle-income households.

“The extensive research compiled in this report shows that proposals of this kind can impede the ability of middle-income families to build wealth and reach their financial goals,” Cruz Katz said. This is the opposite result that regulators want to achieve.” “Canada has a unique opportunity to avoid these unintended consequences by using lessons learned from the implementation of similar measures in the UK and elsewhere.”

Changes to the UK financial regulatory regime highlight potential pitfalls in Canada’s current proposals for limits on coverage. As outlined in the white paper, significant changes to the rules governing UK financial advisors over the past decade have increased overall fees for investors and reduced the minimum required for a client to receive advice. Portfolio sizes have increased significantly, with millions of portfolios becoming smaller. And potential investors will not have access to financial advice.

“Canadian people who have access to financial advice are doing better not only in investing, but also in overall financial habits, such as regular savings, taking out life insurance, and paying off high-interest debt,” says Primerica Canada. CEO John Adams said. “It is important that Canadians have access to a range of financial advice, regardless of their wealth level.”

White Paper Key Findings

  • The Importance of Financial Advisors. Seek advice from a financial advisor Canadians are good at saving, managing volatile markets and building wealth. But many families don’t fully understand the importance of financial advice or how to find someone qualified to give it.

  • Canadian households are underinvested in assets. Cash and other low-income deposit account balances grew 62% between 2015 and 2022, and remain the single largest investment fund at just over $2 trillion. Without financial advice, Canadian households will continue to oversave in low-return accounts rather than invest in accounts with higher-return expectations.

  • Robo-advisors are not for everyone. Some advocates for tighter financial regulation believe that robo-advisors can serve investors without access to advice instead. However, according to comments from investors responding to the survey, these platforms are not trusted or particularly favored by most investors, and they believe investors should be able to invest and save with confidence. It has been shown to fail to provide the most important aspect of the financial advisor-client relationship: guidance. In addition, we educate you on how to invest for the future, explain the benefits of continuing with this course, and provide guidance on building long-term financial success.

About Primerica Co., Ltd.

Primerica, Inc. is a leading provider of financial services to middle-income households in North America. Independent licensed agents assess the needs of Primerica clients and provide appropriate solutions through the term life insurance we write and the mutual funds, annuities and other financial products we primarily represent By doing so, we educate Primerica customers how to better prepare for a more secure financial future. third party. We insured over 5.7 million lives for her and as of December 31, 2022 he had over 2.8 million client investment accounts. Primerica, through its insurance company subsidiaries, will become the third largest issuer of term life insurance in the United States and Canada in 2022. Primerica shares are included in the S&P MidCap 400 and Russell 1000 stock indices and trade on the New York Stock Exchange under the symbol “PRI.”

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