CIRO’s approved-person compensation model

Submission – CIRO – Incorporated Approved Person

Recipients

• Canadian Investment Regulatory Organization (CIRO), Member Regulation Policy
• Alberta Securities Commission (Market Oversight)
• Ontario Securities Commission (Trading and Markets).

Industry segments this resource supports

• Wealth management

Summary

The Securities and Investment Management Association (SIMA) submitted comments on CIRO’s proposed Incorporated Approved Person (IAP) compensation option. SIMA supports the introduction of the optional IAP model as a positive step toward a more level playing field for advisor compensation and supports allowing approved persons to provide other regulated financial services, such as insurance and financial planning, through an incorporated structure. However, SIMA recommends changes to the proposed ownership restrictions, arguing that the framework should permit multiple owners and team-based business models to maintain continuity of service, support succession planning, and reflect existing industry practices. SIMA also provided recommendations regarding corporation ownership, regulatory approvals, taxation considerations, transferability, and implementation timelines.

Why this matters: SIMA supports CIRO’s proposed Incorporated Approved Person compensation model because it would help create a more level playing field for advisor compensation while preserving client service, succession planning, and operational flexibility through team-based advisory businesses.

Key takeaways

• SIMA supports the proposed IAP compensation option and agrees it should remain optional for dealers rather than mandatory.
• SIMA supports allowing approved persons to offer other regulated financial services and ancillary services, such as insurance and financial planning, through the corporation.
• SIMA’s primary concern is the proposal to restrict ownership of incorporated advisor businesses to a single approved person and related persons. The association recommends allowing multiple owners and preserving existing team-based advisory models.
• SIMA argues that team structures improve client service, support succession planning, facilitate continuity of advice, and create operational efficiencies.
• The submission recommends allowing corporations to employ multiple approved persons sponsored by the same dealer and permitting multidisciplinary teams that include other regulated financial services professionals.
• SIMA recommends that incorporated advisor businesses be transferable between approved persons, subject to regulatory approval, to support succession planning.
• On implementation, SIMA acknowledges CIRO’s proposed 12-to-18-month transition period but notes differing industry views on whether a mandatory transition period is necessary.
• SIMA states that the proposed framework should protect investors while preserving operational flexibility and supporting continued access to high-quality financial advice for Canadians.