Leveling the playing field for advisor compensation
CIRO’s policy decisions on advisor compensation will directly affect how advisors operate and how investors receive advice.
Submission to CIRO Re: CIRO Consultation – Policy Options for Leveling the Advisor Compensation Playing Field
Recipients
- Member Regulation Policy, Canadian Investment Regulatory Organization (CIRO)
- Market Regulation, Ontario Securities Commission
- Capital Markets Regulation, B.C. Securities Commission
Industry segments this resource supports
- Wealth management
Summary
Our submission responds to CIRO’s consultation on policy options to level the playing field for advisor compensation. The submission acknowledges the long standing nature of the issue and provides conceptual feedback on the three options presented in CIRO’s position paper. We recommend an approach that allows personal corporations to engage in both registerable and non registerable activities, ideally through amendments to National Instrument 31-103 rather than legislative changes. The submission emphasizes the need for harmonization across business models, clarity for advisors, and minimizing operational disruption for firms.
Why this matters: CIRO’s policy decisions on advisor compensation will directly affect how advisors operate and how investors receive advice.
Key takeaways
- IFIC supports CIRO’s goal of creating a consistent approach to advisor compensation across mutual fund and investment dealer representatives.
- IFIC’s recommended approach most closely aligns with CIRO’s “Incorporated approved person” option but includes modifications to allow corporations to conduct both registerable and non registerable activities.
- Amending NI 31 103 is presented as a more efficient and harmonized path than pursuing legislative changes across multiple jurisdictions.
- IFIC warns that limiting corporations to non registerable activities would create confusion, increase compliance risk, and require dealers to allocate advisor compensation streams between activity types.
- The submission highlights the need to consider employment, tax, and operational implications for firms with different compensation models, especially those with dual registration.
IFIC recommends allowing ownership of corporations by Approved Persons and other regulated individuals in related financial sectors, including personal insurance and financial planning.
