Canada: OSC Publishes Initiatives Aimed At Protecting Seniors

Last Updated: April 19 2018
Article by Clarke Tedesco

On March 20, 2018, the Ontario Securities Commission (OSC) published its Seniors Strategy,1 the purpose of which is to outline initiatives that the OSC is pursuing in relation to older individuals, recognizing that the financial lives of older Canadians have grown increasingly complex relative to previous generations.

This short article will outline the highlights of the Seniors Strategy. The Seniors Strategy outlines proposals only – the policy items discussed have not been approved or implemented at the time of publishing. The OSC's proposed strategy addresses several different topics, including:

  • The financial exploitation of seniors;
  • Marketing practices for market participants;
  • The Ombudsman for Banking Services and Investments (OBSI);
  • Cooperation amongst regulators; and
  • Research and education.

Background

The Seniors Strategy states that its creation was driven by changes to the financial situation of seniors, including:

  • Decreased reliance on public pensions and increased reliance on less stable income sources such as employment, private pensions and savings;
  • Increasing debt levels;
  • Increasing percentage of assets held in real estate; and
  • Persistent challenges with financial planning, education, literacy and numeracy.

In short, increased reliance on non-guaranteed sources of income makes financial literacy and investment knowledge increasingly important and, where that knowledge is lacking, makes seniors more vulnerable. As set out in the Seniors Strategy, because cognitive changes (while they affect individuals differently) often occur with age, they tend to affect more greatly those who rely most on their savings. Those cognitive changes are compounded by the effects of increased social isolation, and make some seniors more vulnerable to undue influence and fraud.

Substance of the Seniors Strategy

The OSC has broken down the Seniors Strategy into four different initiatives:

  1. Policy
  2. Operations
  3. Research
  4. Education and outreach

1. Policy

In arriving at its policy proposals, the OSC attempted to balance the concerns of various stakeholders. On one hand, a concern exists amongst stakeholders that older investors are disproportionately susceptible to financial exploitation and fraud as a result of the influence that arises out of increasing reliance on others as people age. On the other hand, the OSC recognized the difficulties faces by registered firms in spotting and avoiding that exploitation.

A framework for addressing financial exploitation and cognitive impairment

As part of its mandate, the OSC has released a framework for addressing financial exploitation and cognitive impairment. The basics of that framework are as follows:

  • Temporary hold on disbursements of funds or securities – a mechanism that would permit firms to temporarily suspend disbursements where there is a reasonable belief that exploitation might be occurring. The proposed mechanism would not prevent the sale of securities, just the subsequent disbursement of funds;
  • Safe harbours – a proposal to provide 'safe-harbour' from certain regulatory requirements to registered firms that place a temporary hold on funds or disclose personal information to a trusted contact or third-party organization;
  • Trusted contact persons – a proposed regulatory requirement that registered firms make efforts to obtain the name and contact information of a trusted contact for new and existing non-institutional clients. The firm would then be able to reach out to this trusted contact if it has concerns about a client's behaviour or transactions in the client's account;
  • Guidance on suggested practices for engaging with older clients – the OSC will provide continued guidance, through the use of Staff Notices, for suggested practices for registered firms when engaging with older clients.

Addressing confusing and misleading titles, designations and marketing practices

The OSC addresses concerns that credible-sounding titles, such as Vice-President, Seniors Specialist, or Wealth Manager might be potentially confusing and misleading to older individuals because they indicate a level of qualification, experience or competence that might not actually be present.

While the Seniors Strategy does not provide any specific policy proposals in that regard, it references a proposal, originally made in Consultation Paper 33-404, Proposals to Enhance the Obligations of Advisers, Dealers, and Representatives, to standardize titles used by client-facing representatives. The OSC, along with the other members of the Canadian Securities Administrators (CSA), believes that clarification of business titles will strengthen public confidence in registered firms.

Strengthening OBSI

OBSI is a non-government organization mandated to provide independent dispute resolution services at no cost to consumers when they are unable to resolve their complaints with their banking services or investment firms. OBSI reports that nearly 50% of complainants are over the age of 60. The OSC is considering options to strengthen OBSI's ability to secure redress for investors.2 Recently, CSA members released Staff Notice 31-351, which established the view of CSA members that a firm's repeated failure to compensate clients in a manner consistent with OBSI recommendations may be viewed as an indication of problems with that firm's complaint-handling practices.

Breaking down silos

The OSC also plans to improve investor protection by working with other regulators and organizations with mandates for the protection of seniors in order to develop comprehensive strategies and solutions that will prevent seniors from 'falling through the cracks'. For example:

  • "Know your client" obligations: the roles played by the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA) are key to investor protection. The OSC and CSA are considering proposals to enhance obligations owed by registered firms to clients, such as whether a 'one-size-fits-all' approach to the collection of KYC information is appropriate;
  • Powers of attorney: a report by the Law Commission of Ontario highlighted several areas for improvement of the current system regarding powers of attorney, including a lack of proactive monitoring mechanisms, which can make early detection and prevention of abuse difficult;
  • Privacy laws and disclosures of client information: While PIPEDA generally prohibits the disclosure of confidential information without consent, a registered firm may be able to make disclosure to the Public Guardian and Trustee without running afoul of privacy legislation based on certain exceptions. However, guidance on the exceptions is vague. The OSC would be willing to assist in providing additional guidance regarding the application of the exceptions. The lack of a nationally coordinated elder protection service (such as exists in the United States) hinders protection efforts; and
  • Probate fees and jointly-owned accounts: the OSC expressed concerns regarding advice given to seniors, as a part of the estate-planning process, to place their assets in jointly-held accounts to avoid probate or estate fees on death. Such arrangements can increase the risk of financial exploitation by the joint account holder.

2. Operations

OSC Staff currently interacts with the elderly through multiple channels, including the OSC's Investor Office, the Inquiries and Contact Center, and its enforcement branch. The OSC is seeking to improve its interaction with seniors in several ways.

  • Training and education – the OSC intends to provide training and education to Staff members that interact with older individuals;
  • Dedicated staff for older investor inquiries – the OSC seeks to train members of its Inquiries and Contact Center in elder issues, and to direct those who self-identify as seniors to those employees;
  • Applying a new lens to its work – the OSC will take steps to encourage all of its branches to approach their initiatives with consideration to the implication of that work for older investors; and
  • Resources and materials for staff – the OSC seeks to provide additional resources and materials for its Staff for communicating with older individuals.

3. Research

The Seniors Strategy highlights the importance of continuing research into the investment sphere, including trends facing investors and investor behaviour. The OSC hopes that continuing research will allow it to fine tune its policy and outreach measures for older Ontarians.

4. Education and outreach

The OSC plans to develop educational plans for older Ontarians, as well as their networks of family and friends. In addition, the OSC plans to provide education and outreach to registered firms and advisors for dealing with elder Ontarians. The planned outreach programs include:

  • White label materials for firms (such as forms, discussion guides and educational materials that reflect best practices);
  • A resource hub on GetSmarterAboutMoney.ca, an education resource operated by the OSC;
  • Discussion guides, to be provided to older Ontarians to help prepare them for investing;
  • Resources for families, friends and caregivers;
  • Education and outreach strategy for new Canadians;
  • Community outreach; and
  • Online education and outreach – in addition to GetSmarterAboutMoney.ca, the OSC will use social media, the Investor News newsletter and Re: Investing, a digital contact center that allows the OSC to respond directly to questions about investing, financial planning and fraud.

Footnotes

[1] http://www.osc.gov.on.ca/documents/en/Securities-Category1/sn_20180320_11-779_seniors-strategy.pdf

[2] OBSI is seeking to expand its powers to make its recommendations binding on investment firms. See: http://www.cmblaw.ca/news-and-media/should-obsi-have-the-power-to-make-binding-orders.html

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Clarke Tedesco
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Borden Ladner Gervais LLP
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions