Why Surveying Banks Isn't Enough to Protect Canadian Investors

I recently came across a Globe and Mail article that captured my attention - and my concern. Just three months after the OSC and CIRO released their troubling findings about bank sales practices, we're learning that progress has stalled. Investor advocates are pressing regulators to move beyond surveys and reviews to actual enforcement action.

This article prompted me to write this follow-up because it highlights a critical gap between identifying problems and solving them. When I wrote about the initial investigation, in which 24% of bank representatives admitted that clients had been recommended products not in their best interests, and 33% reported that clients had been provided with incorrect information, I hoped it would be a turning point.

But here's what troubles me now: three months later, we're still in the "review" phase, and Canadian investors continue to be exposed to conflicted advice.

At a recent Toronto event, Anthony Quinn, president of the Canadian Association of Retired Persons (CARP), pressed OSC officials with a question that resonates with many of us in the independent advisory space: "If these identified issues continue and the banks are considering perhaps tackling it at some future date, when does the regulator look to start regulating?"

It's a fair question. And it's one that deserves an honest answer.

Matthew Onyeaju, the OSC's senior-vice president of registration, inspections and examinations, explained that while there is a second review underway, the regulator has not commenced a formal investigation at this stage. The OSC is still working to independently corroborate whether securities law violations have actually occurred.

I understand the regulatory process requires due diligence. But I also understand the frustration of Canadian investors across all age groups and life stages who feel like they're being left vulnerable while regulators conduct yet another study.

Let me be clear: I'm advocating for swift action to protect investors. But I also recognize the complexity regulators face, and I think it's important we address this honestly.

The OSC's cautious approach isn't entirely without justification. To take enforcement action against Canada's largest financial institutions, regulators need concrete evidence of securities law violations, not just survey responses. They must balance investor protection with systemic stability concerns, operate within finite resources, and meet high legal thresholds for proving unsuitable recommendations across thousands of individual client situations.

Having acknowledged these legitimate challenges, I must say: they don't justify the pace we're seeing.

As Quinn stated in his interview: "What we heard from the OSC was sobering. Their survey results show that a significant portion of bank clients continue to receive investment advice that is not in their best interest. The incentives at play appear to leave the investor in the back seat."

When we know there's a problem, when we have statistical evidence of harm, and when the root causes are clearly identified, the question becomes: how much proof do we need before we act?

Here's where things get particularly frustrating for those of us who care about true investor protection.

Canada implemented Client Focused Reforms (CFR) in December 2021, based on the concept that "the client's interests come first in a client-registrant relationship". These reforms were supposed to elevate standards across our industry.

And yet, here we are in late 2025, discovering that at Canada's largest financial institutions, sales pressure is still leading to recommendations that aren't in clients' best interests.

The Client Focused Reforms introduced important requirements:

These are meaningful improvements that have elevated the standard of care in our industry. As an independent advisor, I welcomed these changes because they aligned with practices I was already following.

But here's the fundamental problem: the CFR requirement in Ontario is to act "fairly, honestly and in good faith" - known as the duty-of-care model - which is much less strict than a fiduciary standard.

This distinction matters enormously. Acting "fairly, honestly and in good faith" while selling only proprietary products and working under sales quotas can still result in recommendations that aren't optimal for clients. You can follow the letter of the CFR law while still serving the bank's interests ahead of the client's.

Based on my 20 years in independent financial planning and working with investors across all life stages - from young professionals to families to those approaching or in retirement - here's what I believe meaningful reform requires:

Create a two-tier system:

This is not a radical concept. Portfolio managers and certain other registrants already operate under fiduciary-like obligations. We're simply proposing to extend this clarity across the entire industry.

If you hold yourself out as providing financial advice, you should not be subject to sales targets. Period.

Banks can maintain sales teams for their products—but those teams should be called "product specialists" or "sales representatives," not "financial advisors."

Anyone claiming to provide comprehensive financial advice should be required to have access to products beyond a single manufacturer. This addresses the concern raised by investor advocates about banks' "oligopolistic power and collective decision to restrict retail investor choice at bank branches".

Every client should receive clear, plain-language disclosure showing:

Regulators need adequate resources and clear mandates to act on violations. The current cycle of studies and reviews without enforcement action isn't protecting investors.

OSC spokesperson Andy McNair-West said the regulator expects to complete the second review within months and intends to share the findings. But as Quinn noted, investors "cannot wait years for the necessary changes to be made."

I share this concern. Every month of delay means more Canadians are receiving advice that's compromised by conflicts of interest.

However, I also recognize that lasting reform requires getting it right. The goal isn't just quick action - it's effective action that genuinely protects investors while maintaining a functional financial services industry.

This is not the first time the OSC has taken a closer look at Canada's biggest banks. In 2021, Ontario Finance Minister Peter Bethlenfalvy called on the OSC to conduct a review of several banks that had halted sales of third-party investment funds. It was completed in 2022 and submitted to the minister. The findings have not been made public.

This pattern of private reviews and unreleased findings does not inspire confidence. Transparency is essential, not just for accountability, but for allowing investors to make informed decisions about where they seek financial advice.

As much as I'd like to tell you that regulatory reform is imminent, the reality is that meaningful change takes time. In the meantime, here's how you can protect yourself:

Ask Direct Questions:

If you don't get clear, confident answers, that tells you something important.

A fiduciary is "a person or organization that acts on behalf of another person or persons, putting their clients' interest ahead of their own, with a duty to preserve good faith and trust".

If your "advisor" can only show you products from one company, they're not truly acting as a fiduciary, regardless of what title they use.

Independent advisors, such as our firm, have access to the full marketplace of products. We're not subject to sales quotas, and many of us voluntarily operate under fiduciary standards even though Canadian law doesn't universally require it.

Before implementing any financial recommendation, ask to see:

If your advisor can't or won't provide this, you're likely being sold rather than advised.

As an independent financial planner, I'm not just waiting for regulators to act. Here's what we are doing:

1. Voluntary Fiduciary Commitment: My practice operates under a self-imposed fiduciary standard.

2. Full Transparency: Every client receives a comprehensive fee disclosure showing exactly what they pay and how I'm compensated.

3. Open Architecture: We maintain access to products from dozens of companies, ensuring I can truly recommend what's best for each client's situation.

4. Conflict Disclosure: Where conflicts exist, I disclose them upfront and explain how I mitigate them.

5. Client Education: I'm committed to helping Canadians understand the difference between sales and advice, between product-push and planning.

I believe we can have a financial services industry that:

This isn't an either-or proposition. We don't have to choose between a functional banking system and investor protection. We just need the regulatory will to implement meaningful reform.

As Colin Blachar, a spokesperson for Ontario's Ministry of Finance, stated, the government continues to work with the OSC and CIRO to ensure investors have "access to the products that best serve their needs".

That's the right goal. Now we need the actions to match the words.

If you're concerned about whether your current financial relationship truly serves your best interests, I invite you to schedule a complimentary consultation. We'll review:

You deserve advice that's genuinely in your best interest and not recommendations shaped by sales quotas and limited product shelves.

The regulatory wheels turn slowly, but your financial future can't wait. Let's ensure you're getting the quality of advice you deserve, right now.