The Duties of Financial Advisers

• Author: Anita Indira Anand
• Pages: 40-52

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The Duties of Financial Advisers

Advisers and Fiduciary Duties

Canadian investors usually rely on nancial advisers. When meet-

ing with one of these professionals, most people do so believing

that the adviser will put the client’s best interests rst. A study from

Ontario’s Investor Education Fund found that 70 percent of Can-

adians who invest their money with advisers believe that the adviser

has a legal duty to prioritize the best interests of the client.

Unfortunately, in Canada, there is no clear duty contained in

statute that binds nancial advisers generally to act in the client’s

best interests. Those investors who believe otherwise operate under

a misapprehension that may be costing them dearly in terms of

monies they pay in fees to their advisers. As a CSA consultation

paper notes:

Most investors incorrectly assume that their registrants [or advis-

ers] must always provide advice that is in their best interest. As a

result, clients have misplaced reliance or trust on their registrants,

resulting in opportunities for some registrants to take advantage

1 The Brondesbury Group, “Investor Behaviour and Beliefs: Advisor Relationships

and Investor Decision-Making Study” (2012) at 2, online: Get Smarter About Money

www.getsmarteraboutmoney.ca/wp-content/uploads/2017/06/Adviser-relationships-

and-investor-decision-making-study-2012.pdf.