Building Trust in the Client–Investor Relationship
Are investors looking out for the client’s best interest? And can the industry governance standards improve?
These were the two main topics discussed at the Schulich’s Governance and Misconduct in Finance panel sponsored by CFA Society Toronto at St. Andrews Club and Conference Centre on April 28th. Industry experts spoke in front of an audience of 80 investment professionals on how the new OSC policy paper elevates the level of accountability investment managers have in respect to their clients. The panel of finance experts included Maureen Jensen, Chair & CEO of the Ontario Securities Commission (OSC); Sarah Bradley, CEO & Ombudsman at OBSI; Dan Hanson, CFA, Partner & Portfolio Manager at Jarislowsky Fraser Limited; and moderated by Douglas Cumming, Professor in Finance and Entrepreneurship.
“We are dealing with an industry that constantly asks where the rule is that says I can’t, for example, deliver a four per cent return yet charge six per cent,” Cumming said, paraphrasing Jensen’s comments from the panel discussion. “The new OSC policy aligns the client-investor relationship and outlines specific obligations that investors owe their clients.”
The second topic highlighted a lack of diversity in the Canadian finance industry. “This is really important because we have a very small community where there are a lot of interlocking board relationships,” Cumming said. “There is evidence that when there is a lack of diversity on boards, decision making can suffer. The OSC has been proposing to elevate the disclosure standards so it brings attention to this issue.”
The panel discussion was part of a two-day conference where finance professionals from across the globe presented their research to get feedback from industry experts prior to submitting their papers for publication in the Journal of International Financial Markets, Institutions & Money.
Listen to the entire panel discussion here: