When the family of 92 year old Murdo McDonald of Kelowna BC found out that Murdo's trusted RBC investment advisor was assisting him in selling his home and moving him to a care facility they were at first relieved. When they later found that the advisor turned out to the be the person who purchased his home they were surprised. When they found he had purchased it from the elderly client for about $50,000 below market value, without supporting appraisal, and for no money changing hands they were rather upset.
When his son in law contacted the BC Securities Commission, he was told by them to take his issue to the real estate association. He found this disssapointing treatment and asked a second time, and received the same answer a second time.
When I was informed of this, I called Steve Plumber, senior investigator of the BS Securities Commission. His response was that they had no interest in cases like this and that all matters with IDA firms (like RBC) were automatically referred to the IDA. When I asked him if he found any conflict with an industry trade association policing and enfocing itself, he said no, that is "how the system works".
I then asked him, if the Provincial Securities Act allowed him to pass away matters of law such as this to other self interested parties, and he had no answer for me except to repeat, "that is how the system works". I was not informed if "the system" actually follows the legislation in place or if they (regulators) are following a system of greatest convenience to themselves and the industry. After twenty years of seeing cases like this I am convinced it is the latter.
Does the public deserve regulatory and industry participants who paint themselves as the highest providers of ethical and "client first"service, while in practice they are allowed to forget morals, ethics and client protection if they happen to get in the way of making money and convenience?
So for the 92 year old gentleman, the BC Securities Commission failed miserably. Only after vocal investor advocates from across Canada began to act on this gentleman's behalf did the company in question (RBC) make efforts to cause restitution to the client. Even then, corporate lawyers tried to hold the man to confidentiality agreements saying he would remain silent on this indiscretion. He had no interest in publicity, nor did his family have any interest in signing coverup agreements to protect the investment dealer, so none was signed. In order to receive his home back however, the fellow had to sign an agreement that began with the words, "for value received........".
What this means I am not sure, but what it meant to me when I read it was that the parties that took away this mans home in the worst possible abuse of his trust and vulnerability, were suggesting that in order to get his home back, he had to acknowledge that he was receiving some value or benefit in the contract he was signing. He was in fact receiving only his own home.
Financial elder abuse is all too common in the financial services industry, as are the financial predators who roam freely under the guise of investment professionals. The industry seems lacking in motivation to weed them out, since they are generally the top commission or fee producing agents for the firms. The elderly are often vulnerable, trusting, and without doubt some of the wealthiest members of society, and they are easy prey for financial predators.
From my twenty years of experience in the financial services industry, I can say that I am not aware of one single client who has received compensation and or satisfactory treatment from complaint to a provincial securities commission, and I have seen double dipping and other evidence handed to them in hard copy by clients harmed by financial advisors. Each case I have witnessed has improperly and perhaps illegally referred the client away from the law, and turned them over to the foxes who guard the henhouse in Canada, called the Investment "Dealers Association". This is nothing more or less legal a regulatory agency than your local automobile dealers association, and to allow a self appointed body such as this to act as judge and jury on cases against it's own member is nothing short of criminal. A full public investigation should be undertaken to reveal just how many trusting and vulnerable clients have suffered from failed enforcement of securities law, and then suffered insult on top of injury by being told to "go somewhere else" by the government watchdog charged with this. The inquiry will, in my opinon show that the watchdog died some years ago.
For information and resources on the web, go to:
www.regulators.itgo.com
www.sipa.to
