Monday, June 20, 2005

The OSC answers one town hall question, and raises more.

After the recent investor town hall meeting, the OSC invited questions, and promised to answer all. I aksed them about a topic I feel is not only misleading, but contrary to the law as provided by the Securities Act. I think the answer I got confirmed my belief but brushed aside any need for the OSC to do anything about it.
my question:
18. Why are investment salespeople who are officially registered as either "registered representatives", or as "salespeople", at the Securities Commission, allowed to represent themselves to the public as "investment advisors", indicating a different level of fiduciary duty to the public, when the Securities Act is clear on which titles are allowed and which are not?

OSC answer:
The OSC registers individuals in the categories of salesperson, officer, director or partner. These categories are then further designated as trading or advising. The firm can be registered as either a mutual fund dealer, an investment dealer, or as investment counsel or portfolio manager (ICPM). The latter ICPM category is what we refer to as an adviser (spelled “er”). While advisor (spelled “or”) is widely used in the industry to represent a salesperson or representative, it is not a registration category. The OSC does not register job titles.

Did I get the brush off? Any thoughts out there? I still remain convinced that the use of this title is an abuse of the Securities Act that the OSC would find it easier to overlook. From a client perspective however, it is very misleading to let them believe they are dealing with trusted and professional advisors, onlly to find when push comes to shove that it was not the case.