On March 20, 2018, the Ontario Securities Commission (OSC) published its Seniors Strategy, the purpose of which is to outline initiatives that the OSC is pursuing in relation to older individuals, recognizing that the financial lives of older Canadians have grown increasingly complex relative to previous generations.
This short article will outline the highlights of the Seniors Strategy. The Seniors Strategy outlines proposals only – the policy items discussed have not been approved or implemented at the time of publishing. The OSC’s proposed strategy addresses several different topics, including:
The Seniors Strategy states that its creation was driven by changes to the financial situation of seniors, including:
In short, increased reliance on non-guaranteed sources of income makes financial literacy and investment knowledge increasingly important and, where that knowledge is lacking, makes seniors more vulnerable. As set out in the Seniors Strategy, because cognitive changes (while they affect individuals differently) often occur with age, they tend to affect more greatly those who rely most on their savings. Those cognitive changes are compounded by the effects of increased social isolation, and make some seniors more vulnerable to undue influence and fraud.
Substance of the Seniors Strategy
The OSC has broken down the Seniors Strategy into four different initiatives:
In arriving at its policy proposals, the OSC attempted to balance the concerns of various stakeholders. On one hand, a concern exists amongst stakeholders that older investors are disproportionately susceptible to financial exploitation and fraud as a result of the influence that arises out of increasing reliance on others as people age. On the other hand, the OSC recognized the difficulties faces by registered firms in spotting and avoiding that exploitation.
A framework for addressing financial exploitation and cognitive impairment
As part of its mandate, the OSC has released a framework for addressing financial exploitation and cognitive impairment. The basics of that framework are as follows:
Addressing confusing and misleading titles, designations and marketing practices
The OSC addresses concerns that credible-sounding titles, such as Vice-President, Seniors Specialist, or Wealth Manager might be potentially confusing and misleading to older individuals because they indicate a level of qualification, experience or competence that might not actually be present.
While the Seniors Strategy does not provide any specific policy proposals in that regard, it references a proposal, originally made in Consultation Paper 33-404, Proposals to Enhance the Obligations of Advisers, Dealers, and Representatives, to standardize titles used by client-facing representatives. The OSC, along with the other members of the Canadian Securities Administrators (CSA), believes that clarification of business titles will strengthen public confidence in registered firms.
OBSI is a non-government organization mandated to provide independent dispute resolution services at no cost to consumers when they are unable to resolve their complaints with their banking services or investment firms. OBSI reports that nearly 50% of complainants are over the age of 60. The OSC is considering options to strengthen OBSI’s ability to secure redress for investors. Recently, CSA members released Staff Notice 31-351, which established the view of CSA members that a firm’s repeated failure to compensate clients in a manner consistent with OBSI recommendations may be viewed as an indication of problems with that firm’s complaint-handling practices.
Breaking down silos
The OSC also plans to improve investor protection by working with other regulators and organizations with mandates for the protection of seniors in order to develop comprehensive strategies and solutions that will prevent seniors from ‘falling through the cracks’. For example:
OSC Staff currently interacts with the elderly through multiple channels, including the OSC’s Investor Office, the Inquiries and Contact Center, and its enforcement branch. The OSC is seeking to improve its interaction with seniors in several ways.
The Seniors Strategy highlights the importance of continuing research into the investment sphere, including trends facing investors and investor behaviour. The OSC hopes that continuing research will allow it to fine tune its policy and outreach measures for older Ontarians.
4. Education and outreach
The OSC plans to develop educational plans for older Ontarians, as well as their networks of family and friends. In addition, the OSC plans to provide education and outreach to registered firms and advisors for dealing with elder Ontarians. The planned outreach programs include:
 OBSI is seeking to expand its powers to make its recommendations binding on investment firms. See: http://www.cmblaw.ca/news-and-media/should-obsi-have-the-power-to-make-binding-orders.html