Author: Moe Rahimian

Published By: Insurance Journal

Author: Andrew Rickard 

Date Published: July 22, 2016  01:34 p.m.

The Ontario Securities Commission (OSC) says some advisors are not collecting and maintaining adequate Know Your Client (KYC) information, and is warning against the inappropriate use of client testimonials. The regulator is also concerned about the quality of advice that is being offered to seniors and other vulnerable investors.

In its annual summary report on compliance and registrant regulation, the OSC says that the inadequate collection, documentation, and updating of KYC information “continues to be a significant and common deficiency” in the industry. Among other things, compliance reviews have found that advisors have failed to gather information about their clients’ other investments. Without this information, the regulator warns that “a registrant does not have an adequate understanding of the client’s financial situation and whether the proposed transaction may result in undue concentration risk in securities of a single issuer, group of related issuers, or industry.”

Client testimonials

The OSC is also keeping an eye on client testimonials. Although Ontario securities law does not prohibit the use of testimonials, the OSC says advisors need to make sure that they are balanced, fair, and not misleading. “Registrants should be able to substantiate all claims that they make in their marketing materials,” reads the report. “Further, there is a risk that misleading or inaccurate testimonials will be communicated to investors, unless the registrant has procedures in place to conduct an adequate review and approval of the use of testimonials.”

Vulnerable investors

In addition, the regulator says its compliance reviews uncovered instances in which advisors failed to provide appropriate services or products to vulnerable investors. The OSC is particularly concerned about how seniors are being treated, and is developing guidelines and best practices for those who provide advice to older clients. “In the interim, we remind you that you are responsible for the adequacy of your firm’s policies and procedures for the protection of investors, including vulnerable investors,” reads the warning to investment dealers. “You should assess your firm’s business model and policies and procedures.”

These are just some highlights from the 99-page report, which the OSC “strongly encourages” advisors to read and use in order to gain a better understanding of their obligations.

Published By: Insurance Journal

Author: Andrew Rickard 

Date Published: June 30, 2016  10:03 a.m.

Once they begin collecting their Old Age Security (OAS) payments at age 65 the typical Canadian will live about twenty years, but those who were born outside of the country tend to live a little longer.

The Office of the Chief Actuary, which operates within the Office of the Superintendent of Financial Institutions , has published the results of its most recent OAS mortality experience study. It found that in 2013, the life expectancies at age 65 for OAS beneficiaries was 18.9 years for males and 21.8 years for females. The report points out that these numbers are 2.8 years and 1.9 years longer respectively than in 1999.

Low income pensioners live less

The study also revealed that low income pensioners live about 2.5 years less than those with higher incomes. Marital status also had an influence on longevity: married males live on average 3.5 years longer than single males, and married females live on average 2.2 years longer than single females.

In addition, people who were born outside of Canada have slightly longer life expectancies at age 65 than those born in Canada, with foreign-born males living 1.9 years longer and foreign-born females living 1.8 years longer. The Chief Actuary attributes this to a number of factors, including medical and employability screening prior to entry to Canada, as well as cultural and lifestyle characteristics.

Similar trends observed in the Unites States

“Older Canadians are living longer but the growth in life expectancy of 1.6 months per year over the most recent period from 2010 to 2013 has been lower than the 2 months per year experienced over the previous decade.” says Canada’s Chief Actuary Jean-Claude Ménard. “Similar trends have been observed in the Unites States and in the United Kingdom. However, it is too early to know if the recent shift to lower mortality improvements is permanent or if mortality improvements will return to levels more in line with prior years.”