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Originally published: September 6, 2017
This article is part of the Investor Office series of discussions with key figures whose work impacts investors. The views expressed in this article are entirely those of Letty Dewar and are not intended to represent the views of the Investor Office or the Ontario Securities Commission.
Letty Dewar was recently appointed the new Chair of the Investor Advisory Panel (IAP), a nine-member independent committee of the Ontario Securities Commission (OSC) that advises and comments on proposed rules, policies and investor protection initiatives. The Investor Office recently sat down with Letty to discuss her background, the IAP, her role as Chair and areas of focus for the year.
I joined the IAP in 2014 and was recently appointed to serve as Chair.
I have been active in the financial industry since 1984, gaining knowledge and insights on mutual funds, the capital markets and investor issues. My experience includes serving as the chief compliance officer for a major mutual fund company where I championed several compliance and governance initiatives, including establishing an independent board of governors – also known as an investment review committee – before it became a regulatory requirement for the industry. I retired in 2008 but remained active on issues affecting investors. I have served on the CFA Society Toronto’s Portfolio Management Committee since 2014, and my term will complete at the end of the month. I am also a member of the CFA Institute, the CFA Society Toronto and the Genesis Club of Toronto.
I am a designated Chartered Financial Analyst (CFA) and have a Masters of Business Administration (MBA) from York University and a Bachelor of Commerce (BComm) from the University of Toronto.
On the role of the IAP…
The IAP is an OSC initiative to bring investor representation to the rule and policy making process. Our mandate is to solicit and represent the views of investors. As part of our responsibilities, we advise and comment on proposed rules, policies, concept papers and discussion drafts including the OSC annual Statement of Priorities. We conduct our activities without direction or influence from the OSC, and our independence helps ensure we provide necessary objectivity and valuable investor perspectives.
On risk profiling …
In late 2015, we published a research report that we commissioned, Current Practices for Risk Profiling in Canada and Review of Global Best Practices, which evaluated current industry practices for determining an investor’s risk profile. The report found that there were inconsistent and confusing risk concept definitions as well as insufficient understanding of the factors involved with risk profiling. In 2016, we hosted a roundtable on the subject and invited industry experts, investor advocates, academics, regulators and researchers. The discussion was well-received and unique within the North American context. While most participants were initially unaware of the complexity of the issue, they left with a better appreciation and understanding of risk profiling when determining investor needs. There was general agreement to view risk profiling as beneficial to the investor, not just the advisor, and to explore the advancement of standard definitions and minimum standards.
The IAP is currently evaluating next steps as the research report and roundtable confirmed that the industry is receptive to finding ways on improving risk profiling and related issues.
On being Chair of the IAP …
While officially the leader of the Panel, I see myself largely as the representative, organizer and spokesperson for the Committee members. I facilitate and lead discussions at meetings, ensuring all perspectives are considered. I also provide direction on how best to focus the energies of the IAP.
My fellow IAP members – including the new members that joined this year – bring a wealth of knowledge and talent. We all share the same concerns many investors today face and we generally find consensus on ways to move forward. We are united in our common goal of ensuring a strong investor voice within the regulatory decision-making process. As a result, serving as Chair is an absolute pleasure and quite rewarding on a personal level.
On areas of focus for the next year …
The IAP will continue to monitor a number of investor issues with keen interest. I’m optimistic that the necessary advancements in investor protection will be achieved over the next year. The proposed best interest standard governing the client-advisor relationship, the elimination of conflicted compensation incentives for advisors and clarifying advisor proficiency standards and titles are just some examples that could lead to significant improvements for investors.
These are also potential challenges ahead. While I am encouraged that the OSC and the Financial and Consumer Services Commission of New Brunswick will continue to move forward with developing a best interest standard, it is deeply concerning that other provincial and territorial securities regulators have withdrawn from the discussion. I also note that there does not appear to be a clear mechanism for investor input under the new Cooperative Capital Markets Regulator.
The Panel continues to support the OSC to provide leadership on investor protection issues. Investors have had a strong voice through the IAP, and I look forward to continued progress.