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Originally published: May 17, 2016
This article is part of the Investor Office series of discussions with key figures in Canada’s financial services industry whose work impacts investors. The views expressed in this article are entirely those of Rozanne Reszel and are not intended to represent the views of the Investor Office or the Ontario Securities CommissionOntario Securities Commission An independent Crown corporation that is responsible for regulating the capital markets in Ontario. Its mandate is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in capital markets, and to contribute to the stability of the financial system and the reduction of systemic…+ read full definition.
Meet Rozanne Reszel, President and CEO of the Canadian Investor Protection Fund (CIPF), an industry-funded organization established to protect investor assets in the event that a member of the Investment Industry Regulatory Organization of Canada (IIROC)Investment Industry Regulatory Organization of Canada (IIROC) National self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.+ read full definition becomes insolvent. Rozanne recently spoke to the Investor Office about CIPF’s work and the changing roles of investors in the marketplace.
I grew up in Elliot Lake in Northern Ontario, and later came to Toronto to become a Chartered Accountant after graduating from University of Waterloo. It was as an auditorAuditor An auditor is an individual whose job it is to check the accuracy of financial records. An auditor might be either an internal auditor, external auditor or independent auditor for accounting firms in the public or private sector. Professional auditors are generally Chartered Professional Accountants.+ read full definition that I fell in love with the financial services industry, and I went on to head up the compliance department of the InvestmentInvestment An item of value you buy to get income or to grow in value.+ read full definition Dealers Association of Canada, which was the predecessor to IIROC. I later went to Boston to do my MBA at Harvard University, and worked that summer and on graduation for what was then Nesbitt Thomson, doing a variety of things including private placements, operations and cash management. Some years later, CIPF began hiring staff for the first time, and I became one of its first professional hires. I’ve been here ever since, becoming President and CEO in 1998.
Throughout my career, I’ve been interested in financial literacy and finding ways to communicate effectively with the investing public. I sat on the board of the Ontario Securities Commission’s former Investor Education Fund [Ed. Note: since integrated as part of the OSCOSC See Ontario Securities Commission.+ read full definition Investor Office] for many years, which was a great venue for demystifying financial services and making such topics accessible to people who aren’t in the industry.
On CIPF’s role…
CIPF was created in 1969 as a way to protect investors if an IIROC member is suspended or fails financially. In that event, it’s CIPF’s role to ensure that assets held by the member are returned to the affected investors. We typically make that happen by engaging a trusteeTrustee A person or company that you appoint to manage the assets of a trust. You can name more than one trustee.+ read full definition or, in some cases, dealing with claimants individually, and having the accounts moved to another IIROC member so that clients can reclaim access to their assets.
When I started in the industry, most of the investment dealers were privately owned. That has really changed, and now we have members that are part of large, public financial institutions as well as a number of boutique and owner-managed firms. Part of what CIPF does as an industry-sponsored fund is support all firms on an equal basis, so that whether an investor chooses to work with a large or small firm, they can know that they’re getting the same protection from CIPF.
That being said, it’s important that investors understand that our role is to return assets if a member becomes insolvent. We can’t protect against a loss in value of an assetAsset Something of value that a company or an individual owns or controls. Examples: buildings, equipment, property, a car, investments, or cash. Can also include patents, trademarks and other forms of intellectual property.+ read full definition. If an investor has a concern about a transactionTransaction The process where one person or party buys goods or services from another for money. Examples include taking money out of an account, buying something with a credit card or taking out a loan.+ read full definition that they’ve entered into through an advisor, they should ensure that they take the matter up with the advisor’s compliance department, IIROC or the Ombudsman for Banking Services and InvestmentsOmbudsman for Banking Services and Investments A national, independent and not-for-profit organization that helps resolve disputes between consumers and financial services firms when they can’t come to a resolution on their own.+ read full definition, if necessary.
On investors’ changing responsibilities…
More and more people are required to take more responsibility for their retirement savings. There aren’t as many defined benefitBenefit Money, goods, or services that you get from your workplace or from a government program such as the Canada Pension Plan.+ read full definition pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition plans anymore, and this has transferred a lot of responsibility for retirement planning onto individuals. Investors need to keep learning; there are always going to be new products, new opportunities and new investment ideas to know about.
Fortunately, a lot more resources are out there for people to get information. I would encourage everyone to keep asking questions, don’t make assumptions. As an investor, you’re entitled to ask for information to help you make informed decisions about your money.
On financial literacy…
With the work that CIPF does, we often see sad stories. We see the firms that fail, we see the clients who have invested large sums of money in investments that drop in value. But understanding how and why these things happen requires a fundamental understanding of the rules. Financial literacy and learning is a lifelong process; it’s not something you just pick up when you start working and get your first paycheque. Canadians should take steps toward that sort of learning early on so that they can be active participants in saving for their futuresFutures A derivative contract that commits you to buy or sell a commodity, currency or stock market index at a set price on a set date in the future. Unlike an option, you can’t change your mind later; you must do what your contract says you will do.+ read full definition.