What do investors complain about the most in Canada? According to the IIROC (Investment Industry Regulatory Organization of Canada), “…unsuitable investments generate the most number of complaints…”, (investors complain to the IIROC). On October 31st, the IIROC published their Enforcement Report 2015 outlining the complaints they receive (as the industry watchdog) from customers (you complain here). The report outlines a lot of data, and some very specific cases where the IIROC has “prosecuted” their members, from what investors complain about.
The top 5 complaints they received last year are:
- Unsuitable Investments
- Service Issues
- Disputed Fees
- Firm policies and procedures
- Unauthorized trading
The IIROC points out that the percentage of complaints matches their prosecution statistics, where 50 % of prosecutions against their registered members had to do with suitability requirements. Seniors are the largest demographic that complains or makes inquiries with the IIROC.
The report is well worth reading, however, I am concerned that only 838 complaints have been received over the past two fiscal years. That numbers strikes me as being a little low, but remember this is an industry organization, investigating their members, so there may be many more complaints out there, but the “culprits” may not be members of the IIROC.
The fact that Seniors (61-100 years old) accounted for 63% of the complaints seems to point to that group as being the target group for unscrupulous activity (and that they are the group with the most money to try to fleece). We need to protect our Senior Citizens from unscrupulous deals, and downright bad investing advice, is the one thing I take away from this report.
An interesting table of regulatory violations investigated by the IIROC by year.
|Individual – Breakdown by Violation||2015||2014||2013||2012||2011|
|Due Diligence/Handling of client accounts/suitability||19||18||19||26||20|
|Inappropriate personal financial dealings||6||5||7||10||9|
|Manipulative & deceptive trading||1||1||3||4||8|
|Outside business activities||2||3||4||4||2|
|Failure to cooperate||2||5||3||4||6|
|Trading conflict of interest||2||0||0||2||0|
|Off book transactions||0||2||5||1||3|
|Trading order violation||0||0||0||1||2|
|Trading without appropriate registration||0||0||1||1||2|
|Undisclosed conflict of interest||1||0||0||0||0|
|Inadequate books and records||0||2||1||0||0|