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What Do Investors Complain About the Most ?

in Investments

What do investors complain about the most in Canada?

“…unsuitable investments generate the most number of complaints…”,

According to the IIROC (Investment Industry Regulatory Organization of Canada) (investors complaints to the IIROC).

On October 31st, 2016 the IIROC published their Enforcement Report 2015. It outlined the complaints they received (as the industry watchdog) from customers (you complain here).  The report is big, and very specific cases where the IIROC has “prosecuted” their members.

What do investors complain about, ask the IIROC

I received this report because I am on the IIROC mailing list. The list is where they publish their findings on investigations done on their members.

The top 5 complaints they received last year were:

  • 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. Fifty (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. I am concerned that only 838 complaints were received over that period. That numbers strikes me as being a little low. Remember this is an industry organization, investigating their members. 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. It is not surprising that seniors seem to be the largest victim group.  We need to protect our Senior Citizens from unscrupulous deals, and downright bad investing advice. This is the major conclusion I take away from the report.

Complaints by Category

An interesting table of regulatory violations investigated by the IIROC by year.

Individual – Breakdown by Violation20152014201320122011
Due Diligence/Handling of client accounts/suitability1918192620
Inappropriate personal financial       dealings657109
Misappropriation11394
Misrepresentation58394
Discretionary  trading95565
Forgery54362
Unauthorized  trading610167
Manipulative & deceptive trading11348
Outside business activities23442
Supervision56454
Gatekeeper42235
Failure to cooperate25346
Trading conflict of interest20020
Off book transactions02513
Trading order violation00012
Trading without appropriate registration00112
Fraud00200
Undisclosed conflict of interest10000
Inadequate books and records02100
Data from 2014-2015

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