Drivers of Change
The MFDA operates in an environment that is continually changing. The drivers of change include new policy reforms within the securities industry, proposed changes to the regulatory framework in Canada, an aging Canadian demographic and, of course, the development of new technologies.
Regulation within the financial services industry continues to evolve. Within the securities industry, product regulation, registrant standards of conduct and the regulatory framework is continually subject to review and change. Regulators in other financial sectors are also experiencing similar changes which may also have an impact on MFDA Members and their clients. Financial advice spans multiple regulatory regimes and almost all of MFDA advisors are licensed in either the insurance or banking sectors. Collaborating and harmonizing with other regulators is key to ensuring the financial advice clients receive is subject to a consistent and appropriate standard of investor protection.
The aging demographic is also posing challenges for regulators worldwide. Seniors are more vulnerable to financial abuse and at greater risk of experiencing a cognitive decline. MFDA research indicates that at least one individual at or approaching retirement resides in 35% of the households serviced by MFDA Members and these households have less than $100,000 in financial assets. The MFDA will continue to focus on senior initiatives, including performing research to better understand client outcomes and to enhance our risk-based regulatory functions.
Members are also adopting new technology at an increasing pace. New technology allows Members to increase efficiencies and also offer new products and services to clients. While the benefits of implementing new technology can be significant, it must be accomplished in a manner that continues to protect investors and addresses risks, particularly risks relating to the safety and security of client information. MFDA must take proactive measures to understand new technologies in use and collaborate with Members to achieve a successful outcome for clients and Members.
All these factors present risks, challenges and opportunities for the MFDA and its membership. By understanding these drivers of change, we are able to plan our actions and continue to contribute to the financial well-being of Canadians.