Saturday, March 26, 2011

The Responsible Investor

About six years ago I was a member of one of the OSC's Fair Dealing Model's [ FDM] subcommittees, the Performance measurement team. I was the only retail investor member ; the others were dealers and lawyers along with OSC staff. A number of firms suggested that the cost of providing personalized returns would be prohibitive. A few argued it was a value-add service that should be subject to fees. Concerns were expressed about the unrealistic short term expectations that can be fostered by periodic performance disclosure if clients do not have an appreciation of market risk .Nevertheless, there was general acceptance of the proposal to focus on improved periodic performance reporting, especially of personal performance against goals, but there was some concern expressed about the way in which performance would be measured, the development of uniform performance measurement requirements and the use of performance benchmarks. There were many other good ideas to protect investors. Unfortunately, the FDM died when other provincial regulators didn't buy into its modern concepts and industry lobbyists rallied aggressively against its principles. Read the full article 

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