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August 25, 2021

Advisors face same rules as telemarketers: CRTC

Pretty much everyone views telemarketers as annoying pests. But do financial advisors fall under the same umbrella?

Seems so, according to the Canadian Radio-television and Telecommunications Commission. It's decided that the rules governing unsolicited telemarketing now apply to financial advisors and insurance agents as well, rescinding an exemption for advisors granted back in 2008.

Instead of extending the exclusion to the insurance sector, as industry lobbyists had hoped, the CRTC went the other way, removing the exemption for financial advisors.

In its decision, the CRTC said that while both groups clearly have an obligation to communicate with clients, there’s nothing to say they have to do it by telephone.

And there’s seems to be little evidence that this obligation requires them to communicate with clients outside of the existing telemarketing restrictions – i.e. calling outside certain hours, not identifying themselves during the call, and not accepting ‘do not call’ requests from their clients.

The CRTC points out that every other industry is subject to these guidelines, and ruled that there’s no reason why the financial industry should be exempt.

Advisors can still contact existing clients who are registered on the National Do Not Call List under the existing business relationship exemption, but they will have to abide by the telemarketing rules when making other unsolicited communications with those in their book of business.

Advisors’ reactions have been mixed so far, according to Advisor.ca, a trade publication. Detractors maintain that the ruling would only impact new industry recruits, and that it would likely not deter 'boiler room' operators.

"Today's clients want solutions that are relevant to their unique situation in the shortest possible time. What is wrong with saving the client and advisor time via a telephone conversation to explore possible solutions?" asks Canfin Financial’s D. Tony Mahabir.

Do you want to hear from advisors when something new is in the pipeline? Or are their calls really no different from everybody else that disturbs you at supper time?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...