The Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) published a joint report, Sales Culture Concerns at Five of Canada’s Bank-Affiliated Dealers, summarizing survey evidence from mutual fund dealing representatives at five large bank-affiliated dealers. While many respondents viewed their product shelves as generally adequate for clients, the report identifies indicators of potential investor harm linked to the sales environment. Across the five dealers, one in four representatives reported that clients are recommended products or services that are not in their interests at least “sometimes”. Forty percent said scorecards used to track performance against targets influence product and service recommendations, and one in three reported clients being provided with incorrect information about recommended products and services. The OSC and CIRO point to sales environment, compensation, incentivization, and performance tracking as possible contributing factors; the survey was voluntary and conducted between November 26 and December 13, 2024, with nearly 3,000 responses. The next phase of the coordinated review will focus on understanding the dealers’ sales practices and the controls in place to address any material conflicts of interest arising from those practices.
Ontario Securities Commission 2025-07-09
Ontario Securities Commission and Canadian Investment Regulatory Organization publish report flagging sales culture concerns at five bank-affiliated dealers
The Ontario Securities Commission and the Canadian Investment Regulatory Organization released a report highlighting sales culture concerns at five bank-affiliated dealers in Canada. The report reveals potential investor harm due to sales practices, with issues such as inappropriate product recommendations and misinformation. The next review phase will examine sales practices and controls for conflicts of interest.