I have been asked more than a few times by advisors whether I think product commissions will be banned. While we can never say never, I’ve had enough questions on this to warrant an article. In the October issue of Investment Executive, I highlight three reasons why I think we’re unlikely to see a commission-ban similar to plans unveiled in Britain and Australia.
This was my view before writing the article. But as I did a bit of homework on the issue, I went looking for some details in the old Fair Dealing Model. Recall that the FDM was the proposed legislation that started at the OSC in 2004 and it was moving in the direction of banning commissions. After getting watered-down, it shifted to a national initiative and was renamed Registration Reform – the new rule that was implemented just over a year ago. Hence, the industry already batted down one significant attempt to ban commissions.