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In September 2018, the Financial Services Commission of Ontario (FSCO) released a new guideline: the Treating Financial Services Consumers Fairly Guideline.

According to FSCO, the Guideline applies to the insurance, credit union/caisse populaire, loan and trust, and mortgage brokering sectors. It is meant to ensure “a common understanding between FSCO and its Licensees about what it means to treat consumers fairly throughout the life cycle of a financial product.”

The Guideline includes eight principles. They are:

  1. FSCO expects that a core component of a Licensee’s business governance and culture is fair treatment of consumers.

According to FSCO, this means that a “treating consumers fairly culture” should be directed from senior levels of an organization and included in any size of organization. Licensees should “design, implement, communicate and monitor compliance with codes of conduct, and/or policies and procedures that reinforce a culture of treating consumers fairly.” Policies should be made public.

  1. FSCO expects Licensees to act with due skill, care and diligence at all times, but especially when dealing with consumers or designing financial services or products for consumers.

This includes having an established process to mitigate risk (such as stress testing) and regularly delivering and/or participating in training programs on ethics and integrity.

  1. FSCO expects Licensees to promote financial services and products in a manner that is clear, fair and not misleading or false.

This includes being clear about any risks, exclusions, or limitations; informing customers about their rights; and obtaining marketing material approval from the product manufacturer.

  1. FSCO expects Licensees to recommend products that are suitable, taking into account the consumer’s disclosed personal circumstances and financial condition.

FSCO recommends a three-step process including getting to know clients by using methods such as fact-finding; conducting a thorough needs analysis; and understanding the products fully.

  1. FSCO expects Licensees to disclose and manage any potential or actual conflicts of interest.

Examples of conflicts of interest include:

  • Payment or acceptance of an incentive, commission, or any non-monetary benefit for the sale of financial services or products.
  • Making a financial gain or avoiding a financial loss at the expense of the consumer.
  • Inability to act in the best interest of one consumer without adversely affecting the interest of another.
  • Any relationship that may be perceived to potentially affect the independence of advice given.
  1. FSCO expects Licensees to provide continuing service and keep consumers appropriately informed, through to the point at which all obligations to the financial services consumer have been satisfied, including claims handling or the diligent provision of benefits.
  2. FSCO expects Licensees to have policies and procedures in place to handle complaints in a timely and fair manner.
  3. FSCO expects Licensees to protect the private information of financial services consumers and inform them of any privacy breach.

Read the full Guideline on the FSCO website:

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