June 25, 2013
Laura Paglia was sought for comment on a June 25 industry roundtable hosted by the Ontario Securities Commission, an event that included a candid debate on the implications of introducing a statutory best interest duty for fiduciary advisors. Read an excerpt of Investment Executive’s review of the discussion below.
Even without the additional operational costs, the real expense in the adoption of best interest or fiduciary standard of care would come from the courts, argued Laura Paglia, partner with Torys LLP.
While most people in the industry at the moment use the terms ‘best interest’ or ‘fiduciary’ to imply acting in good faith or doing the right thing for clients, Paglia said, the courts will have very specific understanding of the meaning of those words, which will lead to an increase in liability for advisors and their firms.
“[Fiduciary] means something to judges and to lawyers in disputes, that’s the cost,” said Paglia. “The liabilities that [regulators are] opening up investment professionals to in the way, this will be interpreted by my ilk and my profession on both sides of the fence and those who decide those disputes.”
To read the full article, click here.