Advisor-adviser?? That is the question.
From my 30 years around the industry (20 years inside) it was observed that we "make things up as we go along". Not that this is a terrible thing, because when times and conditions change, certain things must also change.
The trouble that I observed repeatedly in the investment dealers where I worked (top Canadian bank owned brokers) was that the rules they found most difficult to meet were:
a) ignored at will
b) not enforced by choice
c) altered after the fact to benefit the dealer
d) papered over to benefit the industry, even at harm to the public
One exemple of this that I have found interesting is the use of certain titles by commission investment salespeople, and investment dealers.
These titles began (Investment Advisers Act of 1940) with two simple categories of investment service provider. One was a "broker" who bought and sold securities for a commission, and the other was an "Adviser" who did professional portfolio management, using his or her skill and discretion to make investment moves and decisions on behalf of the customer.
Fast forward to about 1988, and recall Black Monday, the 500 point crash in the Dow Index. I go only from memory but this crash erased 500 points in one day from an index that was standing around the 2200 or 2300 mark back then. It make quite a mark on society and on finance.
A few months after this October crash, all our (investment brokers, stockbrokers, investment salespersons etc) business cards were "recalled" and new ones issued to us by the dealer. The new cards called us by the title "Investment Advisor", and I was informed that this was because the words "stock" and "broker" has lost some of it's status, and "advisor" was seen as far more professional sounding.
This was perhaps my first or second experience in seeing my industry simply "re=paper" things as they went along, to make things better for themselves. Such was the wild west nature of the business back then.
Certainly there were, or are rules and regulations about titles, names, and license categories, but the enforcement of those is entirely left to the industry itself, or to "self" regulators put into place by the industry, so it continues to this day, the ability to magically make "anything happen", that the industry wishes to make happen, even when rules do not allow, and even when it does harm to the public. With that as some background, lets jump ahead to where we stand today with the ADVISER/ADVISER name game.
I made a few videos on Youtube, about this topic, and some of you might wish to visit there and see what has been said already. This "flogg" article is written mostly to summarize some of the new info and research that I have been gathering just in the last few days. It is a place and a way to combine this info into one location for reference. Youtube videos here:
https://www.youtube.com/user/investorad ... ature=mhee(There are six or seven different videos on this channel about how the industry makes billions by misleading consumers into the belief that their commission salespeople are some version of a professional investment fiduciary (undivided loyalty to the customer).
I make these videos in fun, but obviously with a slight resentment that I was unable to get my own profession to straighten up and be honest. The rules are pretty clear and I found myself able to follow them, but was drowned out by the majority I guess, looking back. Industry requirements of "honesty, fairness and good faith" when dealing with customers is just a series of words, and nothing else. I have yet to see a single case where those exact words were trotted out and used to benefit the public on a specific case of dishonesty.......but I digress.
After taking ten or more years, just to understand how the "behind the scenes game" worked, and how the regulators act more like a "defence mechanism" for the industry, or "damage control" for the industry as one US senator puts it, I became so sick of writing to industry paid sycophants (self regulators etc) and getting run-around answers.....that I gave up for a time. It was just like what I imagine people felt in the 1960's, when writing their concerns and questions to the tobacco industry at that time. They were the most powerful thing going, and they simply "bought the truth" that they wanted to "be" the truth.
In my opinion, the financial industry has perfected that art today, the art of "buying the truth". As you will see from one of my videos, very credible people are beginning to put financial harm estimates together that easily come up with billions in harm to the public from playing games with names, rules and "honesty, fairness and good faith".
One good example how games are costing Canadians $25 billion a year (now might be $38 billion, 2014) in this U of T study by Keith Ambaschteer, Global Pension Studies expert.
https://drive.google.com/file/d/0BzE_LM ... sp=sharingRecently I found the motivation to, once again, write to investment industry-paid "regulators", to ask them to clarify, if they can, the terms "Advisor", and "Adviser" as they apply to the retail investment selling industry.
Immediately below, I will paste in my correspondence to them, and a few of the replies I received (most do not bother replying).
As you will see, they vary in their answers, and a some refuse to even put their names on their replies. Personally, I discount any reply where the person is unable to sign their name to their "facts".
(Marketwatch columnist Paul B. Farrell, puts the skim number in the USA at $100 billion per year in this article from May 2014, titled
"10 ways Wall Street skims $100 billion of your money" )
http://www.marketwatch.com/story/10-way ... 4882413745========
Emails sent out March 22, 2014
I write to you seeking clarification of any difference and definition of the words "adviser" and "advisor",
Since it is fraud prevention month, and March 19th was "check your adviser" day, can you tell me if there is any official license category that need be held to hold oneself out to be an "advisor"?
Also wondering if there is any official difference or definition between the words "adviser" and "advisor", with the second last letter spelled with an "e" or an "o"?
Thank you for clearing up any confusion, so consumers can be better informed.
Best regards
=============================================
Replies received:
First response:
Thank you for contacting the Alberta Securities Commission (ASC).
While the "check registration" day was a CSA initiative, I can tell you that "adviser" is a defined term in the Alberta Securities Act meaning "a person or company engaging or holding itself out as engaging in the business of advising in securities or exchange contracts." Pursuant to section 7.2(1) of NI 31-103, there are two categories of registration for a firm that is required to be registered as an adviser: (1) portfolio manager; (2) restricted portfolio manager.
Individuals who conduct registerable activities for a firm registered as a "portfolio manager" or "restricted portfolio manager" must be registered as an "advising representative" or an "associate advising representative" pursuant to section 2.1(1) of NI 31-103.
An "advisor" is a generic term with no specific meaning in Alberta securities law.
Kind regards
Information Officer
Alberta Securities Commission
Suite 600, 250-5th Street SW,
Calgary, AB, T2P 0R4
Tel: 403.355.4476
Toll Free: 877-355-4488
Fax: 403.355.4453
Email:
http://www.albertasecurities.com===================
Response # 2 (from the OSC)
Dear Mr. Elford:
Thank you for your inquiry to the Ontario Securities Commission (OSC) concerning checking registration for your adviser.
When you refer to "check your adviser" day on March 19, 2014, I believe you are referring to "Check Registration Day". Here is the link to information about this day on the OSC's website:
http://www.osc.gov.on.ca/en/NewsEvents_ ... eg-day.htm.
"Adviser" is a legal term under securities law that describes a company or individual who is registered to give advice about securities. "Advisor" is not a legal term under securities law.Investors often refer to the person or firm who provides an investing service to them as their "adviser" or "broker", and this is a common term used in a generic, not legal way. Business titles, designations for courses completed, and professional memberships may be informative, but the important facts for any investor are to know what the person's registration is, what products they are permitted to trade or advise about, and the services they are allowed to provide. It is important to check with the relevant provincial securities regulator to ensure that the individual and company you are dealing with is registered to trade or advise in securities, if that is part of what they are doing.
This link:
https://www.securities-administrators.c ... 1128#tools on the Canadian Securities Administrator's (CSA) website provides information about checking registration. You may also find this link to Understanding Registration useful, as it describes the different categories of registration and what they mean:
https://www.securities-administrators.c ... ion_EN.pdf.
Since securities law is regulated provincially, if you have specific questions about a company or individual through which you are considering investing, you may wish to check with the securities regulator in your jurisdiction for more information.
Sincerely,
Senior Inquiries Officer

=====================================
Response #3 (another response from another OSC staff member)
Industry Titles
Investors often refer to the person or firm who provides an investing service to them as their "advisor" or "broker", and this is a common term used in a generic way. Business titles, designations for courses completed, and professional memberships may be informative, but the important facts for any investor are to know what the person's registration is, what products they are permitted to trade or advise about, and the services they are allowed to provide. It is important to check with the relevant provincial securities regulator to ensure that the individual and company you are dealing with is registered to trade or advise in securities, if that is part of what they are doing.
The CSA has very useful information on checking registration and what the various categories of registration mean, and other helpful information that I would suggest you look at to see if you want to provide a link to from your web page.
http://www.securities-administrators.ca ... px?id=1128Since securities law is regulated provincially, if you have specific questions about a company or individual through which you are considering investing, you may also wish to check with the securities regulator in your jurisdiction for more information.
The Ontario Government is currently examining the need for more consistent standards for individuals who offer financial advice and planning services. The OSC will work with the government as this initiative evolves.
In addition, IIROC issued guidance on the Use of Business Titles and Financial Designation in March 2014 and in October 2013 IIROC launched an online glossary of common designations to assist investors. The MFDA rule 1.21(d) prohibits MFDA members from using any business name or designation that deceives or misleads as to their proficiency qualifications.
Consultation Paper 33-403
With respect to your question on CSA Consultation Paper 33-403, the consultation was meant to solicit views of the applicability of the standard to all categories of registrants, which would include both advising and dealing representatives
Regards,
Lisa
Lisa Enright | Ontario Securities Commission | Office of the Investor | Advisor
20 Queen Street West, Suite 1903 | Toronto ON M5H 3S8
(416-593-3686 | 7416-593-8252 |
*lenright@osc.gov.on.caPlease consider the environment before printing this e-mail
====================================
Response #4
(some people in the industry do not wish their comments to be in writing, I called her and she was very nice)
Hi Larry,
I received your email
inquiry regarding the difference and definition for the words advisor and adviser? I wonder if I could call you to discuss?Let me know what number I can reach you at and when would be a convenient time to chat.
Thanks!
Michelle Robichaud
Communications and Media Relations Specialist
Spécialiste des communications et des relations avec les médias
Tel / Tél : (506) 643-7045
Michelle.Robichaud@fcnb.caFinancial and Consumer Services Commission
Commission des services financiers et des services aux consommateurs
=========================
Response #5
Mr. Elford,
Thank you for contacting the CSA Secretariat.
Although we strive for consistency in all of our terminology, there is no difference in the definition of the word adviser, whether it is spelled “adviser” or “advisor”. National Instrument 14-101 Definitions uses the spelling with an “e”:
“adviser registration requirement” means the requirement in securities
legislation that prohibits a person or company from acting as an adviser
unless the person or company is registered in the appropriate category of
registration under securities legislation;
We have also consulted the Public Works and Government Services Canada’s Termium Plus database and both spellings, adviser and advisor, are correct.
(The CSA is the umbrella organization for 13 provincial and territorial securities commissions in Canada)
(advocate comment: The problem we see with this anonymous reply, is simply this: If this person is correct in their answer, namely if "there is no difference in the definition of the word adviser, whether it is spelled “adviser” or “advisor”, then approximately 150,000 persons in Canada who are licensed as "dealing representatives" while calling themselves "advisor" (which they are not licensed as).......these salespersons are effectively misrepresenting themselves to the investing public.)=======================
Response #6
From: "Tavares, Isilda (FINMSC)" <Isilda.Tavares@gov.mb.ca>
Subject: RE: I write to you seeking clarification of any difference and definition of the words "adviser" and "advisor", MSC
Date: 31 March, 2014 10:51:36 AM MDT
To: "lelford@shaw.ca" <lelford@shaw.ca>
Hello Mr. Elford:
Your e-mails below have been directed to my attention. You have requested clarification on the words "adviser" and "advisor".
The definition of Adviser under the Securities Act:
"adviser" means a person or company that engages in or holds himself, herself or itself out as engaging in the business of advising others with respect to buying, selling or investing in securities or derivatives; (« conseiller »); and
Under The Commodity Futures Act:
"adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in, or being held out by a registrant as engaging in, the business of rendering advice as to trading in contracts, and includes a person or company engaging in the publication of newsletters, analyses or reports or broadcasting analyses or reports advising others respecting trading in contracts; (« conseiller »)
We are aware that under the Manitoba Securities Commission website there is reference to "advisor". This matter will be discussed with our webmaster to request that "advisor" be replaced with "adviser"Thank you, should you require further information please advise.
Isilda Tavares
Registration Officer, Deputy Director
The Manitoba Securities Commission
500-400 St. Mary Avenue
Winnipeg, MB R3C 4K5
tel : (204) 945-2560
fax: (204) 945-0330
toll free: 1-800-655-5244 (Manitoba only)
email:
Isilda.Tavares@gov.mb.ca web site:
http://www.msc.gov.mb.ca
======================================
Response from IIROC
(this man was very helpful)
On 2014-03-27, at 4:45 PM, Joe Yassi <jyassi@iiroc.ca> wrote:
Larry, I'm out of town. This is my second response. In my first, from memory I suggested that all the primarily relevant rules and Nis are cited in the guidance. If there are not links to the rules set up yet there will be soon. In any event you can access the Dealer Member Rules through our public site. There is no requirement to use an RR or IR title on a business card for example. There is a Rule of more general application prohibiting the use of misleading titles. National Instrument 31-103 can give you some insight into the use of the term adviser as a registration category in the CSA jurisdictions. You might also want to research the more historical attempt to deal with financial planning through the regulation of titles...using words like adviser in combination with other words was part of this initiative which ultimately was not adopted. I think this was draft National Instrument 81 or 31 -107. The OSC's Office of the Investor I believe is undertaking a look at titling in the context of registration issues and the "misleading" issue as well.
I hope this helps,
Cheers,
Joe
=================
with apologies for the length of this flogg post (there is a reason I call it a flogg:) I am going to paste in here some rules/laws/cases on "misrepresentation" to help me build my next video chat on this topic. You will find some of my chants/rants at my youtube channel here, I am making a series to highlight how many ways I know of to "steal* a billion dollars", with the word "steal" used to apply to any misrepresentation for money, any fraudulent misrepresentation, negligent, used to cheat, skim, shortchange, or bamboozle trusting and vulnerable people out of some of their money......even when it is not ALL of their money, it is still stealing in my mind.
rules/laws/cases
--Competition Act of Canada
Marginal note: Misrepresentations to public
PART VII.1
DECEPTIVE MARKETING PRACTICES Reviewable Matters
1 74.01 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
1 (a) makes a
representation to the public that is false or misleading in a material respect; 2
http://laws-lois.justice.gc.ca/eng/acts ... ns#s-74.01
===========
--What is a false pretence under the Criminal Code?
Under Section 361., (1),
a false pretence is a representation of a matter of fact either present or past, made by words or otherwise, that is known by the person who makes it to be false and that is made with a fraudulent intent to induce the person to whom it is made to act on it. Subsection (2) states that exaggerated commendation or depreciation of the quality of anything is not a false pretence unless it is carried to such an extent that it amounts to a fraudulent misrepresentation of fact. For the purposes of subsection (2), it is a question of fact whether commendation or depreciation amounts to a fraudulent misrepresentation of fact.
Under the Criminal Code, every one who commits an offence under paragraph (1)(a) (a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding ten years,
******
=============
IIROC Rule 3100 - Definitions "Misrepresentation", i), ii)
"misrepresentation" means:
i)
an untrue statement of fact; or
ii)
an omission to state a fact that is required to be stated or that is necessary to make a statement not
misleading in light of the circumstances in which it was made.
=================
From the BCSC Securities Act (link 1) comes this;
Persons who must be registered34 A person must not
(a) trade in a security or exchange contract,
(b)
act as an adviser,
(c) act as an investment fund manager, or
(8) Misleading Trade Name
No Dealer Member or Approved Person shall use any business or trade or style name that is deceptive, misleading or likely to deceive or mislead the public.
13
(d) act as an underwriter,
unless the person is registered in accordance with the regulations and in the category prescribed for the purpose of the activity.
==============
A misrepresentation is defined by the Securities Act as “
an untrue statement of a material fact or an omission to state a material fact that is required to be stated or necessary to prevent a statement ... from being false or misleading in the circumstances in which it was made.”7
===========================================
Fraud section 380 of the Criminal Code of Canada
380. Fraud
380. (1) Every one who,
by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,
========
media quotes about violations of the public by so-called-professionals.
The quotes following, are from respected experts and refer to industry misrepresentation, deceit, false pretense or outright fraud:
1. “.........
financial advisors, wealth managers, senior financial planners, financial analysts, and investment managers are just a short list of titles that salespeople like to adopt, in an effort to steer clear of the “salesperson” stigma........”
From “Understanding Misleading Financial Advisor Titles – Your Right to Know” Bryon C. Binkholder
2.
"Anything else is fraud, because the seller is delivering a service different from what the consumer thinks he or she is buying. " Edward Waitzer article, Financial Post · Tuesday, Feb. 15, 2011) (Mr. Waitzer is a Bay Street Lawyer and former Securities Commission chair, and this quote ( by another person) appeared in his article.
viewtopic.php?f=1&t=173&p=3438&hilit=waitzer&sid=315213c6fd740f3160d45ff7965fd5de#p3438
3. “
The greatest risk the average investor runs is the risk of being misled into thinking that the broker is acting in the best interest of the client, as opposed to acting in the firm’s interest,” Professor Laby said. New York Times (Arthur Laby, a professor at Rutgers School of Law-Camden, and a former assistant general counsel at the S.E.C.)
http://www.nytimes.com/2012/07/07/your- ... html?_r=1&
4.
This misrepresentation allows persons with a “phony title” to financially violate trusting and vulnerable Canadian investors (and similar across the USA)...............here is one comment from Quebec Superior Court Justice The Honorable Jean-Pierre Senécal, J.S.C., Quebec Superior Court , District of Montreal
The Honorable Jean-Pierre Senécal, J.S.C.

¶ 263 The defendant attributed to Migirdic
fake titles, i.e. "vice-president" and "vice-president and director", in addition to letting him use the title "specialist in retirement investments".
Those titles were false representations that misled the plaintiffs, hid reality from them, disinformed them, comforted them in their confidence in Migirdic, reduced their distrust, and contributed to Migirdic's fraud. The
defendant committed a fault in terms of its obligation to inform and advise, in addition to misleading the plaintiffs.
Further and link to full court documents here: [url]http://www.investoradvocates.ca/viewtopic.php? f=1&t=10&p=3454&hilit=markarian#p3454
5[/url].
========================
Under the new National Instrument 31-103
as of September 28, 2009, mutual fund representatives, formerly called “salespersons”, are now called mutual fund “dealing representatives” and individuals who were an advisor under a portfolio manager are now called an advising representative. See this link for full details:
http://www.bcsc.bc.ca/uploadedFiles/sec ... BNI%5D.pdf see appendix C, page 70 for license category changes
(keywords: deceit )
==========================================
FINALLY!
This last communication from 2010, from the BCSC: (found on a posting in another topic in this same forum)
Re: Are advisors professionals, or salespeople masquerading?
by admin » 27 Jan 2010 04:22 pm
Dear Mr Elford,
Thank you for your message.
With regards to your questions and comments,
you are quite right in that the term "advisor" on its own and used loosely, would be inappropriate for a dealing representative to use without having the educational requirements and experience to be registered as an advising representative.If you are certain that an individual is holding themselves out inappropriately, please feel free to contact the appropriate securities commission or self regulatory body (Mutual fund Dealers Association or Investment Industry Regulatory Organization of Canada ) through our related links available on our website at:
http://www.bcsc.bc.ca our email is
inquiries@bcsc.bc.ca We also have a helpful link on our website called Invest-right , which members of the public can use to assist themselves with their investing.
Thank you,
Kent Waterfield
Senior Registration Administrator
Registration & Compliance Branch
Capital Markets Regulation
British Columbia Securities Commission
Phone: 604 899 6694
Fax: 888 242 9341
800 373 6393 (toll free across Canada)
kwaterfield@bcsc.bc.ca(advocate comments.........my problem, as I see it is that the securities commissions (BCSC included) are morally blind as
evidenced by the fact that NONE of the 130,000 people registered today in the category of "dealing represntative", or yesterday's category of "salesperson" properly identify themselves to the public, and virtually all of them misprepresent themselves as "advisors". It is in every newspaper, every day, on every advertisement, etc., and for the BCSC to ignore this is the ultimate in "see no evil" behavior) Having spent many years of my life already trying to point out rules broken and laws ignored by these very same regulators, what would be the point of letting this person in on the moral blindness? Can anyone tell me the correct solution? Please?)