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The Canadian Securities Administrators (CSA) implemented client-focused reforms that require brokers and advisors (MFR) to better align their interests with those of their clients. These reforms include a major change concerning the management of conflicts of interest and ensure clients understand their relationship with their broker and MFR.

Desjardins Financial Services Firm Inc. considers it vitally important that its clients have a good understanding of its products and services and receive recommenda­tions that meet their needs. The following document, given to clients when they open a new account at DFSF, provides information on the key elements governing their relationship with their advisor (MFR).

While it’s important to read the entire document, here’s a summary of the various sections:

• Range of DFSF services. Representa­tives exclusively offer Desjardins products, such as Desjardins Funds and capital shares
• Investment suitability. The advisor-client relationship is based on mutual responsibility between the client and the broker, i.e., each client is responsible for their investment decisions, and, as a mutual funds broker, DFSF has an obligation to ensure that the recommenda­tions made by its representat­ives or the transactions clients request are suitable for them and in their best interest. Consequen­tly, representa­tives must continuously update their client accounts, and clients must inform DFSF of any material changes to their situation
• The risks associated with the investments
• The various fees that may be charged and the impact they may have on investments
• The specifica­tions of the products held (limits, liquidity risk, minimum balance)
• Cash and cheque processing
• A description of the various documents sent to clients (including investment statements and transaction confirmation notices)
• Trusted contact person and temporary freeze. Designating a trusted contact person helps DFSF and the advisor (MFR) protect clients’ financial interests and deal with certain situations such as health issues or life events that could impact their ability to make informed financial decisions. In these cases, arrangements could be made to secure the client’s assets
• A section on various general provisions, such as amendments, termination, death and notices required by law or any agreement between the client and DFSF
• Complaint processing
• Information on conflicts of interest

The last two elements are further elaborated in the sections below.

DFSF has an efficient procedure to process complaints from clients who are dissatisfied with a financial product or service provided by DFSF.

This document is currently given to any investor who opens an account with DFSF as well as any client living in Canada who files a complaint about a DFSF product.

The following document describes the entire process in detail as well as the options available to clients who wish to file a complaint and provides information on how CIRO protects them as investors.

A conflict of interest exists when any of the following situations occurs:

• The interests of different parties (such as those of a client and an MFR) are inconsistent or divergent.
• An MFR might be tempted to put their own interests ahead of those of their clients.
• An MFR’s judgment is compromised.

DFSF takes reasonable measures to identify any material conflicts of interest that exist or that it can reasonably expect to arise. A conflict of interest is considered “material” when it could reasonably be expected to have an impact on a client’s decisions or on the MFR’s recommenda­tions or decisions. The “Information about Business Relationships and Conflicts of Interest” document presented above mentions elements of material conflicts of interest that must be disclosed to clients.

The CSA’s reforms strengthen the obligation to disclose and address conflicts of interest. Accordingly, Desjardins Financial Services Firm (DFSF) must provide a written disclosure to clients regarding all material conflicts of interest that affect them. This disclosure must describe the nature and extent of the conflicts, their potential impacts and how they’ll be addressed. DFSF must also address material conflicts in the client’s best interest and avoid any conflict that can’t be addressed in the client’s best interest.

DFSF ensures that reasonable and equitable policies and measures are put in place to effectively control any type of conflict. It assesses the level of risk associated with each conflict and avoids any circumstances that involve a serious conflict of interest or that present an extremely elevated risk for its clients.