What do investors complain about the most in Canada?
“…unsuitable investments generate the most number of complaints…â€,
According to the IIROC (Investment Industry Regulatory Organization of Canada) (investors complaints to the IIROC).
On October 31st, 2016 the IIROC published their Enforcement Report 2015. It outlined the complaints they received (as the industry watchdog) from customers (you complain here).  The report is big, and very specific cases where the IIROC has “prosecuted†their members.
I received this report because I am on the IIROC mailing list. The list is where they publish their findings on investigations done on their members.
The top 5 complaints they received last year were:
- Unsuitable Investments
- Service Issues
- Disputed Fees
- Firm policies and procedures
- Unauthorized trading
The IIROC points out that the percentage of complaints matches their prosecution statistics. Fifty (50) % of prosecutions against their registered members had to do with suitability requirements. Seniors are the largest demographic that complains or makes inquiries with the IIROC.
The report is well worth reading. I am concerned that only 838 complaints were received over that period. That numbers strikes me as being a little low. Remember this is an industry organization, investigating their members. There may be many more complaints out there, but the “culprits†may not be members of the IIROC.
The fact that Seniors (61-100 years old) accounted for 63% of the complaints seems to point to that group as being the target group for unscrupulous activity. It is not surprising that seniors seem to be the largest victim group. We need to protect our Senior Citizens from unscrupulous deals, and downright bad investing advice. This is the major conclusion I take away from the report.
Complaints by Category
An interesting table of regulatory violations investigated by the IIROC by year.
| Individual – Breakdown by Violation | 2015 | 2014 | 2013 | 2012 | 2011 |
| Due Diligence/Handling of client accounts/suitability | 19 | 18 | 19 | 26 | 20 |
| Inappropriate personal financial dealings | 6 | 5 | 7 | 10 | 9 |
| Misappropriation | 1 | 1 | 3 | 9 | 4 |
| Misrepresentation | 5 | 8 | 3 | 9 | 4 |
| Discretionary trading | 9 | 5 | 5 | 6 | 5 |
| Forgery | 5 | 4 | 3 | 6 | 2 |
| Unauthorized trading | 6 | 10 | 1 | 6 | 7 |
| Manipulative & deceptive trading | 1 | 1 | 3 | 4 | 8 |
| Outside business activities | 2 | 3 | 4 | 4 | 2 |
| Supervision | 5 | 6 | 4 | 5 | 4 |
| Gatekeeper | 4 | 2 | 2 | 3 | 5 |
| Failure to cooperate | 2 | 5 | 3 | 4 | 6 |
| Trading conflict of interest | 2 | 0 | 0 | 2 | 0 |
| Off book transactions | 0 | 2 | 5 | 1 | 3 |
| Trading order violation | 0 | 0 | 0 | 1 | 2 |
| Trading without appropriate registration | 0 | 0 | 1 | 1 | 2 |
| Fraud | 0 | 0 | 2 | 0 | 0 |
| Undisclosed conflict of interest | 1 | 0 | 0 | 0 | 0 |
| Inadequate books and records | 0 | 2 | 1 | 0 | 0 |
