{"id":703154,"date":"2026-07-21T10:06:37","date_gmt":"2026-07-21T10:06:37","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/703154\/"},"modified":"2026-07-21T10:06:37","modified_gmt":"2026-07-21T10:06:37","slug":"ciro-proposals-on-advisor-incorporation-receive-early-mixed-reviews","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/703154\/","title":{"rendered":"CIRO proposals on advisor incorporation receive early mixed reviews"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

One expert who is in favour of CIRO\u2019s proposal disagreed with its approach in seeking amendments to securities legislation to implement the proposals, arguing that it would further delay the initiative\u2019s progress unnecessarily. THE CANADIAN PRESS\/Nathan DenetteNathan Denette\/The Canadian Press<\/p>\n

Wealth management firm executives and some industry organizations are lauding new proposals from the Canadian Investment Regulatory Organization (CIRO) to allow investment advisors to incorporate, levelling the playing field with mutual fund advisors.<\/p>\n

CIRO\u2019s proposals would \u201craise the overall standards and put financial advice providers on the same footing as lawyers, accountants and other professionals,\u201d says Chris Enright, executive vice president and co-head of wealth, Canada, at CI Financial Corp. in Toronto.<\/p>\n

However, other industry observers and stakeholders remain unconvinced that allowing investment advisors to incorporate and thus to access a lower small business tax rate will improve outcomes for investors, as proponents argue.<\/p>\n

\u201cI don\u2019t think incremental changes on the taxability of already high-income advisors, for tax-planning purposes, solves for [investors\u2019] access to advice,\u201d says Michael Thom, managing director of CFA Societies Canada. \u201cI don\u2019t think anybody\u2019s going to enter the profession because they can tax plan better around the use of a professional corporation.\u201d<\/p>\n

On July 9, CIRO proposed a new \u201cincorporated advisor compensation\u201d option<\/a> that would allow \u201cclient-facing approved persons,\u201d including mutual fund and investment advisors, portfolio managers and associate portfolio managers, to incorporate.<\/p>\n

CIRO also proposed phasing out the current directed commission arrangement option, under which mutual fund advisors can direct some of their compensation to a corporation, once the new option becomes available, citing \u201ca lack of tax certainty\u201d under the directed commission approach.<\/p>\n

The proposals, which are out for consultation until Nov. 6, are a follow-up to a position paper<\/a> CIRO published in 2024 on harmonizing compensation models, a key priority the Canadian Securities Administrators (CSA) set for the self-regulatory organization (SRO).<\/p>\n

CIRO didn\u2019t provide an implementation date for the new compensation model in its proposals, indicating that one would be determined closer to the date the rule amendments are approved. <\/p>\n

The SRO also said implementing the proposals would require changes to securities legislation and CSA registration rules, which \u201cmay require significant time.\u201d<\/p>\n

Shaun Hauser, founder and chief executive officer of Wellington-Altus Financial Inc., said in a response sent by e-mail to questions from The Globe that \u201cadvisors are specialized professionals who also happen to operate businesses and that means they should have access to the tools and structures available to others.\u201d<\/p>\n

Mr. Enright, who is also president and managing director of Aligned Capital Partners Inc., says the initiative enjoyed \u201cacross-the-board\u201d support from CI Financial\u2019s advisor network.<\/p>\n

Laura Paglia, president and CEO of the Canadian Forum for Financial Markets, said in an e-mail that she was glad to see CIRO proceeding with the advisor incorporation initiative.<\/p>\n

She said allowing advisors to incorporate went beyond an issue of fairness. It\u2019s also a way to help Canadian households struggling with the rising cost of living and lack of access to financial advice, as well as a Canadian economy suffering from poor productivity growth.<\/p>\n

\u201cAdvisor incorporation is not a cure-all, but it does expand the infrastructure through which Canadians can get help making financial decisions and support one part of our economy to become more scalable and entrepreneurial,\u201d Ms. Paglia said.<\/p>\n

However, she disagreed with CIRO\u2019s approach in seeking amendments to securities legislation to implement the proposals. She argued this approach would further delay the initiative\u2019s progress unnecessarily.<\/p>\n

\u201cReasonable interpretations may conclude incorporation is not explicitly prohibited in most and possibly all provinces, with easier, more straightforward approaches if the goal is to proceed with advisor incorporation efficiently and effectively,\u201d she said. <\/p>\n

Matthew Latimer, executive director of the Federation of Independent Dealers, said in an e-mail that CIRO\u2019s advisor incorporation proposals represent a positive change.<\/p>\n

However, he also suggested that existing corporate structures established by mutual fund advisors under the direct commission structure should be protected by a grandfather clause under the proposals.<\/p>\n

Mr. Latimer said he would have liked CIRO to address in its proposal the question of whether it had received sufficient \u201ccomfort\u201d from the Canada Revenue Agency on how it would tax advisor corporate structures under the changes CIRO proposed in the bulletin.<\/p>\n

Katie Walmsley, president of the Portfolio Management Association of Canada, said in an e-mail that the initiative shouldn\u2019t be \u201crushed\u201d for the sake of allowing some registrants to access tax benefits, particularly as the extent of any benefit was uncertain absent CRA confirmation.<\/p>\n

In its bulletin, CIRO characterized CRA feedback to its proposals as \u201cgenerally neutral,\u201d with agency staff providing the regulator with \u201clinks to cases and website materials that they felt would be of help to us.\u201d<\/p>\n

Ms. Walmsley also said she didn\u2019t believe that proponents had adequately established that advisor incorporation would benefit investors, improve investor protection or, indeed, that investors were asking for the change. <\/p>\n

Jean-Paul Bureaud, executive director of investor advocate FAIR Canada, said in an e-mail that his group supported \u201ca harmonized approach that maintains or strengthens investor protection.\u201d<\/p>\n

\u201cThe proposed incorporated advisor model could offer stronger protections than directed commissions, but we would require further details about how it will operate in practice,\u201d Mr. Bureaud said. \u201cOur review will focus on whether those protections are clear, enforceable and better protect investors.\u201d<\/p>\n

Mr. Thom of CFA Societies said he believed that both CIRO and the CSA should be focusing on other long-standing regulatory priorities, such as rulebook consolidation, client-focused reforms, know-your-product rules and proficiency regime changes.<\/p>\n

\u201cI\u2019m not sure that [advisor incorporation] is the highest priority regulatory item,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: One expert who is in favour of CIRO\u2019s proposal disagreed with its approach…\n","protected":false},"author":2,"featured_media":703155,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[14370,84,4176,39721,14367,4174,4175,56,54,55],"class_list":["post-703154","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-appwebview","tag-business","tag-finance","tag-globe-advisor","tag-noastack","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/703154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=703154"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/703154\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/703155"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=703154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=703154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=703154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}