Harold Geller Discusses Segregated Fund Guidance with Investment Executive

New national guidance for segregated funds is introducing more detailed expectations around suitability, needs analysis, product knowledge, documentation and oversight.

Sotos partner Harold Geller recently spoke with Investment Executive about the guidance and what it could mean for advisors and the consumers who rely on their recommendations.

Drawing on his experience litigating investor loss claims, Harold focused in particular on the evidence advisors should have to support their recommendations.

KYC, needs analysis, KYP and suitability are, in Harold’s words, “a show-your-work exercise for advisors.”

Among other things, he said advisors should have a documented comparison of the reasonable range of alternative products available when making a recommendation.

Harold also addressed the requirement for a clearly documented needs analysis. While needs analysis has long been industry guidance, he told Investment Executive that, in his experience as a litigator, he has yet to see one in an advisor’s file.

He also questioned whether consumers receive enough information to properly assess the value of segregated fund guarantees and commented on chargeback structures and the need for meaningful advisor training.

The guidance, published by the Canadian Council of Insurance Regulators and the Canadian Insurance Services Regulatory Organizations, establishes national expectations for insurers and intermediaries involved in the design, sale and servicing of segregated funds.

Harold co-leads the Sotos Investor Protection Group, which represents investors, policyholders, beneficiaries and families in investment loss, unsuitable advice, financial advisor misconduct and life insurance disputes.

Read the full Investment Executive article: “Seg funds guidance targets insurance advisor competency, client need.”