An example of advisor malfeasance (The importance of OBSI)

As far as coming to my attention, this story broke on http://www.wheredoesallmymoneygo.com/. The story was originally broadcast on CTV W-5.

http://watch.ctv.ca/news/w-five/going-for-broke/#clip48969

It's heart-wrenching, and you must watch it. Stories like this inspired Onus Consulting Group. It tells the story of a hard-working dairy farmer and his wife, who had their account churned by an investment advisor at a reputable firm from $217,000 to $1800. Besides covering the grave injustice that occurred, the story goes on to cover the farmer's inability to receive restitution from the Investment Dealers' Association, the self-regulatory organization that oversees full-service financial advisors. The segment's lambasting of an adequate means to seek restitution without mentioning the Ombudsman for Banking Services and Investments is where I take issue. The journalist claims at the end of her segment that the best way to seek restitution is to take it to court, which I disagree with....at least initially. Please read.

For a straight-forward tutorial on how to assess churning, see page 14 of our Investor Awareness Kit available on the top left of the page.

A part of my comment, which had its debut on wheredoesallmymoneygo.com:

The one thing I didn't like about the segment is the lack of respect toward OBSI (Ombudsman for Banking Services and Investments) in resolving the matter. OBSI is a private organization, so unlike the IDA and MFDA, they're are not financed by its members. IDA and MFDA are more concerned with policing (and yes, the jury is out on how effective they are) brokers. Restitution, simply, is not their concern.

OBSI, on the other hand, is totally independant. The services are free, and the clients can take legal action if they don't find the judgment satisfactory. While it is true that their judgements aren't binding, their decisions are agreed to by both parties almost all the time. Furthermore, while they cannot order restitution over $350,000, many clients, including the exploited dairy farmer, can really get some justice.

If a client feels that their advisor has commited some sort of malfeasance on their account, file a complaint with OBSI. The news segment really should have stressed this! Unfortunately, it was only briefly mentioned by the anchor after the segment. The journalist covering the story didn't even mention them.

File a complaint with the IDA (or MFDA, if you're dealing with a mutal fund dealer), as well....however, just so the advisor can be disciplined. Don't count on them for restitution.