Unsuitable investments generate the greatest number of complaints by investors, according to statistics published by the Investment Industry Regulatory Organization of Canada, based on complaints it has received against firms it regulates.

Read: Prove you know your clients

IIROC reports that, of the 838 complaints it received from clients of IIROC-regulated firms over the past two fiscal years (April 1, 2014 to March 31, 2016), unsuitable investments topped the list with 222 complaints. Other complaints rounding out the top five were related to service issues, disputed fees, firm policies and procedures, and unauthorized trading.

Read: Suitability issues most common complaint: OBSI

The finding regarding unsuitable investments is consistent with statistics published in IIROC’s 2015 Enforcement Report, which shows almost 50% of prosecutions against individual registrants involved violations of suitability requirements.

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Further, the majority of suitability cases involve elderly and/or vulnerable clients. And that’s not a surprise since IIROC’s statistics also show seniors are the largest demographic group contacting IIROC with complaints and inquiries.

IIROC has now issued confidential Complaints and Inquiries Statistics Reports to all of its member firms. Most dealers received firm-specific information and ranking compared to their peers, while some received general statistics only due to the nature of their business and small number of investor contacts.

“Going forward, dealers will receive an annual Complaints & Inquiries report so they can strengthen their internal processes and reduce the number of complaints,” says Warren Funt, IIROC vice-president, Western Canada.

Read: Regulatory tips from IIROC and FINRA

Quick Stats

From April 1, 2014 to March 31, 2016:

  • IIROC received 838 complaints and 1,423 inquiries from investors.
  • Seniors from ages 61 to 100 accounted for approximately 63% of complaints and 59% of inquiries of those who disclosed their age. (Note: Only 41% of contacts disclosed their age to IIROC.)
  • Men made more complaints than women (370 vs. 182). The same goes for inquiries (659 vs. 294) (Note: Only 67% of contacts disclosed their gender to IIROC.)
  • Non-Regulatory matters accounted for approximately 46% of complaints and inquiries.
  • Requests for information on filing a complaint (33%) was the top investor inquiry. Other common inquiries included: information on firm policies and procedures, questions about IIROC rules, general inquiries about an investment advisor or firm, and information on compensation options.
  • The top five inquiries accounted for 60% of all investor inquiries received by IIROC.

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