“[W]e do not understand why all IIROC advisors will not be given the same advantages as their mutual fund dealer only colleagues,” added Worldsource Wealth Management, an integrated wealth firm with business arms including Worldsource Financial Management Inc. (WFM), an independent mutual fund dealer, and Worldsource Securities Inc. (WSI), a full-service investment dealer.
“More importantly, we do not feel having an IIROC advisor direct their compensation to an unregistered corporation will bring any harm to our clients or to the general public,” Worldsource said. “In fact, continuing to allow an unequal compensation structure represents a barrier for entry to those advisors who may be contemplating joining either an investment dealer or a dealer registered as both an investment dealer and a mutual fund dealer.”
Designed Wealth Management, which also has a mutual fund dealer and an investment dealer arm, noted that advisors can use certain tax strategies that work within CRA rules to flow their income into a corporation, but they can take an unreasonable amount of time and money to implement. As an alternative, it recommended the use of corporate structures allowed for accountants, lawyers, and certain healthcare professionals.
“These Professional Corporation (PC) structures have established parameters that the new SRO could easily adopt in most provinces. MFDA representatives could be provided grandfathering, or a period of time, to establish their PC, whereas effective January 1st, 2023, dual registered firms could begin to establish these structures,” the firm said.
