Navigating Fiduciary Duty in Canada’s Investment Management Landscape

What is Fiduciary Duty?

Fiduciary duty is the legal and ethical obligation that requires investment professionals to act in their clients’ best interests, ahead of their own or their firm's interests. Under Canadian securities law and CIRO rules, dealers and reps must prioritize client suitability, full disclosure of conflicts, and transparent recommendations.

The Suitability Standard vs. Fiduciary Duty

At the heart of this issue is the difference between the suitability standard and the fiduciary standard. Most mutual fund and securities representatives in Canada operate under the suitability standard, which requires that a product be “appropriate” for a client’s situation—but not necessarily the best option.[1]

In contrast, fiduciary advisors are legally and ethically bound to act in their clients’ best interests at all times. This includes:

·         Avoiding or fully disclosing conflicts of interest.

·         Providing transparent, unbiased advice.

·         Prioritizing the client’s financial goals over institutional sales targets.

Unfortunately, many Canadians are unaware of this distinction. They assume that all financial professionals are required to act in their best interest, when in fact, only those registered as fiduciaries—in fact, only discretionary portfolio managers—are held to that higher standard.[2]

The Importance for Clients

Investors should be proactive by:

• Asking questions: “How are you compensated?”, “What alternatives did you consider?”, and “Are there any conflicts?”
• Verifying registration: Confirm that your advisor is properly registered and in good standing with ASC/CIRO.
• Requesting rationale: Ask for written justification for recommendations, and expect them to align with your goals and risk tolerance.

It’s important to recognize that many individual advisors operating under a suitability standard also deliver excellent outcomes for their clients. The regulatory distinction between fiduciary and suitability obligations does not inherently guarantee better investment results. In fact, client success often depends more on the advisor’s integrity, diligence, and alignment with client goals than on their regulatory classification.[3] This distinction is about setting clear expectations—not all fiduciaries outperform, and not all suitability-based advisors underdeliver.

Our Fiduciary Commitment

At Kinsted Wealth, we are proud to operate under a fiduciary standard—the highest level of care in the financial services industry.

This means we are legally and ethically obligated to act solely in your best interest at all times. Our advice is independent, objective, and free from the influence of commissions, sales targets, or proprietary products.

As fiduciaries, we commit to:

• Loyalty: Your goals come first. Always.
• Transparency: We clearly disclose all fees, potential conflicts of interest, and how we are compensated.
• Care: We provide thoughtful, personalized advice tailored to your unique financial situation.
• Accountability: We are held to the highest standards of integrity, professionalism, and regulatory compliance.

We believe that trust is earned through action. Our fiduciary duty is not just a legal requirement—it’s a reflection of our core values and our unwavering commitment to helping you achieve long-term financial success.

[1] https://www.wealthprofessional.ca/partner-content/are-you-a-fiduciary-everything-you-should-know/241434

[2] https://www.wealthprofessional.ca/partner-content/are-you-a-fiduciary-everything-you-should-know/241434

[3] https://www.ciro.ca/media/3465/download

Regards,
Kinsted Wealth