Advisers, dealers, and their representatives can benefit from innovative solutions that help them better understand their clients, make product information more accessible and make better recommendations for their clients.
Theme and Problem Statements
OSC TestLab’s first theme is focused on testing innovative solutions that can help registrants better understand their clients and products and contribute to better client outcomes.
1Making product information more accessible
How can technology or other innovative solutions help registrants more effectively share, collect, assess, and compare current product information and provide this information to their clients?
Why is this important
Examples of solutions
2Improving information sharing and enhancing client interactions
How can technology or other innovative solutions help registrants collect and assess client information to better understand and respond to their clients’ investment needs, and improve their communications with their clients?
Why is this important
Examples of solutions
Participating firms
We are pleased to announce the seven successful applicants that will be testing their innovative solutions as part of our first OSC TestLab cohort.
For our Spring 2022 Test, we received applications to test with Ontario registrants and investors both from firms based within Ontario and extending well beyond. From these applicants, we selected seven firms with solutions that touch on one or both of our two problem statements.
The seven successful applicants will begin testing this spring. We look forward to collaborating with this group and their testing partners as we experiment, learn and improve together.
If you are a registrant or individual investor interested in participating in a test, please read the solution descriptions below for details on the solution providers that are open to including additional users to help test their solution.
Broadridge Investor Communications Corporation
Problem statement addressedMaking product information more accessible
Broadridge Investor Communications Corporation delivers technology-driven solutions to banks, broker-dealers, asset and wealth managers and public companies. Broadridge will be testing a solution that enables the comparison of securities, including funds, equities, and ETFs, facilitates oversight of a registrant’s product shelf and includes compliance monitoring capabilities. The solution will be available through Broadridge’s Smart Advisor platform and aims to support advisors’ abilities to provide objective and consistent comparison quotes to their clients.
LockDocs Inc.
Problem statement addressedImproving information sharing and enhancing client interactions
LockDocs is a digital identity-as-a-service platform for the financial services sector. Once customer data is entered into LockDocs’ platform, it can be used to auto-fill documents needed by financial institutions for onboarding, transacting, and maintaining compliance. LockDocs will be testing a solution that digitizes the client onboarding experience for investors in private market transactions, aiming to provide improved efficiency, accuracy, security, and compliance.
LockDocs is open to including additional registrants in its test. Please contact LockDocs for more information at the email included below.
Mako Fintech
Problem statement addressedImproving information sharing and enhancing client interactions
Mako Fintech provides business process automation for the financial services sector including end-to-end workflows that integrate compliant e-signatures, ID and AML validation, and API connections with CRM, portfolio management and recordkeeping systems and allow for the design of customized algorithmic workflows. Mako will be testing a solution that automates the workflow for refreshing KYC information that aims to help enable registrants to make recommendations that are timely and relevant.
Morningstar Research Inc.
Problem statement addressedImproving information sharing and enhancing client interactions
Morningstar Research offers an extensive line of products and services for individual investors, institutional investors, and registrants. Morningstar will be testing the interface and workflows of the Morningstar Risk Ecosystem, a methodology that ties together a client’s risk comfort range (including the capture of KYC information and the use of a psychometric questionnaire to assess risk tolerance) with portfolio risk for use by advisors to assist portfolio selection and to communicate recommendations to clients.
Morningstar is open to including additional registrants in its test. Please contact Morningstar for more information at the email included below.
Syntoniq Inc.
Problem statement addressedImproving information sharing and enhancing client interactions
Syntoniq is a behavioral science technology company that offers tools for individuals and advisors to better understand financial decision-making and bridge the gap between financial objectives and outcomes. Syntoniq will be testing a solution that uses a behavioral questionnaire to generate an insight-driven assessment for registrants to learn more about their clients and aims to provide individual investors with insights into the often unconscious, behavioral levers that influence their financial decision-making, as well as personalized, actionable recommendations.
Syntoniq is open to including individual investors and additional registrants in its test. Please contact Syntoniq for more information at the email included below.
TMX Inc. (TMX Group)
Problem statement addressedMaking product information more accessible
Problem statement addressedImproving information sharing and enhancing client interactions
TMX Group will be testing TMX Logicly, a research & portfolio analytics tool with data on public stocks, mutual funds, and ETFs in North America. Advisors will test the tool, which includes an AI-driven component that monitors for deviations from client mandates and aims to help advisors optimize client portfolios. Individuals can also test the tool to research and learn about new products.
TMX Group is open to including individual investors and additional registrants in its test. Please contact TMX Group for more information at the email included below.
Wealthscope
Problem statement addressedMaking product information more accessible
Wealthscope offers portfolio-level analytics and retirement planning tools for DIY investors, enterprise firms and independent financial advisors. Wealthscope’s mission is to improve transparency, efficiency, and trust in Wealth Management through the use of its services. Wealthscope will be testing its dedicated advisor solution, which includes a portfolio scorecard and product comparison tool that can help registrants understand and compare products, and ultimately aims to supplement registrants' capacity to recommend a greater variety of products to their clients which are suitable and in their best interests. Wealthscope’s services include the importing of client portfolios, portfolio analysis and comparisons, ESG analytics, tax-optimized drawdown plans, comprehensive retirement blueprints, fund look up and comparisons, hypothetical portfolio testing and a rebalancing system.
Wealthscope is open to including additional registrants and individual investors in its test. Please contact Wealthscope for more information at the email included below.
How did we arrive at this theme?
Know-your-client (KYC), know-your-product (KYP) and suitability obligations are among the most fundamental obligations owed by registrants to their clients. However, this is also an area where registrants have experienced compliance challenges. These challenges highlighted an opportunity for improvement.
Recent amendments to these obligations arising from the Client Focused Reforms (CFRs)" came into force on December 31, 2021. These amendments update registrant conduct requirements to better align the interests of registrants with the interests of their clients, improve outcomes for clients, and clarify the nature and terms of their relationship with clients.
As a result of these amendments, registrants may be required to update their policies and procedures, including those related to collecting and documenting client information and making investment recommendations. These developments suggested the timing was right for market participants to consider new solutions and alternative approaches to meet these obligations and evolve their processes.
We see an opportunity for innovative solutions to enhance registrant-client relationships to be more interactive and tailored to individual client needs and interests. The use of technology also has the potential to make compliance in these areas more efficient and effective, and to reduce costs. But, for these benefits to be realized, new solutions need to be implemented.
We listened to your feedback
Through OSC LaunchPad, we learned that technology providers are finding it difficult to engage with registrants to test their solutions, in part, because registrants may be reluctant to try new technologies without the involvement and guidance of the OSC. This highlighted the potential for OSC TestLab to help.
To further develop this theme into problem statements for solution-focused testing, we obtained input from stakeholders through a feedback survey earlier in 2021. In total, 128 registrants, 8 technology providers and 256 individual investors responded and provided feedback on the challenges they see around registrant-client interactions and related regulatory requirements.
While the survey responses are not representative of all potential views, the survey did provide a window into how certain market participants are viewing these issues and highlighted opportunities for the development of innovative solutions that can improve current processes.
A majority of the registrants who responded believe that technology can help them improve processes in a number of areas. Similarly, investors were generally of the view that the adoption of technology by their dealers and advisers could provide a better overall experience and improve outcomes.
The feedback indicated registrants’ top priorities as:
Obtaining and retaining clients.
Compliance with Client Focused Reforms.
Automating compliance functions.
We’re here to help
If you would like to be notified about OSC TestLab updates or know more about the upcoming test, please drop us a line at testlab@osc.gov.on.ca
