Why wouldn’t your clients want to appoint you, their trusted advisor, as their power of attorney and executor/estate trustee? Advisors develop comprehensive knowledge of their elderly clients’ personal and financial circumstances, and foster a deep sense of trust with their clients. It is reasonable for your clients to view this appointment as a natural progression in their relationship with you, and certainly a testament to your strong relationship building. So while you may want to accept the appointment, regulations and your dealer’s policy manual specifically prohibit it!  

 

CIRO (MFDA and IIROC) advisors aren’t permitted to have “full or partial control or authority” over their clients’ financial affairs, and there is a specific prohibition from accepting such an appointment as a power of attorney or as executor/estate trustee.¹ 

 

If you are thinking of testing this rule, see Re Fairclough, a 2022 IIROC settlement hearing decision where the advisor waited four years to inform her dealer that a client appointed her as executor, and failed to disclose altogether that she had also been appointed as attorney for property. When the dealer became aware of the advisor’s failure to disclose, it had a duty to report the matter to IIROC, who subsequently conducted an investigation that spanned over a year and a half. IIROC’s investigation would have included collecting e-mails and other relevant documents, and an interview of the advisor, all of which is very stressful. In this case, the dealer ultimately sanctioned the advisor by requiring her to make a charitable donation in the amount of $20,000, rewrite and pass the CSA’s Conduct and Practices Handbook exam, and if that wasn’t enough, IIROC imposed an additional monetary penalty of $22,500.

 

You might ask, what if my parents want me, their son/daughter and advisor, to be their POA and executor?  An advisor is only permitted to be the POA/executor for a “Related Person”² (defined by the Income Tax Act (Canada) as “individuals connected by blood relationship, marriage or common-law partnership or adoption”)³; however, to accept such an appointment, you must:   

 

 

For the second condition, your dealer’s compliance department may provide approval only if you relinquish control of your parents' accounts by transferring these to another advisor at the dealer, to avoid violating the provisions that preclude you from having full or partial control over client accounts and to avoid any conflicts of interest. 

 

Although the desire to assist elderly clients, especially family members, is understandable, you are required to seek permission before you accept the appointment. If the client is not a “Related Person”, then you must refuse the appointment. 

---

¹See the MFDA’s Interim Rule 2.3.1(a), and IIROC’s Partially Consolidated Rule 3115(v)–CIRO’s consolidated rules are presently a work in progress.
²See MFDA Rule 2.3.1(c) and IIROC Rule 3115(v)(a)(i), which provide a limited exception for advisors to act as attorneys for property and/or as executor/estate trustee for Related Persons, provided certain criteria are met. 
³Income Tax Act (Canada), R.S.C. 1985, c.1 (5th Supp), section 251.