Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

‘Our ideal would be to have an endowment fund that allows us to be financially completely independent,’ says Neil Gross, executive director of FAIR Canada.

Fred Lum/The Globe and Mail

Canada's main organization representing small investors is launching a fundraising campaign to become self-supporting and independent of the regulators it lobbies for reforms.

Montreal billionaire Stephen Jarislowsky has already committed $2-million to launch a new endowment fund for the Canadian Foundation for the Advancement of Investor Rights – known as FAIR Canada – but his pledge is conditional on FAIR raising a further $4-million this year to match his donation on a 2-to-1 basis.

FAIR executive director Neil Gross said the organization has relied on funding from the Investment Industry Regulatory Organization of Canada (IIROC), which regulates brokerage firms in Canada, and from the Ontario Securities Commission, but it wants to become more self-sufficient. A new endowment fund likely can't generate enough income to fully cover FAIR's annual budget, which tops $800,000, but would provide a secure base of funding.

Story continues below advertisement

"We would like to be self-funding," Mr. Gross said. "Our ideal would be to have an endowment fund that allows us to be financially completely independent so we don't have to lose productive time and resources looking for funding, and also so that we are completely unencumbered in what we do."

Mr. Jarislowsky, who has been a director on FAIR's board since its founding in 2008, said he has a passion for good governance and shareholder rights, and believes no other organization in Canada is doing the same type of policy work on behalf of retail investors.

Mr. Jarislowsky previously helped launch the Canadian Coalition for Good Governance, which represents institutional investors seeking better governance practices at listed companies, and helped fund the Quebec-based Institute for Governance of Private and Public Organizations, which also advocates for broad governance reforms.

"I felt we were leaving out one particular constituency, which is the individual investor, who has been screwed more than anybody else in Canada," Mr. Jarislowsky said. "I thought this is the third leg of the chair … the chair was missing this major constituency."

FAIR, which is a registered charity, has focused on topics such as fighting financial fraud, reforming mutual fund fees, raising standards for people working in the financial sector, and opposing expanded powers for the less regulated "exempt" market.

Mr. Gross, a lawyer who previously represented clients suing financial firms, said FAIR's work is intended to be a "counterbalance" to the raft of corporations and business groups lobbying for rule changes that will benefit them but not help investors.

"There was always a very active, well-represented lobby on the investment business side to present their views of the issues, but there was no one who could comprehensively deal with the issues from the investor perspective," he said.

Story continues below advertisement

Although FAIR's work involves advocating reforms to the same regulators who fund the organization, Mr. Gross said the funding has come with "no strings attached."

IIROC initially provided a $3.75-million grant to help launch FAIR in 2008, using money the regulator collected from fines and penalties. FAIR secured a further $1.7-million in 2012 from IIROC and the OSC to fund another two years of operation.

FAIR founder Ermanno Pascutto, who stepped down as executive director earlier this year but remains a director, said FAIR needs its own financing to ensure it will continue to exist and operate independently.

"The way we've been for the last several years is we run up against the wall and we're about to run out of money and start to lay off staff when we get a new tranche of funding," he said. "We're hoping we can solve that problem on a long-term basis and have a permanent organization that is here to speak for the retail investor."

IIROC chief executive officer Susan Wolburgh Jenah said the regulator agreed to help launch FAIR because there was no major retail investor organization doing policy advocacy in Canada while the United States has large consumer organizations working in the investment realm. "It's harder for regulators to tap into the retail investor perspective, because retail investors aren't organized," she said.

Ms. Wolburgh Jenah said it is now up to FAIR to become self-sufficient, and there is no plan for IIROC to continue giving it operating funds.

Story continues below advertisement

"We've provided a very generous contribution to this organization, and the board has felt from Day One that they needed to develop their own funding plan."

Mr. Jarislowsky said he hopes his seed money will prompt financial firms to also contribute to FAIR's endowment fund because its work is directly aimed at protecting their retail customers.

But Mr. Gross said FAIR's board is still weighing whether to limit donations from the financial industry because there could be a perception of conflict-of-interest. Some of FAIR's policy recommendations – such as changing how fees are paid to advisers who sell mutual funds – have run contrary to views of financial companies.

"Any organization struggles with who they want to be seen to have their support come from," he said.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies