Are advisers who recommend ‘safe’ investments really just safeguarding their fees - NO!

Mark Schoeffel / 05 January 2026

I was surpised to read an "Opinion" piece published in The Globe and Mail on December 30, 2025; written by David McLean and noted as "manager of ROMC Fund - a "global equity-focused unit trust offered by Offering Memorandum and is available to Accredited investors in Ontario, Alberta, B.C. and Quebec." 

McLean's piece contends that financial advisers recommend overly safe investments primarily to safeguard their own fees rather than to serve their clients’ long-term financial interests. While it is appropriate to scrutinize structural incentives within the investment advisory industry, the article’s broad characterization of risk-appropriate advice as self-protective overlooks the complexity of modern portfolio construction, the regulatory environment in which advisers operate, and the fiduciary obligation to align investments with individual client circumstances. It also understates the role advisers play in helping investors understand the interaction between risk, return, liquidity, tax efficiency, and behavioural comfort.

At the heart of the critique is the assertion that advisers rely on regulatory suitability frameworks to justify conservative recommendations that minimize professional risk rather than maximize client outcomes. This framing reduces a substantive client-centred process to a defensive compliance exercise. In practice, know-your-client and suitability obligations are intended to ensure that investment recommendations reflect a client’s financial position, objectives, time horizon, liquidity needs, and tolerance for volatility. These requirements emerged in response to historical mis-selling and remain central to investor protection, particularly for retail clients.

Effective advisers go well beyond a basic risk questionnaire. Portfolio modelling can incorporate income needs, tax exposure, existing concentrations, estate considerations, and the client’s psychological capacity to withstand drawdowns. This holistic approach is particularly important when considering investments that extend beyond traditional prospectus-qualified mutual funds and exchange-traded funds.

A relevant omission in the original commentary is the distinction between investments offered by prospectus and those offered under an Offering Memorandum exemption. Prospectus-qualified investments are subject to extensive regulatory disclosure, continuous reporting obligations, and standardized liquidity features. By contrast, OM investments are distributed under securities law exemptions and typically offer more limited disclosure, reduced reporting frequency, and constrained liquidity. These characteristics do not make OM investments inherently unsuitable, but they do materially increase their risk profile from a regulatory and suitability perspective.

Access to OM investments is generally restricted to Accredited Investors or other exempt categories, as defined under securities legislation. Accredited Investor status is intended to identify individuals or entities with sufficient financial resources and sophistication to evaluate higher-risk, less liquid investments without the protections afforded by a prospectus. Even then, these investments are not broadly available. Products offered under an OM must be approved by a registered dealer, which requires a comprehensive compliance review of the product structure, valuation methodology, liquidity provisions, and the experience and governance of the management team. Firms such as McLean, whose strategies may be accessed through OM exemptions, are therefore subject to heightened scrutiny before their products can be made available to clients.

Importantly, from an adviser’s perspective, OM-based investments are often classified as higher risk that their prospectus "peers" due to limited transparency, valuation subjectivity, and liquidity constraints. These factors make such investments less likely to be suitable for many clients, regardless of return potential. Recommending against their use in certain portfolios is not evidence of fee protection or professional self-interest. Rather, it reflects a disciplined application of suitability standards and an understanding of how illiquidity and reporting limitations can affect an investor’s ability to meet near- and medium-term objectives.

The discussion of risk itself also warrants refinement. Market volatility is only one dimension of risk. Advisers must also consider inflation risk, tax drag, sequencing risk for retirees, and the risk of failing to achieve stated goals. In many cases, a diversified allocation to growth assets is appropriate and necessary. In others, capital preservation and liquidity take precedence. The adviser’s role is to evaluate these trade-offs in context, not to apply a uniform risk posture across all clients.

The suggestion that conservative portfolios exist primarily to protect advisory fees assumes a misalignment between advisers and clients that is not supported by the structure of most modern advisory relationships. Fee-based and fiduciary models emphasize transparency and alignment, with compensation disclosed and agreed upon in advance. In these arrangements, advisers are compensated for planning, oversight, and behavioural guidance as much as for asset allocation decisions. Regulatory reforms have increasingly reinforced this transparency through enhanced fee and performance reporting.

This does not mean the industry is without shortcomings. Conflicts of interest can arise, particularly where commission-based products are involved, and investors are well served by asking detailed questions about costs, liquidity, and product structure. However, it is a mistake to conflate prudent risk management with self-preservation. Advisers who decline to recommend higher-risk or OM-based investments are often responding to genuine suitability concerns, not attempting to shield their revenue.

Ultimately, the value of professional advice lies in the construction of portfolios that reflect each client’s unique financial reality, including their access to different investment vehicles, their tolerance for illiquidity, and their need for transparency and ongoing reporting. Advisers add value by integrating these considerations into a coherent strategy, maintaining discipline through market cycles, and ensuring that risk is assumed deliberately rather than incidentally.

A more constructive discussion about financial advice would focus on improving investor understanding of risk, disclosure regimes, and the spectrum of available investment structures, rather than reducing suitability-driven recommendations to a cynical narrative about fee protection. High-quality advice is defined not by an aversion to risk, but by the thoughtful alignment of opportunity and responsibility in service of long-term client outcomes.

The views and opinions expressed in this article are those of the author, Mark Schoeffel, and are provided for general informational purposes only. They reflect his personal perspectives and professional experience and do not necessarily represent the views, positions, or policies of iA Private Wealth Inc. This commentary is not intended as investment, legal, or tax advice, nor should it be relied upon as such. Readers should consult their own qualified advisors before making any investment decisions.