Asset and portfolio management
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Attitude of the country towards modern asset and portfolio management services
This area is a growing area in the Canadian economy particularly among younger investors. There are many asset and portfolio managers that exist only online and have no bricks and mortar physical locations open to the public. Such entitles are regulated (see below) which limits the ability of non-Canadian players to be involved in the market. In addition, Canada does not have a central securities regulator, so a registrant must register in each Province or Territory where it carries on business. This is often a hurdle for start-ups.
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
It is a requirement that all online asset and portfolio managers be registered with the Provincial securities regulator in every Province where such entity operates. A license is required in order to operate. The registrant is both the actual firm carrying out the business and the individuals, if any, providing actual advise to the end customer. Many Canadian Securities Regulators have pilot projects in place to allow for reduced requirements for registration and a streamlined process. Again, this is only at each Provincial or Territorial level. In Ontario there is an initiative called “OSC Launchpad” which is designed to help new and innovative participants in the area navigate the rules and regulations of the Ontario Securities Commission.
The Ontario Securities Commission also collaborates with other Canadian securities regulators in the CSA Regulatory Sandbox which is designed to assist FinTech companies in expanding their footprint across the country.
There are ongoing compliance requirements which must be met to retain registration. The initial and annual fees vary from Province to Province. In Ontario the fees are based on many factors so it is difficult to say exactly what the fees will be. The CSA Regulatory Sandbox program referred to above is designed to lessen the fees so that they do not become barriers to FinTech companies.
Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area
The major issue is that such industries are regulated on a Provincial and Territorial basis so you need to comply with the requirements of each jurisdictional level.
Market size for asset and portfolio management services and biggest companies in this business area
See below regarding the size of the advisory market.
Additional comments regarding the economic situation for asset and portfolio management services or what FinTech’s must be aware of in this business area