The perils of investment advice

Advice accompanying employer-sponsored retirement and savings plans can be helpful to employees but employers can be liable for bad advice
By Mary Picard
|Canadian Employment Law Today

Investment advice on employee group RRSPs or defined contribution pension plans can be helpful for employees but employers should keep in mind there are legal risks in providing it.

Canadian courts have not yet dealt with lawsuits by employees dissatisfied with their company-sponsored retirement and savings plans, so there is little legal guidance on an employer’s obligations when offering investment choices in a company plan. Employers know they must act prudently and in the best interests of their employees whenever they make benefit plans available. How does that apply to investment advice in retirement and savings plans? The answer lies in voluntary guidelines issued by the Joint Forum of Financial Market Regulators.

CAP guidelines