Firm Bulletin: OBSI firm fee outlook for 2022

While final fees will not be determined until approved by our board in late September and will not be invoiced until November 1, the purpose of this bulletin is to assist firms in their annual planning by sharing the likely direction of OBSI fees for 2022.

2020 and 2021 have been exceptional years for many reasons. From OBSI’s perspective, one of the biggest impacts of the pandemic has been a significant and ongoing increase in consumer and investor complaints. Complaint volumes in late 2020 and throughout 2021 have exceeded those experienced in the wake of the global financial crisis in 2009 and 2010.

To date, the improvements we have made in operational efficiency have proven effective and we have maintained all of our timeliness and service standards and avoided any case backlog. This has required an increase in our personnel expenses which we expect to continue through 2022. As OBSI is a not-for-profit organization operated on a cost-recovery basis, complaint volumes have a direct impact on our staffing and budgetary requirements and consequently, firm fees.

2022 budget increases necessary to deal with continued rising case volumes

For the past decade, OBSI’s budget has been prudently managed within a narrow range, respecting the needs of firms and consumers for an efficient, effective service. Within this budget, in recent years we have made substantial operational improvements and built-up our organization’s reserve funds to target levels.

For 2022, we expect to continue to respond to increased case volumes due to market volatility and financial uncertainty related to the coronavirus pandemic. To deal effectively with this case volume, we will need to ensure that we have adequate staff resources to maintain our service levels.

Our 2022 budget will reflect this need for additional staff and as a result is expected to be approximately 10% higher than our 2021 budget. Virtually all of this increase is related to increased personnel requirements.

Reserve fund used for 2021 expense increases

For 2021, OBSI’s budget increased about 10% but firm fees did not increase because, given the uncertainty surrounding the pandemic and its potential impact on firms, OBSI’s board chose to use our reserve fund to offset any fee increases. Although OBSI’s resource needs were increasing due to increasing complaint volumes, the increase was not passed on to participating firms.

How OBSI fees are determined

Each year, we establish a fee target based on our budget for the coming year and divide that fee target between the sectors of firms that use our service. The division of fees among the different sectors is based on the proportion of OBSI resources that each sector has used in the previous year, based on each sector’s recent case volumes and case complexity. Our board also considers fairness and the impact of fee changes on member firms when setting fees. A guiding principle is that no sector or registrant category should subsidize another. Therefore, a sector’s fees each year can change, even when our budget has remained stable. You can find more information about how our fees are determined here.

Expected 2022 fee changes by sector

As a result of the requirement for increases in our operational budget, pending board approval in September, we anticipate that fees will increase by approximately 15% overall for 2022. Outlined below are the anticipated impact on fees by sector, which are determined based on each sector’s relative case volume and complexity as described above:

• Banks: We expect fees for the banking sector will increase by approximately 15 to 20% relative to 2020 and 2021. 
• IIROC & MFDA firms: We expect fees for IIROC and MFDA firms to increase by approximately 15 to 20% relative to 2020 and 2021.
• Exempt Market Dealers & Portfolio Managers: We expect fees on a per-representative basis to remain unchanged from 2021, primarily due to an increase in the number of representatives in the sector.
• Scholarship Plan Dealers: We expect fees on a per-representative basis to increase approximately 40% for this sector due primarily to an almost 60% increase in case volumes.

Fees for each firm within each sector are set proportionately on the basis of firm size. In some sectors, size is determined by each firm’s assets and in other sectors, by number of registered representatives.

Actual fees will be communicated in October and November

OBSI’s fiscal year begins on November 1. Your firm can expect to receive a final fee information bulletin from us in October, and instructions on how to complete your membership fee payment in November.

Firms who are invoiced annually or quarterly will be contacted with their invoices and provided with options for completing their payments.

Firms who use the OBSI Firm Portal to calculate and process their membership renewals will receive detailed information and instructions for logging into the portal and paying via the portal once the form is available in November.

If you have any questions or concerns please email membership@obsi.ca or call 1 (888) 451-4519 x 2296.