You may be asked to give some additional personal and private information to your financial planner or insurance consultant in the near future. There is new federal legislation making it mandatory for these people, and the companies they work with, to collect additional information from their clients. The legislation we speak of is found in the new and revised federal law, “Proceeds of Crime (Money Laundering) Act 2000.”

Canada has had money laundering regulations since 1991. For years, governments and police agencies have attempted to stifle crime and terrorist organizations by removing or restricting their abilities to profit from, or use the proceeds of crime.

The Canadian government has realized that our laws and our detection methods were inadequate to the increasingly sophisticated methods that criminals and terrorists use to hide their funds. As a result, in 2000 the Federal Government passed a revised Proceeds of Crime Act with additional regulations added in the fall of 2001, after the events of September 11.

Under the old rules, the regulatory burden was placed mainly on banks, casinos, foreign exchange dealers, and securities firms. Criminals have become much more sophisticated, so the new rules have expanded to include new groups of people and companies including lawyers, accountants, life insurance companies/agents and mutual fund dealers/advisors. These people and companies are now obligated to collect additional personal information from their clients.

The events of September 11, 2001, have showed us that criminals and terrorists are very sophisticated and well funded. Most people feel somewhat vulnerable by giving this personal information, but at the same time want the authorities to do anything possible to prevent another tragic event. Understand that it is not the advisor or the company that is needing your private information. It is now the law that this information be collected.

This is a monthly article on financial planning. Call or write to Rick Sutherland CLU, CFP, FDS, R.F.P., of Fundex Investments with your topics of interest at 798-2421 or E-mail at rick@invested-interest.ca.