Ontario Approves New Rules Governing Use of Financial Planner and Advisor Titles


The Ontario Ministry of Finance has given the green light to a new set of rules governing employees in the financial services industry who use the titles “financial planner” or “financial adviser”, standards designed to prevent investors to do business with unqualified people.

On Tuesday, the Financial Services Regulatory Authority of Ontario (FSRA), which has led rule changes since 2019, announced that the title protection rule for financial professionals will be proclaimed in effect in Ontario on March 28.

“Until now, there has been no regulation on the use of the titles of financial planner or financial adviser,” said Huston Loke, executive vice president of market conduct at the FSRA, in a statement. “This has contributed to consumer confusion and questions about the expertise of people offering financial planning and advice services.”

The statement adds that “Deciding how to invest your money is complicated and emotional and requires expertise and good judgment. This change is long overdue and delivers something consumers have been asking for: clarity and confidence when working with their financial professional. »

Financial advisors typically help clients manage their investments, while financial planners help people devise strategies to achieve goals such as saving for retirement or a child’s education. In 2019, Ontario passed legislation to pave the way for the Financial Professionals Title Protection Act, which provides oversight of qualifications and credentials used in the financial services industry.

Ontario’s announcement will also help spur change in other jurisdictions and promote consistency among people across the country who use the titles, FSRA Executive Director Mark White said in a statement. interview with The Globe and Mail. Mr. White has worked to harmonize Ontario’s rules with those of other provinces – including Saskatchewan and New Brunswick – which have similar title protection frameworks.

Upcoming rule changes, which will be phased in over time, will make qualifications and credentials mandatory for people who work in the industry and refer to themselves by either title.

Financial planners will have a four-year transition period, while financial advisors will have a two-year transition period. People who used these securities before and on January 1, 2020 will have “ample time to comply with the framework after it is implemented,” the FSRA said in a statement.

People who started using the credentials after Jan. 1, 2020, will need to “immediately obtain credentials from an FSRA-approved credentialing body,” he added.

The rule change comes two years after industry groups called for tougher standards for people who provide financial advice to Canadian investors.

There are approximately 100,000 financial advisors working across the country. But Canada has no legislated national standards for those who offer financial planning or advice. Outside Quebec, which has its own rules, anyone can call themselves a financial planner or advisor, regardless of their certification, designation or training.

Mr White said he was in talks with four organizations who have requested permission to certify people to use the new credentials. FSRA will publicly announce the final list of approved accrediting bodies after the new rules come into effect on March 28.

One of the best-known credentials is the Certified Financial Planner (CFP) designation, administered by the professional body FP Canada. About 17,000 people in Canada have them, including 9,000 in Ontario. FP Canada also administers the Qualified Associate Financial Planner (QAFP) certification, a designation launched in 2019 for individuals who serve a broader population of Canadians with less complex financial needs. There are currently 1,900 QAFP professionals in Canada, including approximately 900 in Ontario.

FP Canada CEO Tashia Batstone said the CFP and QAFP have been submitted for approval as approved credentials, and she anticipates both will be selected by the FSRA.

“Our organization has been advocating for this type of legislative framework for many, many years and today’s announcement is a big win for consumers,” Ms. Batstone said in an interview. “Clients will be able to trust people who call themselves financial planners and financial advisors, and will know that these people will have the skills and training to put their interests first.”

The Financial Advisors Association of Canada – known as Advocis – has also applied to become an FSRA-approved credentialing body. She submits her existing Professional Financial Advisor (PFA) credential to qualify for the Financial Advisor and Financial Planner designations, and her Chartered Life Underwriter (CLU) credential to qualify for the Financial Planner designation in Ontario.

“This is an important step forward in raising the bar for our members and our clients,” Advocis chief executive Greg Pollock said in a statement. “Only now will this help build consumer confidence in choosing who to partner with, but will also help promote consistency and professionalism among those using the titles.”

Two organizations that have not yet asked to be included, Mr. White said, are the Mutual Fund Dealers Association of Canada (MFDA), a self-regulatory organization (SRO) that oversees about 90 fund companies and distributors. mutual funds, and the securities industry. Regulator of Canada (IIROC), which oversees 170 investment dealers. The two SROs are currently being merged to create a single one.

The MFDA and IIROC have been involved in industry discussions with FSRA, and Mr. White told the Globe that he “still hopes” that SROs will apply to become accreditation bodies “at some point.” given in the future.

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