Ontario to Regulate Use of Financial Advisor and Planner Titles

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New legislation designed to protect consumers from misguided financial advice

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Unless you live in Quebec, you can call yourself a financial planner or financial advisor without any professional credentials to prove it.

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This means that the person advising you on your investments and retirement plan might not be more qualified than you for the job.

But in Ontario, that’s about to change. In accordance with provincial government guidance, the Financial Services Regulatory Authority of Ontario (FSRA) has announced new guidance on how these conditions will be handled.

“We believe investors should reasonably expect that when dealing with someone defending themselves with one of these securities, there will be minimum standards associated with it,” said Huston Loke, vice-president. Market Conduct Executive Chairman for ARSF.

New rules will come into effect during the transition phase

The idea of ​​setting rules on who can and cannot call themselves a financial adviser or planner was first introduced by the Ontario government in its 2019 budget.

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Now anyone working under the title of financial adviser will have two years to update their qualifications to the minimum standard set by the province. Meanwhile, those working as financial planners will be four years old.

Regulating these credentials, including establishing minimum educational requirements and a code of professional conduct, will ensure Ontarians that the advice they receive from their financial professional is knowledge-based and normalized experience.

“Not everyone is a professional investor — most people need professional help,” says Loke.

“We look forward to having an environment where people know they are dealing with a qualified professional with minimum standards of skill and education who will put their interests first. »

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Two certification bodies already identified

In early April 2022, FSRA announced that FP Canada, the body that certifies professional financial planners across the country, and Advocis, one of Canada’s oldest and largest professional financial advisor organizations , will be responsible for managing designations in Ontario.

FSRA continues to accept and review applications from additional certification bodies.

Tashia Batstone, president and CEO of FP Canada, says that while the FSRA’s requirements were stringent, she and members of her organization see value in having their credentials regulated.

“The same way you want to make sure your doctor is actually a doctor and your accountant is actually a CPA or your lawyer has actually passed the bar exam…I think you want to have the same level of protection for the person is giving you your financial advice,” says Batstone.

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Those who are already qualified as a Certified Financial Planner or Associate Qualified Financial Planner by FP Canada, or Certified Life Underwriter or Professional Financial Advisor by Advocis, should be able to continue as usual.

However, anyone who is not currently qualified will have two or four years (depending on their title) to meet one of the education and professional training requirements of the designated bodies:

Consumers already expect minimum standards

In a survey conducted by the FSRA in 2020, 86% of respondents agreed that it was necessary to establish minimum standards for the use of the titles in question.

And yet, nearly three in five Ontarians already assumed their finance professional had credentials overseen by a government regulator.

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With that in mind, consumer education will be an important next step, according to Batstone and Loke.

“I think it helps manage expectations,” Batstone says. “It helps to ensure that what the public expects, the public actually gets.”

Batstone also hopes other provinces will follow. Saskatchewan has already passed legislation, while New Brunswick is considering its options following public consultations last fall.

“Ultimately, we’re all about serving the consumer,” Batstone says, adding that a greater level of compliance across the country is ultimately in the public interest.

For now though, she says consumers should still do their due diligence to make sure they’re working with a professional who can offer informed and unbiased financial advice, because what’s at stake is too high to let go. randomly.

“When you think of individuals who seek the services of a financial advisor or a financial planner…at the end of the day, these are their hopes and dreams, they want to save for retirement, they want to help their families, they want buy a house,” Loki said.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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