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A group of investment industry organizations and consumer advocates is taking aim at the Ontario government’s move to regulate the use of financial adviser and financial planner titles, saying regulators have set the bar too low for financial professionals to be approved, placing Canadian investors at risk.

The coalition, which includes investor advocate FAIR Canada, the CFA Societies of Canada and the Financial Planning Association of Canada (FPAC), is also calling on provinces such as Saskatchewan, which is in the process of setting up its own financial title rules, to establish higher standards for financial advisers.

“We are disappointed with Ontario’s approach to approving credentials for financial advisers,” FAIR Canada’s executive director Jean-Paul Bureaud, said in an interview with The Globe and Mail.

“Consumers expect a financial adviser to have a comprehensive set of skills, high proficiency standards and broad-based knowledge. Right now, in Ontario, an individual who is licensed to sell you, for example, a mutual fund can call themselves a financial adviser,” he said. “That simply doesn’t align with what most Canadians would expect when talking to a financial adviser.”

Earlier this year, Ontario’s Finance Ministry approved the Financial Professionals Title Protection Rule, a new set of rules to govern employees in the financial services industry who use the title financial planner and financial adviser. The rules were designed to protect investors from doing business with unqualified individuals.

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Shortly after, the Financial Services Regulatory Authority of Ontario, the provincial regulator that has spearheaded the rule changes since 2019, began to announce a number of approved designations that individuals would need to acquire in order to use either title.

In an e-mail to The Globe and Mail, FSRA spokesperson Russ Courtney says the minimum standards for the designation providers, and the “robust process” they go through for approval, were determined after extensive consultations and are “objectively applied” by the FSRA when reviewing applications.

In order to be approved, Mr. Courtney says credentialing bodies must clearly demonstrate that they provide a minimum standard of education, require credential holders to complete continuing education, abide by a code of conduct that includes putting clients’ interests first, and are subject to a complaints and disciplinary process.

But as additional designations were approved throughout the spring – including some newly created designations by the industry – investor advocates began to voice concerns with the quality of designations, as well as the overall number of approved designations.

Low requirements for financial advisers also risk undermining the conduct requirements for financial professionals regulated by securities law, the coalition said in a statement made this week.

“Creating a system where the threshold to be a financial adviser is the same as someone who is able to sell a mutual fund means that any mutual fund dealing representative could become a financial adviser, essentially through a rubber stamp of the industry,” Jason Pereira, FPAC’s president, said in a statement. “Ontario’s approach effectively accomplishes little, and instead of reducing regulatory burden, it actually increases it.”

Mr. Courtney says FSRA will review the companies that provide the designation on a continuing basis and take corrective action if one of them does not meet minimum standards. The regulator is open to hearing views on the strengths and weaknesses of each organization to help inform regulatory oversight, he added.

Michael Thom, managing director for CFA Societies Canada, said the Financial and Consumer Affairs Authority of Saskatchewan (FCAA) should “strive to build a model that better meets consumer needs” and expectations for financial advice.

“The number one consideration in implementing a title protection regime should be consumer protection, and credentialing approvals in Ontario are moving towards an increasingly troubling lowest common denominator,” Mr. Thom said in a statement.

In a recent report, the FCAA, which recently completed a request for comment on its title regulation, said it did receive several comments addressing concerns about the approval criteria as well as the approval of multiple credentialing bodies.

Mr. Bureaud suggests provinces should consider following Quebec’s financial planning title regime, which only has one approved credentialing body to oversee one professional designation for anyone who wants to be called a financial planner.

“Trying to regulate the title financial adviser is a bigger undertaking because there is no common definition or existing standards whereas financial planning is a more established field based on globally accepted standards,” he said.

It would be much better for the provincial governments to focus just on financial planners, he suggested. But if they are “stuck” with current regulation, the best option would be to make sure there are approving designations with high standards “that align with reasonable expectations by consumers.”