The Ontario government is moving ahead with plans to crack down on people who use the title of “financial planner” or “financial adviser” when they lack qualifications.
Bill 100, which received royal assent last week, requires anyone in Ontario who wants to use those titles to obtain appropriate credentials and remain in good standing. With that groundwork laid, the province’s Ministry of Finance and the Financial Services Regulatory Authority of Ontario (FSRA) are developing the final rules.
Financial advisers typically help clients manage their investments, while financial planners help clients prepare to meet a goal such as retirement or a child’s education. The coming rule changes will make qualifications and credentials mandatory for individuals wanting to work in the industry and refer to themselves by either title.
The legislative changes comes at a time when industry groups have been advocating for stricter enforcement on individuals providing financial advice to Canadian investors. Canada currently has no legislated national standard for those who offer financial planning or advice. Outside Quebec, which has its own rules, anyone can call him or herself a financial planner or adviser, regardless of certification, designation or educational background.
The province has yet to specify which credentials would be recognized, nor has it stated which professional organizations would enforce the rules. One of the most commonly known credentials is the certified financial planner (CFP) designation administered by the professional body FP Canada (formerly the Financial Planning Standards Council). More than 16,500 people in Canada hold it, about 9,000 of them in Ontario.
Earlier this year, the province announced the Financial Professionals Title Protection Act, 2019, to improve oversight on qualifications and credentials used in the financial services industry. The act was included as part of Bill 100.
FP Canada has been a main voice in asking policy-makers to restrict the use of “financial planner” to those who meet stringent proficiency and ethics requirements. As well, chief executive Cary List has been urging all other provinces to follow Ontario’s lead and legislate similar restrictions.
“We are pleased to see passage of the Financial Professionals Title Protection Act, 2019, which will reduce confusion and help consumers to make better informed decisions about where to turn for financial planning advice,” he added.
A spokesperson for the FSRA, Ontario’s new financial services regulator, says it is too early to confirm specifics of the final rules, but the initiative will be “one of our organizational priorities.”
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