Coalition calls on Ontario regulator to reverse approval of financial planner designation

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A coalition of financial planners and consumer advocates is expressing concern about the recent approval of a financial planning designation under Ontario’s title protection framework, saying it risks creating confusion and undermining consumer protection.

In a statement released Thursday, the group asks the Financial Services Regulatory Authority of Ontario (FSRA) to reverse its decision to approve the chartered financial planner designation as a qualifying credential for the “financial planner” title under Ontario’s regime.

The credential is offered by the Canadian Institute of Financial Planning (CIFP), which maintains the designation fits within a regulated framework that provides a choice of credentials for financial planners.

The statement is signed by Julia Chung, president of the Financial Planning Association of Canada; Lenore Davis, past chair of the Institute of Advanced Financial Planners (IAFP); investor advocate Ken Kivenko, president of Kenmar Associates; lawyer Harold Geller at Geller Law; lawyer Harvey Naglie and Dan Hallett, vice-president, research and principal at HighView Financial Group.

The coalition says the name chartered financial planner is “virtually identical” to the certified financial planner (CFP), an internationally recognized designation with around 9,000 holders in Ontario. The chartered financial planner designation, held by a few hundred people, “indirectly benefits from CFP’s brand recognition among consumers and will cause them confusion,” the statement says.

“We fail to understand the appropriateness of the approval of [the chartered financial planner] that, to our knowledge, has not been in use in the Canadian marketplace in more than 20 years. In our view, this credential’s recognition by FSRA will undermine the Ontario government’s legislative intent and is highly likely to contribute to consumer confusion in Ontario,” the statement notes.

The coalition argues that the regulator should either require the CIFP to rename the chartered financial planner designation or reverse its approval.

FP Canada, which oversees the CFP designation in Canada, made a similar case in a statement last week, expressing disappointment with FSRA’s decision.

“We are concerned about what the decision to approve this credential by FSRA means for the efficacy of the Title Protection Framework and the increased confusion for consumers as to who qualifies to use the title ‘financial planner,’” stated Tashia Batstone, FP Canada’s president and chief executive officer.

Keith Costello, CEO of the CIFP, says FSRA has approved several designations under its framework and the chartered financial planner is the sixth designation approved for the financial planner title.

“The framework gives us choice. The decision was made to go with a framework where the standard does not sit with designations,” Mr. Costello says.

“It’s a framework that protects the public and there’s competition within the framework. It’s an open shop in which financial planners who need a standard can get their credential and support from whatever organization they choose.”

As a condition of approval, Mr. Costello says the chartered financial planner designation is not allowed to use the CFP acronym. He also says other financial planning designations sound similar, such as personal financial planner, and aren’t coming under scrutiny.

In total, FSRA has approved five credentialing bodies and 14 designations for the “financial advisor” and “financial planner” titles. In addition to the chartered financial planner designation, the CIFP offers the registered retirement consultant designation for financial planners, as well as the registered financial and retirement advisor and registered retirement analyst designations for financial advisors.

FP Canada offers the qualified associate financial planner designation as well as the CFP.

Mr. Costello says the point of FSRA’s framework was to bring various approved designations under one roof.

“The public doesn’t have to determine the alphabet soup,” he says. “It’s protected, certified under FSRA with the approved organizations. [Consumers] can go check their advisor under [FSRA’s framework] and will see if the person is in good standing or not.”

The IAFP’s Ms. Davis says she was surprised to learn the chartered financial planner was approved. Ms. Davis received that designation in 1994 but has since received the CFP, as she saw that designation is one that’s recognized worldwide.

“When FSRA looked at all the designations that were out there, their whole point was they wanted it to be clear with no overlap and confusion in the marketplace,” she says. “To have another designation that uses the same letters, CFP, it presents too much confusion for the public. It doesn’t matter that they’re all going to be swallowed as part of the framework.”

In a statement sent to The Globe by e-mail, FSRA said the chartered financial planner credential meets its requirements.

“If a credential is approved, consumers can be confident that someone using the financial planner or financial advisor title has met minimum standards of education, is held to a code of conduct, and is supervised,” the regulator stated.

“A credentialing body’s business decisions regarding the naming of credentials, marketing of credentials and their approach to competition and market share are not within the scope of the title protection framework,” FSRA added, while noting it’s requiring the CIFP refer to the chartered financial planner designation in its entirety “to address any confusion with existing titles such as FP Canada’s CFP designation.”

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