Finally, financial advisory title protection for consumers

Opinion

Ladies and gentlemen, boys and girls, gather round. There is big news in the world of financial advice and investment management, a story which is more than three decades in the making.

Title protection is about to be proclaimed in Ontario.

“Huh?” you ask. What the heck does that mean? And why does it matter?

Well, I’m glad you asked.

Under the current rules in every province but Quebec, anyone can refer to themselves as “financial planner” or “financial adviser.”

That’s right, nothing stops your favourite Uber driver from saying he’s also a financial planner and offering you advice. Real financial planners have been lobbying provincial governments across the country since the 1980s to get that changed, so that only people with proper accreditation, education, experience, compliance with a code of ethics, exam completion and ongoing professional development requirements could use those titles.

The new standards came into effect on March 28, but will be phased in over time for some financial professionals.

The Financial Services Regulatory Authority will give financial planners and advisers who were using the title before Jan. 1, 2020, time to comply. Financial planners using the title before then will have a four-year transition period, while advisers who were using the title will have two years to comply with the new standards.

The new rules are significant for several reasons.

At least 40 per cent of the people who refer to themselves as planners or advisers practice in Ontario. Most of the head offices of their employers are in Ontario. As those organizations comply with the rules in Ontario, they will generally enforce the same rules for their employees across the country, one would hope.

As well, the other provincial securities commissions tend to follow the lead of Ontario in most regulatory areas. So, we can be hopeful that these overdue restrictions will be imposed on people and other provinces as well, for the protection of consumers.

Technically, the Financial Professionals Title Protection Rule is being implemented by the Financial Services Regulatory Authority of Ontario. It will approve the qualified individuals who will be authorized to use the titles “financial planner” or “financial adviser.”

Surprisingly, it appears they have not yet decided on the qualifying standards, or at least they have not announced the designations that will qualify. It appears this announcement will be made after the new rules take effect.

Several organizations have applied for authorization to certify people to use the new credentials. These include FP Canada (CFP and QAFP designations), The Institute for Advanced Financial Planning (R.F.P.) and Advocis (PFA and CLU).

All these designations require levels of training, proof of expertise, ongoing education and compliance with codes of ethics that put clients’ interests first.

Limiting the use of positive titles like “financial planner” and “financial adviser” to such accredited people will go along way to helping financial consumers determine who to trust.

Are you listening, Manitoba?

Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.

David Christianson, BA, CFP, R.F.P., TEP, CIM is recipient of the FP Canada™ Fellow (FCFP) Distinction, and repeatedly named a Top 50 Financial Advisor in Canada. He is a Senior Wealth Advisor and Portfolio Manager with Christianson Wealth Advisors at National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.

David Christianson
Personal finance columnist

David has been a practising financial planner and life advisor since 1982, specializing in helping clients identify and reach their most important goals, and then helping them manage all of their financial affairs, including investments.

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