In July, the Ontario government announced plans to review the regulation of the province’s financial planners. As part of that process, it released a consultation report on alternatives to Ontario’s current financial advisory regulation model.
In response to that report, Advocis has outlined the need to enhance the regulation of all types of financial advisors. Rather than have the MFDA, IIROC, OSC, and FSCO overseeing advisors, Advocis is calling for the establishment of one delegated administrative authority (DAA) that would regulate the activities of all advisors who operate at the retail consumer level.
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The DAA would report to the Minister of Finance, says Advocis, and thereby eliminate current regulatory duplication. This solution, it adds, would:
- simplify basic regulatory functions such as registration, and tracking and reporting of disciplinary measures;
- reduce levels of confusion and frustration for consumers and financial advisors;
- lower compliance costs for firms and, ultimately, reduce government expenditures; and
- preserve existing product development regulation, where appropriate, to keep the focus on advice provision and consumption.
“Since anyone can call themselves a financial advisor, consumers are left vulnerable,” says Greg Pollock, president and CEO of Advocis. The Ontario government’s suggestion “to only regulate a specialized subset of the industry creates a gap, adds additional layers of regulation and cost, and doesn’t address the issues currently under review.”
Additional industry commentary
The Financial Planning Standards Council has also weighed in on the issues brought up by the government’s July consultation report.
FPSC is calling for the Ontario government to codify in law the professional certification structure, governance and oversight mechanisms that already exist for CFP professionals. The problem currently, says the Council, is that these mechanisms are only used in practice and are not enforced.
Specifically, FPSC is recommending the following steps be taken to regulate financial planners.
- The government should adopt a single, harmonized set of standards for financial planners, as already established for CFP certification.
- The government should recognize and adopt Canadian Financial Planning: Definitions Standards & Competencies, a joint publication from the FPSC and the Institut Québécois de Planification Financière.
- The government should make all financial planners in Ontario accountable to a professional oversight body that understands financial planning and the professional obligations of advisors, as well investors’ needs.