compliance-regulation-legislation

IFIC and the IIAC are calling on the Ontario government to enact a general legislative framework for financial planners.

In a joint submission responding to the Ontario government’s Consultation on Financial Advisory and Financial Planning Policy Alternatives, IFIC and the IIAC laid out a framework for accreditation of those who use the title of “financial planner” and regulation and oversight of people who use that title or provide comprehensive financial plans and who are not currently subject to oversight by an existing regulatory body.

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“Securities and insurance advisory services and planning that are ancillary to product recommendations are already well-regulated in Ontario, but there are gaps in non-product-related financial planning that need to be addressed for the benefit of investors,” says Michelle Alexander, vice-president of the IIAC.

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IFIC and the IIAC propose:

  • A General Legal Framework for Financial Planners: developed by the Ministry of Finance in consultation with the Financial Services Commission of Ontario (FSCO), the OSC and the Financial Planning, which includes clear definitions and harmonized standards for financial planners and financial plans, as well as criteria for approving accreditation bodies.
  • Creation of the Financial Planning Authority (FPA): This proposed new entity, mandated by the Ontario government, would develop rules for the regulation of individuals providing comprehensive financial plans to clients or using the title of financial planner, and who currently operate outside of regulated channels. The FPA would be responsible for registration, compliance exams, enforcement and client complaint-handling.
  • Establishment of accreditation bodies: The accreditation bodies would have authority to grant and withdraw financial planning designations.
  • Respect for the authority of existing regulators: The FSCO and the OSC would be required to incorporate the General Legal Framework for Financial Planners into their existing rules. They would continue to regulate dealers or managing general agents and their respective businesses and agents operating within the insurance and securities channels. The MFDA and IIROC would be responsible for creating appropriate rules applying to financial planning activities of their members.

The industry groups are against regulations that would make firms and individuals accountable to multiple regulators, arguing such an approach would create inefficiency, fragmentation, and confusion for clients. The groups also want the Ontario government to work with other provinces and territories to harmonize financial planner regulation across Canada, and to ensure penalties from one jurisdiction are automatically recognized by all other jurisdictions.

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Originally published on Advisor.ca

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