It might sound outrageous, but back in the day Canadian investors generally stayed on in the cities they were born in. Today’s retirees travel across the country for months on end, while working stiffs pick up and move to another province if the right job pops up.

While that’s great for Canada’s economic growth, all this activity can be a pain for advisors who hate to lose an important file just because a client moves from Ontario to B.C.

Valerie Chatain- White, a Manitoba- based CFP, has been working with people outside her home province for more than 10 years, and it hasn’t been a breeze. Working in multiple jurisdictions means dealing with numerous regulators— and if you sell insurance as Chatain-White does, it entails dealing with twice the number of overseers.

"It can be challenging," says the founder of Winnipeg-based VCW Financial. "There are different rules you have to comply with, so you have to go to appropriate regulators’ sites on a regular basis and make sure you are compliant."

Besides being registered in Manitoba, Chatain- White works in Alberta, B.C. and Ontario. This means she’s dealing with eight regulators.

Ed Skwarek, associate director of regulatory affairs for Advocis, agrees the lack of harmony among regulators is a big challenge for advisors.

Multiple Regulators
There are countless reasons why advisors find it difficult to work across provincial boundaries, but it’s the small details that can really trip up a financial planner.

For example, an advisor in Manitoba, who also practices in Ontario, has to provide an Ontario mailing address. "What do I provide if I don’t have an office there?" asks Chatain-White, who uses a colleague’s mailing address. "To this day I haven’t received a satisfactory answer to why this is structured this way."

Registration is another such issue requiring different rules in each province. And in many jurisdictions the rules haven’t been updated for decades. There are more than 30 different registration categories for an individual and upwards of 60 categories for firms. "Some of the rules even mention telegraphs as a way of disclosing information," says David Gilkes, manager of compliance and registrant regulations for the Ontario Securities Commission.

Such dated and divided rules can sure be vexing, but the cost and time involved are probably the most frustrating aspects of multiple regulators. If advisors want to register in other provinces they have to pay in each locale. For example, one-time transaction fees cost $200 in Ontario, $225 in B.C. and another $270 in Alberta, with the rest of the provinces just as varied.

There are a number of other costs as well that vary from province to province, including an annual fee, which is based on revenue, that firms are required to pay. Wayne Robinson, president of W.A. Robinson & Associates in Sharbot Lake, Ontario, says it cost him $26,000 in legal fees to get his company registered in Ontario, and another $9,000 to serve clients in Quebec.

Apart from the humongous costs, Robinson, who is registered with the OSC and the Financial Services Commission of Ontario, says compliance requirements have become so strict since September 11, 2001 that he’s actually looking to hire someone full-time to deal with regulation issues. There is so much documentation, he says, and everything needs to be meticulously filled out. "If you have one thing wrong on the OSC renewal, they send it back. So you can’t have a junior person do it the same way it was done last year. You have to be very precise," he explains.

When it comes to insurance regulation, a whole host of other issues emerge. Errors and Omissions insurance, an important form of protection for advisors, has to be purchased before a person can practice. Luckily, advisors don’t have to buy this in each province they work in, though their payment defaults to the jurisdiction with the highest rate. So, if an advisor is registered in Ontario, where E&O insurance costs $654 for $1 million of coverage, and Quebec, where someone has to cough up $927 for the same protection, they have to pay the latter province’s price tag.

As with securities, registration is a mess. John Whaley, executive director of the Independent Financial Brokers of Canada, says the industry has tried to make things easier for advisors, but with little success. "The regulators did get together and try to evolve a standard form, but it ended up being a long cumbersome document," he says. "Each province wanted its own questions in there."

Continuing education is just as contentious as registration. For both the insurance and securities industries, CE requirements are different in each province, and the courses you take for one type of registration don’t apply to the other.

Provinces do accept CE credits from other jurisdictions, but some places require more credits than others. Advisors have to make sure they get enough CE to satisfy every regulator they’re responsible to.

Those who are registered with both securities and insurance/ mortgage regulators in the same province also face an uphill battle. Robinson says the two sides come from different worlds, and he can’t understand why there needs to be two regulatory bodies in the same place. "It’s like working part time for the Toronto Star and then going up the street and working for a construction company," says Robinson. "It’s a totally different process. They’re not even using the same platform."

"Securities regulators are much more prescriptive than insurance regulators and it’s a different licensing process," Whaley says. He also points out the most popular dual license that his members seek is one where they can sell mutual funds and life insurance. These advisors not only need to pass the mutual fund course, they also have to find a dealer to work with. "It’s very involved," he adds.

Get Help
So what can an advisor do to make things easier?

Not much, says former OSC commissioner Glorianne Stromberg. "If you’re going to advise people in multiple provinces you have to be up to date with the different laws," she says. "Perhaps some advisors would prefer to arrange for a local person to take over that advisory role."

Short of farming out their business, advisors can ask Advocis, IFB or other associations for help. Skwarek says Advocis has best practices and compliance manuals for the various jurisdictions, which detail complex regulatory issues advisors need to be aware of. They also track rule changes on both the insurance and securities sides and, maybe most importantly, lobby on behalf of members for greater harmonization.

IFB members can also ask their association for help. Advisors often inquire about registration rules in various provinces and the organization regularly sets up continuing education courses in Toronto, Calgary and Vancouver. They also help members get E&O insurance; and a regulatory affairs specialist is on call.

While many advisors are disgruntled by Canada’s splintered regulatory regime, not all are complaining. Many don’t even find it a burden. Laurie Stephenson, a Halifax-based CFP, is registered in Nova Scotia and Ontario and has had no real issues. "It really involves filling out some paperwork, paying my money and waiting for the registration to come through," she says. "It’s relatively easy to do business across the country."

In fact, Stephenson finds it so easy she’s planning to be licensed everywhere, except Quebec, so she can serve her 700 clients better.

Registration Reform
But for advisors who dislike dealing with more than one regulator, there are tools that make life easier, and more are on the way. The national registration database, introduced in 2003, lets advisors fill out paperwork online.

The advisor completes the forms for his principal regulator, and then other jurisdictions he wants to be part of look at the database to see if the applicant has been approved by the home province.

"If the advisor lives in Toronto, the Ontario staff would do the complete review," Gilkes explains. "Then non-principal regulators take a look at it and decide whether or not to allow the person to be registered across the jurisdictions." Due to the fact that some provinces have different registration requirements than Ontario, there might be extra paper work that needs to get done, but that can be completed on the NRD website. "Things have gotten easier," says Chatain- White. "The NRD makes it simpler in the long run."

For the securities industry the best hope for a streamlined process, one that would remove confusing inter-provincial rules, is a national regulator. But while most people in the financial industry, including federal finance minister Jim Flaherty, would like to see one body set a standard that all advisors can follow, it’s unlikely that will happen anytime soon.

In the meantime, there is a push toward greater harmonization. The Passport system, which became effective in March of this year, is streamlining some of the varied rules, but many people in the industry are banking on the Registration Reform Project to ease a number of the headaches advisors face.

When the Registration Reform Process (RRP) comes into effect in March, 2009, registrants will have only five registration choices for individuals and eight for firms, as opposed to the 60 and 30 respectively, that they now have to choose from. "The goal of this project is to harmonize, modernize and streamline," says Gilkes. "Rule (NI 31-103) will make it easier for advisors to get registered, and be compliant with rules across Canada so they can represent people wherever they reside."

Gilkes points out the RRP will essentially eliminate 10 OSC rules and policies and 20 different regulations in Ontario alone. That means compliance reviews will be quicker and less costly. Firms will also be able to register employees—such as investment fund managers and district portfolio managers—who didn’t fall under the OSC rules before.

But will the RRP actually help advisors?

In theory, it should, but Stromberg thinks this project won’t live up to its potential. "It’s supposed to be one registration, but I think the reality has fallen short," she says. "They start with good principles and then each jurisdiction has either something they want to opt out of or something they want to add. Until that stops, we’re not going to have a one-stop regulation system."

Whether it works or not, at least the securities industry is trying. On the insurance side, there hasn’t been the same attempt at harmonization. Whaley admits while there have been some moves toward streamlining the industry, they’ve been disappointing. "Despite the fact that jurisdictions get together and try to harmonize things, often the result is provinces arguing that they want to do things a certain way. It’s not working very well," he says.

Clearly, it’s going to take a lot of time and a lot of work to make it easier for advisors to work in multiple provinces. But until then, there’s one thing Chatain-White doesn’t want to see happen. "We don’t need any more regulators," she says. "I’m quite busy with just the four."

Originally published in Advisor's Edge