Advocis pushes industry cooperation to reduce

By Doug Watt | February 7, 2003 | Last updated on February 7, 2003
3 min read

(February 7, 2003) Advocis, the country’s largest association of financial advisors, says it’s time the industry took steps to reduce fragmentation by working together on common projects. After consulting with 18 professional associations and financial services firms, Advocis today released an ambitious “call to action” paper, suggesting a more cooperative approach would better serve the advisor community.

Advocis is looking for feedback on six strategic initiatives in an attempt to address “industry shortcomings.”

“The industry is fragmented,” the paper states. “There are too many regulators, too many designations and too many organizations, all competing for the interests of the same advisor pool.”

The main thrust is to try to restore consumer confidence, says Advocis chair Brian Mallard. “Recent polls show that consumer confidence in the financial services industry and advisors has fallen to a record low in the past decade. Unless we can come together to make an effort to restore that confidence, it doesn’t bode well.

“There’s a crisis of confidence out there and is this is an opportunity for us to show some leadership,” Mallard told

Advocis suggests rationalizing the industry to reduce duplication, overheads and procedures. “In our view, the members of various organizations would be better served if they pooled their resources and relied on each other’s strengths to achieve common goals,” the paper states.

But Advocis president Steve Howard says that doesn’t mean the association wants to stifle competition or create a monopoly. “We recognize that there are autonomous organizations and we’re not suggesting that any of them be disbanded,” he said in an interview. “But working together and sharing resources and dealing with each other’s strengths through a series of alliances seems to make sense.”

As an example, Howard points to the Canadian Institute of Financial Planning and its fledgling membership offshoot, the Canadian Institute of Financial Planners. “They’re known for the quality of the education they provide on the CFP side, as are we. So it seems to make sense to talk about alliances there that serve the interests of members.

“We’re not sure it makes sense to have a competing membership home if that fragments the base for certain services,” Howard adds.

Howard says the Independent Financial Brokers of Canada is another organization Advocis would like to develop closer ties with.

“We’re not at this stage saying let’s tear down those organizations,” Howard says. “We’re saying let’s find a way to cooperate.”

Advocis is also considering reforming its membership requirements. Currently, members must hold either a CFP, CLU or Pl. Fin. designation. The paper suggests opening up membership to those who hold other “credible” designations.

“A membership organization needs to more inclusive,” Mallard says. But Advocis has no plans to abandon the CFP. “It’s our hope that over time the industry will come up with a single designation and hopefully that will be the CFP, which we still say is the pre-eminent financial planning designation,” he says. “In order to be a home for advisors, we have to recognize that at this point in time not all advisors subscribe to that mantra.”

Advocis also suggests developing “best practices” guidelines for the industry, a change Howard says would make regulators less intrusive and more balanced in their advisor-related decisions. “The practice-based elements should rest with us but we have to prove we’re capable of doing that.”

Repositioning the CLU designation, creating a conference of advanced financial planning, consolidating errors and omissions insurance and enhancing value to corporate partners make up the remainder of the Advocis initiatives.

The next step is to garner feedback and begin talking with other industry representatives, Howard says, although he admits some of the suggestions may provoke controversy. “In the short run, there’s going to be a lot of reaction based on entrenched positions, biases and prejudices,” he says. “But the first objective is to begin the dialogue.”

“We look at this as an opportunity to provide some leadership, now we want to hear what everyone thinks,” Mallard says.

Begin the dialogue in the “Free For All” forum of the Talvest Town Hall on What do you think of the Advocis initiative? Is it realistic to expect the various industry associations to work together?

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Doug Watt