By Mark Noble | August 7, 2007 | Last updated on August 7, 2007
6 min read

Controversy surrounding specialized designations that target seniors in the U.S. is raising questions as to whether Canada should be looking hard at its own accreditation system.

A New York Times article in early July publicized that some insurance agents were calling themselves experts in financial planning for seniors after completing relatively easy correspondence courses or three-day seminars.

The article also drew attention to a number of cases where these agents were selling their clients deferred annuities, which draws a monthly fee for a guaranteed income that’s not paid for up to 10 years. Since most seniors require immediate income, in many cases, deferred annuities are viewed to be completely inappropriate for elderly clients.

The story raised the eyebrows of U.S. legislators, who questioned the quality of these advisors’ expertise in financial planning for seniors if they were overlooking such rudimentary financial planning needs. On July 19, the U.S. Senate Committee on Aging sent letters to some of the insurers mentioned in the article as well as to some of the seminar providers and accreditation bodies in question, including the Society of Certified Senior Advisors based in Denver, which administers the Certified Senior Advisor designation.

The CSA designation is available in Canada through the Canadian Society of Certified Senior Advisors and is acquired by advisors through either correspondence study or a three-day seminar. The CSA is a legitimate credential, worth 30 CE credits from Advocis, and boasts the Bank of Montreal as its largest Canadian client. But critics warn that on its own, it is insufficient training for the complex financial planning needs of senior citizens.

This is a perfectly legitimate assertion, according to one of the founders of the Canadian CSA, Dr. John Crawford. A long-time gerontologist and director of the CSA’s curriculum, Crawford says he has trained about 2,000 Canadian CSAs but that in no way is the CSA designed to teach financial planning. He describes it as continuing education complementary to any professional field that deals with senior citizens, not just financial services.

“I wouldn’t dare sit in front of a classroom of professionally trained financial planners and tell them how to do their business,” Crawford says. “We can tell them about what the aging process means to all of us as individuals. Hopefully, they can take that knowledge about that aspect and apply it in their professional planning to the advantages to those clients.”

Crawford says the New York Times story has blown things out of proportion and taken an isolated case of an advisor in Massachusetts who was actually accredited as a financial advisor by other organizations.

“We don’t train people in content or how to do their jobs. We just give them an orientation in what it means to grow older,” he says. “When you come into the CSA training program, at the end of it, you don’t become a gerontologist; you don’t become a geriatric social worker; you don’t become a specialist in anything.”

So why would people with only a CSA accreditation call themselves financial planners? Most likely because they can.

Currently in Canada, self-regulatory and governmental regulatory organizations alike don’t weigh in on the myriad of financial credentials in the marketplace. Instead, regulators like the Ontario Securities Commission, for example, maintain quality control by monitoring conduct rather than qualifications.

“We do not regulate financial planners,” the OSC wrote in a statement to “To the extent that a financial planner sells securities or offers investment advice in Ontario, they must register with the OSC, unless they have an exemption. We regulate the conduct of registered dealers and advisors either directly or through the SROs.”

The Financial Planners Standards Council, which administers the Certified Financial Planner designation, is concerned about an increase in people calling themselves financial planners without using financial planning credentials.

“We do become concerned with [financial advisors] using any designations or mark use,” says Cary List, the FPSC’s president. “It’s not even necessarily the organizations that give out the designations but the individuals who pursue a path to a particular credential that may be very narrow in scope and then use that as an opportunity to call themselves financial planners or financial advisors.”

List would like to see regulators set qualification standards for financial planners, preferably with the CFP as the base qualification. For example, if an advisor who held a CFP also obtained a senior specialty designation, the CFP designation would ensure that the advisor had the appropriate training to offer informed financial advice regardless of the standards of specialty designation.

He says this would bring integrity to the industry but would not deter specialization in the financial services, something he says is essential for the advisory community to grow because there are growing market segments, such as seniors, that require specialized financial advice.

Julia Dublin, the former senior legal counsel of the OSC and currently a barrister and solicitor in private practice with the law firm Aylesworth in Toronto, says regulators tried to do in 1999, but it failed due to political infighting between some of the country’s regulatory bodies.

Dublin, along with the OSC, created a financial planning proficiency exam, in consultation with some of the leading accreditation organizations, like the FPSC, but she says virtually none of the proposals were enacted because of opposition from a group of SROs and some of the other provincial regulators.

You’ll see nothing whatsoever about the registration reform rule on this subject, Dublin says. “The proficiency requirements are extremely traditional and tied into IDA courses. There really doesn’t seem to be any attention to all of these issues that were considered compelling when we were looking at the financial planner rule.”

Dublin says the problem, however, hasn’t gone away, particularly since the majority of those doing financial planning are not subject to one regulatory set of standards. For example, a planner who sells insurance and securities will be regulated by both the security and insurance commissions in his or her province, likely in addition to an SRO for securities (such as the IDA or MFDA) and the CHLI for insurance. The result is a vacuum of who regulates planning itself.

“In lieu of all sorts of regulator tension, what has happened is that situation has gotten worse from the point of view of the retail investor,” she says. “From the point of view of a client, they don’t know what kind of regulatory complexity exists behind the person they’re talking to.”

Some regulators say they are starting to move again toward planning accreditation. While not a law, there is a guideline that the British Columbia Securities Commission has that says financial planners should have the equivalent of a CFP, says Sandra Jakab, the commission’s director of capital markets regulation.

“For those people that we do register, we do have guidelines in Policy 31-601 that make it clear that if you are holding yourself out as a financial planner, you actually have that level of qualification offered by the CFP,” she says. “Certainly the CSA designation alone, at least from what I’ve read on their website, couldn’t possibly qualify you for financial planning so that you understand tax planning, insurance, securities and all other kinds of financial products.”

Jakab says that the advisory community in B.C. is very cognizant of this guideline and tends to enforce it internally.

“One of the things that does happen in the registered community is that people do keep an eye on each other, and they do provide us with information when people aren’t skating within the lines,” she says.

As well, on the product side, she says new Canadian Securities Administrators point of disclosure rules, which attempt to harmonize the disclosure criteria on both securities and insured investment products, will serve as another check on advisor quality since investors will be able to make more educated decisions on their investment products.

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Mark Noble