IFIC has recommended titles for advisors based on firm registration and recognized planning designations in its submission to the CSA on title reform.
In a letter addressed to the OSC, IFIC suggests advisors at mutual fund dealers have the title “investment funds advisors,” while advisors at investment dealers be called “securities advisors.” “Financial planner” is added to these titles where advisors are, for example, FPSC certificants and the firm provides financial planning services.
“Portfolio manager” is IFIC’s suggested title for the categories of portfolio manager and investment dealer-portfolio manager (advisors at the latter are IIROC-registered and have discretionary authority). IFIC again adds “financial planner” to these titles where PMs have financial planning certification and their firms offer financial planning services.
See a table of IFIC’s proposed titles in the letter.
IFIC says the functions of the person providing services should be reflected in the title, as should the concept of advice, where appropriate.
On that second point, IFIC provided an example of a title that doesn’t cut it. “Mutual fund dealer representative,” which is similar to the individual registration category of dealing representative, doesn’t reflect the advice provided to investors, the organization says.
Based on IFIC’s guiding principle of reflecting advice and its proposed wide use of “advisor,” the institute doesn’t parse advice according to whether it’s sales-focused or not.
In contrast, the term “salesperson” was floated by CSA in two alternative frameworks for titles in its original targeted reforms proposal (33-404). In one framework, “salesperson” was suggested for advisors where the firm has a proprietary product list; in the other framework, reps would be “salespersons” unless their firms are registered as portfolio managers or investment dealers that are IIROC members with discretionary authority.
In CSA’s most recent proposals on client-focused reforms, released in June, CSA says that, longer-term, it plans to review the use of “advisor” for those not registered “in a category of adviser.”
Referring to those proposals, IFIC says it supports CSA’s move to ban registered advisors from using titles, designations, awards or recognition based on sales activity or revenue, and from using a corporate officer title if not legally appointed to the officer position.
IFIC further says in its letter that titles should avoid technical jargon and not be misleading or vague. It encourages CSA to work with other financial services industry regulators to harmonize titles across all financial services—specifically, insurance and banking services.
It also recommends titles be consumer-tested to ensure they’re readily understood.
“IFIC believes that determining consistent, clear titles for registrants will improve investor understanding of and confidence in the investment funds industry,” says Paul Bourque, IFIC president and CEO, in a release. “The objective of our proposal is to proactively offer the industry’s practical suggestions on how to create clarity for consumers in this challenging area.”
Read IFIC’s letter to CSA.