If you’re a financial planner or advisor in Ontario, the government wants your insights on proposed policy to regulate financial planning and advisory services.
Last week, Ontario’s Ministry of Finance released a consultation paper indicative of its commitment to establish credentials for financial planners, as well as to regulate who can use the title of financial planner and, potentially, financial advisor.
The government says it seeks input from a wide range of stakeholders, including consumers, accrediting bodies, financial planners and financial services industry associations.
Specifically, the consultation paper seeks input on questions related to:
- restricting the title of “financial planner” to those holding “a recognized financial planning credential”;
- prohibiting the use of titles similar to financial planner; and
- creating a central database of financial planners.
The government says it is also soliciting stakeholder views on how “financial advisor” should be treated under the proposed framework.
In the paper, the government says that “other aspects of the proposed framework remain under development” and that “the government will ensure that stakeholders have the opportunity to provide further input as it develops other aspects of the framework.”
Restricting who can use “financial planner”
The government acknowledges there are several accreditation bodies that provide education or training related to financial planning, but they have varying requirements.
For a credential to be recognized under the proposed framework, it would have to meet specific standards under the proposal, including a code of ethics, continuing education and a disciplinary process for revoking credentials when warranted.
In the consultation paper, the government says that the framework is expected to include a periodic review of credentials to ensure they meet proposed standards. Further, the standards themselves “will be subject to periodic review, to ensure that they remain relevant as the financial planning discipline evolves.”
The paper also says the government will consider “an appropriate transition period” to allow sufficient time for advisors to acquire a recognized credential.
In Quebec, where “financial planner” is already a regulated title, there’s a move by the Professional Association of Financial Services Advisors for a designation for independent advisors, since being a financial planner doesn’t necessarily preclude one from being a salesperson.
Prohibiting other titles
Ontario’s framework proposes that the word “planner,” in combination with any of the following words, be prohibited as a title: wealth, portfolio, asset management, securities, insurance, money, retirement, asset, investment, mutual fund and mortgage.
The above list isn’t exhaustive, says the paper.
Also prohibited would be other titles that could mislead consumers to believe they’re dealing with a financial planner.
And, as previously mentioned, the government wants input on the use of “financial advisor.” Asking for input, the consultation paper says, “How should the use of the title ‘financial adviser’ or ‘financial advisor’ be treated under the proposed framework outlined in this paper?”
Creating a central database
The government intends to create a new central, publicly accessible database for all financial planners in Ontario, in response to current fragmented registries, which represent a challenge for consumers.
The central database would “provide a one-stop-shop where consumers will be able to verify whether or not an individual holding himself or herself out as a financial planner holds a recognized credential,” says the paper. “This will reduce the burden of due diligence on the consumer and promote increased consumer confidence in financial planners.”
Looking at how we got here
The consultation paper is the latest step in a process that began in April 2015, when the Ontario government appointed an independent expert committee to consider the regulatory framework for financial planning and advisory services in Ontario.
The expert committee’s final report, released in March of last year, recommended a harmonized regulatory framework for financial planning and advisory services, including restrictions on title use and establishing proficiency requirements.
Following Ontario’s 2017 budget, the Ministry of Finance worked with Ontario’s financial services regulators to evaluate the expert committee’s recommendations and advise the government on how best to enhance the existing regulatory framework.
The 2017 Ontario economic outlook and fiscal review announced a plan to develop legislation that would regulate Ontario’s financial planners.
Questions for input can be found in the full consultation paper.
Input should be emailed to Fin.Planning@ontario.ca by Apr. 16, 2018.