Industry News

There needs to be a national organization that governs financial planning with ethics and educational standards

By Robert White |

Re: MFDA to regulate reps' use of financial planner title, by James Langon, investmentexecutive.com, January 13, 2016.

The Mutual Fund Dealers Association of Canada (MFDA) regulates mutual funds, a product type, and their distribution. So, to hear that the MFDA is going to regulate representatives' use of the financial planning title is like making me the aviation regulator just because I fly.

A financial planner offers clients insurance, segregated funds, guaranteed investment certificates, annuities, pension products, health and dental insurance, group/employee products, travel insurance and advice on determining needs and suitability of these products. In addition, financial planners focus on planning for clients' estates and taxation as well as performing cost analysis and comparative pros and cons.

So, how does the MFDA believe it can regulate something it knows nothing about? How many people who work for the MFDA are educated as financial planners? How many know about the details of life insurance contracts and have the field experience to know what strategic tax planning is taking place? It will be a sad day if the MFDA regulates the financial title. 

What needs to happen — and it has been presented many times many ways and to many levels of regulators and governments — is that there needs to be a national organization that governs with ethics and educational standards. This organization should also be governed by its members — whether they're individuals, corporations, product providers — and not govern product-specific mandates.

The roadblock to this is the self-regulatory organizations and all the provincial securities commissions who have their own mandates and don't want to share any turf because they'll lose fees and they'll lose high-paying jobs with pensions.   

If the sheepdog is going to monitor the sheep, the cows, the chickens, the turkeys and the pigs, then advisors and financial planners are in for more wasted time in proving that we are capable of doing what we do. Sheepdogs look after sheep, not chickens.

The bottom line is that the MFDA should not regulate the use of the "financial planner" title. Advisors need to stand together and say, "Enough is enough."

Robert (Bob) White, CLU
President, Group One Planning Solutions Ltd.
Kelowna, B.C.

See: Letters to the editor: One regulator and one advisor association is needed