A new self-regulatory organization (SRO) for the financial services industry is not necessary, but financial planners should continue pushing to be recognized as an official profession, according to Cary List, president and CEO of the Financial Planning Standards Council (FPSC).
In a presentation to the Canadian Institute of Financial Planners (CIFPs) Annual National Conference in Halifax on Tuesday, List said financial planners would benefit from enhanced credibility if they were recognized as true professionals. He said the financial planning industry has made considerable strides towards this goal in the past couple of years.
"We are closer than ever to achieving our vision," List said. "We need to continue to move towards official recognition."
List said financial planners already meet all of the criteria that constitute a profession, as set out by academic experts Kevin Ryan and James Cooper in their book, Those Who Can, Teach. This includes providing a unique and definite service, undergoing long and specialized training, having significant autonomy and decision making authority, and having high ethical standards of conduct, among other criteria.
The industry will take further steps towards this goal later this fall, List said, when the FPSC and Institut québécois de planification financière (IQPF), in co-operation with the Coalition for Professional Standards for Financial Planners, plan to publish a formal set of definitions and standards that will apply to all CFP professionals across Canada and financial planners in Quebec.
The FPSC is also urging individual financial planners to get involved in lobbying for recognition as a profession. The organization is in the process of establishing a public policy ambassador program, under which it will formalize the messaging that it would like CFPs to send to politicians at the grassroots level.
"There are opportunities for the entire membership of the financial planning profession to actually have your voices heard," said List. "That's something that is really important, that the governments and regulators actually see that there is a groundswell for this initiative."
List emphasized that the FPSC does not want to create a new SRO, new regulatory oversight for every advisor out there, or any additional regulatory activity beyond what is already regulated. He cited concerned with Bill 157 – a private member's bill introduced in February by an Ontario Liberal member of provincial parliament (MPP), which outlined a proposed plan to regulate financial advisors.
"This act, if it were enacted, was actually going to take us a huge step backwards," he said. Simply forcing all advisors to join a new SRO, List said, would not enhance the professionalism of the industry.