(November 23 – 11:05 ET) – The Canadian Association of Financial Planners has released its response to the Position Paper on Distribution Structures authored by the Canadian Securities Administrators.

While CAFP agrees with CSA’s intent to enhance consumer protection, CAFP criticizes the CSA for failing to define the paper’s key terminology.

“Central to the CSA paper are the phrases ‘financial services activities’ and ‘financial planning activities’,” says CAFP president Terry Taylor, but, he adds, nowhere are they defined.

“The paper implies that financial planning is nothing more than the sale of financial products,” says Taylor. “Clearly, such a definition would be false, misleading and self-serving.”

The CAFP’s position is that financial planning is a process, not an activity. The professional financial planner uses six well-defined steps to identify an individual’s financial goals and objectives and to recommend a strategy to help achieve them. They are:


  • Step 1 – clarify the present situation;


  • Step 2 – identify financial goals and objectives;


  • Step 3 – identify barriers to financial security;


  • Step 4 – provide written recommendations (the plan);


  • Step 5 – implement the plan;


  • Step 6 – monitor progress and make changes as required.

The CAFP also recommends that the regulators differentiate among the steps. “Assessing a person’s financial situation, preparing a written plan based on that analysis and monitoring its progress (Steps 1-4, 6) is markedly distinct from the sale of financial products (Step 5),” said Taylor.

In its submission, CAFP calls for the CSA to:


  • use the six steps to define financial planning

  • distinguish between the preparation and monitoring of a written

  • financial plan from the sale of financial products

  • exclude the preparation and monitoring of a written financial plan

  • from the regulatory regime proposed in the paper.

-IE Staff



For more please see:


www.cafp.org