Professional standards are an essential component of every profession, setting out the ethical principles and code of conduct that guide the daily practice of members of the profession. But standards alone are not enough. The vigilant enforcement of standards is critical to maintain the integrity of the profession and to ensure that consumers are adequately protected.
Over the past five years, financial planning in Canada has taken a monumental step toward professionalization. Ontario’s recently introduced Financial Professionals Title Protection Act, which will regulate the use of the financial planner and financial advisor titles, is another big step toward professionalization.
With such significant progress, it’s critical that all the necessary pieces are in place to ensure we get this right — not just for the professional community, but, more importantly, for the benefit of all Canadians. This requires a regulatory framework that will provide effective and meaningful professional oversight of financial planners.
In Ontario, as the Financial Services Regulatory Authority (FSRA) works to develop regulations for the Financial Professionals Title Protection Act, it’s essential to establish tight parameters regarding both the credentials and the credentialing bodies that will be approved under the legislation.
While strict certification requirements are critical to ensure financial planners have an appropriate level of competence, even the strongest set of professional standards is meaningless without enforcement. Rules and regulations must extend beyond certification criteria to include an ongoing obligation that planners adhere to professional and ethical standards, and approved credentialing bodies adequately enforce their standards.
Consumers deserve to have the confidence of knowing that their financial planners have not only committed to conducting themselves ethically, professionally and in the interest of clients, but that there’s a professional body working in the public interest that enforces those standards and ensures that planners are, in fact, abiding by them. For financial planners who breach their professional or ethical standards, there must be consequences. Ethical financial planners and consumers alike both want and deserve that.
Credentialing bodies have a vital role to play in enforcing their standards, and this responsibility cannot be outsourced. An organization that establishes professional standards must also be responsible for enforcing those standards to maintain the integrity of the credentials it offers, and of the profession as a whole. Enforcement includes thorough, well-established and fair processes for investigating complaints, holding hearings and determining and applying appropriate disciplinary penalties. To meet these criteria, credentialing bodies require sufficient infrastructure, resources, governance and expertise.
With the financial health of Canadians at stake, there’s no room for lip service when it comes to oversight and enforcement.
Collaboration and information-sharing between regulators and credentialing bodies is critical to ensuring that there are no gaps or cracks in the oversight regime.
When Canadians have a complaint or a concern about the conduct of their financial planner, they need to know how to go about filing that complaint, and, more importantly, they need confidence that their complaint will be taken seriously, investigated and properly addressed. In an industry that can be complex and sometimes difficult to navigate, the ability — and responsibility — of the profession to earn the public’s trust is paramount.
At a watershed moment for financial planning in Canada, ensuring the vigilant enforcement of the profession’s standards — and demonstrating this unwavering commitment to the public — will help further the significant progress that’s already underway on the professionalization of financial planning.