Ontario recently took a meaningful step forward for consumer protection. With the proclamation in late March of the Financial Professionals Title Protection Act, 2019, there are now minimum standards in place for individuals using the financial planner title in Ontario. And it’s critical now for other provinces to implement similar changes so Canadians from coast to coast can benefit from title protection.
When Canadians need professional advice about their finances, they deserve to have clarity on who to approach, and confidence in the qualifications of the professionals they choose to work with. In most provinces, that’s still not the case, and that leaves consumers vulnerable.
Under Ontario’s new framework, only those who hold a credential approved by the Financial Services Regulatory Authority of Ontario can use the financial planner title. This means consumers can have confidence that when they work with a financial planner, the professional has a minimum standard of education and is subject to rigorous ethical requirements, actively supervised by an approved credentialing body and subject to a complaints and discipline process.
There’s no question this is good news for consumers. But this legislation is also positive for financial planners. Using the financial planner title under the new framework makes it easier for planners to communicate their value to consumers and validate their education and expertise.
An individual who deserves to use the financial planner title is someone who has worked hard to build the knowledge and acquire the training needed to give their clients sound advice that takes into account all six pillars of a financial plan: managing cash flow, optimizing investments, understanding taxes, planning for retirement, leaving a financial legacy for loved ones and insuring against the unknown. They’ve earned one or more professional designations as a way of showcasing their knowledge and professionalism. They are committed to codes of ethics, and they work in the best interest of their clients.
Many consumers don’t have the information or knowledge to assess the rigour or quality of the various designations in the financial services industry. As a result, in most provinces, they can’t distinguish between the professionals who have worked hard to meet all the criteria above and individuals who have no qualifications. This is unfair to both consumers and professional financial planners.
With Ontario’s newly proclaimed legislation, consumers can take comfort in knowing that a regulatory body has verified the quality of the credentials that are approved. And financial planners who live or do business in that province can take pride in knowing they’ve met the minimum standards now in place.
Elsewhere in Canada, Saskatchewan has passed its own similar title protection legislation, and has consulted on draft regulations. New Brunswick also held consultations on this topic last year, which is a very encouraging sign. Quebec, meanwhile, has its own restrictions in place for financial planners.
I encourage other provinces to consider adopting this type of legislation for the benefit of consumers. As other provinces take this step, it will be important to focus on ensuring the frameworks they implement are sufficiently robust, including high standards for credentialing bodies in terms of certification and enforcement, and — critically — a best interest standard for financial planners.
Harmonizing frameworks across the country, to the extent possible, will provide much needed clarity and confidence to consumers. This eliminates any chance of regulatory arbitrage, while also providing consistency for the many firms and planners who operate in multiple jurisdictions across the country.
Being part of a profession dedicated to the public interest is a point of pride for financial planners. The members of this profession use their knowledge and skills every day to help Canadians achieve greater financial well-being, and that’s worth celebrating.
The more provinces that take this important step to improve clarity and confidence for consumers, the greater a difference this profession can make in the lives of Canadians.
Tashia Batstone is president and CEO of FP Canada.