Investors value the job titles used by financial advisors, but often aren’t clear on how advisors’ qualifications match up with those titles, according to new research from the Canadian Foundation for Advancement of Investor Rights (FAIR Canada).
The investor advocacy group published the results of an investor survey that found the vast majority of investors (92%) said it’s crucial for advisors to have a title that reflects their knowledge and expertise.
A similar percentage also said advisors should be proficient in all of the core areas of personal finance, including tax, estate and retirement planning, investment planning, financial management and insurance/risk management.
Additionally, the survey found that 95% indicated they support a common standard for anyone calling themselves an advisor, and almost three-quarters (72%) said reps who are primarily paid to sell products, rather than provide advice, should be required to be called a “salesperson.”
At the same time, the survey also found that many investors are uncertain about the distinctions in the training, and in the types of advice and services that can be provided by people with different titles.
“The survey highlights potential issues in safeguarding consumers within the financial services sector,” said Jean-Paul Bureaud, executive director of FAIR Canada, in a release.
“Regulators must ensure that investors are not misled by varying titles, including the title of financial advisor,” he said, and allowing individuals with “diverse expertise and qualifications to use identical titles only exacerbates the problem.”
FAIR Canada said it will continue to advocate for improvements to the existing regulation of industry titles “to ensure more uniformity in standards and a level playing field among title users.”
The online survey was carried out in August with over 1,000 investors across Canada, excluding Quebec.