MFDA wants to regulate “financial planner” title

The Mutual Fund Dealers Association of Canada (MFDA) is tackling the use of misleading business titles in the investment business by proposing new measures that would regulate whether reps can hold themselves out as a “financial planner”.

The MFDA on Thursday published for comment proposed rule amendments that would set minimum proficiency requirements for mutual fund reps that want to identify themselves as financial planners.

The aim of the reforms is to provide greater transparency, clarity, and consistency around the use of the planner title.

In most provinces, the title is unregulated. “As a result, there is significant potential for investors to be misled as to the qualifications of an individual using this title,” the MFDA says in its notice seeking comment.

The MFDA published a consultation paper back in September 2015, which sought comment on the idea of regulating the planner title within the fund dealer world.

In the proposals published today, the self-regulatory organization would restrict the use of the planner title to reps that have certain financial planning designations/certifications, and meet ongoing requirements.

Specifically, the proposals would restrict the use of the title to holders of the following designations: Certified Financial Planner (CFP); Certified International Wealth Manager (CIWM); Chartered Life Underwriter (CLU); Personal Financial Planner (PFP); Registered Financial Planner (RFP); and the Financial Planner (F.Pl.) designation that’s used in Quebec.

The move comes amid an ongoing effort to bring some regulation to financial planning in Ontario, and proposed reforms to business titles by the Canadian Securities Administrators (CSA) as part of a larger reform initiative.

The MFDA consulted with Ontario’s Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives, and their objectives “are aligned and complementary,” the MFDA notice says.

The MFDA is proceeding with its proposals on the basis that they can be adopted more quickly, and can be adjusted if broader reforms are ultimately introduced as well.

The MFDA proposals are out for comment until Jan. 25, 2017.

See: Proposed amendments to MFDA Rule 1.2.5 (Misleading Business Titles Prohibited)

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