Judge makes ruling

Advocis has settled with Huntsville, Ont.–based SeeWhy Financial Learning Inc., an exam-prep provider that had sued the association for nearly $100,000 for non-payment of study materials.

“On the eve of discovery proceedings, Advocis finally agreed to pay the full invoice, plus accrued interest, plus the majority of the legal fees we incurred to enforce the contract,” said Cory Snyder, director of sales and service with SeeWhy Learning, in an emailed statement on Thursday.

SeeWhy Learning alleged that Advocis breached a service agreement when it “failed or refused to pay” a $92,963.97 invoice for learning materials, according to a statement of claim filed on Dec. 29 with the Ontario Superior Court of Justice in Brantford, Ont.

SeeWhy had claimed payment of the invoice, pre- and post-judgment interest, and costs.

“Advocis is pleased that it was able to amicably resolve the matters in issue in the litigation with SeeWhy Learning and has no further comment,” Douglas Smith, counsel for Advocis and partner with Borden Ladner Gervais LLP in Toronto, said in an emailed statement.

The previously unpaid learning materials were for Advocis’ course for the life license qualification program (LLQP), which is required for insurance licensing exams. The course’s list of study resources includes the “full suite of SeeWhy Learning study tools,” Advocis says on its website.

Advocis had claimed in a statement of defence that it was overcharged, stating that an “implied term” of the agreement was that Advocis would pay fees to SeeWhy only if students accessed SeeWhy’s learning materials during the course. (The Advocis website does not state that students may unbundle the course’s various resources.)

Snyder said in his statement that, while the service agreement “is a private matter between two companies, Advocis claimed they were overcharged, which is why we are speaking publicly on the matter by sharing the outcome of our lawsuit.”

Advocis had asked the court to dismiss the action with costs.

“Despite making six quarterly payments in accordance with the terms of the agreement(s) as we understand them, Advocis failed to pay the invoice for the seventh quarter,” Snyder wrote. “As a result, we were forced to commence legal action, confident the courts would uphold the plain reading of the contract.”

With the matter now settled, “we are hopeful that both parties can now begin to put this matter behind us and will continue to honour the agreement for the remaining term to the benefit of all students registered in the program,” Snyder said.

Advocis faces two other claims.

Greg Pollock, who was ousted as president and CEO of the association in September, is suing his former employer for wrongful termination, filing the claim in early December. As reported by Investment Executive, Pollock’s claim is for $2.5 million. Advocis denies any wrongdoing and intends to vigorously defend the allegations advanced by Pollock, the association’s lawyer said in a statement.

Julie Martini, chief operating officer with Advocis, is suing her employer for constructive and wrongful dismissal. As reported by Investment Executive, Martini’s claim is for $208,000, along with other compensation amounts, according to a claim filed in March. Advocis denies the allegations and intends to vigorously defend the claim advanced by Martini, the association’s lawyer said in a statement.

In recent years, Advocis has faced falling membership, costs to update its education programs and invest in infrastructure, and pandemic-related fallout. The association looked to cut costs after expenses exceeded revenues by $2.5 million for the 2022 fiscal year.

Financial statement summaries included with Advocis’ 2022 annual report, released last summer, said the association raised cash by increasing its line of credit to $500,000, arranging a loan of $610,000 against the cash surrender value of life insurance policies held, and establishing a $1.7-million line of credit from its Century Initiative Fund (funded with premium membership fees), from which it also received support.

The Century Initiative was created in 2006 to ensure the association’s capitalization and is funded with premium membership fees. Its balance was $5.5 million at the end of 2022.

The summaries said the association was completing a “restructuring plan” to “reduce operating expenses and provide a sound financial base for the organization.”

The 2022 annual report also noted that Advocis had incurred costs as a credentialing body under Ontario’s title protection framework for the “financial advisor” and “financial planner” titles.

As of Thursday, the association’s two regulator-approved credentials — Professional Financial Advisor for use of “financial advisor” and Chartered Life Underwriter for use of “financial planner” — accounted for 0.1% and 8.2% of credential holders in the province, respectively, according to the registry of credential holders created by the Financial Services Regulatory Authority of Ontario (FSRA).

FSRA’s risk-based supervision of credentialing bodies includes a focus on resources stress testing — how the bodies will handle increased demands on their resources and ensure they can effectively administer and maintain their credentialing programs.

As a result of the regulator’s first exam of credentialing bodies, which took place in fall 2023, FSRA released a report with suggested areas of improvement related to continuing education, credential holder attestation and consumer complaints.

Regarding stress testing, the report said a best practice was for a credentialing body to “establish clear roles and responsibilities for functional areas pertaining to credentialing operations and proactively monitor their staffing resources.”

In an emailed statement on Thursday, FSRA said its response when a credentialing body is in financial trouble is to “actively manage and monitor the issue to ensure they are effectively operating as a credentialing body and fulfilling their obligations” under the title protection framework.