CSA report: divisions remain over “best interest”

Most certified financial planners (CFP) see the benefit of having the CFP designation attached to their name, with eight in 10 saying that it confers a competitive advantage, according to a survey from the Financial Planning Standards Council (FPSC) published Friday.

Of the 17,000 CFP professionals enlisted to participate in the survey, conducted in February, almost 3,000 responded to questions regarding the regulation of their profession.

FPSC, which administers the CFP certification and has long called for regulations limiited anyone from calling themselves a financial planner to hold the designation or its equivalent, finds that most CFPs are in agreement that the government should step in to regulate the industry. Among CFP holders under the age of 40, for example, nine in 10 say that financial planning should be regulated by legislation.

As well, about 92% of those surveyed say other financial professionals should obtain the CFP certification.

“This survey of CFP professionals reinforces the value of obtaining CFP certification for those in the financial services industry,” says Cary List, president and CEO of FPSC, in a statement.

In addition, the survey also suggests that an overwhelming proportion of respondents (97%) back the notion that financial professionals should act in their clients’ best interests and that they owe retail investors a “professional duty of care and loyalty.”

Read: Advisors favour “best interest” standard

The FPSC survey results coincide with a wider debate among regulators and members of the financial services industry, as well as the Ontario government, on the merits of tightening restrictions on use of the financial planning title.

In March, the Ontario government released the findings of an expert committee appointed to study the financial advisory and planning sectors — comprised of industry executives and lawyers — which included recommendations that would overhaul credentials and the use of titles in financial services, particularly financial planners.

The expert committee called for a provision that would place a statutory best interest standard on financial planners, the creation of a registry that clients can consult to verify a professional’s accreditation, and the regulation of licensing and proficiency standards, among other recommendations.

Ontario Finance Minister Charles Sousa has since reiterated his support for enhancing government oversight in the financial services sector. In April, when the provincial government released its budget, Sousa pledged to work with regulators on restricting the use of titles to those with certain credentials.

Read: Expert Committee’s proposed rules could have far-reaching implications

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