A stronger distinction needs to be made between the terms “financial advisor” and “financial planner” through a minimum standard of education and regulation, say the heads of financial planning organizations both in Canada and the United States.

Speaking at a panel discussion on Tuesday at the Toronto Board of Trade, Cary List, president and CEO, Financial Planning Standards Council (FPSC), explained that many people in the financial services industry currently use the terms “financial advisor” and “financial planner” interchangeably, and as a result, many Canadians tend to assume that they are receiving a certain level of professionalism and advice.

“Canadian consumers expect an element of competence that is simply not tested,” said List, “and not, in fact required for those people that are holding themselves out to be those advisors.”

As a result, List argued that a stronger connection must be created between the idea of financial advice and financial planning through proper designations and regulations.

In part, that is already beginning to happen with discussion papers recently released by regulators, such as the Toronto-based Investment Industry Organization of Canada (IIROC) paper on titles and designations and the Canadian Securities Administrators (CSA) discussion paper on fiduciary duty.

For List, these topics go hand-in-hand, as it is impossible to have a discussion on fiduciary duty without first clarifying and defining industry titles and designations.

Industry professionals will not have to wait long for such clarifications, he says.

“We’re really at a tipping point in Canada,” he said. “We’ve probably been here many times over the last decade and a half but I do think that in the next three to five years we are going to see [issues of designations and standards of care] addressed.”

While there is also confusion around the terms “financial advisor” and “financial planner” in the U.S., Kevin Keller, CEO, Certified Financial Planner Board of Standards Inc., does not anticipate as quick a resolution as in Canada.

“I’m not as optimistic in the U.S. that the demise of the “financial advisor” term is anywhere close,” said Keller.

After a failed attempt to have fiduciary standards set out as part of the Dodd Frank act, Keller said the board of standards is currently focused on education campaigns to inform the general public on the differences between the two terms.