Financial advisors should prepare for the possibility that their businesses will be much more heavily regulated; and although this may create challenges, advisors should welcome the opportunity for higher proficiency standards and greater professionalism, according to senior leaders with the Canadian Institute of Financial Planners (CIFPs).

The Ontario government’s current investigation into the regulation of financial planning could mark a significant shift for the industry, said Tony Mahabir, outgoing chairman of CIFPs at the CIFPs 13th Annual National Conference in Vancouver on Thursday.

Other provinces will be paying close attention to the work the expert committee recently appointed in Ontario, which is charged with reviewing the regulatory oversight financial advisors and planners, is conducting, he added.

As a result, the committee’s recommendations — expected in early 2016 — could have repercussions for advisors all across the country, Mahabir said: “Depending on the outcome, it will determine the pace for the rest of Canada.”

If more regulation is in the offing, it could create challenges for advisors, particularly as the investment industry grapples with a variety of other evolving regulatory responsibilities, such as the implementation of the second phase of the client relationship model (CRM2), compliance requirements from the Financial Transactions Reports Analysis Centre of Canada and new rules under the Foreign Account Tax Compliance Act.

“This regulatory storm will catch the ill-prepared,” Mahabir said.

However, for those advisors who are properly prepared, the prospect of more tailored regulation could create opportunities to demonstrate that they’re running sound practices, Mahabir added: “Opportunity does favour the prepared.”

In fact, a legislative framework for financial planning would represent a key step toward the “professionalization” of financial planning in Canada, said Keith Costello, president and CEO of the CIFPs at the conference on Thursday.

In fact, the CIFPs has been working with its partners in the Coalition of Professional Standards for Financial Planners toward developing this kind of legislative framework, which would enable those advisors who meet all of the necessary requirements to separate themselves from the rest, he added.

“Those who hold out under a higher standard and demonstrate achievements of higher proficiency and education, and commit to ethics and standards of practice, must be recognized as professionals,” Costello said.

It’s important, however, that any new regulation is principles-based and non-burdensome for advisors, he added. It must also create a level playing field for all industry players.

“There’s no sense having all this great regulation for securities if we don’t have a companion in insurance,” he said. “Uniformity is key.”

Costello expects Ontario’s expert committee to hold hearings with stakeholders this autumn as it examines industry regulation — and he said the CIFPs plans to be actively involved. In fact, the institute’s top priority this year will be to stand up for financial planners as this debate unfolds, he said: “We’re ready to take this on.”