The Financial Planning Standards Council (FPSC) is calling on the Ontario government to formally recognize financial planning as a profession.

The FPSC presented its recommendations to the Ontario Ministry of Finance last week during consultations to review the merits of tailored regulation of financial planners.

These consultations follow the Ontario government’s commitment in the 2013 fall economic outlook to undertake a review of professional standards for financial planning.

President & CEO Cary List spoke on behalf of FPSC, a not-for-profit organization that develops, promotes and enforces professional standards in financial planning through Certified Financial Planner certification

List noted that studies have clearly demonstrated that Canadians are not getting the financial planning help they need, from qualified, professional financial planners. This is partially the result of a lack of understanding of how to identify a qualified financial planner and of what clients should expect of a financial planner and/or a financial plan.

He argued that the unregulated financial planning environment leaves consumers vulnerable and at risk of receiving advice from individuals holding themselves out as planners, but who have not had to meet any qualifications

List said the term “financial planning” is too often used as a sales pitch to sell product and the title “financial planner” is used haphazardly throughout the industry, and that a licence to sell a particular product does not equate to competence in providing financial planning.

“The solution we propose is simple,” said List. “Codify in law the professional certification structure, governance and oversight mechanisms that already exist in practice, but that are currently voluntary, and make them a requirement for all who wish to claim financial planning as their own.”

List’s comments included four recommendations so that consumers will be protected and know what to expect when dealing with a financial planner:

  1. the adoption of a single, unified set of standards for financial planners and financial plans;
  2. the adoption of a unified definition of what is a financial planner and financial planning and what constitutes a financial plan;
  3. the establishment of title and holding out restrictions so that only those who have single, unified set of standards should be permitted to call themselves financial planners; and
  4. the assignment of financial planner accountability to a professional oversight body that understands financial planning and professional obligations and that represents the public interest.

“A professional self-regulatory model for financial planners, with a single unified set of standards of competence, practice and ethics will instil confidence in financial planning and financial planners,” said List.

List is also chairman of the Coalition for Professional Standards for Financial Planners, a group of four organizations including the Canadian Institute of Financial Planners (CIFPs), Financial Planning Standards Council (FPSC), the Institute of Advanced Financial Planners (IAFP), and the Institut québécois de planification financière (IQPF), that has published principles by which it feels financial planners should be bound.

The Coalition is in the process of releasing a proposed regulatory framework for the financial planning profession.