rules and regulations

Ontario’s regulation of “financial advisor” and “financial planner” titles has received ministerial approval and will come into force on Monday, March 28, the Financial Services Regulatory Authority of Ontario (FSRA) said in a release on Wednesday.

The rules and related guidance will be in effect as of that date, with a transition period to allow title users time to comply, the release said.

The regulation is “long overdue,” said Huston Loke, executive vice-president, market conduct with FSRA, in the release. Title regulation “offers something consumers have been asking for: clarity and confidence when working with their financial professional.”

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In an interview, Joel Gorlick, FSRA’s director, policy — market conduct, called ministerial approval a big milestone. “We’re definitely excited to get this framework up and running,” he said.

The regime, which leverages existing licensing and professional designation bodies, requires that those who use the titles “financial advisor” or “financial planner” hold a FSRA-approved credential from a FSRA-approved credentialing body, meet minimum standards of education and abide by a conduct code.

Credentialing bodies must actively oversee credential holders and have a complaints and discipline process.

A transition period is available to those who have used one of the titles since before Jan. 1, 2020, and now need to obtain an approved credential. Such individuals have two years to obtain a credential for “financial advisor,” and four years to obtain one for “financial planner.”

Those who began using one of regulated titles after Jan. 1, 2020, must get an approved credential immediately, the release said, if they want to continue using the title. FSRA can issue compliance orders against those who use the regulated titles without approved credentials.

FSRA said it will soon begin announcing approved credentialing bodies.

“We have a number of prospective credentialing bodies that have applied,” Gorlick said. “In the next week or two, we expect to be able to announce who at least some of the credentialing bodies will be.”

Advocis, the Financial Advisors Association of Canada, said in a release on Wednesday that it applied to FSRA to be a credentialing body, having submitted the Professional Financial Advisor (PFA) credential for both titles, and the Chartered Life Underwriter (CLU) credential for the financial planner title.

As title protection emerges in more provinces, FSRA said it seeks to harmonize with them. Saskatchewan and New Brunswick are in the process of introducing frameworks. Quebec has regulated “financial planner” since 1998.

“We’ve been in conversations with our partner regulators across the country,” Gorlick said, adding that the conversations will continue. “All of them are watching this with interest, including those that have already proceeded with their own frameworks and those that are thinking about it.”

As FSRA has previously made clear, the LLQP licence won’t qualify to allow a life agent to use the financial advisor title, but additional education may eventually change that.

“We’ve been very actively considering the notion of something that would allow you to top up that LLQP,” Gorlick said. “If you’re a life agent and you’re LLQP-qualified, there will be potentially […] an option for those people to be able to get a top-up credential.”

For life agents, more information will be forthcoming.

“Hopefully, in the next few weeks as we’re able to announce who some of the approved credentialing bodies are, we’ll be able to talk some more about that too,” Gorlick said.