middle aged couple discussing something on a document with a female advisor at the table

Ontario’s fledgling financial regulator must now deliver advisors’ title reform.

Securities regulators have hit a few home runs in the past couple of months: the Canadian Securities Administrators finalized the client-focused reforms and the Ontario Securities Commission handed down an impressive burden-reduction plan. Both efforts deftly managed to accommodate valid industry concerns while genuinely prioritizing investor protection.

Hopefully, Ontario’s project to develop rules regarding the use of the “financial planner” and “financial advisor” titles will follow these examples.

Regulating titles, on its face, should be straightforward. However, the actual process has proven particularly thorny.

Previous efforts to restrict the use of certain titles have fallen victim to industry firms pushing back against any policy that would fundamentally raise proficiency standards for their sales forces. The business of educating and conferring credentials on advisors also is rife with self-interest.

What’s not yet clear is whether the provincial government views regulation of advisors’ titles as a consumer-protection initiative or as a sop to political supporters who covet regulation as a competitive tool.

The odd choice of putting a rookie regulator, the Financial Services Regulatory Authority of Ontario — which has no track record of defending investors’ interests and no history with the self-regulatory organizations that oversee the vast majority of genuine financial advisors — in charge of the project suggests that consumer protection is not the top priority.

If consumers’ interests are not at the heart of this initiative, it may do more harm than good.

A system that erects a legal moat that includes poorly qualified advisors, entrenches mediocre proficiency and surrenders the ability to raise standards to commercial designation bodies not only abandons consumers, but also leaves the investment industry with “title protection” that’s essentially meaningless.

That would be a big step backward for those who aspire to see “financial advisor” treated as a genuine profession.