This editorial appears in the Oct. 2022 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
Financial advisor title regulation in Ontario is now so watered down, it’s effectively useless. More than seven years of investigation, consultation and concessions — and untold public spending — have moved the industry mere inches beyond where it was in 2015, when Ontario first appointed a committee to consider regulating titles with the goal of protecting consumers and strengthening the financial services sector.
Indeed, many of the people who called themselves financial advisors in Ontario in 2015 can still do so today with minimal effort. For evidence, look no further than the designation launched on Sept. 1: the designated financial services advisor designation (DFSA) administered by the Canadian Securities Institute (CSI).
The DFSA’s requirements mean reps registered with the Mutual Fund Dealers Association of Canada and the Investment Industry Regulatory Organization of Canada (IIROC) readily qualify.
Understandably, the industry demanded that longtime financial advisors not be burdened by unnecessary recertification processes. But with each approved title designation, more people have been brought into the fold, leading to accusations that such an inclusive exercise is meaningless and will perpetuate consumer confusion.
The Financial Services Regulatory Authority of Ontario’s latest approval strains credulity to almost comical extremes.
Even IIROC seemed to express alarm, calling the DFSA’s approval “an unusual case as it appears to be substantively based on an individual’s registration with IIROC.”
Quebec’s title regulation has long set the gold standard: one organization, the Institut québécois de planification financière, may issue the diploma allowing someone to call themselves a “financial planner.” For a shining moment, Ontario seemed poised to follow. The province had the opportunity to clarify and raise standards for financial advice professionals — and squandered it.
There’s still hope for a clearer regime that actually protects consumers in New Brunswick and Saskatchewan, which are crafting their own title protection regulations. The latter’s Financial and Consumer Affairs Authority is consulting on greater proficiency standards for advisors that are less product-focused, but lobbyists are pushing for looser rules that match Ontario’s.
Regulators in New Brunswick and Saskatchewan cannot be cowed by their opposition. To avoid turning title regulation into a make-work exercise, they must learn from Ontario’s mistakes.
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