Advisors registered with the Investment Industry Regulatory Organization of Canada (IIROC) have limited options when it comes to fulfilling their continuing education (CE) requirements, says a CE course provider.
According to John Waldron, founder of Toronto-based Learnedly Canada Inc., a conflict of interest exists at the Continuing Education Course Accreditation Process (CECAP), which is the service provider that accredits IIROC’s CE courses.
The problem, Waldron says, is that CECAP is administered by the Canadian Securities Institute (CSI), which also is a course provider. Waldron believes this arrangement gives the CSI an unfair advantage over its competitors in getting its courses accredited. Both CECAP and the CSI are owned by Toronto-based Moody’s Analytics Global Education (Canada) Inc.
While this arrangement might seem as if it affects only course providers, Waldron, who previously worked for the CSI, says it affects advisors as well: “IIROC registrants – the advisors themselves – are being limited in terms of course options because of this.”
Waldron says course providers such as his have stopped submitting courses to CECAP for accreditation, leaving IIROC advisors with fewer options for fulfilling their CE requirements. (Newcom Media Inc., parent company of Investment Executive [IE], owns CE Corner, which provides CE material for IIROC registrants.)
In August, Waldron wrote a response to IIROC’s proposed amendments to its CE program. In that comment, he noted that CECAP’s “punitive” accreditation fees are significantly higher than those of other accreditation bodies.
CECAP states on its website that the service provider charges $585 to accredit a one-hour course. This amount comprises a $210 assessment fee and a $375 application fee.
By comparison, FP Canada, the standards body for certified financial planners, charges $70 to accredit a one-hour course. The Institute for Advanced Financial Education – a designation body for financial services providers specializing in advanced estate, wealth-transfer and living benefits planning – charges $125 to accredit a one-hour course.
Perhaps more concerning than CECAP’s fees, Waldron suggests, is that the CSI can submit courses to CECAP for accreditation “essentially at no cost” because the CSI and CECAP are owned by the same company. This, he says, means the CSI is essentially paying itself to have its courses evaluated.
In an email responding to questions from IE, Marc Flynn, senior director, regulatory relations and credentialing with the CSI, wrote: “In order to avoid any potential conflict, the CECAP administration and course evaluation is done completely by third-party consultants. CSI staff [are] not involved in the evaluation process.”
Waldron accepts that no CSI staff are involved in accrediting CSI courses, but he still argues that the CSI can submit courses for accreditation at a lower cost than other CE providers.
“[The CSI’s] only out-of-pocket [expense] is whatever it’s going to pay the [third-party] consultant,” Waldron says.
Waldron also says that if a course provider wants to alter and resubmit a course to CECAP, the course provider must pay both an assessment fee and a new application fee in full a second time. The CSI, he surmises, would be able to resubmit the same course several times at a “pretty negligible” cost.
IE contacted both the CSI and Moody’s to ask for comments on the suggestion that the CSI can submit courses to CECAP at a lower cost than its competitors. Neither party responded.
Another consideration is that Moody’s, the CSI’s parent company, is being paid by the CSI’s competitors when they submit courses for accreditation. On CECAP’s website, course providers are instructed to make application fee cheques payable to Moody’s. CECAP “shouldn’t be a profit centre for anyone,” Waldron says.
An email from a Moody’s spokesperson states: “All final accreditation decisions for CECAP courses are made by IIROC. CSI courses are evaluated through the same third-party process and criteria stipulated and required by IIROC for all providers.”
IIROC declined a request for an interview to explain why it had chosen the CSI to administer CECAP, but an email from IIROC states: “IIROC believes in the fairness and transparency of its continuing education program and, as a part of this, IIROC ensures that no competitive advantage exists from one provider to another.”
CE course providers are not required to submit courses to CECAP for accreditation. IIROC registrants are allowed to take courses that aren’t accredited by CECAP in order to meet their CE requirements, according to instructions on IIROC’s website, but registrants’ firms must ensure the courses meet IIROC’s CE requirements.
“I think there’s consensus that if [a CE course is] not CECAP-accredited, dealer firms run the risk of being audited or called out by IIROC,” Waldron says.
Waldron has other issues with CECAP. He says that when he asked CECAP to reveal the rubric CECAP uses to evaluate courses, he was told that information is “proprietary.” He also points to CECAP’s “comfortable” relationship with the CSI’s content, noting that a 2009 CSI update on the Conduct and Practices Handbook was recertified by CECAP for two additional CE cycles, extending into 2017.
While Waldron would welcome the abolition of CECAP, he says that if IIROC opens up CE accreditation to other service providers, that would at least level the playing field.
“Just adding one alternative would … restore some balance. If another accreditation provider came along, people would naturally go to them because CECAP is so expensive and so unaccommodating for [CE] course providers,” Waldron says.
An email to IE from IIROC states: “IIROC is always open to explore opportunities to improve upon its existing CE process and we remain receptive to feedback.” IE