• Wed. Apr 24th, 2024

Ontario regulator recognizes another industry qualification to use financial planner title

The head of Canada’s largest professional association of financial planners says she is disappointed and concerned that Ontario’s financial services regulator has approved a designation with a similar name to its own.

On Friday, the Financial Services Regulatory Authority of Ontario (FSRA) said the Canadian Institute of Financial Planning can permit people with the Chartered Financial Planner designation to call themselves financial planners. The approval is part of the province’s new legislation to help investors ensure they are dealing with qualified experts.

The institute first launched the Chartered Financial Planner designation in the early 1980s. But chief executive Keith Costello said the institute shut the course down to new entrants in 1998 and maintains the designation for existing certificate holders only – of which there are a “couple hundred.”

Now Mr. Costello said the organization has reopened the designation for new applicants, but Canada’s largest association for financial planners is crying foul, saying the name could cause confusion among investors who are familiar with its own designation.

“It is disappointing that there wasn’t broader consultation with the industry before this decision was made by FSRA and in particular consultation with the largest credentialing body for financial planners who have effectively a very similar title,” said FP Canada’s chief executive, Tashia Batstone. FP Canada oversees the widely known Certified Financial Planner designation, commonly known as CFP. Currently, there are just under 9,000 CFPs in Ontario.

FSRA has been spearheading rule changes for financial services titles since 2019 when Ontario passed the Financial Professionals Title Protection Act. In 2022, the regulator announced the first two organizations that were greenlit as credentialing bodies. FP Canada and the Institute for Advanced Financial Education (IAFE) had two designations each approved to be used by financial professionals under the province’s new regime.

Since then, FSRA has approved a total of five credentialing bodies and 14 designations as part of the framework around the title protection. CIPF’s Chartered Financial Planner marks the sixth designation the regulator has approved for the financial planning title.

“There will definitely be additional consumer confusion by having two very similar credentials approved and that does not strike me as being in the public interest,” Ms. Batstone said. “So we are concerned.”

When the province passed new legislation, however, Mr. Costello re-established the institute’s credential. He said the organization has “made a deliberate decision not to introduce an acronym for the Chartered Financial Planner designation at this time,” in order to avoid confusion.

But regardless of whether CIFP uses the acronym, consumers will begin to use the acronym, Ms. Batstone said, creating additional confusion.

FSRA spokesperson Ashley Legassic told The Globe and Mail both designations met the criteria for approval.

Financial advisers typically help clients manage their investments, while financial planners help clients prepare to meet a goal such as retirement or a child’s education.

About 100,000 financial advisers work across the country. But Canada has no legislated national standards for those who offer financial planning or advice. Outside Quebec, which has its own rules, anyone can call themselves a financial planner or adviser, regardless of certification, designation or educational background. Now, Ontario and Saskatchewan have both passed legislation in order to implement standards.

FSRA is expected to release the results of a recent review of the new title regime by the end of March, 2024. Part of the review, FSRA said, will look at proficiency standards for titles, to ensure they remain relevant and aligned with what consumers expect. The review will also include an evaluation of credentialing bodies’ policies and processes, including complaint handling and disciplinary practices.

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