• Sun. May 26th, 2024

Title protection harmonization faces bumpy road

In March, the Financial Services Regulatory Authority of Ontario (FSRA) approved the Chartered Financial Planner designation, overseen by the Canadian Institute of Financial Planning (CIFP).

FP Canada subsequently issued a statement saying consumers could confuse the Chartered Financial Planner designation with the Certified Financial Planner designation, which it called the gold standard for financial planning.

Last week an industry coalition, which included the president of the Financial Planning Association of Canada and consumer advocates, called on FSRA to make the CIFP rename its credential or rescind approval. The statement cited consumer confusion, as well as the potential for deception and abuse.

FP Canada said in an emailed statement to Investment Executive that it will continue raising its concerns with FSRA and the Ontario finance minister, and will also “vigorously enforce against any unauthorized use of our licenced trademarks.”

Keith Costello, president and CEO of the CIFP, said his organization has the legal right to use the Chartered Financial Planner trademark.

“We will continue to use it with no changes,” Costello said. Further, “we will defend any use of the trademark legally and vigorously if challenged.”

Both credentials meet FSRA’s standard for FP title use in Ontario, the regulator said in an emailed statement. “Consumers can be confident that any approved designation used by a FSRA-approved credentialing body means a financial professional has met minimum education standards, is supervised, and must abide by a code of conduct,” the statement said. 

Ontario’s title protection has also been criticized for its product focus in regulating the financial advisor title.

Quebec, which has regulated the FP title and restricted other titles since 1998, remains an exemplar. Financial planners must have a diploma from the Institute of Financial Planning (among other requirements), and advisors in the province who sell mutual funds, for example, are called “mutual fund dealer representatives.”

While FSRA’s business plan for 2024–27 includes harmonizing title protection across Canada, the plan also includes an evaluation that will “explore possible future enhancements” to the regime. The regulator previously stated it will publish that report in 2024–25.

Saskatchewan, which two years ago consulted on draft rules that include financial planning knowledge for advisors, is watching.

The province’s regulatory officials are “finalizing their analysis … and assessing recent developments in Ontario and New Brunswick, including the approval of credentialing bodies and credentials in Ontario, and the consultation on draft rules in New Brunswick,” a spokesperson for the Financial and Consumer Affairs Authority of Saskatchewan said in an email.

New Brunswick’s Financial and Consumer Services Commission said it was too early to comment on its rules, which in draft form include educational requirements for financial advisors to make recommendations with “respect to comprehensive financial and investment strategies.”

Manitoba, meanwhile, consulted last year on whether to adopt title regulation legislation. A summary of the consultation, which garnered 30 survey responses and 17 written responses, stated that 78% thought Manitoba should follow Ontario’s model. One-fifth (20%) were against, saying not all credentialing bodies are equal, and that the criteria for approving credentialing bodies for the FP title fall short of international standards.

Regarding harmonization, “participants were concerned about Ontario’s regulatory regime including lax criteria for obtaining titles, low proficiency requirements, a product-focused approach, and inadequate recognition of the professional-client relationship,” the summary said. “Many highlighted that the model is still evolving and recommended a focus on improving it to better meet consumer expectations, before adopting it in Manitoba.”

Concerning next steps, “Manitoba’s new government is still considering the feedback we received and are monitoring developments across the country,” Ryan Stelter, press secretary for Manitoba’s finance minister, said in an emailed statement.

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