By The Globe and Mail Custom Content Group
Currently in Canada (excluding Quebec), anyone can call themselves a financial planner – a regulatory gap that puts consumers at risk.
The Financial Planning Coalition – which includes the Canadian Institute of Financial Planners, Financial Planning Standards Council, Institute of Advanced Financial Planners and the Institut québécois de planification financière – are asking provincial governments to codify in law the professional certification structure, governance and oversight mechanisms that already exist in practice for the 22,000 certified or licensed financial planners in Canada, but that are currently voluntary, and make them a requirement for anyone who wants to be a member of the profession and call themself a financial planner.
According to survey data released by the Coalition, almost half of Canadians erroneously believe that there are regulatory standards for financial planners already in place, and that percentage increases even further among Canadians with higher levels of education and income.
The Financial Planning Coalition is asking provincial governments to:
- Adopt a single, unified set of standards for financial planners.
- Recognize and adopt the Canadian Financial Planning Definitions, Standards & Competencies (a joint publication of Financial Planning Standards Council and the Institut québécois de planification financière, the two organizations that establish and maintain standards for the financial planning profession in Canada).
- Create title and holding out restrictions to only those who have demonstrated their competence by meeting a single set of unified qualification standards, ongoing professional ethics and continuous professional development requirements.
- To ensure that financial planners are accountable to a professional oversight body that understands financial planning and professional obligations and that represents the public interest.
According to the Financial Planning Coalition, these recommendations will ensure that the growing financial planning profession will consist only of individuals who have met stringent unified educational requirements and who are accountable to a strict standard of care, practice and ethics – including the requirement to always put the client’s interests before all others.
The Ontario government has appointed an Expert Committee that is currently looking into the issue and is expected to report its findings early in the New Year. In the meantime, until further protections are in place, Canadians should ensure they investigate the qualifications of their financial planner prior to entering into any engagement.