By Cary List, President and CEO, Financial Planning Standards Council
In today’s complex world, Canadians more than ever require the guidance and expertise that come with a trusted financial planning professional. On a recent CBC radio interview, Dr. Moira Somers, one of Canada’s leading neuropsychologists who specializes in financial psychology, got to the heart of the matter: “There are more ways now to torpedo your finances than ever before.”
Despite the degree of impact that financial planners have on the financial and emotional health of our nation’s people, you may be surprised to learn that in Canada, anyone outside of Quebec can claim to be a financial planner or offer financial planning services. There are no restrictions or enforced standards on who may claim – through advertising or title – that they are a financial planner.
This absence of regulation has left Canadians vulnerable and at risk of receiving financial planning advice from individuals who have not had to meet any qualifications based on accepted common standards of competence, ethics, or practice. There are no uniform obligatory standards specifically for financial planners, other than through voluntary certification.
Often, the term “financial planning” is used to sell products or provide only investment or retirement advice. The fact is that most financial advisers in Canada are individuals whose qualifications relate specifically to the products they are licensed to sell (such as insurance or mutual funds). Such individuals, however, have no requisite training or qualifications for broader, more holistic financial planning – advice that takes into account an individual’s life goals and the interconnection of all of the financial aspects that need to be considered to achieve those goals. Unfortunately, most consumers don’t know the difference between a financial planner and a financial or investment adviser, and they are paying the price for it.
The right financial plan, tailored to an individual’s specific life goals, will chart a path that allows Canadians to use the resources they have to get the most out of their life that they possibly can.
So how do Canadians source the right financial planner who has sufficient knowledge, skills, abilities and accountability to adequately plan their financial future? In other words, whom can they trust in the absence of statutory or regulatory requirements for financial planners?
The Financial Planning Standards Council (FPSC) is a professional standards-setting and certification body that works in the public interest on behalf of all Canadians to drive value and instill confidence in financial planning, because we know that without sound financial planning from a qualified and trusted professional, the well-being of Canadians is at risk.
FPSC ensures that those it certifies – CERTIFIED FINANCIAL PLANNER® professionals and FPSC Level 1 Certificants in Financial Planning – meet appropriately high standards of knowledge, skills, abilities and ethics through rigorous requirements for education, examinations and experience.
To obtain the CFP designation, candidates must complete a rigorous education program, pass two national exams and complete three years of qualifying work experience. To maintain certification, every year they undertake ongoing professional education and agree to adhere to the Standards of Professional Responsibility for CFP Professionals and FPSC Level 1 Certificants in Financial Planning – standards that are strictly enforced by FPSC.
It’s not easy to get the CERTIFIED FINANCIAL PLANNER designation, nor should it be.
While provincial governments continue to work through the implementation of consumer protection measures within their jurisdictions, FPSC continues to take measures to help ensure that Canadians are getting the help they need and can trust. In addition to public awareness campaigns to help consumers understand the importance of financial planning and working with a CERTIFIED FINANCIAL PLANNER professional, FPSC has resources about financial planning available to consumers through FinancialPlanningForCanadians.ca. FPSC also offers a tool all Canadians can use to source a qualified professional through FindYourPlanner.ca – accessed by hundreds of Canadians each day.
We encourage all Canadians to experience the benefits that come with participating in the financial planning process guided by a CFP professional they can trust.