Province moves to protect consumers against unqualified financial advice

The 2019 Ontario Budget, announced in mid-April, contains some truly great news for consumers and Certified Financial Planner (CFP®) professionals alike. After about a decade of lobbying for greater clarity on who can call themselves what, the Ontario government has introduced the Financial Professionals Title Protection Act, 2019. The proposed legislation stipulates that individuals who use the Financial Planner and Financial Advisor titles must have financial planning or financial advisor credentials from an approved credentialing body. The need for this strikes many people as being self-evident. There are no enforceable nation-wide regulations around the use of titles and, too often, too many ordinary investors have ended up working with people who were not qualified to give financial planning advice because there was nothing preventing those unqualified people from holding out as being implicitly more capable than they were.

The primary governing body for financial planning in Canada, FP Canada, says it is delighted to see the Ontario government acting on this long-standing consumer protection issue. Specifically, FP Canada has long advocated that policymakers should restrict the use of the title “Financial Planner” to individuals holding an appropriate Financial Planner certification from a recognized professional financial planning body. The proposed legislation represents a giant leap towards improving consumer protection in Ontario by reducing confusion and providing clarity to help consumers make informed decisions about whom to approach for financial advice.

CFPs are equally excited about the news. It’s frustrating to work so hard to get a designation, only to have potential clients work with less-qualified individuals simply because they can’t properly distinguish between the two.

While consumer advocates remain frustrated with the glacial pace of regulatory reform in the financial services industry in general, it’s important to recognize and celebrate progress when it is made.  The reality is that there is still much to do regarding concepts like getting advisors to work in their clients’ best interests (i.e., to be “fiduciaries”) and eradicating the bias-inducing impact of embedded compensation. Still, the 2019 Ontario Budget represents an unambiguous step forward for consumers in Canada’s largest province. Notwithstanding the considerable amount of work that remains to be done, this is a real and meaningful step forward.

John J. De Goey, CIM, CFP, FELLOW OF FPSC™ is a registrant with Wellington-Altus Private Wealth Inc. (WAPW). WAPW is a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC). The opinions expressed herein are those of the author alone and do not necessarily reflect those of WAPW, CIPF or IIROC. Investors should seek professional financial advice regarding the appropriateness of investing in any investment strategy or security and no financial decisions should be made solely on the basis of the information and opinions contained herein. The information and opinions contained herein are subject to change without notice.




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