Financial Advisors Act is one step closer

Financial Advisors Act is one step closer

Financial Advisors Act is one step closer Financial advisors in Ontario are one-step closer to having to adhere to a provincial bill regulating their performance.

The proposed Financial Advisors Act, 2014, will move onto the Standing Committee on Finance and Economic Affairs for consideration after passing through a second reading in the Ontario legislature on Thursday.

The private members’ bill – introduced last month by Sudbury’s Liberal MPP Rick Bartolucci – would regulate commission- or remuneration-based Ontario financial advisors ensuring they adhere to a code of ethics, proficiency standards, ongoing continuing education requirements and possess valid errors-and-omissions insurance.

CEO of Advocis, Greg Pollock – who assisted in the drafting of the proposed bill – believes it is about time an official government bill was passed to monitor financial advisors and protect investors in Ontario. Currently, Quebec is the only province to regulate the profession through legislation.

 “We (Advocis) think that people should be properly licensed, properly educated when it comes to the various specializations that they are holding out with,” Pollock told BNN in an interview earlier this month. “Those kinds of standards of practice – code of conduct, code of ethics … are the things you will see with this legislation.”

Meanwhile, the Independent Financial Brokers (IFB) – an non-profit association representing independent insurance, mutual fund and other financial service professionals across Canada – are among those skeptical of the bill and the process by which it could be passed.

“The financial services regulators in Ontario have historically taken a consultative approach to rule-making. These consultations are critical in developing rules and laws that actually work in practice,” said IFB Executive Director, Nancy Allan, in a news release. “IFB does not support the introduction of an Act without this kind of open and transparent consultation – particularly not one that will add yet another layer of red tape to an industry that is already highly regulated.”

If passed through the committee, the bill will return to the legislature for a third reading. As Pollock points out, it could be several months before the bill is approved - if indeed it ever is.

Do you support Ontario's proposed Financial Advisors Act? Tell WP your thoughts in the comment box below.

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3 Comments
  • Brian E. Jackson CFP 2014-03-21 12:48:09 PM
    Earl Jones was not caught by the Quebec regulators because, in the regulators own words, he was not a dues paying member of their Chambres de la securitie financiere. So unless the regulators are going to go out and find unregistered frauds then we are no further ahead in protecting the public.
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  • Marilyn J Chambers, CFP, EPC 2014-03-21 12:56:03 PM
    I do not support this bill. As a CFP I already adhere to a strict code of conduct. Our industry is extremely highly regulated and this is just one more layer or red tape we can do without.

    I believe advisors should be educated and adhere to a code of conduct. Make CFP the standard before anyone can be called a Financial Planner or Financial Advisor. The colleagues I know and work with take their ethical duties to their clients extremely seriously.

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  • Kevin Cahill, B.Sc.(Hons), CFP, CHS, CLU, EPC 2014-03-25 1:37:08 PM
    I am having a hard time supporting this bill and this URL that was forwarded to me hits the nail on the hammer and I wanted to share it to everyone that has a stake in the conversation

    http://lsminsurance.ca/life-insurance-canada/2014/03/insurance-experts-weigh

    … I feel the bill is only going to add another layer of complexity for the people who are already following the rules… the categories that are exempt are where a lot of the problems lie. I am concerned as to how quickly this is going through as well as how quiet the entire banking system is being over this… but then again they know they will be exempt. I have two friends who own funeral homes in Ontario that are not part of a conglomerate and when a similar bill was introduced in that industry a few years ago it didn't make anything better.

    There are no exceptions to who is a doctor or who is a dentist, you either are or you aren't… I agree something is better than nothing but at the same time define and educate what is a financial planner and what is a financial plan might actually help individuals.
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