Thousands of financial planners are predicted to leave the industry in Australia after new regulations were introduced requiring them to have degree-level qualifications. Now, with debates raging about the use of the term ‘financial planner’, is it possible that Canada could follow suit?
The Financial Planning Association in Australia, which covers 12,000 planners, believes that the introduction of a mandatory Bachelor’s Degree for financial planners – which will be implemented in the country in July, 2019 – is unworkable.
Currently, there is no legislation requiring financial planners to have a diploma or degree in Canada – the only requirement to sell financial products here is to have the appropriate license for the products you provide.
Sean Harrell, partner and advisor at Howe|Harrell & Associates, believes that more could be done to improve the situation in Canada, but that making degrees essential would be going too far.
“I don’t think that imposing a requirement of having a degree before entering the industry is the answer but I truly believe that there should be a timeline in which you are required to pass your CFP in order to refer to yourself as a financial advisor,” he said.
“There is a lot of talk right now about how financial advisors title themselves. For the most part I agree that an advisor should have a CFP before he can call himself a financial advisor. If the CFP was a mandatory requirement after a certain date of entering the industry the rules would be cut and dry.
“Having a timeline may even help the industry police itself, maybe people would obtain their CFP before entering the industry? At the very least it would force serious advisors to finish their CFP and it would weed out the advisors that are not willing to put the effort in to obtain the professional designation.”
The decision in Australia to enhance the qualification requirements in the country, arrived after a series of scandals at some of the nation’s leading banks. However, there is concern that the transition requirements are unfair to existing financial planners who will find it hard to obtain the necessary degree ahead of the 2019 deadline.