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.
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