The alphabet soup of titles in Canada’s advisory sector confuses and the entry bar for the profession is too low, said OSC roundtable panellists in a rare moment of agreement.
While panellists at the Ontario Security Commission’s ‘best interest’ roundtable sparred over proposed fiduciary standards for advisors, they did seem to have one area of agreement: that the alphabet soup of titles in Canada’s advisory sector confuses clients.
For the four panellists – who were evenly or against a new statutory ‘best interest’ standard for advisors serving retail clients – it was a rare moment of concord in an otherwise feisty session: titles are confusing and accreditation standards uneven.
“Investors in today’s world are confused by business titles,” said Anita Anand of University of Toronto School of Law. “I’d like to see more focus by regulators on designations and the requirements needed to maintain these registrations.”
Connie Craddock, a member if the OSC advisory panel and retired vice president public affairs for IIROC agreed, called for reform and enforcement of regulatory requirements on titles. “In other industries you are a either registered massage therapist or you are a physiotherapist.”
The panel’s most senior industry representative said the bar for admitting people to the profession needed to be raised.
“How tough is it to become a licenced advisor in Canada today? Two courses and a job offer—and the courses aren’t even that hard,” said Jim Kershaw, a senior vice president at TD Wealth Private Investment Advice. “Shouldn’t being an advisor in the context of the uncertainty of the capital markets be one of the toughest jobs to get, and one of the easiest jobs to lose?”
While he argued against a new ‘best interest’ standard, Kershaw said that specific areas such as disclosure could be improved. “Why shouldn’t my mother know what she pays?” he asked. “From a regulatory perspective, if you want to go after real change, go for that one!”
The legal representative for the industry’s side, John Fabello, a partner of international business law firm Torys, said regulators should seek harsher punishments of advisors who breached law or regulation: increasing penalties and fees in order to “make advisors better.”
The Canadian Securities Administrators (CSA) is considering introducing a statutory fiduciary, or ‘best interest’, standard for securities advisors when they provide advice to retail clients. The panel was part of its consultations to determine whether a standard should be adopted, if another policy option would be more effective, or whether the Canadian regulatory framework is already adequate.