Manitoba is considering new regulations but maybe the timing is wrong?
In July, finance officials in Manitoba started a consultation on a potential new regulatory framework for financial planners.
With Quebec having adopted legislation regarding the use of the term ‘financial planner’ in 1998, later expanding it to include other terms such as ‘financial advisor’ and Ontario, Saskatchewan, and New Brunswick having brought in their own rules more recently, Manitoba would become the fifth Canadian province to introduce title protection.
But should it hold back and instead focus on the creation of a national framework?
Fair Canada believes that new provincial title protection regulations should be paused until a common and workable approach can be agreed.
“What we need is an approach that truly protects financial consumers, as opposed to the entrenched interests of credentialing organizations and their members,” Fair Canada states in its latest Fair Focus.
However, it acknowledges that a major hurdle in an agreed framework is a lack of consensus on what a financial planner or financial advisor is with differing rules making it challenging for the average Canadian consumer to truly understand.
There is also no agreement on product knowledge and how that is communicated to the public, meaning that different provinces require different levels of expertise in products and may not require limited knowledge to be clearly set out to consumers.
Then there is the matter of credentials. In Ontario for example, being able to use the term financial planner or financial advisor requires certification from one of three (soon to be four) credentialling organizations, each with its own set of qualification criteria subject to minimum FRSA standards. The FRSA has recently proposed a plan to supervise the use of protected titles in Ontario.
Fair Canada says that “because Ontario’s model assumes that a license to sell one kind of financial product qualifies an individual to give financial advice, not every financial advisor is subject to the same regulatory requirements or overseen by the same regulatory agency.”
The organization says that for those whose credentials are obtained through the OSC or CIRO there are legal obligations to resolve all conflicts of interest in the best interests of their clients, and only recommend investments to their clients that are suitable and that put their clients’ interests first. Those not regulated by these two organizations may not have the same legal obligations.
Fair Canada wants investor protection to be boosted by national standards for financial planners and financial advisors.