Regulator announces rules will come into effect March 28
In a significant milestone for the industry – and hopefully for the perception of the wealth space - Ontario's financial regulator has announced that anyone using the financial planner or advisor title must now be overseen by a credentialing body and be subject to a complaints and discipline process.
The Financial Services Regulatory Authority of Ontario (FSRA) revealed today that the Financial Professionals Title Protection (FPTP) Rule and the Amended FSRA Fee Rule have been approved by the Minister of Finance.
The new rules will come into effect once the Financial Professionals Title Protection Act, 2019 and related amendments to the Financial Services Regulatory Authority of Ontario Act, 2016 come into force on March 28, 2022.
Individuals using the financial planner or financial advisor titles will now need to hold an approved credential from a FSRA-approved credentialing body, will be required to meet minimum standards of education, and abide by a code of conduct.
The initiative is set to be phased in over time. The FSRA’s transition periods are four years for financial planners and two years for financial advisors, which is designed to provide individuals who were using these titles prior to and on January 1, 2020 ample time to comply with the framework following its implementation. Importantly, however, those commencing use of these titles after January 1, 2020 will have to get credentials from a FSRA-approved credentialing body “immediately”.
Huston Loke, Executive Vice President, Market Conduct at FSRA, said that, until now, there has been no regulation of the usage of these titles, something which has contributed to confusion among consumers, and doubts about the expertise of those offering financial advice or services.
He said: “Deciding how to invest your money is complicated and emotional and requires expertise and good judgement. This change is long overdue and offers something consumers have been asking for: clarity and confidence when working with their financial professional.”
The new rules have been a ling-time coming. The province said in the 2019 budget that it would introduce legislation to list the use of the financial planner and advisor titles to those who obtained credentials from bodies approved by the FSRA.