Ontario title protection report shines light on financial advice industry

FSRA report shares data from the province's approved credentialing bodies

Ontario title protection report shines light on financial advice industry
Steve Randall

A new report shares insights into the title protection regime in Ontario which aims to shore up consumer trust and maintain standards among those using Financial Planner and Financial Advisor titles.

The province’s four FSRA-approved credentialing bodies – FP Canada, Institute of Advanced Financial Education, Canadian Securities Institute, and Canadian Institute of Financial Planning – provide an annual information return providing an overview of business practices, general title usage information and observed trends within the industry.

The data for the 2022 calendar year reveals that there were 15,094 professionals using the title Financial Planner in Ontario, and 1,600 using Financial Advisor at the beginning of the reporting period, while at the end of it there had been a 1.86% increase. However, this was due to a surge in FPs (15,894) while the number of FAs decreased (1,111).

The credentialing bodies all charged a Certification Fee for their credentials ranging from $100-$670 with Recertification Fees in the range $99-$520. Two of the CBs charged an additional $150-$950 for Examination Fees while two included them in their Certification Fees.

The FSRA’s Financial Professionals Title Protection Rule requires that FPs and FAs “deal with clients competently, professionally, fairly, honestly and in good faith” as a priority when providing financial planning or advice.

Asked how they were ensuring that credential holders were adhering to the ethics and professional standards, the CBs responded:

  • proactive monitoring of credential holders for disciplinary/enforcement actions taken by other credentialing bodies and regulators
  • issuing guidance to credential holders regarding the requirements of the new credentialing framework
  • requiring credential holders to comply with a code of ethics and professional standards through self-attestation during their annual recertification process
  • investigating complaints or allegations of non-compliance against their credential holders
  • performing random audits to identify potential misconduct committed by credential holders
  • monitoring errors and omissions claims from credential holders

The report shows that five credential holders were identified by credentialing bodies who faced disciplinary or enforcement actions from another approved credentialing body or a regulatory body during the reporting period.

Four credential holders were undergoing suitability reviews by credentialing bodies to determine eligibility for maintaining the credential following disciplinary/enforcement actions from another approved credentialing body or regulatory body during the reporting period.

Complaints made

There were 36 complaints received about FPs during the reporting period but none regarding FAs with 63% of complaints resolved and closed by CBs during the period.

The main areas of complaints received by CBs were:

  • Credential holder suitability issues
  • Lack of due diligence in providing financial advice or service
  • Lack of documentation
  • Product suitability and product misrepresentation issues
  • Failure to obtain clear express consent from client(s)

Warning letters, guidance and advice letters, and referral to disciplinary panel for disciplinary action were the most common resolution methods used by CBs.  

Financial planner credential holders faced 127 disciplinary actions while there was just one against a financial advisor credential holder. Overall, 116 credentials were revoked.

Across Canada, financial planners who fell below required standards were more likely to be suspended in 2022 but less likely to be banned according to a report from FP Canada Standards Council.