Why industry is ready to embrace qualification changes

FP Canada CEO says the notion you can 'do well, while doing good' can now finally be applied to financial services

Why industry is ready to embrace qualification changes

The financial advice industry has create the “perfect storm” for the introduction of FP Canada’s new Qualified Associate Financial Planner certification, according to the organization’s CEO.

The qualification is designed to help the average person with their financial planning needs and to access suitable advice, and it forms part of FP Canada’s broader effort to “champion better financial well for all Canadians”. QAFP is a standalone qualification but also acts as a bridge to CFP.

For CEO Cary List, there are so many industry-changing elements at play right now that he believes the industry is ready to embrace the new certification, which came into effect on January 1.

He highlighted squeezed compensation on sales, the regulators’ client-focused reforms around transparency and clients knowing what they're paying for, as well as legislation in Ontario and Saskatchewan that will require an advisor or planner to have qualifications beyond what they’re licensed to sell in order to give advice.

He told WP: “I think all of these things are a perfect storm. The industry is embracing [the QAFP] rather than pushing against it – and that's exciting for us. We've seen a number of institutions really focus on how they reinvent their business model in such a way that they earn a good profit and deliver the best quality advice.”

List conceded that, presently, there simply isn’t enough CFP professionals to go around the country and serve the mass, “average Canadian” market. It’s something he hopes will eventually change through the QAFP, which is holistic in nature and covers all of the core aspects of financial planning that the CFP program does but at a less complex level.

There is also a professional education program attached to it, which you have to complete within a year of certification and which “really rounds out your competence as a financial planner”. The technical curriculum, delivered by third-party educators, should be able to be completed within a year, List said, while the professional education programme should take from 4-6 months. Including the time to write the exam, you could be a fully qualified QAFP within two years.

List explained: “It’s really in the image of CFP and if you think about other professions, many of them have the most senior advanced [certification] and then something that deals with somewhat less sophisticated issues. It's very similar. Within the nursing profession, for example, you have nurse practitioners, registered practical nurses and registered nurses.”

How big a draw is the QAFP, though? Aren’t finance professionals all chasing the high-net-worth clients? List says that assumption discounts a huge number of ambitious people in the industry, who will see this as a chance to advance their career. He added that aside from the holistic financial planners (CFP), individuals who serve clients through the limited sphere of investments or insurance, there is another tier of professionals – the “retail market” of financial institution branches, for example, where there is less space for deep, personal advice.

List said: “These people are not necessarily trained and educated in the holistic nature and really are the best group to start transitioning to the model of professional advice, away from a one-off service.

“It can be done, especially now with technology and platforms, and what we’re seeing and hearing through the big FIs and throughout the industry is that there is an opportunity, with technology playing a big role, to elevate those individuals into a professional space but at an at a less senior level and a less sophisticated level.”

With over 4,000 QAFPs in the pipeline, FP Canada believes the signs are positive. The influx of newly-trained planners will also raise the bar in terms of improving the financial wellbeing of the Average Joe/Jane.

List added: “If someone had $100 to save each month, should it be going into a TFSA or an RRSP or an RESP? That depends on what tax bracket they are in, and if they are in a lower tax bracket, that has an impact. How many people are carrying credit card debt yet are investing in RRSPs? There's a massive, massive opportunity to improve the financial wellness of average Canadians.

“I often refer to a quote from a book I read many years ago on the not-for-profit space and public-interest space, and the notion that you can do well, while doing good. I think that that time has finally come in financial services."