As part of moves to strengthen consumer protection, the Ontario Ministry of Finance is seeking public views on the regulation of Financial Planners in the province.
The consultation paper includes proposals to:
1. Restrict the use of the title ‘Financial Planner’ to those individuals holding a recognised Financial Planning credential;
2. Prohibit the use of titles similar to ‘Financial Planner’; and
3. Create a central database of Financial Planners.
The Ontario government has been looking at the possibility of protecting the designation of Financial Planners since 2015.
One of the most sweeping proposals is to ban titles ‘similar’ to ‘Financial Planner.’
An Expert Committee identified the proliferation of unregulated titles in the financial services industry as a “key consumer protection concern.” The committee said that without restricting other similar titles any protection for ‘Financial Planner’ status might not work.
Because of this the government is contemplating restricting similar titles. The word ‘Planner’ in combination with any of the following words, for use in titles, would be expressly prohibited: Wealth, Portfolio, Asset Management, Securities, Insurance, Money, Retirement, Asset, Investment, Mutual Fund, Mortgage.
The use of other titles that could mislead a consumer into reasonably believing that an individual is a Financial Planner would be prohibited. The government is seeking views on the unregulated use of the “Financial Adviser” or “Financial Advisor” title.
In its consultation the Ministry Financial said: “Currently, consumers seeking Financial Planning services in Ontario confront an array of titles and credentials related to Financial Planning. A mystery shopping exercise conducted by investment industry regulators in Ontario found 48 different titles used across various industry platforms.
“However, these titles and credentials may not accurately reflect an individual’s qualifications or expertise. This, in turn, makes the process of obtaining qualified Financial Planning services unreasonably complex, as consumers are forced to decipher and evaluate the multitude of titles and credentials in the marketplace. Ontarians may reasonably assume that titles are already restricted, or that particular titles necessarily convey expertise. Taken together, these issues represent a clear consumer protection concern in how Ontarians plan for their financial futures.”
In April 2015, the government appointed an independent Expert Committee to Consider Financial Advisory and Financial Planning Policy Alternatives (Expert Committee). The Expert Committee’s final report was released in March 2017.
The report recommended that the government create a harmonised regulatory framework for Financial Planning and advisory services, which would include restricting the use of titles and establishing proficiency requirements.
In the 2017 Ontario Economic Outlook and Fiscal Review, the government announced its plan to develop legislation that would regulate Financial Planners in Ontario. The government committed to consulting with stakeholders in shaping the proposed framework.
The consultation period runs to 16 April. It is not yet clear when or if legislation will follow.