A third industry association has been approved by Ontario’s financial regulator to provide certifications to people who want to use the title “financial planner,” under a new credentialing regime that was approved in the province earlier this year.
The Financial Services Regulatory Authority of Ontario announced on Wednesday that the Canadian Securities Institute (CSI) will now be able to approve the use of the title by those who have completed the Personal Financial Planner (PFP) designation, which is currently held by 5,700 people in Canada, of whom 3,000 are in Ontario.
The new credential rules, which were passed last month by the Ontario government, were put into place to protect investors from unqualified advisers. The rules will now govern people in the financial services industry who want to use the titles “financial planner” or “financial adviser.” Previously there was no regulation for either title, except in Quebec.
Existing financial planners will have a four-year transition period before they are subject to the new rules, while financial advisers will be given a two-year time frame.
The CSI did not apply to be approved for the financial adviser title, only the financial planner title.
“This is another important step towards strengthening consumer and investor protection across Ontario and minimizing regulatory burden,” FSRA’s executive vice-president of market conduct, Huston Loke, said in a statement.
Earlier this month, FSRA announced the names of two organizations – FP Canada and the Institute of Advanced Financial Education (IAFE), a subsidiary of Advocis – that will be allowed to certify use of the titles.
Launched in 1970, CSI, which was purchased in 2010 by New York-based Moody’s Corporation, has grown into one of the largest education providers for financial professionals in Canada. The organization oversees four designations, including the PFP, as well as more than 15 financial certifications. It is widely known in the industry for overseeing the Canadian Securities Course for investment advisers, and the investment funds course (IFC) for the mutual fund industry.
CSI spokesperson Marc Flynn told The Globe that while many of the organization’s certificates would meet the financial adviser proficiency requirements set by FSRA, the organization does not offer a financial adviser designation.
“While courses leading to certificates provide a very thorough educational overview for an adviser, there are certain aspects of a designation that a certificate course does not have – such as a code of ethics and annual continuing education requirements.”
FSRA says it continues to “actively” review applications and will announce more credentialing bodies and their designations as they are approved. In a release, the regulator said it also continues to “welcome” existing professional designation bodies to apply to become credentialing bodies.
Two organizations that have not yet applied to be included in the title regime are the Mutual Fund Dealers Association of Canada (MFDA), a self-regulatory organization (SRO) that oversees about 90 mutual fund companies and distributors, and the Investment Industry Regulatory Organization of Canada (IIROC), which supervises 170 investment dealers.
The two SROs are currently in the process of merging into a new single entity. Both SROs told The Globe earlier this month that they continue to be in discussions with FSRA, but that they will leave the final decision to the newly merged organization.
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Clare O’Hara