Ontario regulator announces proposed financial professionals fee structure
The Financial Services Regulatory Authority of Ontario (FSRA) is seeking comments on proposed changes to the FSRA Fee Rule to set up a fee structure to support its activities on financial advisor and financial planner title protection within the province.
“The fees would enable FSRA to recover the initial costs to design and implement the title protection framework, as well as the ongoing regulatory costs to oversee the sector,” the regulator said in a statement announcing the consultation.
In a notice announcing the rule on its website, FSRA said the costs it incurs in regulating financial professionals include direct costs such as market conduct, legal, and policy costs, as well as activities to educate consumers. Common costs it incurs as it oversees multiple sectors including the financial professionals sector, such as those relating to information technology and corporate services, were also accounted for.
“Common costs are allocated proportionately amongst all FSRA regulated sectors based on the overall direct costs,” the regulator said.
FSRA’s proposed financial professional fee structure includes an application fee for the approval of a CB amounting $10,000, and an application fee of $5,000 for the approval of each FP or FA credential. It also listed fees related to annual assessment of CBs and including a fixed annual CB fee, variable annual CB assessment, and a time-limited annual assessment to recover start-up costs.
The FSRA notice also noted several concerns about fees raised by stakeholders in previous consultations, including the possibility that non-title users would end up paying fees charged by credentialing bodies, scenarios where some individuals may be subject to additional fees/costs, and the risk of high fees being passed on to consumers.
The proposed fee structure could result in a combined annual average cost of $22 per credential holder for the first five (5) years of the framework to fund a CB’s annual fee.
The FSRA’s consultation on open for 90 days, ending on October 20.
