Ontario's financial regulator bares details of supervisory framework for financial advisor and financial planner title use
The Financial Services Regulatory Authority of Ontario (FSRA) has revealed a plan to supervise the use of the financial advisor and financial planner titles in the province.
To help mitigate non-compliance and foster proper conduct in the marketplace, the regulator said its first Financial Planners and Financial Advisors Supervision Plan lays out four key areas for 2023-2024 for approved credentialing bodies (CBs) to focus on, including:
- ensuring their credential holders are putting their client’s interests first;
- administering and maintaining their credentialing program;
- ensuring their complaint-handling processes are fair, easily accessible and efficient; and
- making disciplinary processes transparent, consistent, and reasonable.
“Through supervision and examination FSRA will ensure the effective implementation of title protection in Ontario, higher industry standards and consistency among credentialing bodies,” it said.
According to the FSRA’s 2023-2024 supervision plan for financial planners and financial advisors, the regulator will adopt a risk-based approach to supervision through examinations and supervising/monitoring approved CBs to make sure they’re complying with the Financial Professionals Title Protection Act and the Financial Professionals Title Protection Rule.
The approved CBs so far include FP Canada; the Institute for Advanced Financial Education (IAFE), a subsidiary of Advocis; the Canadian Securities Institute (CSI); and the Canadian Institute of Financial Planning (CIFP)
The regulator will rate CBs annually against risk factors such as complaints lodged with the FSRA against a particular CB, instances of non-compliance with the title protection act, and the number of credential holders in a CB’s FSRA-approved FP and/or FA credentialing program.
“Credentialing bodies with a higher risk rating may be selected for an examination at any time. All approved credentialing bodies will be examined within the first two years the framework is operational,” the regulator said.
FSRA said it has the authority, through the title protection act, to take enforcement action against approved CBs; individuals using the FP or FA titles without an approved credential, subject to transition provisions; and persons or organizations claiming to be an approved CB without approval from the regulator.
Financial advisor title users have until March 2024 to become compliant with the act, while financial planner title users have up to March 2026.
“FSRA’s supervisory processes for approved CBs may include warning and caution letters, remediation plans, or compliance orders,” the regulator said. “If warranted, and if efforts of remediation fail, FSRA has the authority to revoke a CB’s approval.”
The regulator said it can also issue compliance orders against individuals using the FP/FA title without an approved credential, or persons or entities presenting themselves as an approved CB without FSRA approval.
