Industry reacts to Ontario’s financial planning proposalsBy Andrew Rickard | April 07 2016 01:42PM
IFB, FPSC, and Advocis have all published responses to the Ontario Expert Committee’s recommendations for the regulation of financial planning.
On April 5, Ontario's expert committee on financial planning released its policy recommendations. The Independent Financial Brokers of Canada (IFB) says that many of the committee's proposals are consistent with its own positions, such as restricting use of the title “financial planner” to those who hold appropriate credentials.
Leveraging existing system of regulators
“We are pleased that the Expert Committee has not recommended the creation of a new regulatory body”, says IFB's executive director Nancy Allan, “but has chosen to leverage on the existing system of regulators and self-regulators, as well as giving consideration to the recent recommendations made by the Expert Panel examining the mandates of the Financial Services Commission of Ontario, the Financial Services Tribunal and the Deposit Insurance Corporation of Ontario”.
The Financial Planning Standards Council (FPSC) also praised several of the proposals, including the use of title restrictions as well as the introduction of a unified set of financial planning standards. However, FPSC president and CEO Cary List warns that much depends on the details, and how the recommendations are actually implemented.
"Given that the Committee has recommended that the authority to establish universal standards be included in the mandate of the current regulators, if those recommendations proceed, it is imperative that the regulators work closely and cooperatively with FPSC as the national standard-setter for financial planning, to ensure that Ontarians are appropriately protected," says List.
Solution requires direct advisor involvement
Advocis was somewhat more critical and issued a press release suggesting that advisors should be involved in their own regulation. While the association agrees with the committee that there are gaps and inconsistencies in the regulation of financial planning in Ontario, it believes that any solution "needs to be holistic in nature with financial advisors directly involved in their own regulation, similar to other professions such as law and medicine".
Advocis is also uncertain of the way that the terms "Financial Planner" and "Financial Planning" have been used throughout the report in place of "Financial Advisor" and "Financial Advice." Advocis argues that all financial advisors are involved in financial planning, and says that "the language used going forward should reflect this point in order to avoid consumer confusion in respect to professional titles and duties."