It was about five years ago that Greg Pollock, president and CEO of Advocis, as well as other members of his executive team made two disappointing discoveries.

When they cross-referenced some numbers, they found that 70% of Canadian financial advisors had not earned either their CLU or CFP designations. And at the same time they learned that after four years of being a licensed advisor, 70% had left the industry.

“So we said to ourselves collectively: in our view, we’re doing something wrong.”

Found significant gaps

Advocis believed all the technical knowledge advisors needed could be found in both the CLU and the CFP designations – but there were other significant gaps.

While advisors learned the fundamentals of compliance when they became licensed, there is a lot of information not dealt with regarding directives that come from regulators like the MFDA, IIROC, securities commissions and provincial insurance commissions.

Also missing – but needed – was greater detail on an advisor’s professional obligations, such as learning whether they were in an ethical dilemma and how to handle it.

Then there is a major part of any advisor’s career – how to build their business. Many advisors feel challenged in terms of how to build a successful practice, including how to write letters of introduction to prospective clients and how to develop a client base.

“Our view was that if these advisors are not building successful businesses and delivering financial and planning advice to their clients, then they’re not doing what they set out to do and that doesn’t serve any investors well across the country.

Practice management

“That whole area of practice management is part of becoming a professional and we need to assist them in that regard and that’s going to be very critical as we go forward.”

About a year ago, Advocis put together a pilot program on a new designation called the Professional Financial Advisor (PFA) that took into account more compliance, professional obligations and how to build a business.

The PFA goal is to get advisors in their first five years of their careers to help them develop career habits to better serve both them and their clients.

PFA designation holders receive advanced standing for nine of the 12 core curriculum modules, not only for the CLU designation program, but also the newly announced FP Canada designation of QAFP as well as the CFP certification.

Program offered online

The program is online but also includes video tutorials and one-on-one assistance for groups or individuals.

The cost for the PFA program is about $1,000 for Advocis members and $1,500 for non-members.

Pollock says the Ontario government’s proposed legislation to restrict the use of financial advisor titles had nothing to do with the new designation. He is not sure whether the PFA will be one of the recognized credentials from the Ontario government, “but my sense is that it will be because of the breadth of the program.” Pollock expects the province’s final legislation to come out in the fall.

In the meantime, registration for the first PFA program closes March 31. Pollock points out that if people have not registered by that date, they will have to wait until the next cohort, which will probably not be until the fall.

Pollock is hopeful about the success of the new designation. “Over the years if we put 500-600-700 individuals through each year we’re going to build a very robust database throughout the country.”