The Financial Services Regulatory Authority of Ontario (FSRA) announced the publication of its first title protection-related supervisory plan that is focused in particular on the key areas of supervision it will have going forward for approved credentialing bodies in the province.
"When people invest their life savings or are planning for retirement, they need to know that their financial planner or financial advisor is putting their interests first," says Huston Loke, executive vice president, market conduct at FSRA. "I am confident that the supervision plan we are releasing today will lead to higher industry standards, enhanced consumer protection and increased confidence that financial professionals are helping their clients plan and achieve their financial goals."
The four key areas of supervision FSRA intends to focus on include the putting clients’ interests first principle, resources stress testing, complaints handling and disciplinary processes.
“Through supervision, FSRA may also assess a credentialing body’s readiness for potential future enhancements under the Financial Professionals Title Protection Framework and identify where credentialing bodies are not meeting minimum standards,” they write. “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.”
They add that focussing on the four key areas will “help FSRA assess how well approved credentialling bodies are adapting as regulated entities,” while a focus on stress testing will “ensure credentialing bodies have sufficient staffing and adequate resourcing.”
The supervisory tools it intends to use include examinations of credentialing body business practices and annual information returns (AIR) designed to collect information about business practices, internal controls and market conditions for the previous calendar year. FSRA launched its first annual AIR effort for approved credential providers in January 2023.
FSRA’s plan states that the regulator will publish the aggregated results of its examinations and the relevant supervision findings to identify trends and opportunities for improvement, along with any best practices or shortfalls observed.
Currently there are approximately 17,0000 credential holders permitted to use the financial planner and financial advisor titles in Ontario. The four organizations currently issuing qualifying credentials that are affected by the supervisory plan include FP Canada, the Institute for Advanced Financial Education (IAFE), the Canadian Securities Institute (CSI) and the Canadian Institute of Financial Planning (CIFP).
