IIAC comments on FSRA’s proposed title regulation
The Investment Industry Association of Canada (IIAC) has submitted and published its comments made to the Financial Services Regulatory Authority of Ontario (FSRA) regarding FSRA’s proposed rule and guidance about minimum standards for the use of financial planner (FP) and financial advisor (FA) titles.
In its submission, the IIAC says FSRA should consider issuing guidance to clarify the titles that the Financial Professionals Title Protection Act, 2019 is intended to address, pointing out that there are many titles used by industry registrants which might also be confused with the FP and FA titles. “Given the fact that many of these titles (investment advisor, estate planner or financial planning consultant are listed as examples) are generally accepted titles for IIROC (Investment Industry Regulatory Organization of Canada) registrants, we request that FSRA engage in additional consultation with the industry before such guidance is released,” the IIAC writes.
The association also notes some concern about FSRA’s competency profile, saying the profile does not adequately reflect the activities of persons who deliver financial plans. It adds that the competency profile would appear to blur the line between the roles and activities of an investment advisor and that of a financial planner, and requires in other cases, technical knowledge of tasks that advisors in an IIROC firm would not undertake.
“We believe that Table 2 (competency profile) needs to be re-evaluated,” they write. “We would suggest that FSRA review IIROC’s recently released consultation IIROC Notice 20-174 Consultation Paper – Competency Profiles for Registered Representatives and Investment Representatives, Retail and Institutional. These profiles capture the general knowledge advisors should have when initiating and maintaining client relationships, the specific regulatory obligations they should have an in-depth knowledge of, and the technical knowledge they should have in order to fulfill their responsibilities. While IIROC’s competency profiles may not be directly applicable to, for example, MFDA (Mutual Fund Dealers Association of Canada) registrants, we believe it is a useful tool when reexamining Table 2 to ensure it adequately reflects the proficiencies a financial advisors should have and which ones should be included.”
In addition, the IIAC says it supports FP and FA title users disclosing their credentials, but warns against adding additional disclosure requirements. It also suggests FSRA consider developing a service that members of the public can access to verify an advisor’s background, qualifications and disciplinary information.
Finally, the IIAC also requests that FSRA consider an exemption for IIROC and MFDA registrants, arguing that the rule will create duplicative oversight and unnecessary regulation for market participants who are already governed by a self-regulatory organization (SRO). It also calls on FSRA to be more specific about its fee structure. “The IIAC would like greater detail before providing comments,” they write. “When considering the details, we wish to highlight the importance of keeping fees low or providing a reduced fee to those SRO registrants currently subject to SRO fees.”
FSRA says interested persons are invited to make written representations with respect to the proposed rule on or before November 12, 2020.