The province of Manitoba is joining Quebec, Ontario, Saskatchewan and New Brunswick, in working to adopt title protection legislation that would prohibit people from using financial advisor (FA) and financial planner (FP) titles without qualifications or credentials.
The province released a consultation paper, giving stakeholders until September 30 to comment. Two organizations taking up the call to action included the Investment Funds Institute of Canada (IFIC) and the Independent Financial Brokers of Canada (IFB).
In addition to asking if Manitoba should proceed with legislative developments in the area, the consultation document asks if the rules should follow any already established in other jurisdictions. The consultation also contemplates matters of harmonization. (Similar legislation is in place in Ontario and Quebec, while New Brunswick and Saskatchewan have enacted legislation not yet in force.)
The IFB, which says its members have long supported a regulatory approach to restrict the use of misleading titles, says Ontario’s efforts may appear to meet the threshold of better protecting consumers, but they suggest that a deeper look “makes it apparent that there are a number of deficiencies which not only do not address the wider issue of misleading titles, but could create further confusion for consumers,” they write. “It is our view that Manitoba should not simply mirror the Ontario approach, but enact a more meaningful standard.”
They add that the fact the new legislation does not require a mechanism for consumer redress is a significant shortcoming. “Clients of licensed FPs and FAs have formal complaint mechanisms they can access. Clients of unlicensed FPs and FAs will not have this protection.” They add that it is perplexing that Manitoba would not require title users to carry errors and omissions insurance. “IFB recommends that title restriction legislation requires credential holders to be subject to both a mandatory continuing education and professional liability insurance (E&O) requirement.”
IFIC, meanwhile says it supports the appropriate use of titles which do not confuse investors, but adds that those approved persons already regulated by the Canadian Investment Regulatory Organization (CIRO) should be exempt from any additional regulation.
“CIRO oversees proficiency requirements and enforcement mechanisms that are comprehensive, consistent, and applicable nationally,” said Andy Mitchell, president and CEO of IFIC. “Any further regulation of the ‘financial advisor’ title for those regulated by CIRO would impose an unnecessary regulatory burden.”
Further, they say IFIC recommends the government’s consultation should focus on coordinating and harmonizing regulation of the use of the FP and FA titles in Manitoba with existing standards. “Activities which are regulated by CIRO should be exempt from further regulation in Manitoba.”
