What’s in a title? More than you know.
Is your financial advisor qualified to give you advice? You shouldn’t have to wonder.
By Greg Pollock
A young family turns to their physician, who they know is regulated in their province, for their family’s medical needs. They are confident in their choice because they know the title “Medical Doctor” is a protected title, and not just anyone can use it.
They turn to their lawyer, who they know is regulated in their province, to help close the deal on their first home. They are confident in their choice because they know the title “Lawyer” is a protected title, and that not just anyone can use it.
They then turn to their financial advisor, who they assume is regulated in their province, to help them build a plan for their child’s education. However, unlike the other professionals that they have come to rely on for advice, anyone can call themselves a financial advisor, regardless of their qualifications.
This leaves Canadians like that young family at risk, and we believe that it’s time for our provincial governments to take action.
In polls commissioned by Advocis in five provinces across the country between October 2018 and March 2019, it was found that on average, half of respondents believed that the title Financial Advisor was already protected in their province.
When confronted with the reality that this was not the case, over 80% believed that a professional code of conduct for financial advisors should be mandatory for all financial advisors. Most importantly, nearly 90% of respondents expressed support for legislation protecting the title of financial advisor.
For over a decade, Advocis has made it clear to governments and regulators across the country that a lack of title protection for both financial advisors and financial planners presents a serious risk to the financial health of hard-working families seeking professional financial advice.
The 13,000 members of Advocis must adhere to a code of professional conduct, continuing education requirements, best practices, and a disciplinary process. However, membership in a professional association like Advocis is purely voluntary. In order to appropriately protect consumers and maintain high standards, we believe that all financial intermediaries providing advice should belong to a recognized profession.
We were pleased that, in his first Budget, Ontario Finance Minister Vic Fedeli committed to moving forward with legislation – namely “The Financial Professionals Title Protection Act”. The Act would require individuals using the titles of financial advisor or financial planner to have an appropriate credential and be overseen by a recognized credentialing body. With the provincial Budget having recently received Royal Assent, Ontario has become the first province, outside of Quebec, to take action on consumer protection.
The restriction of key titles to individuals with qualifying credentials will go a long way in elevating the trust and stature of financial advisors and financial planners as true professionals. More importantly, it ensures that families can be confident in their choice of financial advisor or financial planner, as not just anyone will be permitted to use these titles.
Now that Ontario has taken this long-awaited action, we will work hard to encourage other provinces to adopt a similar approach.
Because at the end of the day, Canadians deserve to be confident in their choice of professional when it comes to their medical, legal AND financial health.
Greg Pollock is president and CEO of Advocis, The Financial Advisors Association of Canada.