Ontario to establish minimum standards for financial planner designations

This month, the Ontario government continues to move forward with new standards for people using the financial planner and financial advisor titles in the province. The key takeaway from the latest report from the Financial Services Regulatory Authority of Ontario (FSRA) is that those individuals currently using either title will not be “grandfathered” from the new rules that establish the minimum standards for their use.

Canada currently does not have any legislated national standard for those who offer financial planning or advice, thus anyone can call themselves a financial planner or advisor regardless of their designation, certification or educational background.

Last year, the Financial Professionals Title Protection Act was passed in Ontario to enhance oversight of qualifications and credential being used in the financial services sector. The government appointed FSRA to develop the specific rules and decide which designations would qualify. This rule is expected to be finalized by 2021.

Minimum standards will not require a credential that has an educational component related to financial planning, such as retirement planning, estate and tax planning, technical knowledge and ethics. FSRA’s recent report advised that individuals will have three years after rule implementation to acquire any credential or educational requirement needed to use the title of financial advisor; and five years for the “financial planner” designation. The complete list of designations that will be approved under the rule is still being finalized.

One of the most widely known credentials is the certified financial planner (CFP) designation administered by the professional body FP Canada (formerly the Financial Planning Standards Council). More than 16,900 people in Canada hold it, about 9,000 of them in Ontario. FP Canada believes that their designations will be approved under the new FSRA rule and will help to remove confusion around the use of these titles, especially the distinction between advisor and planner.

As the regulatory momentum continues to move in the direction of minimum standards, it is all the more important for new and existing practitioners in financial services to begin getting their QAFP and CFP designations.