Unqualified reps won’t be able to use alternate spellings, abbreviations or other variations to get around new rules that will restrict the use of financial planner and financial advisor titles, says the Financial Services Regulatory Authority of Ontario (FSRA).
FSRA issued new guidance Monday on its proposed regime for regulating the use of the planner and advisor titles in Ontario. The new guidance covers the use of regulated titles and similar titles that could be confusing, as well as the credentialing bodies that will supply educational qualifications.
The guidance sets out FSRA’s proposed approach to unapproved use of restricted titles. The new regime will give the regulator enforcement authority over individuals who use the regulated titles without an approved credential.
FSRA said it will accept complaints from both consumers and the industry about improper title usage, and that it will be able to take action such as issuing a compliance order.
Credentialing bodies will also be expected to report instances of individuals using titles without an approved credential to FSRA “as soon as practicable,” it said.
In addition to improper use of regulated titles, the agency will also look into the use of titles that could “reasonably be confused” with the restricted titles. The guidance sets out examples of potentially confusing titles, including any alternative spellings (such as financial adviser instead of financial advisor), abbreviations (such as FP instead of financial planner) or the use of added words (such as senior financial planner, financial planning coach, or financial wealth advisor) that could mislead investors.
“In making a determination, FSRA will consider the goal of increasing consumer confidence in individuals who provide financial planning and advising services and ensuring that only qualified individuals use the FP/FA titles,” it said.
At the same time, the guidance stresses that the new rules are focused on regulating title usage but that they do not give FSRA authority to oversee the conduct of advisors and planners who use the titles — that job falls on the organizations that grant and administer qualifications.
“Complaint handling in relation to title users who hold an approved credential is the responsibility of the approved [credentialing bodies],” it said.
Apart from overseeing the use of titles, FSRA will also have authority over approved credentialing bodies and organizations that claim to supply valid credentials without approval.
FSRA noted that it’s already in discussions with organizations that “have expressed interest in applying as a credentialing body.”
To obtain approval, it said that entities must have “robust controls to ensure that only qualified and competent individuals are granted and allowed to hold a credential.” Those controls include a process for assessing the ongoing suitability of a rep in the event of enforcement action by a regulator or other credential provider.
Approved providers must also have policies and procedures in place to oversee the conduct of their credential holders, including a process for investigating and adjudicating complaints about non-compliance; and they must have a process for sharing information about complaints and enforcement action with regulators and other providers.
Credential providers will also be expected to provide public disclosure about their credential holders and any disciplinary action taken against both current and former credential holders.
In overseeing credential providers, FSRA’s supervisory processes may include issuing warnings and caution letters, requiring remediation plans or imposing compliance orders.
“If efforts of remediation fail, FSRA has the authority to revoke a CB’s approval,” it noted.
As part of its enforcement efforts, FSRA also intends to establish a public registry that will list approved title users and the body that granted the credentials.
The registry will help consumers verify that the financial advisor or planner they’re considering or already working with holds an approved credential, FSRA said. It will also list the credentialing body from which the credential was obtained and could also include links to additional information on credential holders.
The final rules for establishing the new regime were submitted to the Minister of Finance for approval in January. Once the rules are approved and legislation has been proclaimed, the new guidance will take effect.