In an environment of lower tolerance to risk, the rising expectations of Canada’s financial services employers and investors create strong momentum for change in the delivery of financial advice, according to Toronto-based Canadian Securities Institute (CSI).
CSI’s recent research shows that advisors who are among the first to adopt professional best practices will gain a strategic advantage in a fast-evolving industry, where some sectors are still largely dominated by a sales culture.
From June to September, CSI conducted a series of focus groups and personal interviews with a cross-section of financial services professionals and recognized opinion leaders. The objective was to gauge industry perceptions around the evolution of the financial advisor role, as well as financial education and credentialing.
“We are hearing over and over again that not only do advisors need to know more, but they also need to work harder to prove their credibility with more empowered clients and, even more so, with their employers who face a heightened compliance environment,” says Simon Parmar, managing director, CSI.
Professional credentials a must have in new advice landscape
Canadian investors expect more value and better service from their advisors, CSI notes.
“Clients — who can access much of the same information online as their advisors — are asking tougher questions. They want their advisors to understand their financial big picture, to interact with them in a more meaningful way and to add real value with their advice,” says Marc Flynn, senior director, regulatory relations and credentialing, CSI. “In this environment, recognized financial designations — above and beyond basic licensing requirements — are no longer a ‘nice-to-have’ for advisors who want to stay relevant to the needs of their clients. They are a ‘must have’.”
CSI’s research also suggests a strong impetus for change in raising the bar of advisors’ professional standards comes from financial services employers. Banks, securities firms and other financial services institutions expect professionals they hire and promote to have the right credentials relevant to their roles, as well as the specific needs of their clients, which are becoming increasingly diverse due to greater differences in culture, lifestyle, family structure, levels of wealth and life goals of Canadian investors.
Financial institutions see designations as risk management tool
According to CSI, a higher focus on credentials across financial services roles reflects a greater premium employers place not only on better client value, but, as importantly, on their own risk management process. With the markets remaining volatile, companies view financial designations as part of their internal system of “checks and balances” to ensure advisors not only deliver on increasingly complex and diverse investor expectations, but also operate in a professional and ethical manner.
CSI’s research also indicates that advisors can only maximize the value of their financial credentials in combination with other critical success factors — specialized knowledge, relevant experience, strong ethical standards, quality service and sophisticated relationship-building skills, allowing these professionals to establish trust and have meaningful dialogues with their clients.
CSI offers more than 270 courses, such as the well-known Canadian Securities Course (CSC), nine certificate programs, popular specialized designations, such as PFP, CIM, CSWP, MTI, and the Fellow of CSI (FCSI).