The Institute of Advanced Financial Planners (IAFP) has submitted a formal response expressing several concerns with the Financial Planning Rule proposed by the Investment Industry Regulatory Organization of Canada (IIROC).

In a letter to the IIROC, the IAFP calls the definition of the Personal Financial Planning Process far too narrow under the proposed rule. The institute argues that it is fundamentally wrong to determine that any planning directed at making investment recommendations is not financial planning and should be exempt from the rules regarding practitioner qualifications as well as oversight and control of the financial planning process.

The IAFP says it will not support a situation where a dealer, who has a vested interest in meeting investment or product quotas, controls a solution that will be presented to the consumer.

The institute says that implementation of a financial plan may involve recommendations and activity that the planner’s regulator or dealer has no capacity to evaluate. A member dealer’s business is product-oriented, but the IAPF argues that financial planning is the process of developing measurable steps to achieve defined financial objectives.

The proposed policy seems to necessitate dealer involvement in invoicing the client even though the member dealer’s name may barely be known to the client since no “investment implementation will transpire,” the IAFP argues.

A member dealer has a right only to client information necessary to establish the suitability of an investment recommendation for client and yet the client has a right to privacy of information provided to their financial planner in the development of many other far-reaching recommendations, the IAFP says.

The IAFP says it fully supports the recommendation that a member dealer ensures the provision of financial planning services is only undertaken by a person who holds a recognized financial planning designation.