Canada’s portfolio managers recommend that the certified financial planner (CFP) designation should be adopted as the standard for those who want to call themselves financial planners — and that this can be overseen by the existing industry regulators.

The Portfolio Management Association of Canada (PMAC) says in its submission to the committee examining the possible regulation of financial planning in Ontario that individuals who offer financial planning should be regulated. In turn, the required regulatory framework should be developed co-operatively between the securities and insurance regulators, the self-regulatory organizations (SROs) and the Financial Planning Standards Council (FPSC), which administers the CFP designation.

PMAC argues in its submission that it’s not necessary to create a new regulatory authority to oversee financial planners: “Given the various regulated settings in which financial planners may operate, we don’t believe an additional regulatory body is required.”

To start, PMAC’s submission recommends that the use of the “financial planner” title should be restricted to those who hold a CFP designation. “Those individuals who have not been granted CFP status by the FPSC should not be allowed to call themselves or hold themselves out as financial planners.”

Beyond that, PMAC suggests that policy-makers should conduct an analysis of the regulatory framework to address any gaps in the current system; and that the existing provincial regulators, the SROs and the FPSC should then work together to determine the required nature and scope of regulation, utilizing the existing regulators as much as possible.

“The government, working with existing regulators and the FPSC, should ensure that standards for competency and business conduct are harmonized across all regulating entities, and that financial planners are required to hold an accreditation approved by the FPSC,” PMAC’s submissions says. “We also believe there should be a clear commitment to avoiding overlap and duplication of regulatory mandates, which would only further confuse clients, raise costs for the system as a whole and add no net new benefits for Canadian investors.”

In addition, PMAC stresses that this effort must not be limited to Ontario and that it should be adopted nationally. PMAC also opposes the regulation of pricing and compensation, but says that cost transparency, similar to what will be introduced next year under the second phase of the client relationship model (a.k.a. CRM2), should be required.

Finally, PMAC’s submission says the government should play a role in educating the public about the value of financial planning as part of its efforts to boost financial literacy. “We believe the government should stress the importance of objective, independent and tailored financial planning.”

The committee examining the issue in Ontario is slated to provide its recommendations for reform in this area in early 2016.