The vast majority of Ontarians believe, contrary to fact, that the title “financial advisor” is regulated and requires some kind of professional accreditation, according to survey results published Thursday from the Toronto-based Financial Advisors Association of Canada (a.k.a. Advocis).
Only 24% of survey respondents knew that anyone can charge for financial advice, regardless of training (though a licence is required to sell financial products). This puts investors at risk of trusting their livelihoods to unscrupulous actors, or of simply taking poor advice from under-qualified advisors, Advocis says in a news release.
The survey also found that people under age 30 and those with lower incomes place the highest trust in their financial advisors.
“For years, we’ve recognized the dangers that lack of title protection presents for the financial wellbeing of hard-working families seeking professional financial advice,” Greg Pollock, Advocis president and CEO, says in a statement. “This survey proves there is a tremendous amount of misplaced trust in the market, and reinforces just how badly new regulations are needed to protect the public.”
An overwhelming majority of respondents (91%) said they would support provincial government legislation to regulate the title “financial advisor,” and 80% said financial advisors should be held to a mandatory code of professional conduct.
“All Ontarians deserve to know their money is in the hands of true professionals, who are qualified to help them meet their financial goals,” Pollock says. “The time has come to legally recognize the provision of financial advice as a profession and to oversee financial advisors as we do all other professionals who provide essential advice and services.”
Advocis is urging Ontario’s new government to take action on the survey’s results. Namely, it is calling for a system in which any financial advisor is “required to be a member of a professional governing organization and adhere to a common code of professional and ethical conduct, maintain mandatory professional liability insurance, complete ongoing professional development, and commit to a fair and impartial disciplinary process.”