Latest credential undermines title regulation, advocates say

The designation officially launched on Sept. 1, with the CSI saying it builds upon the existing Certificate in Financial Services Advice. Other designations that have received approval under Ontario’s regime (see below) were already established.

The move has investor advocates calling the new title regime misleading and “effectively a rubber stamp,” while the CSI says the DFSA raises the bar for the industry.

The CSI website says DFSA requirements include completing the Investment Funds in Canada course or Canadian Securities Course and being licensed as a mutual fund representative or registered securities representative. Both courses are provided by the CSI.

In other words, salespersons registered with the Mutual Fund Dealers Association of Canada (MFDA) and representatives registered with the Investment Industry Regulatory Organization of Canada (IIROC) readily qualify for the new credential.

The DFSA’s post-licensing educational requirements include courses from the CSI’s Certificate in Financial Services Advice. For IIROC advisors, the post-licensing requirement is the Wealth Management Essentials course, already required by IIROC.

“This new designation presents an unusual case as it appears to be substantively based on an individual’s registration with IIROC,” said Julia Mackenzie, manager of public affairs with IIROC, in a statement emailed to Investment Executive. “We are examining it closely.”

“A designation was created that is almost a perfect carbon copy of licensing standards and is effectively a rubber stamp,” said Jason Pereira, partner and senior financial consultant with Woodgate Financial Inc. and president of the Financial Planning Association of Canada. Advisors are now “literally paying” for their title, he said. (DFSA fees aren’t yet posted on the CSI website.)

Marie Muldowney, managing director of CSI, said in an email that the DFSA is meant to raise the playing field for advisors.

“We have worked closely with financial institutions in developing the DFSA, so that it meets the FSRA requirements, minimizes regulatory burden, raises the bar for advisors while at the same time making it efficient and cost effective,” she said.

CSI has offered the Certificate in Financial Services Advice for more than a decade and most Canadian banks endorse the certificate for their financial advisors, she said.

“In creating the DFSA designation, we leveraged this certificate’s body of knowledge while adding additional requirements such as adhering to a code of ethics on an annual basis and CE requirements.”

In an email, investor advocate Ken Kivenko, president of Kenmar Associates, asked, “How does a credential that basically mirrors existing registration requirements, approved for title protection, protect consumers? No value add.”

FAIR Canada echoed these sentiments.

“The idea that the title protection framework would protect consumers and raise the level of professionalism in the financial services industry appears to be dead,” said Jean-Paul Bureaud, FAIR’s executive director, in an emailed statement. “It’s clear now that almost anyone can call themselves a ‘financial advisor’ — all they have to do is be licensed to sell you a mutual fund or trade securities, take a rudimentary online course, and pass a multiple-choice exam within two years. […] Being able to sell a financial product does not make you a financial advisor.”

Bureaud added that FSRA’s approval of the DFSA designation “will lead to consumers being misled into thinking they are getting comprehensive financial advice, when in fact they are only being sold financial products.”

“We should all be concerned with where this is headed,” he said, adding that he hopes Saskatchewan and other jurisdictions “learn from the FSRA’s missteps.”

New Brunswick and Saskatchewan have title protection regulation in the works, with the latter currently consulting on greater proficiency for advisors that’s less product-focused. Quebec has regulated the financial planner title for decades and restricts other titles.

In an emailed statement, FSRA said the DFSA “is an increase in educational standards for title use,” and the regulator referenced the post-licensing requirements.

“A candidate is allowed to utilize the title for up to 24 months, and must complete additional education requirements within that time period,” FSRA said. “Failure to do so, means they can no longer use the title.”

Other title credentials

Earlier this year, the CSI’s personal financial planner (PFP) designation was approved for use of the “financial planner” title.

The DFSA designation brings the total of approved credentials for financial advisors to four, adding to Advocis’ professional financial advisor (PFA) and the Canadian Institute of Financial Planning’s registered financial and retirement advisor (RFRA) and registered retirement analyst (RRA).

Five designations have been approved for financial planners:

• FP Canada’s certified financial planner (CFP) and qualified associate financial planner (QAFP) designations
• The Canadian Institute of Financial Planning’s registered retirement consultant (RRC)
• Advocis’ chartered life underwriter (CLU)
• CSI’s personal financial planner (PFP)

When asked about submitting a proposal to FSRA to have mutual fund registration be sufficient to use the financial advisor title, the MFDA said it continues to “review and discuss FSRA’s initiative along with other similar title reform initiatives with provincial regulators.”

The MFDA said its ongoing review “includes considerations relating to the establishment of the new SRO [self-regulatory organization], which will be established Dec. 31, 2022.”