Designations still a contentious issue

2001 Brokerage Report Card

Designations – who has what

Earned designations (% of advisors surveyed)
 	CFP	PFPC	CLU	CIM	RFP	CFA	FCSI	CA
BMO Nesbitt	22.5	12.5	—	2.5	2.5	5	2.5	5
Canaccord Capital	35	22.5	5	—	—	—	—	—
CIBC Wood Gundy	12.5	17.5	2.5	20	2.5	5	5	7.5
Edward Jones	12.5	15	—	—	—	—	—	—
Merrill Lynch	35	7.5	—	—	5	—	—	—
National Bank	17.5	7.5	—	2.5	—	15	—	2.5
Raymond James	10	15	—	15	—	5	7.5	2.5
RBC DS	25	10	2.5	7.5	2.5	—	10	5
ScotiaMcLeod	7.5	10	7.5	7.5	2.5	5	2.5	5
TD Evergreen	20	15	7.5	12.5	7.5	2.5	15	2.5
 
Working on designations (% of advisors surveyed)
 	CFP	PFPC	CLU	CIM	RFP	CFA	FCSI	CA
BMO Nesbitt	10	7.5	—	—	2.5	5	2.5	—
Canaccord Captial	2.5	10	—	—	—	5	—	—
CIBC Woody Gundy	5	5	—	—	—	2.5	—	—
Edward Jones	15	25	—	5	—	—	5	—
Merrill Lynch	2.5	2.5	2.5	2.5	—	2.5	2.5	—
National Bank	5	2.5	—	2.5	—	—	—	—
Raymond James	5	—	5	5	—	2.5	—	—
RBC DS	2.5	5	—	2.5	—	—	—	—
ScotiaMcLeod	–	5	—	5	—	5	—	—
TD Evergreen	5	7.5	2.5	—	—	5	5	—
SOURCE: INVESTMENT EXECUTIVE RESEARCH

Having some letters after your name is becoming a necessity: your clients look for it and a growing number of firms are requiring it. The only choice seems to be deciding what courses to take and which designations to earn.

In this year’s survey of more than 400 advisors nationally, the certified financial planner designation granted by the Financial Planners Standards Council and the professional financial planning course given by the Canadian Securities Institute ran neck-and-neck in popularity. This is a clear sign that educational standards have risen in the industry.

However, some brokers argue that experience sets its own standard.

“[Designations] are a bunch of hooey,” says a ScotiaMcLeod Inc. broker in Vernon, B.C. A colleague in Mississauga, Ont., says, “If [ScotiaMcLeod] thinks that’s what I need to do a good job in the view of the clients, fine, but that’s not what mine want.”

But it is what head office wants. Although ScotiaMcLeod doesn’t have any firm policies, its brokers are strongly encouraged to earn a designation, says Linda White, head of training at the Toronto-based company.

ScotiaMcLeod offers several incentives, including reimbursement of course fees, an extra bonus that can range from $1,000 to $5,000 — depending on the designation — and time off work to study and write the exam.

“Clients want to deal with someone who is accredited,” White says. “A lot of our clients have their [Canadian Securities Course] and that’s entry-level.”

ScotiaMcLeod requires brokers to complete the CSI’s professional financial planning course — not to be confused with the personal financial planner designation granted by the Institute of Canadian Bankers. “All of our new people take the [planning course] through the securities institute, and an insurance licence is also a requirement,” says White.

At Canaccord Capital Corp., the Canadian Securities Course is also required, as is the successful completion of the conduct and practices handbook exam, and the professional financial planning course. Although not mandatory, the Investment Management Techniques course, offered by the institute, and an insurance licence are strongly encouraged and supported.

The other contentious issue concerning designations is that age seems to be a factor in determining whether a broker should have a financial planning designation. Brokers from ScotiaMcLeod, Raymond James Ltd., Canaccord and National Bank Financial Inc. all complain that the younger generation of advisors is required to be accredited, while experience is usually considered enough in the older crowd.

A Canaccord broker from Toronto offers a different perspective: “[Designations are] not particularly useful for my business. It’s good to know a bit but I find that specialization in this business is key. I take wealth-management calls and I refer insurance calls to our insurance specialist.”

A Merrill Lynch Canada Inc. broker in Penticton, B.C., who recently earned his CFP, says it was a waste of time studying for it. “If you have been in the business for longer than five years, you should already know the material,” he says.

Experience may exempt advisors from earning a designation but, as of February 2002, it will not excuse them from having a financial planning licence. The Canadian Securities Administrators proposed its financial planning proficiency rule this year. Unless advisors are grandfathered, anyone who offers financial planning advice must successfully complete the six-hour financial planning proficiency exam to get a licence. The rule will be enforced in all provinces except British Columbia, Alberta and Quebec.

“Advisors should always be trying to increase their knowledge and education,” says a Canaccord broker from Calgary. “The market is getting more complex and info-saturated. It’s really important to be up to date with the latest terms and trends.”

Brokers at RBC Dominion Securities Inc. agree. One DS broker in Etobicoke, Ont., says, “[designations] are a good benchmark for keeping everyone up to date.” Another from Halifax says she has found the education process useful: “I feel like I now have a global understanding of both the insurance and estate planning side of investing.”