With the world recovering from an unprecedented financial crisis and the recent spate of rogue financial “advisors,” the financial services industry is under increased scrutiny. Being under the microscope, this industry needs to re-examine its continuing education standards for financial advisors and planners.

The doubts being raised about financial advisors’ and planners’ competence are well known. Doubts are demonstrated through a seemingly endless barrage of questions about advisors. Can consumers trust advi-sors with one of the most important aspects of their lives — their finances? Can financial advisors and planners truly serve their clients’ needs in a way that ensures the public is protected? How much knowledge about financial services products and services do financial advisors and planners really have?

Financial advisors and planners find themselves being questioned, and pressure is building on policy-makers to scrutinize the education provided to the financial services industry. At the same time, advi-sors and planners know the value they provide their clients, day in and day out. In order to demonstrate that value to regulators and designation-granting bodies, it is absolutely essential that advisors and planners participate in current and relevant CE activities. These activities should help meet practice needs and the requirements established by regulators and designation-granting bodies.

The words “current” and “relevant” need to be stressed when discussing CE because almost every advisor and planner has participated in programs in which the content was not current, relevant or even ethical. All too often, these programs are little more than entertainment or recreation, a sales promotion or motivational in nature. It is not surprising that these types of programs are never submitted for any kind of impartial review to ensure educational value. Programs that just don’t measure up end up wasting money and time for participants. And, even worse, they do nothing to help advisors better serve the Canadian consumer.

All this being said, there are some high-quality CE programs available; however, the need for a debate regarding the quality of CE remains. Even with the existence of some high-quality CE in Canada, and the numbers of advisors and planners who have higher levels of education today than ever, our industry needs to ensure that all CE is appropriate for participants. For instance, CE must reflect regulatory changes that affect the financial advice provided to the consumer. Ensuring that CE of this kind is available and recognized would have the effect of helping advi-sors and planners maintain and build on their competency. It would also provide a robust defence against criticism of the financial services industry’s educational standards.

One key element for upholding education standards for CE is accreditation. Indeed, accreditation for financial services CE needs to serve as a basis for improving CE quality. How does accreditation ensure that CE is current and relevant?

First, industry practitioners need to be engaged in the development and validation of practice guidelines for financial advisors and planners that take into account the variety of requirements facing them. These guidelines need to be vetted by industry practitioners to provide CE reviewers with criteria for making decisions and confirming the educational quality of a program.

Second, once CE programs are completed by participants, a report should be issued to attendees that helps them attest to meeting CE requirements. This report should provide clear evidence to regulators and designation-granting bodies of the knowledge, skills and abilities targeted in the CE program. In turn, this will help advisors and planners with their compliance responsibilities by providing clear, defensible proof of what a given CE program delivered. Advisors will then have greater ease proving to regulators and designation-granting bodies that they have participated in high-quality CE. For instance, in the context of an audit, advisors will be able to provide clear documentation to demonstrate the appropriateness and value of the CE they have taken.

Third, an independent body to provide oversight on the direction for CE accreditation is essential for there to be valid, reliable and fair practice guidelines and criteria. The independent body must be divorced from any industry associations (including Advocis) to eliminate any conflicts. In doing so, this independent body will ensure that practice guidelines continue to meet advisors’ and planners’ needs while maintaining a clear standard of educational quality. This will be challenging but necessary in an atmosphere in which advisors and planners have evolving needs and face a variety of CE requirements.

@page_break@This framework should serve as the basis for CE accreditation in Canada. In the context of the larger debate on quality of CE in financial services, the need for impartial third-party review is essential to raising the bar and mitigating criticism of our industry. IE



Taylor Train is chief operating officer of the CLU Institute. He has worked in the financial services industry for more than three decades.