Quebec regulators are giving a thumbs down to a proposal to create a professional order to oversee the work of financial planners in the province.

The idea is being promoted by the Institut québécois de planification financière, an organization that trains and grants diplomas to financial planners.

The Institut argues that an order, like the ones that supervise doctors, and lawyers, is needed to improve protection for an investing public whose confidence has been shaken by a series of scandals.

In response to the Institut’s proposal, the ffice des professions du Québec, the provincial agency that oversees professional orders, held a public consultation in the fall on how planners should be regulated in the province. The office could decide to recommend the government create a professional order.

That won’t happen if the self-regulating organization that currently supervises planners has its way. The Chambre de la securité financière has come out strongly against the idea, contending financial planners are adequately supervised and the public would be hurt, not helped, by the creation of another regulator in the province.

Quebec’s senior regulator, the Autorité des marchés financiers, has also questioned the need for an order.

Currently, financial planners must obtain a diploma from the Institut and be licensed by the AMF. They are disciplined for ethical and professional infractions by the Chambre, which also regulates mutual-fund representatives and insurance agents. Quebec is the only province in which financial planners must obtain a licence.

In all, the Chambre has 31,000 members, of which 4,750 are financial planners. About 500 financial planners are members of other professional orders, including chartered accountants, certified general accountants and notaries.

Jocelyn Houle-LeSarge, executive director of the Institut, insists there is a need for an order specifically for planners, pointing to surveys showing solid support for the concept among both planners and the public.

A recent Léger Marketing poll commissioned by the Institut found 81% of financial planners favour the creation of an order “whose first mission is to protect the public.”

Houle-LeSarge says her organization has also polled Quebecers a number of times in recent years on the idea and has had a positive response from about 80% of those surveyed each time.

The public is ill-served by a regulatory regime in which some planners are answering to as many as nine bodies including the AMF, the Chambre, the Institut and various other professional orders, she says.

Houle-LeSarge argues that financial planners need their own order administered by their peers rather than a body that’s responsible for several categories of financial professionals of which planning is just one.

“This will be specifically for financial planners and it will be the application of a code of ethics and rules and regulations designed specifically for them.”

She suggested that the Chambre’s opposition to the order is motivated by a desire not to lose planners for its membership.

But the Chambre argues the creation of another regulator would hurt the public interest by creating confusion about the roles of different regulatory bodies.

In a brief to the Office des professions, the Chambre notes that all but 9% of the financial planners in its membership hold other licences, permitting them to sell, for example, mutual funds, securities or insurance.

The creation of an order would fragment regulation of these representatives, creating confusion and costs for the public, the Chambre argues, noting planners are already subject to its code of ethics and a disciplinary system.

“The Chambre believes that the current regulatory framework is best suited to ensuring public protection and that fragmenting the current model would damage this protection,” the organization said in its brief. “The Chambre has searched in vain for reasons justifying the creation of a professional order for financial planners on the grounds of public protection.”

The Chambre goes even further in the brief, suggesting that it, and not the Institut, should have responsibility for delivering continuing education to planners as is the case with other categories of professionals it oversees.

In an e-mail, Chambre executive vice president Luc Labelle says he and the organization’s president made a tour of Quebec’s regions in the fall and found financial planners “did not appear to know what this ‘ordre professionel’ project was really about, but they did not look supportive of the idea.”

In a letter to the president of the Office des professions, AMF head Jean St-Gelais also poured cold water on the idea of an order for planners.

@page_break@“Our principal conclusions are the following: defining financial planning raises difficulties and is a considerable challenge; the current regulatory framework…appears to us to be adequate.”

The Office des professions is currently studying the briefs it received during the public consultation and has not said when it expects to issue a report. IE