IFIC proposes four titles for advisors

The mutual fund industry trade group support’s the CSA’s proposed ban on titles that are based on sales activity

By: James Langton
September 14, 2018 November 13, 2019
15:50

With regulators contemplating reforms to clear up the confusing array of advisor titles that may mislead clients, the Investment Funds Institute of Canada (IFIC) on Friday offered the Canadian Securities Administrators (CSA) its recommendations on title reform.

In its submission, IFIC recommends requiring securities registrants to use titles that reflects the service and advice being offered and is understandable to the average investor.

“IFIC believes that determining consistent, clear titles for registrants will improve investor understanding of and confidence in the investment funds industry,” says Paul Bourque, IFIC president and CEO, in a statement. “The objective of our proposal is to proactively offer the industry’s practical suggestions on how to create clarity for consumers in this challenging area.”

In its submission IFIC proposes using just four possible titles depending on an advisor’s and their dealer’s registration and planning qualifications. They are:

financial planner, for advisors with recognized financial planning credentials;
securities advisor, for advisors registered with investment dealers;
investment funds advisor, for advisors with mutual fund dealers; and
portfolio manager, for investment dealer portfolio managers.

IFIC supports the Canadian Securities Administrators’ (CSA) proposals, as part of the client-focused reforms, to ban advisors from using titles and designations that are based on their sales activity, the submission states, or from using corporate officer titles (such as the ubiquitous use of vice president in the industry) unless they actually qualify for the title under corporate law.

IFIC recommends that the CSA carry out consumer testing to ensure that regulated titles are “readily understood by retail investors.”

It also recommends that the ultimate approach to title reform be adopted across the financial industry, not just in the securities sector.

“We believe that consistent titles across the financial services sector are attainable and will result in consumers having a better understanding of the services provided by the individuals with whom they work,” IFIC states.