Ontario proposing to regulate "financial planner" and "financial advisor" titles | General financial discussion | Discussion forum

I may be incompetent by the time meaningful change actually takes place. These consultations take forever, proposals get watered down, and political interference (as already done by Ford resulting from Bay St pressure) will prevent the most meaningful proposals from taking force.

The answer as to how this will play out may have to do with where the impetus for doing it is coming from.

Is it coming from the Ford gov't because the current regulators are getting a large number of complaints and they can't act, and the gov't is afraid the Opposition will run with this issue, so they need to be seen to be doing something about it?

Or is it because the lobbyists from the major financial institutions, who are many and persistent, and from the existing professional bodies (note the position taken here https://fpassociation.ca/) have convinced them that they should do so? The motivation from the banks etc would be in order to protect their turf from smaller and even less scrupulous agents and encourage people to trust them more.

I would hazard a guess that it's more the latter than the former which is motivating this. The process of professionalization in various fields of endeavour has been well studied by sociologists. I remember learning about it in undergrad decades ago. These folks are on track. The professional bodies always want to get ahead of the issue as it enhances their importance, supports higher incomes for them, encourages public trust, etc.

I remember a few decades back when the professional nursing bodies decided that all Registered Nurses should have university degrees. This was opposed by much of the membership, and the professional organizations did not initially get what they asked for, but they persisted and they won. Doe it make for better nurses? Not necessarily, but it makes for better "qualified" nurses.
You can see this kind of progression in many professions. Long ago, in Ontario, there were two routes to becoming a physician or even a veterinarian. You could go to medical school somewhere, usually abroad, or you could apprentice to a local physician. That choice would be unimaginable today. Such changes usually take place in the first instance to protect the status and integrity of the better qualified professionals, and, secondarily, to protect the public from charlatans.

The only change that would make any difference is if these people had fiduciary responsibility and meaningful penalties for offenses. It may get there, eventually, but not necessarily before AltaRed has to pack it in!

I didn't read the exact legislation, but the summary sounds to me like they do intend to "limit" the use of these designations to those who have "credentials" acceptable to them. That is a clear step in the professionalization process, especially as it is intended that the current professional organizations will be responsible for determining who qualifies, once the gov't agrees.
Another aspect of the professionalization is that those who hold these designations will have to pay a fee. It is very unlikely this will be reimbursed by employers. It's the same for all professions I know of. And you can be sure those fees will increase regularly. What is unusual about this one is that the fees ultimately go to the government.

So I think the impetus is coming from a combination of the larger FIs and the professional associations, with the goal of increasing consumer confidence without really changing anything significant. It is completely in synch with the professionalization process.

These new standards clearly do not include fiduciary responsibility. Even the financial plan is only required to be "suitable", according to the magazine article. It doesn't have to be a great plan or arguably the best plan for the individual; a C+ quality plan will be as good as an A+ plan, the problem being that you won't know which one is which. There is an old joke in the medical field that applies: "What do you call the person who came in last in their class in medical school?" Answer: "Doctor".

The intention is probably to weed out some independents or small firms and to enhance the credibility of existing salespersons. As with the nurses, it won't necessarily mean you get somebody who knows more or is able to give better informed advice. It will be the same people doing essentially the same jobs with basically the same qualifications in most cases - but it will look better (they hope).

Anyone who, for some reason, doesn't meet the new "standard" will quickly get a new set of business cards, designating themselves "financial planning consultant" or "financial services executive" or "financial products professional" or whatever they like. The banks will ensure that all their people have the designation as a condition for new hires, and nothing will happen that they haven't approved.
And you and I can take a nap and then go back to business-as-usual, looking out for ourselves.

It would require a much bigger overhaul than this to protect consumers.

These provisions are designed to ensure those using "financial planner" and "financial advisor" have met some minimum standards, that consumers can have a degree of confidence to that effect, that's all. I think we all get that risk has not been completely eliminated, but even a small improvement helps.

To me, "looking out for ourselves" to some degree is a good thing to promote, certainly happy to take on that job when I was old enough.

That's a hoot, Norman. Thanks for finding it.
I've always wondered how the banks could possibly have so many VPs - especially as they seem to have no particular responsibilities as such. I wondered where was the boardroom that could accommodate them all.
Clearly the major intention is to impress the customer so as to justify the fee they charge and the terrific incomes they enjoy. All the VPs I've run into charge a percentage of assets annually and their portfolios appear to be boiler plate.

During my recent difficulties with RBC, a friend offered to ask their guy at RBC if he could help. He pointed out that he was a "Vice-President". I declined, precisely because I couldn't believe this title was worth anything.

It reminds me of something some friends of mine did years ago for a joke. They had formed a very informal soccer team and decided to get themselves team T-shirts. On the back of every T-shirt, the number "1" was prominently displayed.

More seriously, Quebec has been in the forefront on consumer protection ever since I can remember, so it is not surprising that they are trying to be so thorough. But I fear it's like dandelions in Spring. No matter what you do, there will always be a new crop next year.

He would have been on the Securities side, I'm sure. The reason my friend knows him is because he manages their money. He's one of those guys to whom one pays an annual fee to do so, for "high net worth individuals"

Great idea Doug, but, like you say, ain't gonna happen. The lobbyists would never allow it, and no government of any stripe would be willing to go against that block to this extent.
I don't think there are enough people in the industry who could pass the CFA. I know less about CIM. (A lot of them aren't too bright.)

But it raises an interesting question. Why do people who are really salespeople need to be called anything other than salespeople? The jobs of salespeople could be retained but they wouldn't have as much to do. They could still be responsible for explaining the product(s) and taking orders/applications, but without the editorializing.