The Financial and Consumer Services Commission of New Brunswick (“FCNB”) released a consultation paper on a framework for the protection of the financial planner and financial advisor titles used by financial professionals. The existing proposals in Ontario and Saskatchewan are noted, as well as the fact that Saskatchewan will have different penalties and enforcement provisions for people who use protected titles without authorization. Saskatchewan will also have a process for approving credentialing bodies that have already been approved in another province. The FCNB is seeking feedback on a number of questions, including whether New Brunswick should follow the framework in Ontario and Saskatchewan. It also asks if it should adopt enforcement powers similar to those available in the Saskatchewan legislation, and a simplified method for approving credentialing bodies already credentialled elsewhere in Canada. The FCNB is also considering setting out a list of prohibited titles as is currently the case in Québec, including titles such as “financial consultant” and “private wealth advisor” which are considered to be confusing to the “financial planner” title. In contrast, Ontario’s FSRA has set out a list of examples of potentially confusing titles.
Overview of the Council’s Comments:
The CAC supports the frameworks adopted in the provinces of Ontario and Saskatchewan, which will create minimum standards that entities will have to meet to obtain approval as a credentialing body, as well as to obtain approval for an acceptable financial planner or financial advisor credential. Harmonization of resulting regulatory regimes is important in order to reduce regulatory burden and enhance compliance. The CAC supports provisions for any framework that would provide reciprocity for credentialing bodies that have already been recognized in another jurisdiction. When the fees for any such framework are being developed, it will be equally as important to recognize the fact that credentialing bodies may operate throughout the country and thus may be subject to other provincial fees relating to title protection regulation.
The CAC believes New Brunswick should follow the rules as set out in Québec with respect to the identification of titles that could reasonably be confused with the financial planner or financial advisor title. Additional guidance on examples of confusing titles would be beneficial for both industry and investor advocates. When setting out parameters to avoid confusion in the marketplace, the FCNB should provide additional guidance while retaining flexibility to undertake enforcement measures against those persons intending to deceive the public through clever title usage and intentional regulatory avoidance.
With respect to any transition periods that would permit individuals to continue to utilize titles for a period of time after any framework is adopted, the CAC encourages the FCNB to keep such periods as short as possible and believes that that a two-year transition period for each title should be more than sufficient. The CAC highlighted that it is important that consumers of financial advice and financial planning understand the purpose of the credentialing regulation and process, the recognized credentials, and permitted use of titles. The FCNB and other similar regulators should be responsible for such educational initiatives for consistency in messaging and implement frameworks that include measures for reciprocity to reduce regulatory burden, including application fees, relating to the application process for credentialing bodies and recognized credentials in multiple jurisdictions.