The revised proposed rule continues to establish approval criteria for credentialing bodies as well as approval criteria for financial planning and/or financial advisory credentials. Several amendments were made to the application guidance, including to specifically require applicant credentialing bodies to show their policies and procedures with respect to real or perceived conflicts of interest. Additional expectations are set out with respect to the curriculum of credentialing bodies’ credentials, such as a specific requirement for a financial advisor credential curriculum to provide an understanding of standard retail investment products. FSRA’s approach to supervision will include annual reviews of approved credentialing bodies. FSRA also expects that credentialing bodies will have a process in place to review the good standing of their own credential holders in the event regulatory action is taken by another credentialing or regulatory body. An appendix to the draft supervision guidance now provides examples of titles that FSRA considers could reasonably be confusing and those that would not likely be confused with the title of financial planner or financial advisor. The transition period for persons utilizing the title of financial planner or financial advisor without a recognized credential has been shortened to four years for the financial planner title and two years for the financial advisor title (from the date the rule comes into force, and only if the title was already in use as of January 1, 2020).
It is also proposed that credentialing bodies provide FSRA with information that will allow it to create a central registry of credential holders. FSRA has also set out for the first time its overview for its intended collection and remittance of fees, for which a separate consultation will be launched in the next few months.
Overview of the Council’s Comments:
The Canadian Advocacy Council of CFA Societies Canada (the “CAC”) are supportive of FSRA’s intent to create minimum standards that entities will have to meet to obtain approval as a credentialing body, as well as to obtain approval of an acceptable financial planner (“FP”) or financial advisor (“FA”) credential.
We are strongly supportive of FSRA’s proposal to create a central registry of credential holders on its website. We continue to believe that FSRA should be responsible for any consumer education campaign to ensure that consumers of financial advice and financial planning services understand the purpose of the credentialing regulation and process, the recognized credentials, and permitted use of titles.
We support efforts to regulate the use of the FP and FA titles in Ontario as an investor protection measure and believe that the Proposed Rule could be strengthened by removing the list of ‘not confusing’ titles from the approach guidance, specifically requiring credential curriculums to address asset allocation, and by further shortening the transition timelines.