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What’s Behind an Advisor’s Title?

Marc André Castonguay, CFP, CIM

October 2, 2021


How regulating certain titles used by financial professionals can improve your financial wellbeing.


A few weeks ago, I had the opportunity to chat with a university student who was interested in pursuing a career in financial planning. When she asked me about the necessary credentials required to be a financial planner, she was surprised by my answer: none. Certainly, in an industry as highly regulated as the financial services industry, it is surprising that in every Canadian province except Quebec, anyone can call themselves “financial planner” or “financial advisor”, regardless of education or credentials. The onus is therefore on the consumers to ask questions and do research to know more about the financial planner or advisor they are dealing with. They cannot rely solely on a title. It seems to me this current situation is not in the best interest of consumers.


Financial planning is much more than recommending a fund for your RRSP or determining which insurance product is best suited for you. It is a multi-step process of assessing your current financial and personal circumstances against your future desired state and developing strategies that help meet your personal goals, needs and priorities in a way that aims to optimize your resources. Simply put, financial planning determines where you are now, where you want to go, and then maps out how to get there with strategies that help mitigate risks and take advantage of opportunities.


The lack of standardization and qualifications to use the “financial planner” or “financial advisor” titles contributes to confusion for consumers as to what the financial professional they deal with actually does for them. Worse yet, these titles give the person providing the service a level of credibility that may be completely unearned and unwarranted. When it comes to financial services, clarity and high standards should be the norm.


In my home province, rules around the use of the “financial planner” and “financial advisor” titles could be changing in the coming months and years. The Government of New Brunswick has mandated the Financial and Consumer Services Commission of New Brunswick (FCNB) to develop a legislative proposal for the protection of titles used by financial professionals. If this new legislation is adopted, any individual wanting to use the title “financial planner” or “financial advisor” will be required to have credentials from an approved credentialing body, such as FP Canada, the national organization which certifies financial planners with the CFP® designation. By requiring a financial planning credential, it will ensure that professionals holding themselves out as a financial planner or financial advisor have completed a robust education program, will complete additional continuing education on an ongoing basis and will adhere to a code of ethics and rules of conduct that put clients’ interest first.


New Brunswick is following in the footsteps of Ontario and Saskatchewan, which have both introduced legislation in recent years that would limit the use of the titles “financial planner” and “financial advisor” only to financial professionals who hold a qualifying credential. Both provinces are now working on the regulations to implement the law. In Quebec, such regulation is in force since 1998.


So, what does this mean for consumers and why does it matter? I firmly believe that when it comes to your financial well-being and life goals, it is essential that the professional advisor you work with has the knowledge and abilities to skillfully navigate all aspects of your financial life and also has an ethical obligation to put your interests ahead of their own. This proposed legislation is certainly a step forward for greater consumer protection.

FCNB has published a consultation paper on the proposed legislation and invites the public and stakeholders to submit comments no later than October 25, 2021. You can find the notice of public consultation here: https://www.fcnb.ca/sites/default/files/2021-08/Notice%20of%20Public%20Consultation_0.pdf


Author:

Marc André Castonguay, CFP®, CIM® is Director of Financial Planning with Louisbourg Investments. Comments or questions may be submitted to him at marcandre.castonguay@louisbourg.net.



More articles from Marc André:

Year of the Meme Stock

Sustainable Investing: Aligning Profitability with Values


This writing is for general information purposes only and is not intended to provide legal, accounting, tax or personalized financial advice. If you are not sure how to proceed with a request for further information, seek help from a professional. Any opinions expressed are my own and may not necessarily reflect those of Louisbourg Investments.

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