Ontario makes ‘financial planner’ and ‘financial adviser’ regulated terms

For the first time Canadians using the titles ‘Financial Planner’ or ‘Financial Adviser’ will be required to hold credentials from an approved body to prove their qualifications, under new laws proposed in the 2019 Ontario Budget.

The Financial Professionals Title Protection Act, 2019 closes a gap that allowed unqualified people to use the terms financial planner or financial adviser to represent themselves as more qualified and capable than they are. Canada’s governing body for financial planning, FP Canada, has campaigned for this change and welcomes the announcement.

The word ‘Planner’ in combination with any of the following words, for use in titles, would be expressly prohibited for anyone not holding an approved credential:

  • Financial
  • Wealth
  • Retirement
  • Portfolio
  • Asset
  • Asset Management
  • Investment
  • Securities
  • Mutual Fund
  • Insurance
  • Mortgage
  • Money

For a credential to be recognized it must meet these standards:

  • A focus on financial planning to ensure that holders of a recognized credential (Holders) would be able to meet a wide range of consumer needs;
  • An education or course requirement to ensure Holders have a solid educational grounding in the area of financial planning;
  • An examination requirement that will serve as an objective measure of the Holders’ mastery of course material;
  • A code of ethics or standards, which will ensure that Holders are required to act in an ethical manner and follow a standard of conduct in their dealings with clients;
  • A continuing education requirement which will require that Holders keep up to date with changes as the marketplace evolves; and
  • A disciplinary process and mechanism for revoking the credential when warranted. The disciplinary process results must be publicly reported and easily accessible for consumers, in a timely fashion.

For individuals currently using the title “Financial Planner”, the government will consider an appropriate transition period to allow sufficient time to acquire a recognized credential.

The proposed legislation is a significant step towards improving consumer protection by reducing confusion and providing clarity to help consumers make informed decisions about whom to approach for financial advice.

Meanwhile, the government intends to create a new central, publicly-accessible database for all financial planners in Ontario. The central database will provide a one-stop-shop where consumers will be able to verify whether or not an individual holding himself or herself out as a Financial Planner holds a recognized credential.