ID
2021-018

Type
Policy
Sector
Financial Planners and Advisors
Status
Open
Date
Comment Due Date

Summary

The Financial Services Regulatory Authority of Ontario (FSRA) is seeking additional feedback on the updated Proposed Approach Guidance – Financial Professionals Title Protection – Administration of Applications (FPTP Application Guidance) and Supervisory Framework (FPTP Supervision Guidance).

The proposed FPTP Application Guidance and FPTP Supervision Guidance were posted for consultation in May 2021. All stakeholder comments received were carefully considered and are summarized in the consultation summary report. For this consultation, a summary of the changes made to the proposed guidance documents is also available.

The public consultation is open for 28 days.

Overview

The proposed FPTP Application Guidance sets out FSRA’s proposed approach to the administration of applications for credentialing bodies and Financial Planner (FP) / Financial Advisor (FA) credentials under the proposed Title Protection Framework. It is intended to help potential applicants understand what is required to be approved, and to maintain approval, as a credentialing body, and what is required to have an FP or FA credential approved under the Financial Professionals Title Protection Act, 2019 (FPTPA).

The proposed FPTP Application Guidance includes an outline of the type of information FSRA would expect in an application for approval of a credentialing body, as well as approval of FP or FA credentials.

The proposed FPTP Supervision Guidance outlines FSRA’s proposed supervision approach for approved credentialing bodies and FP/FA title users without an approved credential, as well as entities that misrepresent themselves as approved credentialing bodies or as offering approved credentials without FSRA approval. The proposed guidance also outlines how FSRA will interpret titles that could reasonably be confused with FP/FA.

Background

In the 2019 Ontario Budget, the government announced that it would introduce legislation to limit the use of the titles of “financial planner” and “financial advisor” in Ontario to individuals who have obtained a credential from a credentialing body approved by FSRA.

The Financial Professionals Title Protection Act, 2019 (FPTPA) received Royal Assent in May 2019. It has not been proclaimed into force.

FSRA was granted rule-making authority under the FPTPA to design the FP/FA Title Protection Framework, including:

  • approval criteria for credentialing bodies and credentials;
  • applications by prospective credentialing bodies;
  • application fees; and
  • transition periods for existing FP/FA title users.

Useful links

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No comments have been added to this consultation yet.
Date posted Sector Question and response
Financial Planners and Advisors

Question: The communication today from FSRA on Ontario states that the professional accrediting agencies will be required to include a code of conduct clause that requires putting the clients' interests first. When I worked at another dealer which was owned by one of the banks, I was told I had to sign a code of conduct that said I would put that bank's interest first. When I refused to sign because of the conflict this presented with the codes of conduct through professional bodies I had standing with, I was told that if I did not sign I would be terminated and my block of business distributed to other advisors. When I checked with the professional bodies they indicated this had been brought to their attention. I was told at a subsequent follow-up with these professional bodies that they attempted and were refused a meeting with this bank. If banks are going to be able to promote some planners' professional accreditation, how does the conflict between the accrediting body's code of conduct, requirements under securities legislation and this bank's code stating its interests will be put first get resolved. Eric Warden CFP, CLU, CH.F.C., TEP

FSRA response:

The Financial Professionals Title Protection Act, 2019 (FPTPA) grants FSRA authority to approve and oversee credentialing bodies.

In order to obtain approval as a credentialing body, entities must demonstrate how they meet the approval criteria outlined in the proposed Financial Professionals Title Protection Rule (FPTP Rule), including a proposed requirement for credentialed individuals to comply with a code of ethics and professional standards.

FSRA’s most recent amendments to the proposed approach guidance, Financial Professionals Title Protection – Administration of Applications, includes credentialing bodies requiring their credential holders, as part of the code of ethics/professional standards, to put the client’s interest first. Monitoring and enforcing this requirement will be the responsibility of the credentialing body.

Any applicable standards for identifying and managing conflicts of interest should also be taken into account.

The policies and procedures of other organizations, such as banks or investment firms, do not fall under FSRA’s purview to administer and enforce the FPTPA.