Financial Professionals Title Protection Framework Webinar April 21, 2022

Joel Gorlick 00:12

Hello. Welcome, everybody. We’re just going to give people a couple of minutes. We’re still a little bit ahead. 2 minutes before 11:00. I see we have about 60 people on the line so far, so welcome. Thank you for making the time. We’ll just give people a couple more minutes to get on board before we get started.

Joel Gorlick 01:44

Okay. So it is 11:00 o’clock. I think we have about 85 people here so far, so we’ll get started. I know people will probably start filtering in as we go. But just to kick us off, I am Joel Gorlick. I’m the Director of Market Conduct Policy at FSRA. I know many of the people who have registered for this. So thank you again for making the time and for attending today’s webinar on the Financial Professionals Title Protection Framework. So just before we begin, we traditionally will start with a land acknowledgment, so we’ll do that now. We acknowledge the land we are on is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Inuit, and Métis peoples. We acknowledge that Toronto is covered by Treaty 13 with the Mississaugas of the Credit and the Williams Treaties signed with multiple Mississaugas and Chippewa bands.

Joel Gorlick 02:38

Also, just a little bit of housekeeping before we get started as well. This is a webinar, so audio and video have been disabled for attendees. If you have questions, you will see a Q&A-- you should see a Q&A button or moderated Q&A section at the top right-hand side of your screen. So you can direct your questions there at any point. After we have done our presentation, we’ll be going to a Q&A portion where we will deal with as many of those questions as we can today. Today’s webinar is also being recorded. Just letting you know that. A copy of the recording and of the presentation slide deck we’ll be presenting will be posted to the FSRA website in case you miss any of it.

Joel Gorlick 03:19

Joining me to present to you today and to address as many of your questions as we can are Houston Locke, FSRA’s Executive Vice President of Market Conduct. He’s going to talk to you a bit of the value of the framework. Wendy Horrobin, whose FSRA’s Head of Licensing and Risk Assessment, will give you an update on where we are with the implementation of the Title Protection Framework, as well as approval of credentials and credentialing bodies. And just to let you know, we’re also joined by Andrea Foy, who’s the Senior Manager of Financial Planners and Advisors Policy. She’s going to help address some of your questions as well. So before we get to all that, I’ll turn things over to Mark White, Chief Executive Officer of FSRA. And he’s going to be making some opening remarks to get us started. Mark?

Mark White 04:02

Thanks, Joel. And good morning, everyone. It's my pleasure to welcome everyone who has joined us today to learn about the financial planner and financial advisor title use in Ontario. Over the next hour, we'll walk you through FSRA's new Financial Planner and Financial Advisor Title Protection Framework and hopefully have a great opportunity to answer your questions and get some discussion going. The issue of title confusion and the absence of minimum standards title use has really been around for years and even perhaps decades. And while it’s taken FSRA about three years to implement, I think we’ve reached a good place for both title users and consumers. The title protection regime was enacted in 2019 when the government noted lack of title protection undermines professionalism and confidence in offering financial planning and advisory services. The Financial Professionals Title Protection Act, 2019 was proclaimed into force on March 28 of this year. And shortly thereafter, we announced our first two credentialing bodies, FP Canada and the Institute for Advanced Financial Education.

Mark White 05:13

For close to two years, we’ve held extensive stakeholder consultations to develop what we call our Financial Planner and Financial Advisor Title Protection Framework. Many thanks to the diverse stakeholders that provided thoughtful input and many recommendations to us. We carefully considered your input, and we used it to enhance our framework. This framework establishes, for the first time in Ontario, minimum standards to be entitled to use and to keep using these titles. When fully implemented, consumers will be able to have confidence that they can rely on the title users who will put their interests first. The act and the framework recognize that there are currently several different pathways to legitimate title use, and as such, rather than building a new regulatory structure and rather than restricting title use to a single pathway, business framework leverages off existing designation and license granting entities. FSRA determines which of these entities and which credentials meet the minimum standards for acceptable title use. Improved credentialing bodies then supervise that title use and deal with continuing education, complaints, and discipline.

Mark White 06:31

Under the framework, the individuals credentialed by such entities are able to continue their title use without disruption or the requirement to requalify, subject only to continuing to be a member in good standing of that credentialing body. The framework provides the public with transparency. It'll identify who is entitled to use the titles and what is the source of that title. This is all part of building brand value in those titles. In addition to supervising credentialing bodies, FSRA will also protect the public and credentialed title users by defending the framework against those who use titles without being properly credentialed. This is an important initiative to protect Ontario consumers and investors and to recognize qualified financial professionals in Ontario. We hope you will after today, better understand the framework and the timelines for full implementation. I'll now turn it back to Joel who will describe our agenda and introduce the FSRA team that will provide you with more detail. I look forward to your questions and to the discussion that will follow. Thanks very much for coming here today. Joel, over to you now.

Joel Gorlick 07:44

All right. Thank you so much, Mark. Maybe, Maggie, just onto the next slide so we can go through the agenda for what’s coming? Thank you. So you should have in front of you what we’re going to cover over the next hour or so, as Mark said. First, I’ll provide a very quick refresher on the legislation that came into force on March the 28th, as well as our FSRA rules that came into force, as Mark mentioned. And also, some reminders about some of the key elements of the Title Protection Framework, which I think a lot of people in this call are probably already familiar with. After that, Houston will talk to you a bit about the value of the framework both to consumers and to industry, as well as how we’re looking to harmonize our approach with other Canadian jurisdictions as much as possible. And then finally, Wendy will provide an update on where we are with approved credentialing bodies, what our supervision approach will be over the course of the rest of this year, and next steps beyond that. So we’ll move into your questions after we do all that. And as I mentioned, we’ll deal with as many of them as possible before we wrap up. So that’s our agenda. So onto the next slide, please.

Joel Gorlick 08:44

So a little bit of background. On to slide four, I think is the next one. So as Mark mentioned, Financial Professionals Title Protection Act, 2019 has now been proclaimed into force as of just a few weeks ago, March 28. And our Financial Professionals Title Protection Rule came into force at the same time. So we are now well underway at implementing the Title Protection Framework. As it says here, the framework establishes minimum educational requirements for individuals who want to use the financial planner and financial advisor titles, as well as professional expectations that require credential holders to put their client’s interests first. So there are a number of other key design elements of the framework that by now, as I said, most of you are probably pretty familiar with. I won’t spend time on those here in the interest of giving time to Houston and Wendy to talk about implementation. But of course, we’re happy to deal with any specific questions you may have about the design of the framework when we get to the Q&A portion. Meantime, maybe let’s go on to the next slide.

Joel Gorlick 09:41

So this is a diagram that will look familiar to those of you who attended last year’s technical briefing and other presentations we’ve done in the past. This is just a quick, at a glance view, that lays out the key roles and responsibilities under this framework. And the really key element to remember here is that this framework gives limited responsibility to FSRA with regard to overseeing the conduct of individual title users. Individual Financial Advisor and Financial Planner Title Users. FSRA’s main role under this framework is to approve and oversee credentialing bodies that are responsible for giving out approved credentials to financial advisor and financial planner title users. So the responsibility for overseeing the conduct of those title users directly falls to the credentialing bodies themselves. And that’s the main point that the slide is trying to make. If you look on the left-hand side, you’ll see the over sighting powers we have, versus on the right-hand side with the credentialing bodies are there to do. So we have the ability to issue compliance orders against people who are using the titles without being properly credentialed. But that is really sort of the extent of our ability to take action against individual title users. For the most part, they fall under the jurisdiction and under the conduct oversight of the credentialing body that approved their credential.

Joel Gorlick 10:55

So, as you probably know by now, we announced last week that we have so far approved two credentialing bodies and a total of four credentials. Wendy’s going to talk a bit about that in a few moments. If we receive a complaint about someone who is using a title without having an approved credential, FSRA does have authority to issue a compliance order, as I mentioned, against that individual. But other than that, we do not have direct authority over the conduct of individual title users. Sorry to keep bringing that point. Just want to make sure it’s clear. Those title users would need to abide by a code of conduct that would be set up by the credentialing body that issued their credential that enabled them to use the title. The legislation gives us authority to take enforcement and action with respect to credentialing bodies if we feel there’s a credentialing body that is-- a credentialing body that we have approved, that for whatever reason, we need to take some action with regard to their activity; we do have some ability to do that under the legislation. And, of course, we are cost, recovery-based regulators. So the legislation and our fee rule give us authority to collect fees from credentialing bodies to enable us to recover the cost of implementing the framework. But the way in which the credentialing bodies choose to pass fees onto individuals using the titles is basically at their discretion. So that’s all I really wanted to highlight by way of background about the framework. Again, happy to answer questions about that at the end. But in the meantime, I will now turn things over to Houston Locke, who I mentioned, is the Executive Vice President of Market Conduct at FSRA. He is going to talk a bit about the value of the framework.

Houston Locke 12:21

Thanks very much, Joel. The issue that we came across when developing this framework was that there were no requirements. There were no standards in connection with an individual holding themselves out to be a financial planner or financial advisor. This is confusing for consumers, and it's simply not acceptable. There were no requirements, and that was an issue that needed to be addressed. So what we have here is a framework that will see every individual who holds themselves out as a professional, as a financial adviser, or a financial planner, they will need to have a minimum standard of education, they'll need to be actively supervised, and be subject to a complaints and discipline process. With that, consumers will have the confidence that title users must meet these requirements. And one of the requirements for-- one of the expectations for the code of conduct and professional ethics is that there is an expectation to put the client's interest first.

Houston Locke 13:24

Title users will be required to disclose their credential so the consumers will know where to go if there are problems. And title protection will also reduce confusion because, currently, there is a wide array of titles and credentials being used in the financial services marketplace. Going further, I think I'd like to just point to-- [inaudible], if you can go to the next slide if we could? Just going further. I'd like to point to a few things that came up during consultation. There were two rounds of consultation and we received over 70-- we received 70 formal submissions and numerous informal roundtables, one-on-ones, and calls. And a few themes emerged. First of all, the majority of stakeholders recognized that this was an area where they're needed to be some action. There was a benefit to having the titles be protected and be supported by minimum levels of education and accountability. We also did some consumer research. And a survey found that the vast majority of consumers agreed with the statement that these titles should be regulated and controlled. So the framework that has been put forward will increase the level of confidence that consumers have. And everyone dealing with these professionals will know that they will be subject to minimum education standards and be supervised. If you go to the next slide, we can discuss the value of the framework for industry.

Houston Locke 15:02

Officially being able to use the financial planner or financial advisor title will make it easier for a professional to communicate their value to consumers and validate their education and expertise. And I'll go one step further and mention that, as credentialing bodies are approved, FSRA intends to develop a registry that will be searchable publicly. And so professionals who may use the title will have their names, as well as their credentials, on this registry. And consumers will be able to search the registry and validate the use of those titles. When we establish minimum education, conduct, and supervision standards, that promotes consistency and professionalism, and confidence among those individuals using the titles. The framework provides credibility to those using those titles, and the minimum education requirements and active supervision will help weed out bad actors and those that are not serving the investors and consumers. Credentialing bodies will also share information with each other on disciplinary and enforcement proceedings so that inadequate performance by a title user will be widely known throughout the sector. This again benefits both industry as well as consumers.

Houston Locke 16:26

Next, I'd like to speak to efforts underway on the harmonization front, if we can move to the next slide. There are numerous jurisdictions that have issues around title confusion and minimum standards. There currently are rules in Quebec for financial planners, but Ontario's title protection framework could be adopted nationally and benefit consumers across Canada. A number of other jurisdictions, such as Saskatchewan and New Brunswick, are currently adopting similar frameworks, and we're working with them and consulting with them to discuss opportunities for harmonization. And this would, of course, benefit credentialing bodies as it will aim to harmonize compliant standards and create efficiencies in the application process. What I'd like to do-- and, of course, we're happy to answer any questions you may have at the end of the webinar. But in the meanwhile, I'd like to pass things over to my colleague Wendy Horrobin, who will speak about approved credentialing bodies and credentials. Wendy?

Wendy Horrobin 17:31

Thank you very much, Houston. And I will kick it off with slide 11, which at this point is probably no surprise to anyone on the call. But out of the gate, we do have two approved credentialing bodies, that being FP Canada, as Mark mentioned, and the Institute of Advanced Financial Education, IAFE, which is a subsidiary of Advocis. And there you see their respective credentials that have been approved to date as well. I’ve also included at the bottom of this slide a link to FSRA's public registry, which we will continue to add to, which basically will document those approved credentialing bodies and their credentials. If we can move to the next slide, thank you, or we can skip ahead to discuss the transition period. Okay. These next couple of slides will be of much interest to those on the call today. The framework will be phased in over time. And we’re currently focused on the approval of credentialing bodies, as well as helping those already approved to implement the regime. We continue to take applications and meet with organizations wanting to know more about the framework in the next while with respect to noncompliant title users, we’ll focus on responding to complaints, as well as educating consumers about the transition period. As well as those who are the subject of a complaint, we will be asking that they voluntarily cease using the title within 30 days if they’re not yet compliant with the act. So we invite you to assess the use of titles with either your employer or for yourself to decide upon your approach to coming into compliance with the framework. Then, of course, those who-- this slide also alludes to the date that I think a lot of people know about. January 1, 2020. Those who were using this title prior to this date and continue to do so, they will have two years if it is a financial advisor title, four years for a financial planner title, to acquire an approved credential, but they can continue to use the titles during those interim periods that are mentioned. Next slide, please.

Wendy Horrobin 20:00

So it is the title user’s obligation to monitor whether you already have an approved credential and are in good standing with that approved credentialing body. Failure to do so, as we mentioned in the prior slides, may result in asking you, again, to cease use of that title. We intend to run these sort of holding out provisions the same way that we do with our other sectors. So essentially what that means is we ask the person to remediate. So, in that case, that would be to acquire an approved credential. If we have people who just continue to be non-compliant, what we typically do if they’re unwilling to remediate is we do have a rather robust public warning lever that we use to notify consumers that someone is using a title, in this case, without the acquired and approved credentials. Next slide, please. Actually, we can skip to 16, which is similar titles to financial planner, financial advisor.

Wendy Horrobin 21:27

Whoops. Section 2 and 3 of the FPTPA extend to the use of financial planner and financial advisor titles in another language, in abbreviation, or a title that could be reasonably confused with financial planner and financial advisor titles. I invite you to go to Appendix 1 of FSRA's supervision guidance - and again, we’ve provided a link on the slide - just for further illustrative examples. A link is provided on this page, as I mentioned. Concerns and complaints that we receive will be reviewed on a case-by-case basis. And here’s just a small sampling of some titles that could be reasonably confused. So any variation in spelling, abbreviation, or language of the financial [lanner and financial advisor titles, for example, financial adviser, spelled with an E rather than an O, or the acronyms FP, FA. Also, a title using financial planner/planning in combination with another term. For example, Financial Wealth Planner, Financial Planning Advisor, and finally, a title using Financial Advisor/Advising in combination with another term. Such as Senior Financial Advisor, Financial Advising Coach. And finally, we’ll discuss next steps.

Wendy Horrobin 22:52

So we continue, as mentioned, to review applications and credentials as we speak, and we’ll announce those as they are approved. It would be a good idea to check back on our website, I would say probably on a weekly basis at this point so that you can be in touch with the latest with respect to any approvals that have come through. In addition, we have a number of plans for education campaigns moving forward. Our public affairs team is currently working with CBs and industry on a successful implementation, also on an effective industry education campaign - which we would invite your feedback with respect to that - regarding how best to reach current and prospective financial services professionals, as well as a consumer education campaign slated for the fall. Again, please, as far as the registry goes, if you can continue to check, you will see any approved credentialing bodies and additional credentials. And with that, I will pass this back to Joel for our Q&A.

Joel Gorlick 24:09

Right. Thanks very much, Wendy. The next slide, I think, was one that Wendy was just speaking to. So I don’t know if people had that up. Maybe Maggie didn't go to the--

Wendy Horrobin 24:17

Oh, sorry about that.

Joel Gorlick 24:20

No, no, no, no. That’s the one that Wendy just spoke to. So hopefully, people caught all that. Obviously, we’ll be posting this as well, so people have a chance to see it. But thank you so much, Wendy. So, yes, now we’re into the Q’s and A’s. And thank you very much to those who have already put some questions in. There are some really, really great questions. We’re trying to group some of them together for ease of reference. I think I’ll start with, there have been a few questions with regard to the self-regulatory organizations, MFDA and IIROC. And given that, obviously, there are large numbers of registrants in Ontario that some of which may wish to use one or both of the financial advisor financial planner titles and questions around whether there are going to be credentialing bodies at this stage? The very short answer to that is, at this point, we have not received applications from the SROs as credentialing bodies. And I’ll pass it over to Houston or Wendy to give more detail on that. And there was a separate question about whether there’s an expectation that once the new single SRO is in place, will they be applying to be a credentialing body? And I think that is to be determined is the short answer. But maybe I can ask Houston if you can maybe address those questions overall? And Wendy can chime in as well if needed.

Houston Locke 25:37

Sure. I agree with the comments you’ve made, Joel. We have a framework that has been developed where we welcome an application from the SROs. When the reorganization has been completed, when there’s a single SRO, perhaps that can be revisited. At this time, we currently have the two credentialing bodies with a number of credentials that have been approved, and we are going to continue to approve additional credentialing bodies as the applications move forward. At this time, the rule, as is enforced presently, does not have exemptions. And so all users of the protected titles - financial advisor and financial planner - would need to obtain an approved credential from a credentialing body. With the passage of time, and with additional credentialing bodies being brought on stream, this does provide for additional different types of business models and approaches. For example, fee-only advisory services that allows for recognition of credentials that provide different sets of skills. And we look forward to making those announcements as those credentialing bodies come on stream.

Joel Gorlick 27:12

Thank you very much. I wanted to move to-- thank you, Houston, for that. I wanted to move to there were a couple of specific questions about some of the credentials that have already been approved. And I was maybe hoping that Wendy might be able to address some of these. One question around the PFA. I think its professional financial adviser for use of the financial advisor title, as well as the chartered life underwriter for the use of financial planner, and just questions around the criteria by which the determination was made that those two designations would be approved for those two titles, respectively? So maybe if I could ask Wendy to speak to that.

Wendy Horrobin 27:52

Sure. Thank you for that question. What I will say, and in the language that you’ve heard during the presentation, is that we continue to work together with approved credentialing bodies with respect to implementation. So really what that means is that with respect to the minimum educational requirements, those are currently etched in stone. So the people who do the work of reviewing these applications are evaluating versus that minimum criteria. In the event that there are shortfalls, we do have the ability to impose terms and conditions. And we can do that at any time, by the way. But it would be probably included in those types of terms if there were anything that needed to be shored up so that it met the minimum requirements or any other provision or the act or the rule. That’s where those would be handled. So when we talk about implementation and working together with the CB, it may be things like their registry is not quite ready for purpose where we want it to be in terms of aligning credentials with the person’s name, along with any probably disciplinary issues. It could be things like that. It could be things around the credential, etc. The important thing if those things happen is that they are disclosed to current and prospective credential holders so that they’re well aware of the conditions of that approval.

Joel Gorlick 29:54

Okay. Great. Thank you so much, Wendy. Lots more questions coming in now. There’s one with regard to similar titles. Titles that are similar to or reasonably confused with financial planner and financial advisor, as Wendy spoke to earlier. And there was some examples given, like wealth planner, financial coach, things like that, and whether those would be in scope and considered to be similar. I guess I can start to address that. I can pass it to Wendy if she has more to add. But I mean, in the supervision guidance we’ve put out, there is a list of examples of titles that would be considered to be similar to financial planner and financial advisor. And in general, these are things, like Wendy said, that would be-- it'd be different spellings or abbreviations, as well as things that contain the words within them. So financial blank advisor or blank financial advisor, if they have those words in them or the same thing with financial planner. Things like wealth planner wouldn’t necessarily fall in scope in the way we’re interpreting those provisions of the legislation. So that’s the short answer. I don’t know whether, Wendy, you had more to add to that in terms of how we’ll be looking at those?

Wendy Horrobin 31:05

Other than the fact that these would be on a case-by-case basis. We have had a number of inquiries already as to what is okay, what is not, and we’ll continue to review them that way.

Houston Locke 31:22

As mentioned, some of that has been published on our website. And so people can take a look at that to make a determination as to whether the titles that they’re interested in are on that list.

Joel Gorlick 31:39

Okay. Terrific. Just again, trying to group things together. A lot of similar types of questions coming in. There was a question around fees, I mentioned that very briefly earlier, and what costs will be for individual title users. We do have a fee rule that we’ve put out there. As I mentioned earlier, FSRA will be collecting fees from credentialing bodies, and it’s up to those credentialing bodies to figure out how they are collecting the fees from individual title users. And we have in the past put out some information about what the average cost per credential holder or per title user would end up being. I would, I guess, encourage folks to check that out. And we can certainly provide the link to that on our website. I don’t know whether there was anything more that either Houston or Wendy you wanted to add on fees at all? No? Okay. So I think that does that. I guess there are a few questions with sort of the theme of people who have an existing designation, but one that has not been, at this point, approved by FSRA as a credential or as a credentialing body. Basically, a question of what should those people do, at this point, if they are currently using titles over the rest of, let’s say, this year? So maybe I’ll hand that over to maybe Wendy. You had talked a bit about the transition period and what you had spoken to. Maybe we can go into a little bit of detail around how that’s going to go?

Wendy Horrobin 33:16

Right. So anyone who finds themselves in that position, if you were using either title - financial advisor, financial planner - prior to including January 1, 2020, then you have 2 years in the case of financial advisor, 4 years in the case of financial planner, to get yourself an approved credential from an approved credentialing body. So that’s why it’s important to keep checking back to see, as more credentialing bodies are approved, there will, in turn, be additional designations. So it’s possible that it’s just a matter of time, depending on the designation you have. But I mean that understandably is a bit of a roll of the dice. So I think that everyone who is in that situation will have to decide whether they want to take a look at the current list and undertake to get one of those approved credentials. So there is a choice to be made. And as I said, currently, we will be focusing on complaints that do come in. Oh. And when we get complaints, education is always a part of it. And that doesn’t mean just for yourselves. Because, obviously, you probably have a lot more information in hand than the consumer who is just concerned about, "What does this all mean?" We will be looking at that. And if you happen to be the subject of a complaint in that regard, we will ask that you cease using the title for 30 days if you don’t fall into that other category. And again, at that point, you have to reassess and get yourself a credential if you want to continue using title.

Houston Locke 35:22

If I could add something, I would say that for the balance of 2022, it’s our intention to focus on education, as well as implementation. As mentioned, we are continuing to review credentialing body applications. And when we look back to, what are the core goals of this framework? Core goal would be to provide a minimum level of education and proficiency requirements and that accountability, including the expectation that those that use these titles would put the interests of their clients first. This all relates strictly to the usage of the titles. This does not in any way impact or effect type of services that professionals carry out their duties for their job and the clients that they serve. So I just wanted to make that distinction clear. The individuals that are affected by the titles, by the title regulation, to the extent that they no longer use the titles or they use different titles, that would not be reasonably confused. That would not be covered under this framework. Mark, did you want to add to that?

Mark White 36:38

Yeah. Thanks, Houston. I mean, you and Wendy both make some great points. And I just wanted to highlight that we understand that this is a transitional period. And that's why during our consultation, which went on for pretty close to two years, we were always very transparent about the consultation, and during the consultation about the transition that will have to occur. We're not in the business of going out there and trying to catch people who are inadvertently-- their credentialing, how they get through-- they are ultimately going to get their credential use. They're not approved yet. So we're not out there chasing those people. Our focus is on making sure that we have that good transition that protects the consumers and also protects the legitimate interests of people who are legitimate, well qualified, financial title users. And so we see this as part of a process where we're working with people. On the other hand, we do have to respect the rules. The act was passed in 2019. Anybody who read the act and read our consultation documents knew very clearly of when the grandfathering period was going to cease in January 2020. And that was a widely supported date.

Mark White 37:53

And so we do ask that people who are coming into the industry knew that they should either seek out one of the paths to get an appropriate credential to use the titles, rather than basically trying to use the title without that benefit. Because that's only fair to the people who are appropriately grandfathered and the people who are going through those processes. And I'll also point out this is part of our consultation. There's a formal part, an informal part. We chose the two- and four-year periods so that there was flexibility. The expectation being that there should be paths to the ability to get a financial adviser credential to someone who has the right background and skillsets within a year. So that nobody is going to have a gun to their head where they have to make a decision today because the organization they're part of, for example, isn't a credentialing body today they have some time. And that was intentional. So we don't we didn't want to see people who are legitimately providing good services to the public that they would be disrupted in their approach to going to market. We want people to have that time for those grandfathered professionals to just sit back. More credentialing bodies are coming in. And so let's see how that unfolds for the next little while. And we are committed to working with different organizations that are interested in becoming credentialing body, and we know that will take some time.

Joel Gorlick 39:27

Right. Thank you so much, Mark and Houston and Wendy for those responses. I guess I’ll just add on, there was a follow-up question around the transition periods and when do they start, the two- and four-year transition periods? And the answer to that is the date that the legislation and the rule came into force. And that was March 28th. So that’s the two- and four-year clocks, so to speak, began as of March 28th, just a few weeks ago. So just dealing with that one quickly. There have been a few questions around other provinces and what they’re doing. And Houston did mention that during the presentation that we are working with-- we are talking to, particular, Saskatchewan and New Brunswick, who are at different stages of bringing out their own frameworks. In Saskatchewan’s case, they have legislation that’s already been passed and they are working on their regulations right now. And New Brunswick has been out consulting publicly. So I guess the answer to that is that we are working with other provinces to try to harmonize as much as possible so we don’t have frameworks that are completely different from each other operating across the country. There was a related question around how we are going to handle-- and I might ask if Wendy might be able to chime in on this. About how we are going to handle situations where a financial advisor, a financial planner, or title user, may be residing in another province that maybe does or does not have its own framework, title protection framework, but is doing business in Ontario, for instance, or doing business with Ontario clients and how we’re going to address those types of situations? Maybe I could ask Wendy to speak to that if she could?

Wendy Horrobin 40:58

Thanks, Joel. We have provided guidance to the credentialing bodies about determining scope. So we expect individuals within access to Ontario to be included. So that means that you live in Ontario and you do business in Ontario, and you would fall under this regime.

Joel Gorlick 41:24

Okay. Thank you very much. There’s, I guess, a related question on title use after the January 1, 2020 date. And maybe some questions around-- I know we’ve spoken to this quite a bit already, but basically, do people have to look at-- maybe we can just talk. I know we’ve said some of this already, but maybe we can just speak further to this. Do people have to just stop using the title right away if they started after January 1, 2020, and they don’t have an approved credential? Maybe we can maybe just talk a bit more, again, about our approach to enforcement over the course of the first phase of this framework? I know we’ve said some of this already, but if either Houston or Wendy wants to speak to this bit more, we’ve got a number of comments, I think, on that same vein.

Houston Locke 42:09

Yeah. So I’ll start things off. And Wendy, feel free to chime in. As mentioned, for the balance of 2022, our intention is to continue to work with prospective credentialing bodies, announcing those as they are approved, and to focus on education as well as implementation. So what that will mean is, for the current period, to the extent that there are complaints and someone indicates there’s an issue here, then I think then we would be in touch with the individual to say, "You know what? We request that you see using this title within a certain period of time." That will not be our focus on a proactive basis. Part of the reason why we think it’s important to have the discussion here today is to let people know what the position of FSRA is in connection with issues such as this. And we would hope that the individuals that plan to use this title for the long-term would either take steps to move forward to receive an approved credential or take steps, as appropriate, to use a title other than what is covered by this framework. Wendy, did you want to add anything?

Wendy Horrobin 43:25

No. I think that covers it all, Houston. Thank you.

Joel Gorlick 43:31

There's one I just want to handle quickly that came in about specifically around the Certified Financial Planner designation that’s given out by FP Canada, one of the already approved credentialing bodies, and whether someone with a CFP, for instance, the CFP designation, would have the option to use the Financial Planner title or the Financial Advisor title. This is a common question we’ve gotten a lot. The short answer is no. The title you are allowed to use is based on whether the credential you are using is approved as an FP or FA credential. In the case of the CFP, it has been approved by FSRA as a Financial Planner credential. So it allows you to use the Financial Planner title. It would not in and of itself give you the ability to use the Financial Advisor title in addition, unless you have a separate approved credential that gives you that ability. So that’s the short answer to that. We can add more on that if people have follow-up questions. But I don’t know whether, Wendy, you had more to add on that one specifically before we move on? No.

Wendy Horrobin 44:32

That’s it.

Joel Gorlick 44:34

Okay. Perfect. I guess there have been a few questions around how individuals or how clients, customers are meant to know whether their financial advisor or financial planner has an approved credential or not. And that is a question we’ve gotten a lot through this process, and we’ve given quite a lot of thought to how we ensure that consumers are aware and where they go to find that information. Maybe I’ll ask, if Houston doesn’t mind, talking a little bit about that?

Houston Locke 45:03

Yes. I think that’s a great question. Because what this framework does is it supports customers from more than one angle. At one level, you have the minimum standards for education, proficiency, and accountability. You have an expectation that there be a code of ethics that will speak to putting the client’s interest first. And there is also the element of information. How can customers get information themselves about the professional who is serving them and who is working for them? And to support that, FSRA is going to initiate work for a public registry that will be searchable online by the customer, by prospective employers, by others in the industry. And this really will bring together credentials that currently would involve, for example, searching on multiple different websites without great knowledge about how an individual might, for example, hold multiple designations. This registry’s not live. As we’ve mentioned, this framework went into place last month. As credentialing bodies are approved, we require that each of them will have a registry that people can search, but FSRA will stitch these together. And so this will take some time. And also, we will require, once the framework is fully implemented and we have additional credential bodies, it will provide the opportunity to provide that enhanced level of information. So consumers will have better information and they can make better choices about the professionals that will meet their needs. Mark, did you want to add anything to that?

Mark White 46:54

Yeah. I mean, you’re very modest, Houston. First of all, I know you've already begun work with our technology people getting a searchable FSRA public database in place. These things always take some time. And in the interim, we'll have the credentialing bodies having their own registrations. But I want to add the other point related to that, that-- and we consulted on this, and I think there was very strong support that financial title users should associate their title, and how you do that is up to you, but when you're dealing with your customers. So certainly, that would be appropriate, for example, in a new engagement letter. And so they know the basis on which you're getting that title use. And that's important because it builds brand value in the financial planner title because we're connecting with those important designations for licenses and also allows the consumer to know, as a title user, who you're being supervised by. And so I think that's another really important linkage about how consumers will understand the value being created by the financial planner and financial advisor title use because we're leveraging off the work that is already being done by those designation licensing bodies when we approve these credentialing bodies, and the public can take comfort in that. And I think that will add value to the titles and confidence in the public that these are good, credible professionals, well-supervised, and subject to good standards.

Joel Gorlick 48:28

Okay. There have been a few questions with regard to life insurance agents that are licensed under the LLQP, and of course, that's something that FSRA's obviously very familiar with, and whether those people would be able to call themselves, for instance, financial advisor, just by virtue of having completed that. The short answer to that is no. But we have talked publicly before about how we are working actively on the potential for, what we'll call a top-up credential that would enable you to, not necessarily start from zero, but add on to your LLQP, your existing LLQP training, to enable you to get up to the point where you could call yourself a financial advisor. So I know a number of people have asked about what would be required of people who are LLQP licensed and what they would need to do if they wanted to use the title. I don’t know whether Houston or Wendy you have anything to add to that in particular?

Wendy Horrobin 49:24

Other than to say, I believe that is definitely something that we will likely see soon. And yeah, I think it will be of great use to a number of advisors in that space who currently use the title.

Joel Gorlick 49:47

Okay. And there were also a few questions in the theme of if I have one of the approved credentials, and if I have-- if I’m a holder of a designation that happens to be an approved credential, do I now have to call myself a financial advisor or financial planner? And I would say the short answer to that is no. You are not forced to use the title. It works the other way around. If you want to use one of the two titles, you have to have one of the approved credentials that allows you to use that title. But there is nothing that forces you to use the title just because you happen to have one of the designations that we have approved as a credential. So really, it’s up to the individual’s choice. No one’s going to say, "You now have to put this on your business card because you have this designation." So that one's a relatively easy one. Another one that’s come up a little bit in a few different questions is around whether FSRAs interested in activities of individuals as opposed to their title use? So the examples that were brought up where there may be a number of lawyers and CPAs in Ontario who may do financial planning work and may do financial advice to clients and can that continue? I mean, there was a specific question around whether organizations representing those professions have applied to be credentialing bodies. The answer to that is, at this point, they have not. But I would say as well that we are not actually-- unless you are using the title financial advisor or financial planner if you are an accountant or a lawyer who happens to do that work for your clients, this framework does not capture those individuals. It is meant to capture title use, not specific activities. So hopefully that helps to address part of that concern. Someone else had asked about our consumer education strategy and for a bit more information about that. I think, Wendy, you had brought that up on the slide about next steps. I know there are a number of people at FSRA that are actively talking about what that’s going to look like. I don’t know whether either Houston or Wendy wanted to speak a little more to what that will look like?

Wendy Horrobin 52:02

Houston, do you have anything further on that?

Houston Locke 52:06

Wendy, why don't you start? And I’ve got a few comments.

Wendy Horrobin 52:10

Yeah. Well, currently what is happening is our public affairs team is working closely with approved credentialing bodies, and they’ll continue to do so as things roll out and additional credentialing bodies and credentials are approved. So that involves some of the initial media that we’re putting out there with respect to these approvals. But then down the road, they certainly have much bigger plans, both on the consumer front, so that consumers become more and more aware of what’s happening with titling, as well as initiatives designed to further the understanding of industry.

Houston Locke 53:02

Yeah. And I think that’s absolutely correct, Wendy. And I’d add to that a couple of other thoughts. We'll be making sure that we have information out there for consumers so they understand, "Here is what it means when you were dealing with someone who refers to themselves as a financial advisor or financial planner. Here’s what you can expect in terms of professionalism, education proficiency, accountability, as well as important code of conduct issues, such as the requirement to put the interest of customers first." In addition, we will be doing work on the registry to make that information available, and we will consider what information is required to support that. What are instructions for use? How can a consumer interpret the information that is stored in that registry? And in terms of moving forward, this is a framework where we will be supporting the usage of titles out there and the approval of credentialing bodies through discussions and publications on how they are carrying out oversight of the members that use the titles that are granted by the credentialing bodies. So those are a number of ways that we intend to support usage of the titles.

Joel Gorlick 54:28

Okay. Great. Thank you, Houston and Wendy. There have been a number of questions all around asking about what the minimum criteria are for title use, as well as the baseline proficiencies that we’re expecting for financial planner and financial advisor title use. I think the short answer is we’ve set the minimum standards out in guidance that we have put out there and that is publicly available on our website. And what we might do after the fact is share around, maybe just post a link to that for you so you can see where to find that because it’s all in our application guidance. I believe it’s all there in terms of what the minimum standards are that are expected, both for credentialing bodies and for title users of both titles. So hopefully that will address what people are looking for there. I don’t know whether anybody wanted to speak specifically to any of the proficiency requirements we’re looking at?

Mark White 55:21

Joel, I'd just say that the conceptual framework is exactly as you said. You can read it in our rules and guidance. But it’s also instructive to see the credentialing bodies and the designations that they have approved. For example, if you want to see their education requirements and their examination standards for entry and ongoing education, that will give a very good idea of a tangible example of what is the path. And as you get more credentialing bodies approved, and as I said in my introductory remarks, there's different pathways to people legitimately providing great financial planning and great financial advisory services. And so this regime is about leveraging off those existing paths making sure that they meet minimum standards. So what I'd also welcome is look at the credentials as they’re approved. And someone new to the industry, they may see a certain type of pattern of what they’re interested in doing that they think is the right way to go forward, and then that will give them choice as to how they want to get the right to be a financial planner or a financial title under this regime.

Joel Gorlick 56:35

Thank you, Mark. I know we only have a few minutes left. A few people have asked a question about people who are financial planners in Quebec and potentially have been issued “planification financière” from the IQF and whether, by virtue of that, they will be able to call themselves a financial planner for clients they serve in Ontario? My understanding is there is an arrangement, I know, for those people even currently. But I think that my understanding is you have to have a credential that’s approved by FSRA to be able to do business in Ontario. So the IQPF designation you’ve received in Quebec is not in and of itself enough. That you would have to get one of the approved credentials that we have now listed for use of financial planner title in Ontario to be able to do that business with Ontario clients. Wendy, correct me if I’m wrong on that? But I believe that’s the answer, right? Okay. I’m going to say yes, I think, for Wendy. So that’s that.

Wendy Horrobin 57:37

Oh, [crosstalk].

Joel Gorlick 57:38

Oh, sorry.

Wendy Horrobin 57:38

I think I have a delay here. Yes. That’s right.

Joel Gorlick 57:42

Oh, yeah. No worries. And then there were questions about-- I think there were follow-up questions, Wendy, I want you to talk about in terms of other provinces as well. Just to clarify whether a person needs to reside and do business with clients in Ontario to be subject to this regime. I think people were looking for a bit of clarity around who is captured in that respect?

Wendy Horrobin 58:02

And I might flip that to Andrea. May be able to provide a bit more clarity? Or if you have it, Joel? I know it certainly is in the guidance. I don’t have the wording right offhand, but we can take that one back. Or actually, Andrea’s here.

Andrea Foy 58:27

Yeah. We haven’t specifically prescribed the criteria of who’s captured or who’s in scope. But as Wendy mentioned earlier, we did provide some guidance. You can find this information, actually, in our consultation summary report for our fees consultation. We’ve given some guidance about individuals should be considered in scope if they have a nexus to Ontario. So if they use the title in Ontario, if they live in Ontario, if they do business in Ontario. Those are just a couple of examples.

Joel Gorlick 59:01

Okay. Oh. No, I’m not muted. I thought I was muted. Thank you so much. I know we only have a couple of minutes left. So we’re going to have to start to wrap up, I think. A number of people have asked some similar questions around when we will be announcing further credentialing bodies. Wendy did say we are actively working with some additional entities who have applied to be credentialing bodies. I think the short answer is stay tuned. We hope to make more announcements in the coming weeks. I don’t think we can be more specific than that at this point. But you will start to see someone else what’s coming out soon. So please bear with us as we go through that. I don’t know if, Wendy, you have anything more specific to add on that?

Wendy Horrobin 59:42

No. That’s perfect. Thank you.

Joel Gorlick 59:46

Okay. So we are almost out of time. So I might suggest-- we have a lot more questions that have come in. Thank you so much. This has been great. Really good engagement - almost 200 people - with a lot of great questions. We will work to address the questions we weren’t able to get to. You can see, I think, in the next slide, Maggie, there’s an email address that you can send those to if you want to flip to the next one? [email protected]. There it is. So please do feel free to send additional questions there that weren’t able to be addressed today. Otherwise, I will hand things over to Houston to wrap up.

Houston Locke 01:00:23

Thanks very much. And I’d like to once again thank all of you for attending today’s webinar. We now have in place for the first time, a framework that, for the province of Ontario, will set minimum efficiency, accountability, and code of conduct standards for those who hold themselves out as financial advisors and financial planners. We look forward to continuing to provide information on educating consumers, on providing information on who is on the registry, and also to support growth and success for the professionals that are appropriately credentialed and have the satisfied requirements and, of course, the customers that they serve. We thank you very much and we look forward to speaking with you about this more in the future. All the best. Thank you, and goodbye.

Joel Gorlick 01:01:15

Thanks, everyone. Bye-bye.

Q: Has FSRA received feedback from SROs such as MFDA and IIROC, given that they have rules around the approval and use of titles used by Approved Persons in Canada?

A: FSRA consulted extensively with various stakeholder groups, including the Self-Regulatory Organizations (SROs). FSRA's approach to designing the title protection framework was to position it to leverage existing regulatory frameworks for granting and supervising FP and FA designations and licences. The framework applies to the use of the FP and FA titles, which is not addressed by the SROs. Feedback from the SROs based on public consultations has been posted along with feedback from other stakeholders at fsrao.ca.

Q: Please clarify "actively supervised" by whom?

A: The conduct of individuals holding an approved credential will be overseen by their approved credentialing body in accordance with that credentialing body's requirements for its approved credentials. Activities undertaken by individuals that are regulated by other authorities (e.g., insurance, securities, money laundering, privacy, etc.) will continue to be subject to the relevant supervisory authorities.

Q: Re inter-provincial harmonization, has there been discussion of having a quasi-national approach through CISRO?

A: FSRA has engaged with Saskatchewan and New Brunswick on several occasions, and has discussed the potential for harmonization between jurisdictions with respect to key elements of the title protection framework. Currently, there are no plans to implement the framework on a national level.

Q: Can you use those terms if you do have the credentials, or do you have to strictly stick to Financial Planner / Financial Advisor?

A: Under the title protection framework, the use of the FP or FA title is voluntary. The requirement to hold an approved credential only applies to individuals who wish to use the FP or FA titles, or a title that could be reasonably confused with FP or FA.

Q: Knowing that in our industry there are multiple platforms both investments and insurance , why couldnt their be a cordinated effort to bring all SRo's together and unify a framework that affects all?

A: FSRA has been tasked with implementing the title protection framework as set out under the Financial Professionals Title Protection Act, 2019. FSRA has consulted extensively with various stakeholder groups, including the Self-Regulatory Organizations (SROs), on key elements of the framework design. FSRA's approach to designing the title protection framework was to leverage existing regulatory frameworks for granting and supervising FP and FA designations and licences to mitigate the potential for regulatory burden and/or increased costs.

Q: What protections are there to protect FAs & FPs from unreasonable credentialing rules and charges from the credentialing bodies - this framework seems to increase regulatory burden & costs rather than reduce them as was promised by the Provincial Government.

A: The Ontario government introduced the Financial Professionals Title Protection Act, 2019 as a consumer protection measure to increase professionalism and confidence for individuals providing financial planning and advisory services. FSRA's approach to designing the title protection framework was to leverage existing regulatory frameworks for granting and supervising FP and FA designations and licences to address concerns regarding regulatory burden and/or costs. As part of its regulatory activities, FSRA will monitor the conduct of approved CBs under the framework with respect to fees associated with the title protection framework, as well as their practices for granting approved credentials and overseeing their credential holders.

Q: When does the two or four year timeframe begin? Would people be on the clock starting today?

A: Individuals who were using the FP or FA titles on or before January 1, 2020, are permitted to continue using the title for a transition period of up to two years or four years, starting from the proclamation date of the Financial Professionals Title Protection Act, 2019 on March 28, 2022.

Q: What are or will be the annual professional development requirements for a CFP?

A: In order to obtain approval as a credentialing body under the title protection framework, organizations must demonstrate they have continuing education requirements in place, and that those requirements are consistent with the minimum educational requirements for FP or FA credentials to ensure the continued qualification of credential holders. Each approved credentialing body will determine the number of hours or credits required for their credential holders.

Q: Will you announce when a credentialing body is not approve... so holders are aware?

A: FSRA will announce the approval of credentialing bodies under the title protection framework. It will not make public the denial of an application.

Q: During the transition period - while our advisors are eligible to use the title, but do not have an approved credential....they must also be listed on the registry as the title use is legitimate in the interim - otherwise you'll potentially be erroneously not accurately reflecting the current transition advisors as being "legitimate".

A: FSRA’s public registry will only capture individuals that hold an approved credential in Ontario. It will not capture individuals who may be utilizing the transition period or those who may be currently enrolled in a credentialing program.

Q: Do user approach FP Canada for approving similar title?

A: It is the responsibility of each title user to determine whether their current title falls under the scope of the title protection framework. Subject to applicable laws administered by other regulators, titles that could not reasonably be confused with the FP or FA titles are not required to be approved by FSRA or an approved credentialing body.

Q: For this top-up credential for LLQP, then would FSRA be the CB?

A: FSRA welcomes interested organizations who wish to develop a credential that would leverage the existing Life Licence Qualification Program (LLQP) curriculum, and, with additional proficiency content, permit life insurance agents the ability to use the FA title. FSRA is not a credentialing body under the Financial Professionals Title Protection Act, 2019.

Q: It appears the word Financial is the common theme in the titles not permitted. What educational breadth are you thinking is needed to use that title that wouldn't already be a part of the curriculum for example for IIROC Registrants? What work did FSRA do to identify the "missing pieces" of the current regulatory and educational frameworks that will be remediated through these new course requirements? What gaps did you see that led to this regulation?

A: Prior to the launch of the framework, there were no minimum standards for the use of the FP and FA titles. There is also no registry that sets out the status of individuals who hold themselves out as Financial Planners or Financial Advisors. The Ontario government introduced the Financial Professionals Title Protection Act, 2019 as a consumer protection measure to increase professionalism and confidence for individuals providing financial planning and advisory services. FSRA's approach to designing the title protection framework was to leverage existing regulatory frameworks for granting and supervising FP and FA designations and licences to mitigate the potential for regulatory burden and/or increased costs.

To develop the minimum standard, FSRA conducted an analysis of existing financial services licensing and designation programs, typically completed by FPs and FAs in Ontario. FSRA’s goal was to obtain a better understanding of the oversight practices of the organizations, as well as the technical knowledge, professional skills and competencies covered in each educational program and how those might qualify an individual to use the FP or FA titles. Based on this review and initial stakeholder feedback, FSRA set the minimum standards for the approval of credentialing bodies and FP/FA credentials under the framework (as set out in the Financial Professionals Title Protection Rule and the Financial Professionals Title Protection - Administration of Applications guidance). The minimum standards were consulted publicly and with individual stakeholders to ensure they properly reflected the existing marketplace. Overall, stakeholders supported the minimum standards.

Q: Your framework seems to put responsibility for the supervision of the activities of the Advisor (including trading activity) in the hands of the Credentialing body - this seems to give them equal status with the SROs and how do we deal with situations where the Credentialing body's rules are in conflict with SRO rules 9i.e. complaint handling requirements)

A: As set out under FPTPA, in order to obtain approval as a credentialing body under the framework, organizations must have robust complaint handling and disciplinary/enforcement processes in place to oversee the conduct of their credential holders. Approved credentialing bodies are expected to conduct their own complaint handling and disciplinary activities. The FPTPA applies to the usage of titles only. Applicable supervisory activities could result in an inability to use the FP or FA titles by an individual. The SROs do not regulate the usage of the FP or FA titles but administer rules relating to securities-related activities.

Q: If a consumer feels an FP/FA has not acted in the consumer's best interest, what options will the consumer have for redress?

A: FSRA requires approved credentialing bodies to maintain effective processes to respond to complaints and adjudicate such complaints in a transparent and impartial manner. FSRA will review these processes upon application to ensure that they will provide appropriate resolution for consumers in the event of a misconduct of a credential holder.

Q: Did you say at the outset that there were no rules in place governing the use of titles and proficiency. If so, why was this statement so broad so as not to carve out securities registrants that are governed by provincial securities legislation, national instruments and SRO rules, which include proficiency and conduct rules?

A: Prior to the proclamation of the Financial Professionals Title Protection Act, 2019 (FPTPA) and the implementation of the title protection framework, regulation of the use of the FP and FA titles did not exist in Ontario. As such, this is the first time minimum standards have been established for the use of the FP and FA titles in Ontario. FSRA acknowledges that some title users may already be subject to regulatory oversight (securities, insurance, anti-money laundering, privacy, etc.).