Consumers should be confident that they are receiving financial planning and advisory services from qualified individuals. To strengthen consumer protection in the financial services sectors, the Ontario government and FSRA are targeting to implement Ontario’s new title protection framework in the Spring of 2022. Once implemented, the framework will protect titles for financial planners and financial advisors in Ontario and set minimum education standards for use of these titles.

What this means for mortgage agents and brokers

With the introduction of the framework, if a mortgage agent or broker is holding themself out as a Financial Planner (FP) or Financial Advisor (FA), they must obtain, or already have, an approved credential.

The approved credential must be from a credentialing body (CB) approved by FSRA. Agents1 and brokers may not use the title FP or FA without the approved credential. Mortgage agents and brokers can continue to hold themselves out as providing advice related to a mortgage/mortgage investments to their clients.

Consumer confidence in financial planning and advisory services

In the 2019 Ontario Budget, the government announced it would introduce legislation to regulate the use of the FP and FA titles in Ontario. The new title protection framework is intended to respond to concerns about the expertise and knowledge of individuals using unregulated titles when providing financial planning and advisory services. These concerns were raised by consumer and investor advocates. A consumer research survey commissioned by FSRA in the fall of 2020 also found that 86% of consumers agreed that minimum standards were needed for the use of FP and FA titles.

The Financial Professionals Title Protection Act, 2019

The title protection framework will be implemented under the Financial Professionals Title Protection Act, 2019 (FPTPA). The FPTPA received Royal Assent in May 2019, but it has not yet been proclaimed into force. The targeted implementation date for the title protection framework is Spring 2022. FSRA will post approved credentialing bodies and credentials on its website.

Suitability of mortgage/mortgage investment recommendation

Mortgage agents and brokers provide consumers with recommendations/advice regarding mortgages/mortgage investments. They must be competent to do so as stated in:

  • Principle 4, Competence, of the National Code of Conduct for the Mortgage Brokering Sector published by the Mortgage Brokers Regulators’ Council of Canada (MBRCC): “Regulated persons must have and maintain the skills, knowledge and aptitudes necessary for their business activities. They should decline to act when they are unable to provide products / services in accordance with this Code.”
  • Section 24 of Ontario Regulation 188/08 (O. Reg. 188/08) under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (“MBLAA”): brokerages2 must take reasonable steps to ensure mortgages/mortgage investments presented to a consumer are suitable for that consumer based on the unique needs and circumstances of the consumer (i.e., borrower and/or investor/lender).

The licensing education requirement for agents and brokers ensures these licensees can provide suitable recommendations/advice regarding mortgages/mortgage investments. If agents and brokers are providing advice beyond this focus area, they should have the competencies to do so (e.g., education, experience and/or qualification).

While mortgage agents and brokers may wish to meet more than consumers’ mortgage needs, they must remember they cannot hold out as an FP or FA without an approved credential once the new title protection framework is implemented.

1 As per section 8(3) of Ontario Regulation 187/08: Mortgage Brokers and Agents: Standards of Practice, in public relations materials, at least one reference to the broker or agent must include his/her licence title (e.g., mortgage broker). Other titles may be included in the materials, as appropriate.
2 While the brokerage is ultimately accountable for ensuring the suitability of a mortgage/mortgage investment for a client, agents and brokers have direct responsibility for ensuring suitability and must not do or omit to do anything that might reasonably be expected to result in the brokerage contravening or failing to comply with a requirement under the MBLAA. See Duty re authorizing brokerage in section 3 of O. Reg. 187/08.