Financial planner regulations needed, say 2 Canadian groups

Many people turn to financial planners and advisers for essential advice on how to manage their money and plan their future, but not all of those who use those titles are qualified to advise you and two national organizations want that to change.

'Anyone can hang out a shingle,' says Financial Planning Standards Council spokeswoman

Just because someone calls themselves a financial adviser or planner does not mean they are qualified. (Shutterstock)

Many people turn to financial planners and advisers for essential advice on how to manage their money and plan their future, but not all who use those titles are qualified to offer advice and two national organizations want that to change.

"A lot of Canadians might be surprised to find out there's no requirement in terms of holding out as a financial adviser or holding out as a financial planner," said Greg Pollock, CEO of Advocis, the Financial Advisors Association of Canada, a voluntary membership group that wants to raise the professional bar.

Pollock's organization has been urging government to introduce regulations for financial planners and advisers.

The Financial Planning Standards Council agrees, and saying the term financial planner is one of most misused titles in the financial industry.

"Anyone can hang out a shingle and so they don't have to have any requisite requirements as far as education, competence, ethics or accountability," said Kimberley Ney, a spokeswoman for the Financial Planning Standards Council.

Ney said even the people most likely to invest don't realize this.

Good income and education not a safeguard

"The research that we've seen has shown that the higher the income level of the household and the higher the education level of the household, the more confused they are around this," she said.

"They actually think they are protected."

Ney said an estimated 80,000 people across Canada imply through title or advertising that they offer financial planning, but the "vast majority of them are not qualified to do so and haven't gone through a certification program."

The Nova Scotia government jobs website shows 1.3 per cent of those using the title of financial planner or other financial officer have less than a high school graduation certificate.

Another 11.5 per cent have a high school graduation certificate or the equivalent. The majority have a bachelor or postgraduate degree, but Pollock says even one uneducated financial adviser can damage the reputation of those who are qualified.

Both groups lobbying for change

Pollock's organization met with Nova Scotia Finance Minister Randy Delorey in November, urging him to introduce regulations for financial planners and advisers.

"I think there needs to be minimum proficiency standards in place," he said.

Advocis wants to see a foundational educational program to get them admitted into the industry, plus a requirement for quality continuing education, which would see them remain current in terms of developments in the industry.

Pollock said there are always new products being developed and says some of them are relatively complex.

"As much as we want our clients to understand these products and how they work, it's even more important that these financial advisers are totally on top of the industry, on top of those products and can advise their clients appropriately," he said.

Advocis is also suggesting they be required to have professional liability insurance to protect clients.

Quebec regulates financial planners

The Financial Planning Standards Council makes a distinction between financial planners and financial advisers.

Ney says planners "would take a step back and a much more holistic view of this person's entire financial circumstances."

Ney said Quebec is the only province to regulate financial planners so she recommends people in other provinces search for certified financial planners to ensure they have a qualified person.

She said certified planners must go through rigorous training and complete a number of steps including education, exams and appropriate work experience in order to earn the designation. They must abide by standards and ethics and follow a code of conduct so clients' interests come first.

They are also accountable to the council.

Pollock said before consumers seek advice from a financial planner or advisor, they should check their education, determine if they have licenses related to the services that they are selling and check the Nova Scotia Securities Commission website to see if they've been disciplined in the past.

About the Author

Yvonne Colbert

Consumer Watchdog

Yvonne Colbert has been a journalist for nearly 35 years, covering everything from human interest stories to the provincial legislature. These days, she's focused on helping consumers get the most bang for their bucks and avoid being ripped off. She invites story ideas at


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