An overwhelming majority of Ontarians wrongly believe that the title ‘financial advisor’ is currently regulated and requires some form of accreditation, similar to lawyers, doctors or other professionals, according to survey findings released today by Advocis, the Financial Advisors Association of Canada. With this false assurance, investors are at significant risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors.
Although a license is required to sell financial products in Canada, there is no minimum education requirement to provide financial advice. The survey of 1,500 Ontarians, conducted by Abacus Data in September and October, found only 24 per cent of respondents are aware that anyone, regardless of education, training or membership in a professional governing body, can legally call themselves a financial advisor. The research also found that younger people (ages 18-30) and those with lower incomes, who arguably need sound financial advice most, place the highest levels of trust in the financial advisor title.
“For years, we’ve recognized the dangers that lack of title protection presents for the financial wellbeing of hard-working families seeking professional financial advice, said Advocis CEO and President, Greg Pollock. “This survey proves there is a tremendous amount of misplaced trust in the market, and reinforces just how badly new regulations are needed to protect the public.”
In fact, 91 per cent of those surveyed said they would support the provincial government passing new legislation to regulate the title of ‘financial advisor’. Meanwhile, 80 per cent of respondents felt all financial advisors should be subject to a mandatory code of professional conduct.
“All Ontarians deserve to know their money is in the hands of true professionals, who are qualified to help them meet their financial goals,” concluded Pollock. “The time has come to legally recognize the provision of financial advice as a profession and to oversee financial advisors as we do all other professionals who provide essential advice and services.”
Due to the lack of professional regulation, today there is also no single registry or database where an investor can go to verify their advisor’s credentials and disciplinary history. What’s more, without consistent continuing-education requirements, investors have little assurance that their advisor’s knowledge of financial planning and products is being kept current.
Advocis is encouraging Ontario’s new government to take meaningful action, and protect the financial security of Ontarians. The Association is calling for every financial advisor to be required to be a member of a professional governing organization and adhere to a common code of professional and ethical conduct, maintain mandatory professional liability insurance, complete ongoing professional development, and commit to a fair and impartial disciplinary process.
Advocis, The Financial Advisors Association of Canada, is the association of choice for financial advisors and planners. With more than 13,000 members in 40 chapters across the country, Advocis is the definitive voice of the profession, advocating for professionalism and consumer protection. Advocis works with decision-makers and the public, stressing the value of financial advice and working toward an environment in which all Canadians have access to the advice they need.
SOURCE Advocis, The Financial Advisors Association of Canada