On August 13, the Financial Services Regulatory Authority of Ontario (FSRA) published for comment Proposed Rule [2020-001] Financial Professional Title Protection (Rule), which will require individuals who use either the financial advisor (FA) or financial planner (FP) titles to have the appropriate credential from a FSRA-approved, credentialing body. FSRA’s authority to regulate the use of the FA and FP titles comes from the Ontario Financial Professionals Title Protection Act (FPTPA), which was passed in May 2019 but hasn’t come into force yet.

Instead of introducing a brand-new licensing regime for individuals, FSRA has proposed a framework that leverages existing credentials. The proposed Rule provides for the approval and oversight of bodies that offer credentials that meet FSRA’s minimum standards for FA and FP title users. Under the new regime, holding a designation (such as the CFA Charter) or a license from a regulatory agency will not automatically qualify an individual to use either the FA or FP titles. The body that issues the credential or license, and the specific license or credential, will have to be approved under the Rule first.

FSRA is seeking comments on, among other things:

  • Its criteria for approval of credentialing bodies and specific credentials;
  • Whether the baseline competency profiles outlined in the proposed Rule reflect the knowledge, skills and competencies that should be included in a credentialing body’s education program to establish the minimum standard for FP and FA title users; and
  • Whether title holders should have to disclose to their clients the credential they hold that entitles them to use the FA or FP title (and what this disclosure should look like).

FSRA has also published draft guidance (Guidance) on the application process for approval of credentialing bodies and specific credentials.

Financial planning and advising activities that are subject to regulation will, in addition to oversight by the credentialing body with respect to the appropriate use of title, continue to be overseen and regulated by the relevant regulatory bodies.

Transition Period: Individuals who used either the FA or FP title immediately before January 1, 2020 and continue using it until the proposed Rule comes into force may continue using that title for another three years (in the case of FA title users) or five years (in the case of FP title users). This will give credentialing bodies time to become approved at the entity and credential level and give title holders time to obtain an approved credential, if required.

The comment period closes on November 12, 2020. If you have any questions about how the Proposed Rule could affect your business, please do not hesitate to contact us.

August 31, 2020