This is a necessary and welcome development. While we would have preferred a statutory-based best interest standard enforceable by FSRA, requiring it to be included in a Code of Ethics is an improvement to the framework that was first proposed. If implemented properly, this change has the potential to better protect investors like you when dealing with Financial Planners or Financial Advisors.
It also means that Ontario’s rules will be more in line with similar existing or proposed rules in other provinces such as Saskatchewan and Quebec, as well as the Client Focused Reforms recently launched by Canadian securities regulators.
The proposed rules are designed to help reduce consumer confusion by requiring Financial Planners and Financial Advisors to obtain credentials from an approved “credentialing body.” They will also need to meet minimum education standards established by the rules.
To ensure that these individuals treat their clients fairly, the proposed rules mandate that the credentialing bodies monitor their behavior, have them sign on to a Code of Ethics, and discipline them if they fail to follow the Code. FSRA, in turn, will oversee the behaviour of the credentialing bodies.
Other important improvements to the proposed Ontario rules include:
---Financial Planners and Financial Advisors ---
---must disclose their credentials to consumers ----in a clear and timely manner.
---Credentialing bodies will need to develop -
---consumer complaint handling processes.
The success of these rules, once finalized, will depend largely on how effective credentialing bodies are in enforcing them, and on FSRA ensuring that credentialing bodies live up to these important responsibilities.
FAIR Canada will be reviewing the proposed amendments to the rules and advocating for any further changes needed to better protect consumers.