Advocis Professions' Model - Raise The Bar

Advocis Professions' Model

The Problem: Currently, anyone can present themselves as a “financial advisor,” regardless of their training, experience or education. Consumers need to know that their advisors comply with the highest standards of professionalism, ethics and conduct. However, due to gaps in the current regulatory framework, Canadian consumers are exposed.

• Existing regulation is focused on the sale of products as opposed to the ongoing relationship of trust between financial advisors and their clients.
• Requirements for advisors to keep their knowledge current are inconsistent between regulators.
• There is no effective, industry-wide disciplinary process.
• There is no easy mechanism for the public to verify their advisor’s registration credentials.

The Solution: Fortunately, the solution to the problem is simple and straightforward: Anyone using a professional financial practitioner title such as “financial advisor” should be required to maintain ongoing membership in an accredited professional association.

• By requiring financial advisors to obtain and maintain membership in a recognized association, consumers could easily review the advisor's credentials and complaints history.
• Advisors would be required to:
  • meet clearly specified proficiency standards prior to being admitted into the professional association;
  • satisfy continuing education requirements as a condition of their membership; and
  • adhere to the association's code of professional and ethical conduct.

• To be accredited, the professional association would be required to have the following characteristics:
  • a code of conduct and ethics;
  • a requirement that members maintain errors and omissions insurance;
  • elevated minimum education requirements;
  • a best practices manual or handbook;
  • a governance structure that includes public representation;
  • a complaints and disciplinary process that empowers the association to cancel the advisor’s membership; and
  • a public-facing database through which clients can conduct a “one-stop” check of their advisor’s credentials and disciplinary history.

Who Benefits: Raising the professional bar by requiring that all financial advisors be members of a professional association will enhance consumer protection and benefit advisors, regulators, product providers and distributors.

• Consumers would benefit from their advisors having to adhere to a mandated code of professional conduct and ethics, proficiency standards, continuing education, best practices, and professional accountability integrated across all sectors. Consumers would also benefit from public access to information about financial advisors’ credentials and disciplinary history.
• Financial advisors would benefit from enhanced public trust, status and confidence in advisors as professionals; access to resources that complement and facilitate standards and compliance with regulatory requirements; and a raised professional bar for all financial practitioners.
• Regulators would benefit from the delivery of enhanced consumer protection and the "reining in" of unethical advisors who move from sector to sector.
• Product providers and distributors would be able to trust in the professionalism of financial advisors representing their firms. They would also benefit from the prevention of unethical advisors moving from one company to the next, and an enhanced professional standard would enable greater success in recruiting new advisors into the industry.

If you have further questions, please contact Kristin Doucet, Director of Communications & Media Relations, Advocis, at 416-342-9896 / kdoucet@advocis.ca.