Financial Planners and Financial Advisors: 2023-2024 supervision publication

The Financial Services Regulatory Authority of Ontario (FSRA) is an independent regulatory agency established to improve consumer protection in Ontario. FSRA promotes high standards of business conduct by regulating financial services sectors, including the Financial Planners and Financial Advisors sector.

In 2019, the Ontario government introduced the Financial Professionals Title Protection Act, 2019 (FPTPA) as a consumer protection measure to increase professionalism and confidence for individuals using the Financial Planners or Financial Advisors titles in Ontario. This is the first-time minimum standards have been established for title users and organizations. The legislation came into force in March 2022.

As part of its regulatory activities, FSRA oversees approved credentialing bodies and monitors their compliance under the Financial Professionals Title Protection Framework. Through supervision and examination, FSRA will ensure the effective implementation of the minimum standards under the Financial Professionals Title Protection Framework with a goal of enhanced consumer protection, higher industry standards and consistency among credentialing bodies.

During fiscal year 2023/2024, FSRA conducted the first examinations of approved credentialing bodies. In line with FSRA’s object of promoting transparency, FSRA is publishing the aggregated results of these examinations to identify best practices and opportunities for improvement. This approach is consistent with FSRA’s other regulated sectors.

Among the four (4) credentialing body examinations, no violations of the FPTPA or Financial Professionals Title Protection Rule (FPTP Rule) were observed. FSRA identified and communicated (3) areas of improvement for the credentialing bodies. Furthermore, FSRA observed and recognized twelve (12) best practices categories from the credentialing body examinations, which exceed the minimum standards that are prescribed in the FPTP Rule and relevant guidance.

Prior to the introduction of FSRA’s title protection framework, anyone could refer to themselves as a “financial planner” or “financial advisor”. The framework creates minimum standards for individuals using the Financial Planner and Financial Advisor titles, so that consumers can have confidence that the individual they are dealing with has a minimum standard of education, is being actively supervised by an approved credentialing body and is subject to a complaints and discipline process. 

Officially being able to use the Financial Planner or Financial Advisor title will make it easier for financial services professionals to communicate their value to consumers and validate their education and expertise.

With the introduction of the Financial Professionals Title Protection Framework, the use of the Financial Planner and Financial Advisor titles is limited to only those individuals who have obtained an approved credential from a FSRA-approved credentialing bodies. As of December 2023, FSRA has approved four (4) credentialing bodies and nine (9) credentials. There are approximately 17,000 credential holders permitted to use the FP and FA titles in Ontario.

FSRA differentiates between Financial Planner and Financial Advisor title users by establishing different minimum levels of technical knowledge, professional skills and competencies that would be reasonably expected of each title user.

Financial Planners should have the breadth and depth of knowledge to develop integrated financial plans for clients. These financial plans would include a holistic analysis of a client’s financial circumstances. Financial planners are expected to be proficient in all the core personal finance areas, which include estate planning, tax planning, retirement planning, investment planning and alternatives, finance management, and insurance/risk management.

Financial Advisors should have technical knowledge about at least one common investment product, as well as the necessary expertise and experience to develop suitable financial and investment recommendations for retail clients, based on their specific type of licence or designation.

To promote FSRA’s vision of financial safety, fairness and choice for Ontarians, FSRA published its 2023-2024 financial planners and financial advisors supervision plan in August 2023.

FSRA conducted examinations to supervise and monitor approved credentialing bodies to ensure they remain in compliance with the requirements of the FPTPA the Financial Professionals Title Protection Rule (FPTP Rule) and the terms and conditions of FSRA’s approval.

FSRA takes a risk-based approach to supervision. For 2023-2024, FSRA’s supervision approach focused on FSRA-approved credentialing bodies and on examining four (4) key areas of supervision:

Putting client’s interest first 

• How prioritization of the client’s interest first principle is integrated at the core of the credentialing bodies’ credentialing program. 

Resources stress testing 

• How credentialing bodies are prepared to handle increased demands on resources and ensure they can effectively administer and maintain a credentialing program. 

Complaint handling process 

• Transparency and accessibility of credentialing bodies’ complaint handling processes to the public and ensuring they are fair and efficient. 

Disciplinary process

• Process for credentialing bodies to impose appropriate and timely disciplinary actions.

In 2023-2024, FSRA aims to achieve the following outcomes through the supervision of credentialing bodies:

Ensuring compliance	Ensure all FSRA-approved credentialing bodies adhere to the relevant legislation.
Protection of consumers	Ensure that the credentialing bodies’ complaint handling processes are effective, fair, and efficient, with the underlying goal to serve the public interest and protect consumers. Ensure that consistency and reasonability of disciplinary outcomes/actions.
Ensuring professional conduct in the sector	Ensure that all credential holders are aware of the most valued aspect of financial planning and advisory services. Increase overall client satisfaction for individuals who use a Financial Planner or Financial Advisor titles. Ensure credentialing bodies have sufficient staffing and adequate resourcing (including financial resources) to ensure the integrity of the credentialing program and the individuals who hold approved credentials.
Promoting transparency	FSRA is publishing the aggregated results of the credentialing body examinations to identify trends and opportunities for improvement, best practices and any shortfalls observed.

All credentialing bodies are required to comply with the FPTPA and the FPTP Rule. FSRA will take appropriate action when contraventions are identified, which may include letters of warning and in the most egregious of circumstances, the revocation of FSRA’s credentialing body and/or credential(s) approval.

Among the four (4) credentialing body examinations, no violations of the FPTPA or FPTP Rule were observed. However, FSRA identified the following areas of improvement for the credentialing bodies:  

• Improve credential holder continuing education compliance rates.
• Enhance the efficiency of the credential holder attestation process.
• Enhance the accessibility and content of webpages to handle consumer complaints more effectively.

Credential holder continuing education compliance 

All credentialing bodies continue to demonstrate compliant processes to implement and monitor effective continuing education programs for credential holders.

FSRA provided a recommendation to one (1) credentialing body to improve on their credential holders’ continuing education compliance rates. FSRA recommended the issuance of frequent reminder communications to credential holders regarding the mandatory completion of continuing education requirements and issuing guidance that provides additional information on continuing education requirements. Additionally, it was noted that two (2) credentialing bodies were also addressing or implementing improvements to their own processes to improve on their continuing education non-compliance rates.

FSRA is of the view that the fulfillment of continuing education requirements is crucial, as it enables individuals using the Financial Planner and/or Financial Advisor title in Ontario to remain current with their technical knowledge to provide the most current and suitable financial advice to consumers, which aligns with FSRA’s mandate of consumer protection.

Credential holder attestation process 

The credential holder attestation process is important as it is a mechanism that credentialing bodies implement to ensure credential holders comply with their code of ethics and professional standards. It also ensures that all credential holders confirm their fulfillment of continuing education requirements and verify that they are not involved in any disciplinary proceedings that could affect their ongoing suitability to hold the credential. All credentialing bodies continue to demonstrate effective processes to ensure credential holders comply with a code of ethics and professional standards. 

FSRA made a recommendation to one (1) credentialing body to enhance their credential holder attestation process. This level of credential holder accountability and transparency are fundamental to the Financial Professionals Title Protection Framework. The credential holder attestation process serves as a mechanism through which credentialing bodies enforce adherence to their professional code of conduct and verify completion of continuing education requirements. This process ensures that credential holders remain informed and equipped to offer appropriate financial advice to consumers, which supports FSRA’s mandate of consumer protection and promoting professional conduct in the sector. 

Enhancing accessibility of the credentialing bodies’ complaints handling webpages 

All credentialing bodies continue to demonstrate an effective complaint handling process. FSRA provided recommendations to two (2) credentialing bodies to enhance the consumer accessibility and user-friendliness of their complaints handling webpages. 

FSRA is of the view that establishing a user-friendly and accessible complaints handling webpage enables members of the public to effectively submit complaints, ensuring an easier and more effective avenue for filing a compliant against the conduct of a credential holder. This aligns with FSRA’s aim of promoting professional conduct in the Financial Planners and Financial Advisors sector.

The FPTP Rule outlines the minimum standards for approval of a credentialing body and credentials for Financial Planner or Financial Advisor title usage. FSRA has set these outcomes-based standards to establish a framework that protects consumers, while still allowing credentialing bodies the flexibility to meet the standards and achieve compliance in a manner that best suits their business and/or operational needs.

FSRA had observed that some credentialing bodies are demonstrating best practices that exceed the minimum standards. Best practices are key to promoting consistent standards for the sector, managing risks, promoting continuous improvement, and maintaining compliance. The publication of best practices plays a pivotal role in the overall development and success of the sector by providing a framework for innovation.

FSRA observed and recognized twelve (12) best practices categories from the credentialing body examinations, which exceed the minimum standards that are prescribed in the FPTP Rule and relevant guidance. As a result, it is FSRA’s view that the following best practices are a robust and effective way to achieve compliance under the framework. Over time, FSRA will seek to close the gap between credentialing bodies to achieve a more consistent set of standards, while still allowing for differences in approach relevant to the credentialing bodies and its unique circumstances.

1. User-friendly and publicly accessible complaints handling webpage 

Best practice observed: FSRA observed that two (2) credentialing bodies exhibit the following key attributes of an effective public-facing complaints webpage:  

• The credentialing body’s homepage prominently features a clear and visible hyperlink leading to their public-facing complaints webpage. The hyperlink conveys a call to action, such as "submit a complaint" or an equivalent phrase, ensuring that members of the public can access information relating to the credentialing body’s complaints process effortlessly. 
• The credentialing body includes the contact information for the department or individual responsible for addressing queries related to the complaints process should be readily available on the webpage. 
• The details outlining the complaint-investigation process is presented in a concise and easy to understand manner, fostering transparency, and understanding. 
• The complaints page informs consumers about the types of complaints the credentialing body is equipped to investigate, providing clarity on the scope of the credentialing body's jurisdiction. 

FSRA observed that establishing a user-friendly and accessible complaints handling webpage is crucial to enable members of the public to effectively submit complaints against the conduct of a credential holder. This not only facilitates a user-friendly experience but also serves to protect the public interest and support professional conduct in the sector.

2. Resource stress testing 

Best practice observed: All credentialing bodies establish clear roles and responsibilities for functional areas pertaining to credentialing operations and proactively monitor their staffing resources. 

By defining roles within functional areas, credentialing bodies can effectively prepare for staff and team expansion without the need for extensive training for new hires. Proactive monitoring will ensure the credentialing bodies are prepared to recruit additional personnel when necessary to meet business requirements.

3. Credential curriculum

Subject matter experts 

Best practice observed: All credentialing bodies employ a dedicated team of subject matter experts with advanced education, extensive industry experience, and professional designations to review and update their curricula. These subject matter experts collaboratively develop courses and undergo a regular curriculum review process. The credentialing bodies also enlists external subject matter experts to ensure that the curriculum stays current with industry advancements, providing learners with relevant and up-to-date education.  

Inclusion of the putting the client’s interest first principle into the credentialing curriculum

Best practice observed: All credentialing bodies integrate the putting the client’s interest first principle into their curriculum content, emphasizing this essential principle throughout the credentialing program. 

Frequency of credential curriculum review 

As per the FPTP Rule, credentialing bodies are required to regularly review their educational curriculum to ensure that it is up to date having regard to industry best practices, legal requirements and developments in the economy and the financial services sector. All credentialing bodies conduct thorough reviews of its curriculum, ensuring alignment with industry standards and maintaining engaging and relevant content for learners 

Best practice observed: Two (2) credentialing bodies conducts thorough reviews of its curriculum once a year, ensuring alignment with industry standards and maintaining engaging and relevant content for learners.

4. Communicating the importance of putting the client’s interests first to credential holders 

Best practice observed: All credentialing bodies convey this crucial concept to their credential holders through various communication channels: 

• Annual conferences and professional networking events serve as platforms for conveying the importance of prioritizing the client's interest. 
• Regular publications and newsletters disseminate information to credential holders, emphasizing the importance of putting the client's interest first. 
• Mandatory continuing education courses, covering the putting the client's interest first concept, are imposed on credential holders. 
• Ethics presentations are regularly conducted during organizational events, featuring PowerPoint materials and practical scenarios. These presentations focus on in-person interactions to effectively convey the message of prioritizing the client's interest to credential holders. 
• The credentialing bodies organize events featuring industry experts, both for credential holders and the public. These events cover topics aligning with the putting the client’s interest first principle. 

FSRA supports the continued promotion of this concept using the various best practices identified above and other innovative ways to communicate the fundamental principle of putting the client’s interest first to credential holders.

5. Defined service standards over complaints handling 

Credentialing bodies are required to demonstrate an effective complaint handling process. However, the FPTP Rule and relevant guidance do not prescribe service standards for the adjudication of complaints. 

Best practice observed: Two (2) credentialing bodies1 have implemented and consistently adheres to defined service standards for the adjudication of complaints.  

Defined service standards ensure that all staff members in the complaint resolution process understand their roles and responsibilities, which promotes consistency in how complaints are addressed. Defined service standards also help manage the public’s expectations by establishing clear timelines and procedures for resolving complaints. Efficient complaint resolution not only ensures consumer protection but also elevates professional standards within the sector.

6. Credential holder environmental scanning 

All credentialing bodies currently have processes and procedures to conduct environmental scans for disciplinary actions related to their credential holders. The credentialing bodies routinely scan various sources, such as legal publications, disciplinary websites of all other FSRA-approved credentialing bodies and financial regulators’ websites.  

The following are the best practices that FSRA observed amongst the credentialing bodies’ credential holder environmental scanning process. 

Process for scanning for credential holder disciplinary action 

Best practice observed: One (1) credentialing body utilizes software to automate the environmental scanning process, to occur daily.  

The software conducts a comprehensive search across the Google search engine and the results are systematically recorded for subsequent manual staff review and investigation. The search engines return results from legal publications, social media, disciplinary websites of all other FSRA-approved credentialing bodies and financial regulators websites and other sources. The data and the results of the environmental scan are recorded and logged into the credentialing body’s credential holder database.  

Process for investigation of matches found among credential holders 

Best practice observed: All credentialing bodies uses cases facts when a match (referred to as a “hit”) is encountered during the environmental scanning process, where a name found online matches to a credential holder.  

FSRA observed that the credentialing bodies used the following case facts to determine the association of the “hit” to the relevant credential holder such as, but not limited to:  

• the full name of the credential holder
• employer information
• critical dates
• geographic location

Best practice observed: Three (3) credentialing bodies have implemented processes to send a request for information to the named credential holder when a “hit” is encountered during the environmental scanning process. The outcome is to assess credential holder suitability by requesting information from the credential holder that will aid in investigating whether the identified “hit” is linked to the named credential holder.

7. Continuing education audits 

All credentialing bodies have procedures to randomly select credential holders for a continuing education audit. Selected individuals must submit supporting documents to verify the completion of continuing education requirements. Failure to provide supporting documents would result in disciplinary action and being labeled as "not-in-good-standing" on the credentialing bodies’ public registry. 

Appropriateness of audit sample size 

Best practice observed: All credentialing bodies select an appropriate and proportionate number of credential holders for a continuing education audit relative to their total number of credential holders. 

Proactive communication of continuing education requirements to credential holders 

Best practice observed: Three (3) credentialing bodies engage in proactive, regular communication with their credential holders, reminding them to fulfill their continuing education requirements.

8. Disciplinary / enforcement actions 

All credentialing bodies have processes to adjudicate complaints and enforce discipline in a transparent and impartial manner. Best practices observed related to disciplinary / enforcement actions are described below. 

Publishing ongoing disciplinary investigations involving credential holders 

Best practice observed: One (1) credentialing body publicly shares information about ongoing disciplinary actions proceedings involving its credential holders on its website, in addition to posting actions taken after a resolution has been reached. The details shared regarding ongoing disciplinary actions include information on the statement of allegations, the history of these allegations, and the upcoming date for the disciplinary hearing.  

Publishing information after imposition of disciplinary action(s) on credential holders 

Best practice observed: One (1) credentialing body, after imposing an enforcement action, publishes a comprehensive report related to the enforcement action. The report provides the public with transparent information about the allegations, particulars of the adjudication and the rationale behind the disciplinary enforcement action imposed on the credential holder.  

Oversight of credential use following the imposition of disciplinary actions 

Best practice observed: Three (3) credentialing bodies continues to monitor for appropriate use of their credential by individuals following revocation or lapse of their credential. This ensures consumer protection by allowing only qualified individuals use their credential and use the Financial Planner and/or Financial Advisor titles.

9. Public registry 

All credentialing bodies currently maintain a current, publicly accessible list of individuals holding approved credentials.  

Best practice observed: All the credentialing bodies’ information technology systems include a date and timestamp reflecting when the public registry was updated. This allows for transparency and accountability in tracking the latest updates to the credentialing body’s public registry, ensuring accurate and timely information for stakeholders. 

10. Continuing education requirements

All credentialing bodies currently require credential holders to comply with continuing education requirements. Failure to comply with continuing education requirements could result in enforcement action. Best practices observed related to continuing education requirements are described below. 

Credentialing bodies offer continuing education courses that cover the principle of putting the client’s interest first 

Best practice observed: All credentialing bodies offers in-house continuing education courses to their credential holders, including topics such as the putting the client’s interest first principle.  

Implementing compulsory/mandatory continuing education topics for credential holders 

Best practice observed: Three (3) credentialing bodies enforce mandatory continuing education requirements, specifying courses or themes such as ethics, to ensure ongoing professional development among their credential holders.  

11. Requiring credential holders to disclose their credential in a clear and timely manner 

Credentialing bodies are required to have policies and procedures to require credential holders to disclose their approved credentials to consumers in a clear and timely manner. However, the FPTP Rule and guidance do not prescribe how to achieve this requirement. 

Best practice observed: All credentialing bodies include this requirement in their credential holder annual attestation form, a document which all credential holders must attest to on an annual basis.

12. Use of annual attestations

Credentialing bodies are required to have processes and procedures to ensure that all credential holders comply with certain requirements, such as adhering to a code of conduct, completing continuing education requirements and payment of fees. However, the FPTP Rule and guidance do not prescribe how to achieve these requirements. Best practices observed related to credential holders’ compliance with code of ethics and professional standards are described below. 

Credential holder attestation process 

Best practice observed: All credentialing bodies use annual attestations to achieve compliance with various requirements under the FPTP Rule and guidance. The annual attestations require credential holders to confirm their adherence to the credentialing bodies’ code of professional standards and attest to the completion of their mandatory continuing education requirements. The credentialing bodies also included specific questions in the attestations aimed at determining their credential holder’s ongoing suitability to continue holding the credential.

Integration of the credential holder attestation process to collection of fees from credential holders 

Best practice observed: Three (3) credentialing bodies integrates the annual credential holder attestation to the process of collecting payments for their credential renewal fees. This linkage facilitates the simultaneous collection of required certification fees from credential holders and obtaining the completed annual attestations from credential holders. The advantage of this integration is that it allows the credentialing body to take appropriate and operationally efficient enforcement actions against those credential holders that fail to meet these obligations.  

The objective of FSRA’s supervisory activities is to ensure that credentialing bodies remain in compliance with the requirements of the FPTPA, the FPTP Rule, and the terms and conditions of FSRA’s approval. 

In its 2023-2026 Annual Business Plan, FSRA committed to conducting a review of the Financial Professionals Title Protection Framework to evaluate its effectiveness in achieving expected outcomes and to assess opportunities for improvement. The best practices observed may also inform the framework evaluation and potential future amendments to the FPTP Rule and / or relevant guidance. 

FSRA will continue to supervise approved credentialing bodies and publish annual supervision plans. Findings from FSRA’s supervision of credentialing bodies will inform future amendments / enhancements to the Financial Professional Title Protection Framework, with the goal of achieving consistency between credentialing bodies and enhanced professionalism and consumer protection.