Financial Planners and Financial Advisors 2024-2025 Supervision Publication

Executive summary

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.

Credentialing body thematic reviews

As part of its 2024-2025 Supervision Plan, FSRA conducted thematic reviews of all five approved credentialing bodies. FSRA identified five areas of improvement among the credentialing bodies and issued recommendations to address the findings. FSRA will review the measures implemented by the credentialing bodies in response to these recommendations with the goals of strengthening credential holder oversight and protecting consumers.

During the thematic review, FSRA also observed several best practices among credentialing bodies to refer uncredentialed title usage to FSRA for further review, upholding the integrity of the title protection framework.

FSRA’s education initiative in the Life and Health Insurance sector

In support of the Supervision Plan, FSRA launched an education initiative to raise awareness about the Financial Professionals Title Protection Framework and address uncredentialed title use in the Life and Health Insurance sector. As a result of the education initiative, FSRA reached approximately 60,000 life insurance agents and accident and sickness agents with educational material, raising awareness about the framework and its role in supporting compliance with appropriate title usage.

FSRA also engaged seven life insurance companies and managing general agencies, covering approximately one-third of the life insurance agent population in Ontario, to help raise awareness about the framework. FSRA recommended strategies to these organizations to promote compliance by educating their agents on the requirements for using the protected titles.

FSRA will continue to work with stakeholders to promote education and awareness of the framework, ensuring that title users are appropriately credentialed and subject to oversight by the credentialing bodies to protect consumers.

Approach

FSRA’s supervision plan for 2024-2025 intended to achieve the following outcomes:

• assessing how well approved credentialing bodies are adapting as regulated entities under the Financial Professionals Title Protection Framework
• ensuring the effectiveness of credential holder oversight processes at the credentialing bodies to better protect consumers
• ensuring that credentialing bodies have processes in place to refer uncredentialed title usage to FSRA for review once they become aware of an occurrence
• promoting education and awareness about the framework in the Life and Health Insurance Sector

The first part of FSRA’s supervision plan involved conducting thematic reviews of approved credentialing bodies. Thematic reviews focus on specific themes across credentialing bodies and provide insights into industry trends, risks, and compliance issues. Furthermore, such reviews serve the public interest by identifying opportunities to promote best practices among credentialing bodies.

The focus areas for FSRA's credentialing body thematic reviews in 2024-2025 are as follows:

1. Reviewing prior year supervisory findings to ensure previous year’s recommendations are implemented.
2. Conducting an evidence-based review of credential holder oversight processes across credentialing bodies.
3. Reviewing credentialing body processes to determine if there is a procedure in place to refer uncredentialed title usage to FSRA.

The second part of the supervision plan is FSRA’s education initiative in the Life and Health Insurance sector on the title protection framework. Following the conclusion of the transition provision for the Financial Advisor title on March 28, 2024, FSRA launched the education initiative to raise awareness about the framework and the implications of uncredentialed title usage.

Credentialing body thematic reviews

Focus area #1: Reviewing prior year supervisory findings to ensure recommendations are implemented

FSRA published its 2023-2024 Financial Planners and Financial Advisors Supervision Publication following its first examination of key credentialing body processes at the credentialing bodies. During the 2023-2024 examinations, FSRA made the following recommendations to credentialing bodies:

1. Improve credential holder compliance rates for credential holder continuing education.
2. Improve the efficiency of the credential holder attestation process.
3. Improve the accessibility and content of webpages to better address consumer complaints.

1. Improve credential holder compliance rates for credential holder continuing education: In 2024-2025, FSRA observed the implementation of processes by credentialing bodies aimed at improving continuing education compliance. These processes included issuing more frequent communications to credential holders about continuing education requirements, emphasizing the importance of staying current, and increasing monitoring efforts to ensure compliance. FSRA will continue to monitor this area to ensure that credential holders maintain up-to-date knowledge, ensuring consumers receive relevant and appropriate financial advice.

2. Improve the efficiency of the credential holder attestation process: In 2023-2024, FSRA recommended that a credentialing body enhance its credential holder attestation process. The purpose of this process is to ensure the ongoing suitability of credential holders and their adherence to their credentialing body’s code of ethics and professional standards. In 2024-2025, FSRA observed improvements, noting that the credentialing body has strengthened its approach to collecting attestations. The updated process now allows the credentialing body to identify credential holders who fail to complete their required attestations and take appropriate follow-up actions.

3. Improve the accessibility and content of webpages to better address consumer complaints: In 2023-2024, FSRA provided recommendations to certain credentialing bodies to enhance the consumer accessibility of their complaints handling webpages. In 2024-2025, FSRA observed improvements, with credentialing bodies enhancing their webpages to simplify the process of submitting complaints and provide clearer access to support. FSRA will continue to monitor this area to ensure that members of the public can easily submit complaints regarding credential holder conduct, protecting the public interest and upholding professionalism in the sector.

Focus area #2: Conducting an evidence-based review of credential holder oversight processes across credentialing bodies

FSRA identified risks associated to the credentialing bodies based on evidence obtained during its supervisory activities. The evidence obtained informed FSRA’s approach to the 2024-2025 credentialing body thematic reviews, helping FSRA monitor sector risks and make recommendations to credentialing bodies if necessary. As a result of these reviews, FSRA identified several areas for improvement and made the following recommendations to the credentialing bodies:

1. Improve the oversight of credential holder continuing education compliance processes.
2. Ensure that disciplinary decisions imposed on credential holders are promptly published on the credentialing body’s website.
3. Ensure adherence to the credentialing body’s defined service standards throughout the complaint handling process.
4. Ensure that credentialing educational curricula are reviewed according to the credentialing body’s curriculum review policies.
5. Ensure the accuracy of information reported to FSRA on the credentialing body’s Annual Information Return.

1. Improve the oversight of credential holder continuing education compliance processes: FSRA issued a recommendation to a credentialing body to enhance its follow-up procedures for credential holders who are selected for continuing education audits and found to be non-compliant. Effective follow-up procedures at the credentialing body will ensure that non-compliant credential holders take corrective action to fulfill their continuing education requirements. This helps protect consumers by ensuring credential holders stay current and maintain the technical knowledge required for providing financial planning and advisory services.

2. Ensure that disciplinary decisions imposed on credential holders are promptly published on the credentialing body’s website: FSRA provided recommendations to certain credentialing bodies to ensure that disciplinary decisions are published on its website in a timely manner after the imposition of a disciplinary action on a credential holder. Timely publication of credential holder disciplinary decisions protects consumers by providing them with the information to make informed decisions on the financial professionals they choose to work with.

3. Ensure adherence to defined service standards throughout the credentialing body’s complaint handling process: FSRA issued a recommendation to a credentialing body to adhere to their defined service standards for complaint handling. Adherence to defined service standards ensure that potential breaches of the code of conduct are addressed promptly, protecting consumers and holding credential holders accountable for their conduct.

4. Adhere to policies on curriculum review frequency: FSRA issued a recommendation to a credentialing body to adhere to its policy on the frequency of curriculum reviews. Regular reviews of the curriculum ensure that learning materials are updated to reflect regulatory changes and technological advancements, enabling credential holders to stay current and maintain the technical knowledge required for providing financial planning and advisory services.

5. Ensure the accuracy of information reported to FSRA on the credentialing body’s Annual Information Return: FSRA recommended that certain credentialing bodies take steps to ensure the accuracy of the information submitted in their Credentialing Body Annual Information Returns. The Annual Information Returns provide FSRA with insights into industry risks and trends, supporting its risk assessment and oversight of the sector.

Focus area #3: Ensuring a procedure is in place for credentialing bodies to refer uncredentialed title usage to FSRA

In 2024-2025, FSRA reviewed whether credentialing bodies had processes to refer uncredentialed title use to FSRA for further review. Processes to refer uncredentialed title use to FSRA uphold the integrity of the title protection framework, by ensuring those holding out as a Financial Planner or Financial Advisor are appropriately credentialed, supervised and subject to a complaints and disciplinary process.

During the thematic review, FSRA observed that all credentialing bodies have established processes to refer instances of uncredentialed title usage to FSRA for review. FSRA identified the following best practices at the credentialing bodies:

• conducting internet scans using automated search tools to identify instances of unauthorized use of their respective credential marks
• verifying that individuals who formerly held a FSRA-approved credential are no longer using a protected title
• monitoring disciplinary action decisions from regulators to determine if the disciplined individual is using their respective credentialing body marks without a credential
• referring complaints received from the public to FSRA when uncredentialed title use is identified

FSRA’s education initiative in the Life and Health Insurance sector

Following the conclusion of the transition period for the Financial Advisor title on March 28, 2024, any individual using the Financial Advisor title must hold a FSRA-approved credential. FSRA’s preliminary review of internet advertising by financial services professionals revealed that there may be instances of uncredentialed title usage among individuals selling life insurance products. Uncredentialed title use can mislead and harm consumers and erode trust in financial professionals. In response, FSRA launched an education initiative in the Life and Health Insurance sector with the outcome of raising awareness about the title protection framework. This proactive approach will educate stakeholders about the framework and promote appropriate title use to protect consumers.

Broad life sector engagement

FSRA raised awareness about the framework in the Life and Health Insurance sector by distributing an information sheet on uncredentialed title use to approximately 60,000 life agents and accident and sickness agents, as well as several life insurance industry associations. Furthermore, information about the title protection framework and appropriate title use has been incorporated into FSRA’s program for supervising life insurance agents.

Targeted life sector engagement

FSRA engaged seven (7) life insurance companies and life and health insurance managing general agencies^[1] to educate them on the title protection framework and the implications of uncredentialed title use. The selected life insurance companies and managing general agencies, who employ or are contracted with approximately one-third of the life insurance agents in Ontario, committed to several strategies to raise awareness about the framework and address uncredentialed title use. FSRA observed that the following strategies are best practices:

• including restrictions on Financial Advisor title use in life agents’ terms of employment letter
• amending job titles with the words “Financial Advisor” or “Financial Planner” if the position does not require the individual to hold a FSRA-approved credential
• updating job postings of Financial Advisor job titles to include a requirement to hold a FSRA-approved Financial Advisor credential
• amending consumer-facing websites using the titles “Financial Advisor” or “Financial Planner” if the organization does not require the individual to hold a FSRA-approved credential
• conducting regularly scheduled environmental scans of life agent advertising to ensure that individuals holding out as a Financial Advisor or Financial Planner hold a FSRA-approved credential
• updating life agent training protocols to include information about the title protection framework
• disseminating information about the title protection framework to agents through email communications and newsletters

There is further work to be done in promoting awareness about title protection. FSRA will continue to work with stakeholders to promote education and awareness of the framework, ensuring that title users are appropriately credentialed and subject to oversight by the credentialing bodies.

Conclusion

FSRA aims to enhance protection for consumers and investors and promote a strong culture of credential holder oversight across credentialing bodies. FSRA will follow up on its findings and recommendations, to promote continuous improvement in the Financial Planners and Financial Advisors sector.

FSRA will also continue to work with stakeholders to raise awareness about the title protection framework and uncredentialed title use to ensure title users are appropriately credentialed and subject to oversight by the credentialing bodies.

Your feedback is welcome

FSRA expects approved credentialing bodies and stakeholders to review the 2024-2025 Financial Planners and Financial Advisors Supervision Publication, along with other relevant FSRA publications and resources for the sector.

FSRA welcomes comments from stakeholders on this supervision publication. Your comments will help inform current and future supervision priorities and will increase our understanding of the Financial Planners/Financial Advisors sector.

Additional Financial Planners/Financial Advisors supervision resources

FSRA maintains key resources related to the Financial Planners/Financial Advisors sector publicly on its website. These resources contain information related to the established regulatory standards that guide FSRA’s supervision efforts for the sector.

Financial Professionals Title Protection – Administration of Applications Guidance

The Administration of Applications Guidance sets out application criteria that approved credentialing bodies have demonstrated in their application to be approved by FSRA. The Administration of Applications Guidance is also a valuable tool for organizations interested in becoming an approved credentialing body and offering a Financial Planner and/or Financial Advisor credential in Ontario.

The application form for approval of a credentialing body and Financial Planner/Financial Advisor credentials is available on FSRA’s website. Interested organizations should contact FSRA for more information on how to apply.

Financial Professionals Title Protection – Supervisory Framework Guidance

The Supervisory Framework Guidance sets out FSRA’s supervision approach under the Financial Professionals Title Protection Act and the provisions of the Financial Professionals Title Protection Rule. The Guidance also explains how FSRA interprets titles that could reasonably be confused with the Financial Planner and Financial Advisor titles.

FSRA also has dedicated webpages with additional information related to the Financial Planners/Financial Advisors sector regulatory framework:

• Financial Planners and Financial Advisors Industry page
• Financial Planners and Financial Advisors Consumer page