Proposed IIROC rule too lax: FPSC

By Steven Lamb | August 20, 2008 | Last updated on August 20, 2008
4 min read
  • minimum levels of work experience
  • a standardized examination
  • continuing education; and
  • a code of conduct or ethics

“Rather than recognizing that, IIROC has simply listed four certifications that they believe meet their own requirements,” he says. “Several of them don’t necessarily have the components of what goes into true professional certification.”

As drafted, the proposed IIROC rule states:

“(a) While a Dealer Member is entitled to impose its own proficiency standards higher than those noted below, any of the following, as updated or replaced from time to time by the applicable educational and trade Associations or sponsoring organizations, may demonstrate proficiency:

(i) Completion of the Canadian Securities Course and the Professional Financial Planning Course sponsored by the Canadian Securities Institute,

or …”

The guideline goes on to list several of the top designations, including CFP, PFP, R.F.P., or Quebec’s Pl. fin. List says he is surprised that IIROC has set the Canadian Securities Course and the Professional Financial Planning Course on a par with the professional designations.

“We would suggest that no single course of study, regardless of how good it is, is a sufficient measure of competence to hold out as a financial planner. That flies in the face of everything that professional certification is about,” says List. “The FPSC, for the CFP certification program, has over 30 approved providers of core education that meet our educational standards. IIROC has singled out one.

“Education alone is not enough, and we think it’s inappropriate that they singled out a specific education path to demonstrate proficiency.”

He points out that by simply completing the Canadian Securities Course and the Professional Financial Planning Course, a candidate for the CFP designation would still face additional requirements, notably the standardized examination.

After passing the exam, newly minted CFP professionals would then be subject to the designation’s code of conduct and be required to maintain their professional development through continuing education.

“[I am] in no way suggesting anything negative about the Professional Financial Planning Course, but that alone as a minimal standard, we say, is far too low a standard to be a financial planner,” List says.

Be heard on this issue. Join the Advisor.ca Forum.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

(08/20/08)

Steven Lamb

The Investment Industry Regulatory Organization of Canada’s proposed rule governing how its member firms supervise financial planning activities has drawn fire from critics, but even among those who support the measure, there are those who feel it could have been better written.

The Financial Planners Standards Council (FPSC) of Canada welcomes the proposed rule, in that its stated goal is to better protect client interests. The body, which governs the Certified Financial Planner (CFP) designation, had engaged the securities regulator from the outset, when IIROC’s predecessor, the Investment Dealers Association, embarked on the project in 2007.

“It’s not something that was unexpected, by any means,” says Cary List, president and CEO of the FPSC. “We knew what was coming and we knew what the contents would be, pretty much.”

While he maintains that financial planning should be seen as a distinct and separate professional service, List admits that the proposed rule recognizes the reality of the industry: that the vast majority of financial planners are conducting their business in the context of regulated aspects of the industry, to wit, sales of securities, mutual funds and/or insurance.

“They’re intertwined, and its very difficult to separate them out, so we do support the fact that IIROC has come out and said its members need to recognize that their reps are performing financial planning, which leads to investment advice, and that the member firms actually have to recognize the need for minimum standards of competence and adequate supervision of financial planning activities, which may ultimately lead to investment advice.”

Related Stories
  • Financial planning gets a regulator

    • With the FPSC’s mandate focused on consumer protection in the financial services industry, he says the group supports anything that enhances such protection.

    “We applaud IIROC for the initiatives they have taken, and what we think is a well-considered effort in that regard,” he says. “That said, we think they kind of missed the mark in a number of areas.”

    What List finds puzzling is the list of credentials that IIROC suggested would be sufficient for a financial planner.

    “We think they really missed an opportunity to recognize the true value of professional certification,” List says. “There are nationally and internationally accepted standards out there for what professional certification should look like. There’s an ISO standard, ISO 17024, which has been adopted as a national standard by the Standard Council of Canada, called CAN-P-9.”

    These standards require:

    • minimum levels of work experience
    • a standardized examination
    • continuing education; and
    • a code of conduct or ethics

    “Rather than recognizing that, IIROC has simply listed four certifications that they believe meet their own requirements,” he says. “Several of them don’t necessarily have the components of what goes into true professional certification.”

    As drafted, the proposed IIROC rule states:

    “(a) While a Dealer Member is entitled to impose its own proficiency standards higher than those noted below, any of the following, as updated or replaced from time to time by the applicable educational and trade Associations or sponsoring organizations, may demonstrate proficiency:

    (i) Completion of the Canadian Securities Course and the Professional Financial Planning Course sponsored by the Canadian Securities Institute,

    or …”

    The guideline goes on to list several of the top designations, including CFP, PFP, R.F.P., or Quebec’s Pl. fin. List says he is surprised that IIROC has set the Canadian Securities Course and the Professional Financial Planning Course on a par with the professional designations.

    “We would suggest that no single course of study, regardless of how good it is, is a sufficient measure of competence to hold out as a financial planner. That flies in the face of everything that professional certification is about,” says List. “The FPSC, for the CFP certification program, has over 30 approved providers of core education that meet our educational standards. IIROC has singled out one.

    “Education alone is not enough, and we think it’s inappropriate that they singled out a specific education path to demonstrate proficiency.”

    He points out that by simply completing the Canadian Securities Course and the Professional Financial Planning Course, a candidate for the CFP designation would still face additional requirements, notably the standardized examination.

    After passing the exam, newly minted CFP professionals would then be subject to the designation’s code of conduct and be required to maintain their professional development through continuing education.

    “[I am] in no way suggesting anything negative about the Professional Financial Planning Course, but that alone as a minimal standard, we say, is far too low a standard to be a financial planner,” List says.

    Be heard on this issue. Join the Advisor.ca Forum.

    Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

    (08/20/08)

    The Investment Industry Regulatory Organization of Canada’s proposed rule governing how its member firms supervise financial planning activities has drawn fire from critics, but even among those who support the measure, there are those who feel it could have been better written.

    The Financial Planners Standards Council (FPSC) of Canada welcomes the proposed rule, in that its stated goal is to better protect client interests. The body, which governs the Certified Financial Planner (CFP) designation, had engaged the securities regulator from the outset, when IIROC’s predecessor, the Investment Dealers Association, embarked on the project in 2007.

    “It’s not something that was unexpected, by any means,” says Cary List, president and CEO of the FPSC. “We knew what was coming and we knew what the contents would be, pretty much.”

    While he maintains that financial planning should be seen as a distinct and separate professional service, List admits that the proposed rule recognizes the reality of the industry: that the vast majority of financial planners are conducting their business in the context of regulated aspects of the industry, to wit, sales of securities, mutual funds and/or insurance.

    “They’re intertwined, and its very difficult to separate them out, so we do support the fact that IIROC has come out and said its members need to recognize that their reps are performing financial planning, which leads to investment advice, and that the member firms actually have to recognize the need for minimum standards of competence and adequate supervision of financial planning activities, which may ultimately lead to investment advice.”

    Related Stories
  • Financial planning gets a regulator

    • With the FPSC’s mandate focused on consumer protection in the financial services industry, he says the group supports anything that enhances such protection.

    “We applaud IIROC for the initiatives they have taken, and what we think is a well-considered effort in that regard,” he says. “That said, we think they kind of missed the mark in a number of areas.”

    What List finds puzzling is the list of credentials that IIROC suggested would be sufficient for a financial planner.

    “We think they really missed an opportunity to recognize the true value of professional certification,” List says. “There are nationally and internationally accepted standards out there for what professional certification should look like. There’s an ISO standard, ISO 17024, which has been adopted as a national standard by the Standard Council of Canada, called CAN-P-9.”

    These standards require:

    • minimum levels of work experience
    • a standardized examination
    • continuing education; and
    • a code of conduct or ethics

    “Rather than recognizing that, IIROC has simply listed four certifications that they believe meet their own requirements,” he says. “Several of them don’t necessarily have the components of what goes into true professional certification.”

    As drafted, the proposed IIROC rule states:

    “(a) While a Dealer Member is entitled to impose its own proficiency standards higher than those noted below, any of the following, as updated or replaced from time to time by the applicable educational and trade Associations or sponsoring organizations, may demonstrate proficiency:

    (i) Completion of the Canadian Securities Course and the Professional Financial Planning Course sponsored by the Canadian Securities Institute,

    or …”

    The guideline goes on to list several of the top designations, including CFP, PFP, R.F.P., or Quebec’s Pl. fin. List says he is surprised that IIROC has set the Canadian Securities Course and the Professional Financial Planning Course on a par with the professional designations.

    “We would suggest that no single course of study, regardless of how good it is, is a sufficient measure of competence to hold out as a financial planner. That flies in the face of everything that professional certification is about,” says List. “The FPSC, for the CFP certification program, has over 30 approved providers of core education that meet our educational standards. IIROC has singled out one.

    “Education alone is not enough, and we think it’s inappropriate that they singled out a specific education path to demonstrate proficiency.”

    He points out that by simply completing the Canadian Securities Course and the Professional Financial Planning Course, a candidate for the CFP designation would still face additional requirements, notably the standardized examination.

    After passing the exam, newly minted CFP professionals would then be subject to the designation’s code of conduct and be required to maintain their professional development through continuing education.

    “[I am] in no way suggesting anything negative about the Professional Financial Planning Course, but that alone as a minimal standard, we say, is far too low a standard to be a financial planner,” List says.

    Be heard on this issue. Join the Advisor.ca Forum.

    Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

    (08/20/08)

    The Investment Industry Regulatory Organization of Canada’s proposed rule governing how its member firms supervise financial planning activities has drawn fire from critics, but even among those who support the measure, there are those who feel it could have been better written.

    The Financial Planners Standards Council (FPSC) of Canada welcomes the proposed rule, in that its stated goal is to better protect client interests. The body, which governs the Certified Financial Planner (CFP) designation, had engaged the securities regulator from the outset, when IIROC’s predecessor, the Investment Dealers Association, embarked on the project in 2007.

    “It’s not something that was unexpected, by any means,” says Cary List, president and CEO of the FPSC. “We knew what was coming and we knew what the contents would be, pretty much.”

    While he maintains that financial planning should be seen as a distinct and separate professional service, List admits that the proposed rule recognizes the reality of the industry: that the vast majority of financial planners are conducting their business in the context of regulated aspects of the industry, to wit, sales of securities, mutual funds and/or insurance.

    “They’re intertwined, and its very difficult to separate them out, so we do support the fact that IIROC has come out and said its members need to recognize that their reps are performing financial planning, which leads to investment advice, and that the member firms actually have to recognize the need for minimum standards of competence and adequate supervision of financial planning activities, which may ultimately lead to investment advice.”

    Related Stories
  • Financial planning gets a regulator

    • With the FPSC’s mandate focused on consumer protection in the financial services industry, he says the group supports anything that enhances such protection.

    “We applaud IIROC for the initiatives they have taken, and what we think is a well-considered effort in that regard,” he says. “That said, we think they kind of missed the mark in a number of areas.”

    What List finds puzzling is the list of credentials that IIROC suggested would be sufficient for a financial planner.

    “We think they really missed an opportunity to recognize the true value of professional certification,” List says. “There are nationally and internationally accepted standards out there for what professional certification should look like. There’s an ISO standard, ISO 17024, which has been adopted as a national standard by the Standard Council of Canada, called CAN-P-9.”

    These standards require:

    • minimum levels of work experience
    • a standardized examination
    • continuing education; and
    • a code of conduct or ethics

    “Rather than recognizing that, IIROC has simply listed four certifications that they believe meet their own requirements,” he says. “Several of them don’t necessarily have the components of what goes into true professional certification.”

    As drafted, the proposed IIROC rule states:

    “(a) While a Dealer Member is entitled to impose its own proficiency standards higher than those noted below, any of the following, as updated or replaced from time to time by the applicable educational and trade Associations or sponsoring organizations, may demonstrate proficiency:

    (i) Completion of the Canadian Securities Course and the Professional Financial Planning Course sponsored by the Canadian Securities Institute,

    or …”

    The guideline goes on to list several of the top designations, including CFP, PFP, R.F.P., or Quebec’s Pl. fin. List says he is surprised that IIROC has set the Canadian Securities Course and the Professional Financial Planning Course on a par with the professional designations.

    “We would suggest that no single course of study, regardless of how good it is, is a sufficient measure of competence to hold out as a financial planner. That flies in the face of everything that professional certification is about,” says List. “The FPSC, for the CFP certification program, has over 30 approved providers of core education that meet our educational standards. IIROC has singled out one.

    “Education alone is not enough, and we think it’s inappropriate that they singled out a specific education path to demonstrate proficiency.”

    He points out that by simply completing the Canadian Securities Course and the Professional Financial Planning Course, a candidate for the CFP designation would still face additional requirements, notably the standardized examination.

    After passing the exam, newly minted CFP professionals would then be subject to the designation’s code of conduct and be required to maintain their professional development through continuing education.

    “[I am] in no way suggesting anything negative about the Professional Financial Planning Course, but that alone as a minimal standard, we say, is far too low a standard to be a financial planner,” List says.

    Be heard on this issue. Join the Advisor.ca Forum.

    Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com

    (08/20/08)