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New qualifications for Canadian financial planners on the horizon

Chris Hamblin, Editor, London, 19 January 2016

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The Mutual Fund Dealers' Association of Canada, which regulates mutual funds there, is thinking of introducing proficiency requirements for anyone who wants to use the term 'financial planner.'

The existing MFDA rule 1.2.1(d) contains requirements in respect of the use of business titles, including those designations/certifications used by approved persons who present themselves to high-net-worth customers as financial planners. It states: "No Approved Person shall hold him or herself out to the public in any manner including, without limitation, by the use of any business name or designation of qualifications or professional experience that deceives or misleads, or could reasonably be expected to deceive or mislead, a client or any other person as to the proficiency or qualifications of the Approved Person under the Rules or any applicable legislation."

The trade body thinks that this is no longer enough. In September it issued a consultative paper (comment period now closed) that proposed that approved persons should not be allowed to use the title 'financial planner' unless they have demonstrated that they are proficient enough.

No national regulatory body oversees financial planning titles, although the province of Quebec has established minimum proficiency standards for people there who describe themselves as financial planners and the government of Ontario has also recently launched an initiative to explore regulatory changes in this area.

The MFDA's members are responsible for a significant portion of the Canadian wealth management landscape. It proposed amendments to rule 5.3.2 (Content of Account Statement) and published them for comment in June - the result of this exercise does not seem to have materialised yet. The proposal is to require members to tell clients, in their account statements, that they are indeed members of, and regulated by, the MFDA.

The MFDA is recognized as a self-regulatory organisation for mutual fund dealers in Canada, regulating the operations, standards of practice and business conduct of its members and their 83,000 'approved persons' with a brief to protect investors and the public interest.

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