TORONTO, May 7, 2019 /CNW/
Almost half of British Columbians wrongly believe that the title ‘financial advisor’ is currently regulated and requires some form of accreditation, similar to lawyers, doctors and other professionals, according to survey findings released today by Advocis, the Financial Advisors Association of Canada. This misperception places investors at risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors.
Although a license is required to sell financial products in Canada, there is no minimum education requirement to provide financial advice. The survey of 1,000 British Columbians, conducted by Abacus Data in March, found that only 54 per cent of respondents are aware that anyone, regardless of education, training, or membership in a professional governing body, can call themselves a financial advisor. The research also concluded that those with lower incomes, who arguably need sound financial advice the most, place the highest levels of trust in the financial advisor title. Surveys conducted in Ontario and Manitoba in 2018 yielded similar results.
“For years, we’ve recognized the dangers that lack of title protection presents for the financial well-being of hard-working families seeking professional financial advice, said Advocis CEO and President, Greg Pollock. “This survey proves there is a tremendous amount of misplaced trust in the market, and reinforces just how badly new regulations are needed to protect the public.”
In fact, 89 per cent of those surveyed said they would support the provincial government passing new legislation to regulate the title of ‘financial advisor’. Meanwhile, 85 per cent of respondents felt all financial advisors should be subject to a mandatory code of professional conduct.
“British Columbians deserve to know their money is in the hands of professionals who are verifiably qualified to help them meet their financial goals,” concluded Pollock. “The time has come to formally recognize the provision of financial advice as a profession and to oversee financial advisors as we do all other professionals who provide essential advice and services.”
Due to the lack of professional regulation, there is no single registry or database that exists today where an investor can go to verify their advisor’s credentials and disciplinary history.
Furthermore, without dependable continuing-education requirements, investors have little assurance that their advisor’s knowledge of financial planning and products is being kept current.
Advocis is encouraging the Government of British Columbia to take meaningful action, and protect the financial security of British Columbians.
A concrete step towards professionalizing financial advice would be to mirror the Government of Ontario’s recent announcement that it would move forward with proposed legislation that would require individuals using the titles of “financial advisor” or “financial planner” to have an appropriate credential.
Results of the Advocis survey clearly indicate that British Columbians would like to see similar action taken, and Advocis looks forward to working with the government and other stakeholders to make that happen.