Personal Investor: Ontario takes up call for advisor crackdown
The Ontario government appears to be backing a longstanding request from the Financial Advisors Association of Canada (Advocis) for stricter regulation of their own ranks.
Finance Minister Vic Fedeli says he’s pushing for new regulations relating to who can call themselves financial advisors in the province that hosts the bulk of the investment industry. Although a licence is required to sell financial products in Canada, there is no minimum education requirement to provide financial advice. There is also no single registry or database where an investor can go to verify their advisor's credentials and disciplinary history, and no consistent continuing education requirements.
Advocis argues the lack of regulation for financial advisors puts investors at risk of not only receiving poor advice, but also falling victim to fraud. It says regulations fall short across the country except for Quebec, where formal requirements already exist.
In a speech to financial advisors this week, Fedeli said he would like to see more oversight relating to qualifications and ongoing training for investment advisors. He also suggested mandatory financial literacy classes for Ontario high schools.
Last month, Fedeli pulled his support for a review of hidden deferred sales charges, also known as back-end loads, on early sales of mutual funds. He cited a ban on similar fees in the United Kingdom, which resulted in an exodus of financial advisors from the industry.