Three-quarters of Ontarians wrongly believe that the title ‘financial advisor’ is currently regulated and requires some form of professional accreditation, according to survey findings released Oct. 25 by Advocis, the Financial Advisors Association of Canada.
The association says that due to this false belief, “investors are at significant risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors.”
A license is required to sell financial products in Canada, however there is no minimum education requirement to provide financial advice, notes Advocis.
The survey of 1500 Ontarians, conducted by Abacus Data in September and October, found only 24 per cent of respondents were aware that anyone can legally call themselves a financial advisor. Younger people (ages 18-30) and those with lower incomes, placed the highest levels of trust in the financial advisor title.
A tremendous amount of misplaced trust
“For years, we’ve recognized the dangers that lack of title protection presents for the financial wellbeing 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.”
Because of the lack of regulation, there is no single registry or database where an investor can go to verify their advisor's credentials and disciplinary history, notes Advocis. There are also no consistent continuing-education requirements.
Advocis is calling on Ontario’s new government to take action. “All Ontarians deserve to know their money is in the hands of true professionals, who are qualified to help them meet their financial goals,” concluded Pollock. “The time has come to legally 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.”