The Financial Services Regulatory Authority of Ontario’s (FSRA) proposed rule expanding the definition of managing general agents (MGAs) risks increasing costs and limiting access to financial advice, particularly for small advisory businesses, according to Advocis, The Financial Advisors Association of Canada.
The rule, titled Life and Health Insurance Managing General Agents (Rule 2025-001) and released Oct. 20, would capture thousands of small advisors and sole practitioners that were not part of previous consultations. These businesses could face new licensing fees, including a $1,000 application charge, ongoing renewal fees yet to be determined, and overlapping compliance obligations that many legal experts find unclear.
Kelly Gorman, President and CEO of Advocis, said that small advisory firms play a critical role in their communities, helping Canadians make informed insurance and financial decisions, and that the proposed rule risks imposing an unnecessary burden on them, potentially reducing access to financial and insurance advice.
The proposed MGA definition could also complicate succession planning, raise barriers for new entrants, and create a widening advice gap. Advocis noted that the consultation period was limited to just 30 days, leaving little time for meaningful feedback on an extensively revised and expanded rule.
Advocis is calling on FSRA to delay and revise the proposal, recommending a more targeted MGA definition that reflects actual business realities, plain-language guidance to avoid duplication, proper consultation timelines, and alignment with regulations in other provinces to prevent deharmonization.
The association is mobilizing its members through individual submissions to FSRA and outreach to provincial lawmakers, urging regulators to reconsider the proposed approach. Advocis added that while it supports effective regulation, the proposal appears rushed and overreaching, and it is not aligned with the needs of consumers and advisors.
The FSRA submission deadline is Nov. 19, providing a limited window for stakeholders to influence the final framework. Advocis emphasized that revising the rule now is critical to protecting access to affordable insurance advice while maintaining effective oversight of the industry.
The proposal highlights the tension between regulatory modernization, which aims to reduce administrative burdens, and expansive rules that could inadvertently raise costs and reduce accessibility for consumers seeking insurance guidance.
