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Canadian financial advisors’ association Advocis believes that the Ontario government should start properly regulating financial advisors and the professionals should be required to secure professional liability insurance, following sobering results of its latest survey.
According to Advocis’ new survey, an “overwhelming majority” of Ontarians misguidedly believe that the title “financial advisor” is currently regulated and requires some accreditation.
Only 24% of the 1,500 survey respondents are aware that anyone – regardless of education, training or membership in a professional governing body – can legally call themselves a financial advisor without repercussion.
The association warned that due to the false sense of assurance, “investors are at significant risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors,” Advocis said in a release.
The study also found that younger people (aged 18-30) as well as those with lower incomes tend to place the highest levels of trust in the financial advisor title.
While a licence is required to sell financial products in Canada, there is no minimum education requirement to provide financial advice, Advocis cautioned.
“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 president and CEO 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 its release, Advocis called for Ontario’s new government to “take meaningful action, and protect the financial security of Ontarians.” The Association also called for every financial advisor to become a member of a professional governing organization, adhere to a professional code, maintain professional liability insurance, undergo ongoing education, and “commit to a fair and impartial disciplinary process.”
