Advocis, the Financial Advisors Association of Canada, says about half of Albertans don’t realize that just because someone has the title financial advisor doesn’t mean they’re regulated.
A survey of 800 Albertans by the association 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.
That lack of knowledge puts investors at significant risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors, said the association.
“Although a licence is required to sell financial products in Canada, there is no minimum education requirement to provide financial advice,” it said.
“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.”
The survey found that 89 per cent said they would support the provincial government passing new legislation to regulate the title of ‘financial advisor.’ Also, 85 per cent felt all financial advisors should be subject to a mandatory code of professional conduct.
“All Albertans deserve to know their money is in the hands of true professionals, who are qualified to help them meet their financial goals,” said 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.”
Advocis, with more than 13,000 members in 40 chapters across Canada, said it is encouraging the government of Alberta to take meaningful action and protect the financial security of Albertans.
“The association is calling for every financial advisor to be required to be a member of a professional governing organization and adhere to a common code of professional and ethical conduct, maintain mandatory professional liability insurance, complete ongoing professional development, and commit to a fair and impartial disciplinary process,” it said.
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.