Study: Ontarians wrongly believe financial advisors are government regulated
Published: October 26, 2018
CATEGORY: Industry News
Most Ontarians believe financial advisers in the province are regulated. Canadian financial advisors’ association Advocis says this is absolutely not the case and the provincial government should create regulations, including mandatory professional liability insurance.
A new survey from Advocis provides worrying results. The study finds an “overwhelming majority” (76%) of Ontarians thinks regulations are in place for financial advisors. Just 24% of 1,500 respondents were aware that financial advice is not a regulated industry.
In fact, any person can all themselves a financial advisor regardless or training, experience, or education. Because there are no regulations, and anybody can become an advisor, the chances of poor advice for customers is increased.
Time for Regulations
The study also shows young people and lower income respondents put the most trust in someone claiming to have a financial advisor title.
Advocis warns “investors are at significant risk of not only receiving poor advice, but also falling victim to unscrupulous actors posing as legitimate advisors.”
It is worth pointing out a license is required to sell financial products in all provinces. However, there are no minimum criteria for education.
“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.”
The association is now urging the new Conservative government in Ontario to step up. The release calls for a regulatory framework for financial advisors. Advocis says the government must “take meaningful action and protect the financial security of Ontarians.”
Moreover, Advocis says financial advisors should be a part of a professional governing body. Other industry standards offered by the association include a professional code and liability insurance.
91 percent of survey respondents said they would support government intervention through new legislation. Furthermore, 80 percent believe all financial advisors should work under a standardized code of regulations and conduct.